Update: Recession Warning, Bitcoin & Smaller Government

Recession Early Warning? 

Well, it looks like the rich are tightening their belts. According to a report at Yahoo Finance, spending by the rich has slowed over the last year. This could be an early warning of a recession. Spending by the top 10% of households by income makes up nearly half of overall consumption in the US. 

I Want Less Government 

A lot of people want the rich to pay more taxes so that government can be bigger. I want the rich and everyone else to pay less taxes so that the government can be smaller. Less taxes means more freedom and prosperity. Let's make government smaller so the economy can be bigger! 

Early Bitcoin Buyers 

Not everyone who got into #Bitcoin early is ahead. Many took flyers on Bitcoin with small amounts of money early on. After the huge rise, thinking they were smart instead of lucky, they added much larger sums at much higher prices. So now they are down overall or soon will be.

This Rally Is Fueled By A Weak Economy

This stock market rally is being driven by a weak economy. It's a weak economy that's more instrumental in driving the market higher because the weak economy keeps the Fed in play. It keeps quantitative easing in play. It keeps interest rates going down.

U.S. - China Trade Deal

When Trump first announced Phase One he said it was already a done deal. Now it's delayed until sometime next year, if it ever happens at all. Trump should just see if he can get a Phase 1A deal done, or at least pretend that he can. That should be good for 500 more Dow points!

QE4, Pot Stocks, IPOs

Even as QE4 has pushed stock indexes to new highs, despite a weakening economy and the absence of a trade deal, not all stocks have gone along for the ride. Pot stocks have been smoked, falling 70% -90%. Bubbles are popping, and it will not be contained to pot stocks and IPOs!

Press Round Up: Bitcoin, Marijuana Stocks, A Weakening Economy

Peter Schiff has been mentioned often in the press in the last few days. Here's a summary of the most relevant article:


Peter Schiff States That Bitcoin Has Less Utility Than Pot - in U TODAY

Marijuana Stock Crash Could Affect Bitcoin Price, Peter Schiff Suggests - in International Business Times

Peter Schiff: Recession So Bad Coming, US Doomed to Default on National Debt - in Money and Markets

On a recent podcast episode, Peter Schiff told investors that the U.S. Economy is getting sicker,

“The economy is getting sicker. And that’s what the central banks are doing when they cut rates and they print money — they’re actually making the underlying economy sicker, even though it doesn’t look sicker because they’re just measuring the spending that goes on and they’re ignoring the debt that’s behind it.”

Market Update: Gold, IPO Market, Bitcoin

The main reason Gold is not getting a bigger boost from QE4 is that traders expect the markets to react the way they did to QE3. But when the Fed did QE3, markets believed it was the last QE, and that the Federal Reserve had an exit strategy. But QE4 is open-ended and exit is impossible! 

Related articles: Serbia Joins Central Bank Gold-Buying Spree

IPO Market and Stock Market Bubbles 

If you think popping bubbles are going to be contained to the IPO market or to the pot stocks, no. All of the bubbles are going to pop, including the total bubble in the US stock market overall.

Bitcoin and Pot Stocks

Lots of Bitcoin bugs criticized my tweet warning that the bursting of the pot stock bubble could be a harbinger of doom for Bitcoin as well. I am not comparing Bitcoin to pot. You can smoke pot and get high. You can’t do anything with Bitcoin. The similarities are the bubbles!

Creating Demand For Gold

The new head of the European Central Bank (ECB) Christine Lagarde believes she can create jobs by destroying savings. But jobs come from savings. Jobs need capital, and capital investment is funded by savings. When you destroy savings you also destroy jobs! All Lagarde will create is demand for Gold!

Market Update, Wealth Tax & Bitcoin

Market Update: US Dollar Index, US Stocks & Gold 

The U.S. Dollar Index closed a down week on the lows, while 30-year Treasury yields closed an up week near their highs. The dollar and bonds falling in tandem is a good sign that the bubble has popped! This is bearish for stocks and very bullish for gold.

Bitcoin: Bearish Chart 

The Bitcoin chart looks horrible. Not only does the flag that followed the recent breakdown project a move to $6K, but we are close to completing the right shoulder of a head and shoulders top, with a $14K head, and neck line just below $8K, that projects a collapse to below $2K!

Wealth Tax: Impact On Startup Capital 

If an unconstitutional wealth tax is passed, startup capital will be extremely hard to come by. What wealthy investor would want to put money into an illiquid private investment that is subject to annual appraisal and taxation, even if the investment itself never produces a gain? 

AOC Endorses Sanders 

AOC has endorsed Sanders for President. I guess Warren pretending to be a "capitalist to her bones" was too much for the unabashed socialist. If this propels Sanders to win the nomination, this is bad news for America, as he is left of Warren and even more likely to beat Trump!