Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Category Archives: Economics

Obama Judge in California Rules Against Gig Economy

This article appeared online at TheNewAmerican.com on Tuesday, February 18 , 2020: 

The ruling denying injunctive relief to Uber and Postmates and their drivers from California’s onerous, and likely unconstitutional, law AB 5 by Obama-appointed judge Dolly Gee last week illustrates why such judges holding for unions and the state need to be replaced.

The bill was supported by unions and the state of California for obvious reasons. The unions hated the competition, and the state needed the tax revenues that would be generated by turning freelancers into employees.

Proponents said gig workers would benefit from minimum-wage laws imposed on employees, and they would now have sick-leave coverage and unemployment insurance, along with other benefits. And the state would gain an estimated $8 billion from payroll taxes that gig operators such as Uber and Postmates and their independent contractors weren’t currently paying.

Opponents pointed out the obvious: Most gig workers don’t want to be employees. Most like the freedom associated with the gig economy, such as setting their own hours. And customers and consumers enjoy the better service and lower costs associated with services such as Uber and Postmates when compared to taxi drivers and FedEx, UPS, and the U.S. Postal Service. They predicted that once the law became effective on January 1, many of those freelancers would be out of work.

It’s already happening.

As The New American pointed out, Vox Media (which interestingly supported AB 5) has canceled its contracts with about 200 freelance writers and replaced them with just 20 new part-time and full-time employees.

Thomas Cushman, a commercial fisherman, has seen the law force his business to stop paying his crew:

Keep reading…

House Set To Pass “Worst Bill,” the PRO Act

This article appeared online at TheNewAmerican.com on Thursday, February 6, 2020: 

The National Retail Federation (NRF) is calling the Protecting the Right to Organize (PRO) Act, H.R. 2474, “the worst bill in Congress”. It’s a “compilation of dozens of extreme labor policy proposals from the past several years lumped into one disastrous bill,” according to Lizzy Simmons, NRF’s Vice President.

Not only does the bill have the support of Democrat presidential candidates Bernie Sanders, Elizabeth Warren, Amy Klobuchar, Pete Buttigieg, and Joe Biden, it has 218 cosponsors in the House. This means that the bill, expected to be voted on on Thursday, will easily pass over Republican resistance.

The bill threatens all of the gains the president talked about during his State of the Union message on Tuesday, including wage growth among lower-paid workers and a thriving economy pushing unemployment down to levels not seen in 50 years.

This summary includes the most egregious of the 30 provisions of the bill:

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ADP Says 291,000 New Jobs in January; It’s More Like 336,000

This article appeared online at TheNewAmerican.com on Wednesday, February 5, 2020: 

The jobs report from ADP on Wednesday understated job growth in January. Based on its own payrolls, the growth of private employment in the United States wasn’t 291,000. It was actually 336,100 when new jobs created by franchises were included.

The new jobs appeared in every sector of the economy, from small businesses to large and from goods-producing to service-providing. Small businesses added 94,000 new jobs; medium sized companies added 128,000 while large companies (500 employees and up) added 69,000. Those running franchise operations hired 45,100 new people in January.

Construction and manufacturing added 55,000 jobs, while professional and business services hired 49,000. Education added 70,000, while the leisure and hospitality sector brought on 96,000 new people.

The president didn’t need this information Tuesday night. He already had more than enough to fill his State of the Union speech before Congress. He took credit for

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Latest Gallup Poll Gives Trump More Ammo for SOTU Speech

This article appeared online at TheNewAmerican.com on Monday, February 3, 2020: 

The latest Gallup poll, conducted the first two weeks of the New Year, provides President Trump with even more ammunition for his State of the Union speech scheduled for Tuesday night.

The poll found that public satisfaction with the economy, security from terrorism, the strength of the country’s military, and the state of race relations all rose by double digits from three years ago.

The average satisfaction for all 27 issues tracked by Gallup is the highest seen by the pollster since 2005. In general, said Gallup, Americans are satisfied with the way things are going in the country.

These results echo similar polling done by Rasmussen, USA Today/Suffolk University, Fidelity Investments, and the University of Michigan.

Back in October,

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China’s Declining Birth Rate Threatens Its Globalist Plan

This article appeared online at TheNewAmerican.com on Monday, February 3, 2020: 

The number of babies born in China in 2019 was the lowest since 1961, during the forced implementation of Mao Tse-tung’s “Great Leap Forward.” That effort to turn China’s agrarian society into a purely communist one not only cost the lives of an estimated 45 million people through starvation but dropped the number of births to less than 12 million in a year.

Afterward, policies were implemented by Mao’s followers to rein in China’s population growth, which soared following that greatest famine in all of human history. Chinese officials implemented a “two child policy” in 1969, but changed it 10 years later to “one child” per family, with some exceptions.

That policy worked so well that Chinese officials celebrated the news that 400 million births were prevented. Actual births prevented, including the families not created, approached a billion, according to more reliable outside sources.

It set in motion what Yuanj Xin, a demographer at Nankai University, told Financial Times is “an irreversible trend.”

The trend became obvious in 2017,

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Fed Chairman Powell Said a Lot by Saying Very Little on Wednesday

This article was published by The McAlvany Intelligence Advisor on Friday, January 31, 2020: 

By saying very little on Wednesday, Fed Chairman Jerome Powell revealed a great deal about himself, the Federal Open Market Committee (FOMC), and the Federal Reserve banking system itself. With the economy hitting its stride, he’s unhappy. Inflation is too low and he wants to do something about it. Following Wednesday’s meeting, Powell said:

We’re not satisfied with inflation running below 2%, particularly at a time such as now where we’re a long way into an [economic] expansion and a long way into a period of very low unemployment when in theory [emphasis added] inflation should be moving up….

 

While low and stable inflation is certainly a good thing, inflation that runs persistently below our objective [of 2%] can lead longer-term inflation expectations to drift down, pulling actual inflation even lower.

 

In turn, interest rates would be lower as well … as a result we [the FOMC] would have less room to reduce interest rates to support the economy in a future downturn….

To make sense of this hash,

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Fed to Hold Interest Rates Steady; Seeks Increase in Inflation

This article appeared online at TheNewAmerican.com on Thursday, January 30, 2020:

Federal Reserve Chairman Jerome Powell said very little following the meeting of the Federal Open Market Committee (FOMC) on Wednesday. But what he did say revealed the vast chasm between the views of advocates of a free market and those supporting statist interventionism. After announcing, “We’re comfortable with our current policy stance [Fed Funds rates between 1.5 and 1.75 percent],” he said he’s unhappy that inflation isn’t running higher:

We’re not satisfied with inflation running below 2%, particularly at a time such as now where we’re a long way into an [economic] expansion and a long way into a period of very low unemployment when in theory inflation should be moving up…. [Emphasis added.]

 

While low and stable inflation is certainly a good thing, inflation that runs persistently below our objective [of 2 percent] can lead longer-term inflation expectations to drift down, pulling actual inflation even lower.

 

In turn, interest rates would be lower as well.… As a result we [the FOMC] would have less room to reduce interest rates to support the economy in a future downturn.

To make sense of this hash, one has to remember first that

Keep reading…

Impeachment? What Impeachment? Voters Are Tuning Out

This article appeared online at TheNewAmerican.com on Monday, January 27, 2020: 

Voters are tuning out of the Trump impeachment trial in droves. After two days of watching the Democrats bash the president, viewership of the six major networks covering it dropped by 20 percent. When the Associated Press asked voters why, they said they’re bored and tired of “the whole partisan saga.”

Most of them made up their minds months ago, said Eric Kasper, director of the Center for Constitutional Studies at the University of Wisconsin-Eau Claire: “A lot of people have made up their minds, and it looks pretty clear what the outcome of this trial is going to be.”

Only 11.8 million people watched the six networks during the first two days of the Senate trial, compared to

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Davos Confab to Replace “Shareholder Capitalism” With “Stakeholder Capitalism”

This article appeared online at TheNewAmerican.com on Thursday, January 23, 2020:

As The New American noted on Wednesday, the real agenda of the Davos confab taking place this week in Switzerland is giving more and more power and control to global elites in order to make the world more “sustainable.” We wrote: “This involves us giving them — the saviors — more power and more money.” The partners supporting the World Economic Forum (WEF) vision include Big Business, Big Banking, Big Tech, Big Foundations, Big Green, and Big Labor. As we noted, “This united front pushes for more Big Government as the solution to every “crisis” — with Global Total Government as the ultimate solution.”

The “crises du jour” Davos is laboring to solve consists of “income inequality,” “climate change,” and “political polarization.” The solution: changing how corporations operate to meet those needs and solve those problems, by force.

It’s called “stakeholder” capitalism, and it will replace the old, outmoded, and corrupt “shareholder” capitalism that has done nothing less than catapult the world’s standard of living to levels never seen in history.

The real intentions of the gathering at Davos were barely visible in 1973 when its Code of Ethics for Business Leaders concluded that

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Faceoff Between Trump and Thunberg at Davos Was a Bust

This article appeared online at TheNewAmerican.com on Wednesday, January 22, 2020: 

Cain Burdeau, writing for Courthouse News, hoped for more drama at Davos as Greta Thunberg (the “voice of climate change”) and Donald Trump, the president of the United States, were expected to confront each other over the climate-change issue. Instead, Trump “said nothing about global warming, called climate activists [without mentioning Thunberg by name] ‘prophets of doom’, and touted a future where ‘virtually unlimited energy reserves’ from fossil fuels and other polluting energy sources will keep factories humming while government cuts regulations and taxes.”

Thunberg set the table for the confrontation in a nearly unintelligible speech given just hours before Trump’s arrival, in which she stated,

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Big Trump Donors Looking to Double Their Money in 2020

This article was published by The McAlvany Intelligence Advisor on Monday, January 13, 2020: 

Most investors expect to get their money back, plus a profit. A few big Trump donors are now being given a chance to double their money by November.

There’s a movement afoot to purchase tiny One American News Network (OANN) for $250 million. It started in 2013 and already reaches 35 million homes.

By contrast, Fox News reaches 90 million households. But an increasing number of Fox viewers are being turned off by its leftward drift, and could be enticed to move to OANN if that drift continues.

There could be a double bonus in it for those Trump donors being given the chance to buy the tiny news network. It being election season, a small network like OAN needs only a few million more households to sign on to make the investment profitable. And if it picks up enough households disgusted with Fox News‘ leftward drift, it could also help reelect the president in November.

That would turn a good investment into a great one.

A dozen GOP heavyweight donors are being pitched on the idea of buying up the tiny television network to offset the steady leftward drift of Fox NewsThe Wall Street Journal first reported that

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Economy Adds Another 145,000 Jobs in December, Says Labor Department

This article appeared online at TheNewAmerican.com on Friday, January 10, 2020: 

Said the Bureau of Labor Statistics on Friday, “total nonfarm payroll employment rose by 145,000 in December, and the unemployment rate was unchanged at 3.5 percent.” It also noted that the long-term unemployment rate U6 (which includes discouraged workers no longer seeking jobs and part-time workers seeking full-time employment) dropped to the lowest level since the agency started reporting it in 1994.

This followed the report from ADP on Wednesday that the U.S. economy added 261,700 jobs in December and caps off a remarkable year for the U.S. economy.

For the year, new jobs rose by 2.1 million, following a gain of 2.7 million in 2018. Since Trump’s inauguration, the U.S. economy has added more than seven million new jobs. The robust economy has simultaneously reduced those on food stamps (SNAP) by four million while adding $5,000 a year to the average American’s household income.

Wall Street has soared as well, with the popular averages gaining between 20 and 35 percent during 2019.

The outlook for 2020 looks for a repeat,

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“Made in China” Is Becoming “NOT Made in China”

This article was published by The McAlvany Intelligence Advisor on Friday, January 10, 2020:

With so many companies leaving China for more favorable business climes, the ubiquitous slogan “Made in China” is slowly turning into a pejorative, being increasingly replaced with “NOT Made in China!”

The number of companies moving some, most, or all of their manufacturing operations out of China, or making plans to do so, is turning from a trickle into a flow, and likely to become a flood.

In July, the Nikkei Asian Review listed just a few of those companies, including Apple, Nintendo, Sketchers USA, Komatsu, Sumitomo Heavy Industries, Mitsubishi Electric, Ricoh, Citizen Watch, Panasonic, HP, Dell, Kyocera, Sharp, Nintendo, GoPro, and Samsung. Each of them is facing rising labor and environmental costs in China, an ever-changing crazy-quilt regulatory system, not to mention the tariff wars that will likely continue long after the highly-touted “Phase One” agreement has been signed.

And the flow is likely to turn into a flood, according to Dan Harris, head of an international law firm that works extensively in China: “For every foreign company that left China in 2019 there are two or three more seriously contemplating doing so. We expect more companies to leave China in 2020 than in 2019.”

As a direct result of those trade war tariffs, China has now fallen behind Mexico and Canada, and is now the U.S.’s third largest trading partner. Before the tariff wars began in July 2018, China was number one.

Compared with June 2018, the month before the trade war began, U.S. imports of goods from Vietnam have soared by more than 50 percent, Thailand nearly 20 percent, Malaysia by 11 percent, Indonesia over 14 percent, Taiwan 30 percent, and Mexico nearly 13 percent.

The ripple effect is showing up in car sales in China, which have dropped for the second consecutive year, dropping 5.8 percent in 2018 and 7.4 percent last year. December car sales were down, the 18th down month out of the last 19.

As China’s consumers face food price increases that are the highest in eight years, they are paring back elsewhere, slowing the country’s economy to its lowest pace seen in three decades. Official numbers from China’s public agencies are increasingly being ignored in favor of more realistic, and much lower, numbers coming from more reliable outside sources. The Federal Reserve Bank of St. Louis has expressed its skepticism about those government estimates:

One way to assess the quality of Chinese economic data is to look at the difference between the growth rate of real GDP reported by the government and the estimated growth from 1992 to 2006 using the night-lights [luminosity] data. Reported real GDP growth in China over this period is about 122 percent, while predicted growth using the night-lights data is only 57 percent.

 

This sizable gap suggests cumulative Chinese growth over the years could be overstated by as much as 65 percent. [Emphasis added.]

Here’s the question: if the Chinese economy was growing at six percent a year or more over the last decade, why has the Shanghai Composite Index (made up of more than 1,000 Chinese companies) failed to show any growth whatsoever over that same period?

John Evans, managing director for marketing and consulting firm Tractus Asia, said that the companies that have left China for places like Vietnam, Malaysia, Taiwan, Indonesia, and elsewhere where conditions are much more favorable are only the “first wave,” which started about 12 to 18 months ago. “The second wave started mid-2019,” he added.

The trade war isn’t going away anytime soon, according to Evans: “For companies exporting to the U.S., the entire time span of the trade war has sent the message that this isn’t going to go away and that they need to rethink things.”

That’s especially true of the communists ruling the country who are seeing their dream of overtaking the U.S. economically by 2030 and having an economy triple the size of the U.S. by 2050 slowly turning to ashes. Their “Hundred-Year Marathon” (Michael Pillsbury’s expression) to replace America as the global superpower is happily coming unglued as the economy staggers under Trump’s America First foreign policy initiatives.

It’s just a matter of time. “Made in China” will disappear from clothing labels, digital devices, and shipping containers in favor of the celebratory “NOT Made in China!”

—————————

An Ivy League graduate and former investment advisor, Bob is a regular contributor to The New American primarily on economics and politics. He can be reached at badelmann@thenewamerican.com.

Sources:

McAlvany Intelligence AdvisorStocks Making Up the Shanghai Composite Index Are Cheap, and Likely to Get Cheaper

McAlvany Intelligence AdvisorThe China Threat Is Real, Says Oxford Scholar

South China Morning PostChina’s manufacturing exodus set to continue in 2020, despite prospect of trade war deal

The Wall Street JournalChina’s Car-Sales Slump Extends Into Another Year

The Wall Street JournalChinese Inflation at Eight-Year High Poses a Policy Dilemma

The New York TimesChina Moves to Steady Its Slowing Economic Growth

The New York TimesChina Injects $126 Billion Into Its Slowing Economy

The Nikkei Asian ReviewChina scrambles to stem manufacturing exodus as 50 companies leave

Keep reading…

More and More Companies Moving Out of China

This article appeared online at TheNewAmerican.com on Thursday, January 9, 2020: 

The number of companies moving some, most, or all of their manufacturing operations out of China, or making plans to do so, is growing from a trickle to a flow and likely to a flood.

In July, the Nikkei Asian Review listed just a few of those companies, including Apple, Nintendo, Sketchers USA, Komatsu, Sumitomo Heavy Industries, Mitsubishi Electric, Ricoh, Citizen Watch, Panasonic, HP, Dell, Kyocera, Sharp, Nintendo, GoPro, and Samsung. Each of them is facing rising labor and environmental costs, an ever-changing crazy-quilt regulatory system, not to mention the tariff wars that will likely continue long after the highly-touted “Phase One” trade agreement has been signed with the United States.

And the flow is likely to turn into a flood, according to Dan Harris, head of an international law firm that works extensively in China:

Keep reading…

Trump’s Tax Cut Act 2.0 Coming

This article appeared online at TheNewAmerican.com on Monday, January 6, 2020:  

Few details are presently available about what the president will be proposing later on in his campaign for reelection regarding his “tax cuts 2.0” package, but the rumors are tantalizing. If Republicans regain control of the House, many of those rumors could be enacted.

It was Larry Kudlow, Trump’s economic advisor and head of his National Economic Council, who timed his announcement as a Christmas present to the American taxpayer. On December 19, Kudlow said on Fox Business Network’s “Bulls and Bears”,

Keep reading…

Money Manager Claims Now Is Time to Buy China Stocks

This article appeared online at TheNewAmerican.com on Monday, January 6, 2020: 

Eric Moffett, a portfolio manager for mutual fund giant T. Rowe Price who works in Hong Kong, told the Wall Street Journal on Saturday that he thinks investors should consider investing in China “because we’re at a sentiment low [and] we think it creates a lot of opportunities.”

It’s no wonder that investor sentiment is low: Investors in the Shanghai Composite Index for the last 10 years have made nothing. Zero. Nada. And this was while China’s economy was allegedly growing at better than six percent a year.

Investors suffered through government manipulations of that index, watching their accounts

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Stocks Making Up the Shanghai Composite Index Are Cheap, and Likely to Get Cheaper

This article was published by The McAlvany Intelligence Advisor on Monday, January 6, 2020:  

As this writer noted here in November, the art of war according to Sun Tzu consists of deceiving the enemy. China’s deceptions extend to the manipulation of its GDP numbers, and have for decades. If China can be perceived to be stronger than it really is, then Washington may be fooled into making mistakes in dealing with its enemy.

At least one portfolio manager is deceived. Eric Moffett, who works in Hong Kong for T. Rowe Price, told the Wall Street Journal on Saturday that he thinks investors should now consider investing in China “because we’re at a sentiment low [and] we think it creates a lot of opportunities.”

It’s no wonder that investor sentiment is low: investors in the Shanghai Composite Index for the last 10 years have made nothing. Zero. Nada. And this while China’s economy was allegedly growing at better than 6 percent a year.

They suffered through government manipulations of that index, watching their accounts quintuple from the summer of 2005 to November 2007 and then lose two-thirds of their value in the following 12 months. And what did they gain for all that suffering? Nothing. The index trades today at the same level it did 10 years ago.

Manipulation was made easy

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Can Gold Hit $2,000 While the Dow Reaches 32,000?

This article was published by The McAlvany Intelligence Advisor on January 1, 2020:

By all appearances, the remarkable run on Wall Street should continue into 2020. So says President Trump’s trade advisor Peter Navarro. On Tuesday, he told CNBC‘s “Squawk Box”: “I’m looking forward to a great 2020. Forecast-wise, I’m seeing closer to 3% real GDP growth than 2%. I’m seeing at least 32,000 on the Dow.”

He added: “It’s going to be the roaring 2020s next year. [Dow] 32,000 is a conservative estimate of where we’ll be at the end of the year.”

Navarro, it will be remembered, told “Squawk Box” the morning after Trump was elected in 2016 that his election would be “a very bullish thing for the markets,” and then proceeded to predict 25,000 on the Dow which was then trading at about 18,000.

Navarro, in retrospect, was too conservative.

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Dow at 32,000 in 2020?

This article appeared online at TheNewAmerican.com on Tuesday, December 31, 2019:  

So says President Trump’s trade advisor Peter Navarro. On Tuesday he told CNBC’s “Squawk Box”: “I’m looking forward to a great 2020. Forecast-wise, I’m seeing closer to 3% real GDP growth than 2%. I’m seeing at least 32,000 on the Dow.”

He added: “It’s going to be the roaring 2020s next year. [Dow] 32,000 is a conservative estimate of where we’ll be at the end of the year.”

Navarro, it will be remembered, told “Squawk Box” the morning after Trump was elected in 2016 that his election would be “a very bullish thing for the markets” and then proceeded to predict 25,000 on the Dow which was then trading at about 18,000.

Navarro, in retrospect, was too conservative. The Dow has gained more than 172 percent since 2010, the fourth-best decade-long performance in the past 100 years. For 2019 the popular averages all notched gains of more than 20 percent (for the record: Dow +22%; S&P 500 +28%; NASDAQ +35%). Even gold, usually considered a “safe haven” during times of economic difficulty, notched a gain of 20 percent.

U.S. citizens are enjoying the ride and predicting that it will continue. A USA Today/Suffolk University poll reported earlier this month that 80 percent of those polled predicted that their lives will be even better in 2020, with just 11 percent disagreeing.

What a turnaround from a year ago! The Federal Reserve had raised interest rates and Trump’s trade war with China was heating up. The stock market dropped in anticipation of a recession when the so-called “yield curve” indicator turned negative.

And then the Fed lowered interest rates in July for the first time in a decade, followed by additional cuts in September and October. This was followed by promises from Chairman Powell that he wouldn’t be intervening in the markets for the foreseeable future.

For the year the Dow gained 5,000 points while gold jumped by $259 from its low in May to close well above $1,500 an ounce to close out the year.

Is Dow 32,000 even possible? That would tack on another 12 percent to 2019’s remarkable gains.

Leave it to the Fed to answer that question. Despite protestations to the contrary the Fed is in fact intervening in the markets, but it is refusing to call it such. It added $500 billion to the money supply to “support” the “repo” market, which was having trouble digesting the enormous flood of new spending by the Treasury. Most of those billions went to help fund “repurchase agreements” between secondary parties handling the tsunami of new debt, with the balance used to purchase Treasury bills outright.

Can gold continue its run? The “wall of worry” that Wall Street has climbed in 2019 remains in place for gold: Will the UK finally end, once and for all, its affiliation with the European Union? Will the Hong Kong protests be resolved peacefully, without China’s Peoples’ Liberation Army clamping down in a replay of the Tiananmen Square massacre? Will there be another drone attack on Saudi oil fields? Will the airstrikes by the United States against Iraq and Syria lead to more intervention by the U.S. military? Will China test Trump’s mettle in the South China Sea?

The U.S. dollar has steadily weakened since early October, falling more than 2.6 percent in response to the flood of new currency entering the bond markets. Bond yields, as measured by the 10-year bond, have dropped from near three percent a year ago to less than two percent currently in response. Experts think those yields could fall further especially as global central banks try to stimulate economic growth abroad.

Fawad Razaqzada, a technical analyst at London’s City Index, thinks the stock market is long overdue for a correction: “If U.S. stocks were to correct themselves in 2020, then this surely could lead to elevated levels of safe-haven demand for gold. As the U.S. equity market bubble finally bursts, safe-haven demand could nudge gold past its 2011 peak of $1,920 [per ounce], before tagging the $2,000 hurdle.”

Lukman Otunuga, senior research analyst at FXTM trading, says that escalating tensions in the Middle East could provide the catalyst for that stock market selloff in 2020: “If geopolitical tensions increase in the Middle East, there will be more reasons for investors to increase their allocation in gold. Otherwise the gold rally makes little sense while equities are making record highs.”

The only thing certain for 2020 is the high degree of uncertainty. However, Warren Buffett provides investors with this reassurance: “It’s never paid to bet against America. We come through things, but it’s not always a smooth ride.”

China Facing Massive Headwinds in 2020

This article appeared online at TheNewAmerican.com on Monday, December 30, 2019:  

The combination of Keynesian economic policies and the increasing strictures of China’s command economy is making for a bleak outlook for China for 2020 and beyond.

The idea that government spending drives economic growth is one of the myths that drive all central banks’ maneuvering. If some government borrowing and spending is good, then more is better — until it isn’t. While government spending has been a significant driver of China’s remarkable change from a third world poverty stricken economy to the world’s second largest economy, government debt is now a lead weight, pulling down the country’s economy.

That government spending has now created a debt-to-GDP ratio among the highest in the world: 300 percent. In other words governments in China — national, regional and local — owe more than three times the total economic output of the country.

As President Xi Jinping has attempted to rein in government borrowing, off-book borrowings (called “off balance sheet” loans) have soared. They now comprise a third of all borrowings, but because the credit-worthiness of the borrowers is questionable, any decline in the economy could push up default rates. In fact, it’s already happening.

But even worse, the Chinese consumer has been hit with

Keep reading…

Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2018 Bob Adelmann