Two weeks ago, the headline of Gerald Celente’s Trends in the News video was “DEATH OF THE DOLLAR ON THE DOORSTEP.”
Since that time, the dollar Index has fallen to a two-month low against a basket of six developed economy currencies. And as this week’s cover of The Trends Journal illustrates, get ready for the dollar’s burial.
It was high interest rates that drove the dollar up against most foreign currencies. As we had forecast, the higher the Federal Reserve raises interest rates the deeper the U.S. economy will fall.
And now the damage of the high interest rates has become evident.
Yesterday, the March U.S. ISM manufacturing report showed activity dropped to 46.3, the lowest level since the beginning of the COVID War, May 2020, when much of the nation was locked down by politicians who imposed draconian mandates.
“Everything in this report was weak. Prices paid fell from 51.3 to 49.2, while employment plunged from 49.1 to 46.9. Demand is falling off a cliff as new orders plunged from 47.0 to 44.3. Inventories are contracting and demand continues to soften,” Ed Moya of OANDA told Kitco.
Further illustrating the higher interest rate damage, the U.S. Labor Department reported today that Job openings fell below 10 million in February. Racking up its lowest number in nearly two years—when the nation was fighting the COVID War and many businesses were shut down—this is a strong indication that the Federal Reserve’s stated mission to slow the labor market so wages fall is working.
TREND FORECAST: The weaker the economic data the greater the odds the Federal Reserve will at the most just raise interest rates 25 basis point when they meet again in early May. However, should the economic landscape continue to worsen between now and then, the Feds will not raise interest rates next month and will lower them by the end of the summer.
Again, the lower interest rates fall the deeper the dollar will decline, since it has been artificially boosted by the Fed’s interest rate hikes which brought it up from 0.25 percent to 0.50 percent last March to 4.75 percent to 5 percent this March. And the lower interest rates fall and the deeper the dollar declines… the higher gold prices will rise.
The bet on The Street as of today is that 62 percent believe the Fed will push up interest rates 25 basis points, while others 38 percent say they will pause.
Worst is Yet to Come
Repeating what we have forecast, but now it is “official” because it came from the top of the Bankster Bandits Syndicate, in a letter to shareholders of JPMorgan Chase, it’s CEO Jamie Dimon, warned that “As I write this letter, the current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come.”
Dimon said that “… while this is nothing like 2008, it is not clear when this current crisis will end. It has provoked lots of jitters in the market and will clearly cause some tightening of financial conditions as banks and other lenders become more conservative.”
While we agree that it will cause tightening of money being loaned out by banks, we disagree that the economic damage will not be as severe as it was during the Panic of ’08. Indeed we forecast it will be much worse. Absent the mainstream rhetoric but a very important economic trend is our forecast of an Office Building Bust that will be a key factor in bringing down banks and businesses across the nation.
TRENDPOST: Bankster Syndicate? Yes, by their deeds you shall know them. This is the JPMorgan that was hit with five felonies, all of which they admitted and as Wall Street on Parade notes with “a rap sheet that is unprecedented in the annals of banking in the U.S.”
Among its criminal felonies, JPMorgan rigged the precious metals market for some eight years that, as reported by Wall Street on Parade (WSoP), involved “tens of thousands” of incidents. The Justice Department wrote that traders at JPMorgan Chase:
“…knowingly and intentionally placed orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution (‘Deceptive PM [Precious Metals] Orders’), including in an attempt to profit by deceiving other market participants through false and fraudulent pretenses and representations concerning the existence of genuine supply and demand for precious metals futures contracts.
“By placing Deceptive PM Orders, the Subject PM Traders intended to inject false and misleading information about the genuine supply and demand for precious metals futures contracts into the markets, and to deceive other participants in those markets into believing something untrue, namely that the visible order book accurately reflected market-based forces of supply and demand.
“This false and misleading information was intended to, and at times did, trick other market participants, including competitor financial institutions and proprietary traders, into reacting to the apparent change and imbalance in supply and demand by buying and selling precious metals futures contracts at quantities, prices, and times that they otherwise likely would not have traded.”
Rig it Once, Rig it Twice
In a nation where the Bigs and the Rich get a slap on the wrist for their crimes while the plantation workers of Slavelandia are punished to the full extent of the law for their illegal activities, the nation’s top Bankster is running the gold powerhouse. As WSoP headlined yesterday, JP Morgan Chase Controls 53 Percent of All Precious Metals Contracts Held by Banks.
And further illustrating the criminality of the Banksters and how, as George Carlin noted that “It’s one big club, and you ain’t in it,” this is today’s WSoP headline article: After Pushing the Wall Street Scheme to Repeal Glass-Steagall, the New York Times Returns to Puff Pieces on Rodge Cohen and Jamie Dimon.
We also note this WSoP article to further illustrate that what is being sold as “news” by the mainstream media is nothing more than selling the government/big business line. The facts speak for themselves.
LAST WEEK: STOCKS END TUMULTUOUS QUARTER IN THE BLACK
After an optimistic start to the year and then being battered by a series of shocks, including America’s second- and third-largest bank failures simultaneously, equity markets turned in a positive performance in 2023’s first quarter.
The Dow Jones Industrial Average grew by 3.0 percent last week, the NASDAQ added 1.6 percent, and the Standard & Poor’s 500 index was up 2.3 percent.
For the quarter, the Dow took on a scant 0.4 percent, but the NASDAQ leaped up 17 percent for its best quarter since 2020. The S&P rose 7 percent.
Bank stocks began to recover from the series of crises earlier this month that included the collapse of Signature and Silicon Valley banks, the failure of Credit Suisse, and the uncertainty around First Republic and Deutsche Bank.
The KBW NASDAQ bank index jumped 4.7 percent last week but ended the quarter 25 percent below its February close. The index booked its worst month since March 2020 at the start of the COVID War.
Wells Fargo and PNC Financial Services Group also logged their worst months in three years, The Wall Street Journal reported. Charles Schwab saw its worst three months since 2008 and First Republic finished its worst quarter ever.
Still, looking at the quarter as a whole, “things have been better than many feared,” Eric Freedman, chief investment officer at U.S. Bank Asset Management, said to the WSJ.
Consumer prices inflated by 6 percent in February, year on year, the smallest yearly increase since September 2021. (See “Inflation, Consumer Spending Slowed in February” in this issue.)
Also, prodded by hints from the U.S. Federal Reserve, futures markets are betting that the central bank will add only one additional quarter point before pausing its interest rate increases.
The Fed disappointed some analysts by increasing its key interest rate yet again this month, rather than pausing it to gauge the impact of the banking crisis.
That indicates the banking sector’s lingering ills “will not shift [Fed officials] off course” from its plan to bludgeon inflation with higher rates, Richard McGuire, Rabobank’s chief rate strategist, told the WSJ.
However, Fed chair Jerome Powell hinted at his press briefing earlier this month that the banking industry’s woes could tighten lending, which would have an effect similar to another rate hike by the central bank.
The 10-year treasury note’s yield slipped to 3.491 percent on Friday, 31 March. The two-year note, which most closely reflects markets’ expectations around interest rates, also ended down at 4.060 percent. Both showed their steepest quarterly losses since the same period in 2020.
Spot gold ended the week down less than 0.01 percent at $1,969.05 at 5 p.m. U.S. EDT on 31 March. U.S. gold futures shot up to $1,997 after OPEC+ announced production cuts on 2 April. (See “OPEC+ Slashes Daily Oil Output Limit by 1.16 Million Barrels” in this issue.)
Brent crude oil for April delivery edged up 0.6 percent to $79.77. West Texas Intermediate climbed 7.1 percent, breaking up through the $70 mark to reach $74.75 at 5 p.m. U.S. EDT on 31 March.
Both jumped more than 5 percent after the OPEC+ announcement.
Brent was trading just below $85 at 5 p.m. U.S. EDT on 3 April. West Texas Intermediate oil, which benchmarks U.S. prices, had risen slightly above $80.
Also, a regional dispute over an Iraqi pipeline could curtail oil flows in the area; traders hedged bets against that possibility.
Bitcoin headed higher by 4.5 percent to $28,433.50 at 5 p.m. U.S. EDT on 31 March. It has gained 71 percent since the start of the year.
Stocks were broadly higher overseas.
The London FTSE was up 3.0 percent, while the pan-European Stoxx index ticked up less than 0.01 percent.
Japan’s Nikkei rose 2.0 percent. The South Korean KOSPI index added 2.2 percent.
The Hang Seng in Hong Kong expanded by 2.7 percent. China’s CSI Composite took on another 0.7 percent and the SSE Composite flicked up less than 0.01 percent.
YESTERDAY: DOW GOES UP AS OPEC+ OIL PRODUCTION GOES DOWN
The Dow Jones Industrial Average closed yesterday up 327, or 0.98 percent, to 33,601.15 and the benchmark S&P 500 was also up 15.20, or 0.37 percent, to close at 4,124.51. The tech-heavy Nasdaq Composite was down 32.45, or 0.27 percent, to 12,189.45.
The big news on The Street was OPEC+’s decision to cut oil output by 1.2 million barrels per day—or 1 percent of oil—from the global market starting next month.
With high energy prices having already spiked inflation across Europe, with Brent Crude having jumped over 6.3 percent yesterday, it will make a bad situation much worse: Dragflation. Higher oil prices will put more downward pressure on the economy while higher prices will push inflation higher.
It will be a short week on Wall Street with the markets closed on Good Friday, when the U.S. releases its March jobs report.
The 10-year Treasury fell 2 basis points to 3.46 percent, and the 30-year Treasury fell 3 basis points to 3.6 percent. The yield on a 2-year note fell 3.976 percent.
The FTSE 100 rose 0.49 percent to close at 7,669 and the pan-European Stoxx 600 index ended down 0.1 percent. In Asia, the Nikkei 225 was 0.5 percent higher to finish at 28,188.1 and South Korea’s Kospi was down 0.22 to close at 2,472.34. In China, the Shenzhen Component increased 1.39 percent to close at 11,889.42 and the Shanghai Composite increased 0.74 percent to close at 3,296.40.
TREND FORECAST: We maintain our forecast for a temporary bounce-back in the banking and equity markets as governments, central banks, and big banks do all they can to avert a “Panic of 23.”
However, with the EU and the U.S. raising interest rates, an economic calamity is on the near horizon. The higher interest rates rise, the deeper economies and equities will fall.
Once again, we see how the system is rigged.
First Citizens Bank, the North Carolina lender, took on $60 billion in loans from Silicon Valley Bank with assurances from the Federal Deposit Insurance Corporation for 50 percent of all commercial loan losses — if the losses of those loans made by Silicon Valley Bank are above $5 billion, according to Yahoo!.
This will come in handy during the looming Office Building Bust.
OIL: Brent crude rose $4.98 per barrel, or 6.23 percent, to $84.87 and West Texas Intermediate was up 3 cents to $80.45 per barrel after the surprise move by OPEC+ to cut more than 1 million barrels of daily output beginning in May.
Crude prices were up 8 percent in early trading after OPEC+’s decision.
Oil prices have been trading below $80 a barrel since the collapse of Silicon Valley Bank due to renewed fears that the global economy was entering a recession.
GOLD: The precious metal rose 1 percent on Monday as the U.S. dollar lost value.
“We’re getting hit consistently by big major events here and that is keeping investors nervous,” Edward Moya, senior market analyst at OANDA, told CNBC. Moya said the shock decision by OPEC+ is “really driving that inflation hedge trade for gold.”
TRENDPOST: The U.S. Dollar Index hit 102.00, which is its lowest level since early February.
Gerald Celente has said the greenback is strong only because of high interest rates.
“When the dollar weakens, gold prices are going to skyrocket,” Celente said. “And they’re going to skyrocket when they [the Fed] hold interest rates and then lower them.”
BITCOIN: Bitcoin, the world’s largest cryptocurrency, was trading at around $27,801. March was a good month for bitcoin and was up about 20 percent. The crypto is trading up about 68 percent on the year.
TRENDPOST: Bitcoin has shown that it can shine while the stock market goes through turbulent times. While Silicon Valley Bank failed, the crypto hit highs not seen since last summer. One crypto executive told The New York Times that the bank failures will end the U.S. dollar and the dawn of “hyperbitcoinization” is upon us.
The Trends Journal has said when bitcoin prices hit $25,000 per coin, the crypto would surge and bitcoin will continue to gain in value unless governments crack down with new regulations.
Mike McGlone, the senior commodity strategist, said bitcoin is impervious to regulatory pressures because it’s more decentralized than other cryptocurrencies.
“You could make a case that Ethereum is a security when you hear about all these upgrades and people doing this and people doing that to make it better, I’m like okay, well that’s kind of scary, can’t do that to Bitcoin, it’s why it’s fine and impressive,” McGlone said, according to CoinTelegraph.
TODAY: STOCKS DOWN ON FEARS ECONOMY IS GOING DOWN
The Dow Jones Industrial Average fell 198.77 points today, or 0.59 percent, to 33,402.38, and the benchmark S&P 500 was down 23.91, or 0.58 percent, to 4,100.60. The tech-heavy Nasdaq was down 63.13, or 0.52 percent, to 12,126.
The main drivers on The Street today was the Labor Department’s report that job openings cooled to 9.93 million, which is the first time they fell below 10 million in two years. The drop was a 632,000 drop from January’s numbers.
The other big news was the sober outlook that Jamie Dimon, the CEO of JP Morgan, has on the banking crisis.
He wrote a letter to shareholders released today that said the “current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come.”
TRENDPOST: This is old news to Trends Journal subscribers, as we have been the first to forecast an Office Building Bust, when the owners of these half-empty office buildings won’t be able to pay their debt and will default on their loans.
More banks will go belly up. And as we have warned, it will escalate the banking crisis and may be the spark that ignites a global economic crisis.
Elsewhere, London’s FTSE was down 38.48, or 0.50 percent, to 7,634.52 and the benchmark Stoxx 600 was down 0.38, or 0.08 percent, to 457.34. In Asia, the Nikkei was up 99.27, or 0.35 percent, to 28,287.42 and South Korea’s Kospi gained 8.17, or 0.33 percent, to 2,480.51. Hong Kong’s Hang Seng was down 134.59, or 0.66 percent, to 20,274.59. China’s Shanghai Composite was up 16.16, or 0.49, or 3,312.56 and the Shenzhen Component was down 29.94, or 0.25 percent, to 11,859.48.
OIL: Brent crude edged lower today and was down 17 cents per barrel, or 0.19 percent to $84.76 and West Texas Intermediate was up 6 cents, or 0.087 percent, to $80.49.
The price stabilized after yesterday’s shock from OPEC+ after its announcement to cut 1.16 million barrels per day from the global market. Saudi Arabia alone will cut 500,00 barrels per day.
TRENDPOST: Clearly it is a supply and demand issue. And with economies slowing down demand is down.
However, the United States only looks at it from one side. Last October, when OPEC+ cut oil production by two million barrels per day because of the worsening economic conditions around the globe, U.S. Rep. Ro Khanna, D-Calif., was furious. He took to Twitter and called Saudi Arabia a “third-rate power.”
“They are actively fleecing the American people and destabilizing the economy. That’s just outrageous. Who do they think they are?”
“It’s outrageous. The Saudis need to be dealt with harshly,” said Khanna, who calls himself a progressive who has been a tough critic of the kingdom’s humanitarian track record. “They are a third-rate power. We are the most powerful country in the world. I don’t know why we kowtow to them,” he said.
As we have detailed over the past several weeks, new global alliances, disgusted with United States military and economic hegemony are forming new anti-U.S. alliances and on the oil front abandon the petro-dollar.
GOLD: Gold and silver hit 12-month highs today with the yellow metal up $38.90 an ounce, or 1.94 percent,to $2,039.30 and silver jumping $1.14, or 4.76 percent, to $25.16.
David Meger, director of metals trading at High Ridge Futures, told Reuters that the weaker economic data out today “portends that the Fed will be in fact closer to the end of its interest rate cycle, and we’ve seen yields drop along with the dollar and that continues to foster a higher gold price.”
Barron’s noted that gold hit the “trifecta” today for price increases: the greenback declined in value against other currencies, bonds were lower, and the recent production cut from OPEC+, compounded by JP Morgan’s Jamie Dimon’s warning about the bank crisis being felt for “years to come,” made the safe haven more attractive to investors.
TRENDPOST: There’s a big upside for gold because, as we have noted, the bank failures have just begun and most importantly, it is the coming death of the dollar. The deeper the dollar falls the higher gold prices will go up.
Also, we have long reported on the dire financial consequences of the Office Building Bust whereby owners of office buildings across the nation will default on bank loans as the occupancy rates stay well below pre-COVID War levels and tenants use less office space or do not renew leases.
Further pressure will be exerted on the banks as the nation dives into recession and more people that are out of work and out of money default on loans. Thus, the move toward safe-haven assets such as gold will escalate.
BITCOIN: The world’s most popular crypto was trading up $345.80, or 1.24 percent, to $28,163.60 as one crypto Greed and Fear Index shows an improving risk-appetite for bitcoin.
Blockworks reported that investor risk appetite for bitcoin is now at 62 percent, which is up from 30 percent from a month ago. The website reported that the yearly peak was 68 percent in the second half of March – right after the collapse of Silicon Valley Bank.
“A value above 50 indicates the market is mildly greedy with 100 hinting at extreme greed, which is pitched as an indicator to sell. Values below 50 and at zero indicate fear, supposedly buying opportunities,” the report said.
TRENDPOST: Investors are betting that there is a 60 percent probability that the Fed won’t increase rates after its next meeting in May after the Labor Department said today that the ratio of jobs to job seekers fell to 1.67—the lowest level since November 2021.
Lower interest rates will make bitcoin more attractive to U.S. investors and will bring down the value of the U.S. dollar against other currencies—which makes bitcoin all the more attractive.