The Gladstone
Economic Newsletter
Volume 19, No. 2
February 2, 2024
The Markets Get More Bizarre Every Day
You are the Carbon the WEF Wants to Reduce.
DISCLAIMER: The following is not intended as investment advice, but is rather intended to promote your own analysis of markets and the economic climate. The author is not a registered investment professional. Any action taken as a result of this analysis carries a high degree of risk. This newsletter contains the personal opinion of the author.
Dear Readers-
I cannot sugarcoat things. The economic reports from the Biden Administration have turned into pure fiction. Today’s job creation report of 353,000 jobs being created in the month of January was purely made up. The actual number of jobs in the U.S. is lower than a year ago. Despite this, the administration has posted nonstop reports of job creation every month. We live in very bizarre times.
The worse the economic news gets, the higher the US equity markets go. Commentator Greg Mannarino has espoused this view repeatedly. Greg Mannarino is what is known as “an acquired taste.” His twice market daily reports on youtube can be strident, but the man does not downplay things. I do recommend his youtube channel for people who are not terribly sensitive types.
The US Leading Economic Indicators have been down for about 22 months in a row. Think about that. This is astounding when you consider the LEI is heavily weighted towards stock market performance. The equity markets have been almost straight up during the period. Zerohedge.com published the following graphic of the Leading Economic Indicators:
The US equity markets are indeed topping out from a charting standpoint. ElliottWave Trader published the following chart of the US S&P 500 Index:
Another indicator of just how bizarrely the US equity markets are is the following chart that shows we have the highest stock prices versus lowest VIX in over 25 years:
Why are almost every indicator of equity market health (or lack thereof) at such extreme levels? The only things I can say are:
A. The Biden Administration has spent money like a drunken sailor. The sums expended on the green energy programs and other boondoggles basically disappear into an economic rat hole.
B. As it is a presidential election year, the US Treasury and the Fed have been manipulating the US equity indices like, well, a drunken sailor. I don’t have proof of this manipulation, but the circumstances fit and the results are damning.
Another key piece of evidence for an economy that has been in decline for quite some time is Federal Receipts.
Lance Roberts at RealInvestmentAdvice.com commented as follows:
“The change in Federal receipts is essential as the Government’s revenue is from the taxes on both corporate and individual incomes. Unsurprisingly, if revenues and incomes decline, such would reflect economic activity. As shown below, there is a very high correlation between the annual change in Federal receipts and economic growth. Historically, when the yearly change in Federal receipts falls below 2% annual growth, such has preceded economic recessions. Federal receipts’ yearly rate of change is currently a negative five percent (-5%).”
“We see the exact correlation by smoothing the data and using inflation-adjusted tax receipts on a 24-month rate of change. Again, a recession follows when tax receipts fall below 2% annual growth rates. I like this measure better as it accounts for the “lag effect” in the economy. The 2-year yearly change in receipts has fallen well below the 2% warning line and is currently at -5.77%.”
“While tax receipts suggest economic weakness is more pervasive than headlines suggest, the deficit spending flows keep economic growth from becoming recessionary.”
Other sacred cows are getting slaughtered, almost on a daily basis. “ESG Investing” is almost never mentioned now. People have figured out that investors actually want their companies to make profits, and not engage in loss-making ESG fantasies. Green energy scams still abound, but the public is becoming increasingly aware of the stupidity of these policies. We are still inundated with “the carbon cost” of almost every activity these days. The general people are still slowly awaking to the fact that they are the carbon the World Economic Forum wants to reduce.
The electric vehicle fantasy has hit a wall. The general public has started to realize the sheer impracticality of electric vehicles, particularly in cold climates. The lack of chargers, the horror stories from the American Midwest where EVs completely failed to function in extreme cold, and countless other horror stories about electric vehicles have finally sunk in. Almost every western carmaker is in panic mode concerning their investments in EVs. The following is visual proof, in the form of the charted resale prices of Teslas:
Shifting gears, Newt Gingrich wrote a very good article on the very small percentage of the American public driving such insane policies. It will not surprise my readers that these people tend to be Ivy League educated, high earners in nonproductive industries (if they work at all):
I will close this newsletter with a discussion of that forgotten topic, Ukraine. I still stand by my statements that the course of the world economy will be dictated by the outcome of the war in Ukraine.
The Biden administration fully participated in the murder of the American citizen in Ukrainian custody, Gonzalo Lira. Southfront.press published more information on Gonzalo Lira’s murder:
“Outrageous facts have come to light about the murder of journalist Gonzalo Lira: The American, who was tortured to death in SIZO, a Kiev pre-trial detention center in a special wing controlled by the SBU, was the victim of extortionists. SIZO employees and an SBU agent extorted $250,000 from Gonzalo for a change of preventive treatment. The vice-consul of the US embassy, who dealt with the problems of Lira, knew about the blackmail and twice wrote a statement to the SBU and the OP. As a result, the extortionists began demanding $500,000 for Lira’s transfer at his own expense.
The money was to be transferred in cryptocurrency to the SBU agent’s bank.
Three days after the increase in rates, Gonzalo called his lawyer, but before the lawyer got there, he was killed. An ambulance crew found that he had died of cardiac arrest, with multiple burns from stun guns. The US embassy is silent, Zelensky’s office is silent, the Ukrainian security service is ready to pay for the delivery of the body to Poland, and that’s it. Curtain closed.”
The senseless slaughter of the male population of Ukraine continues on a daily basis, while the Ukrainian leadership and the NATO powers engage in their own version of “Game of Thrones” in Kiev. Along the entire front line, the Russian Army is slowly digesting the entire Ukrainian Army, while slowly taking territory. Every day, the Ukrainians are ordered into futile attacks against the Russians, with such attacks being routinely repulsed at great cost in Ukrainian lives and equipment. The Russian Ministry of Defense published the following Ukrainian equipment losses on January 31st:
“In total, since the beginning of the special military operation, 568 aircraft, 265 helicopters, 11580 unmanned aerial vehicles, 457 anti-aircraft missile systems, 14,877 tanks and other armored combat vehicles, 1,214 multiple rocket launchers, 7,931 field artillery and mortars, as well as 18,124 units of special military vehicles have been destroyed.”
Think about what 14,877 tanks and other armored vehicles losses actually mean. At the height of its military power, the entire US armed forces had the enormous quantity of 10,000 Abrams tanks. This number has been pared back hugely since then (perhaps to 5,000?). NATO has stripped itself of many weapon systems to supply the insatiable hunger of Ukraine. The above losses are just enormous.
Below is a summary of conditions in Ukraine, from a thread on X (Twitter):
“I just got back from Ukraine, where I was visiting some friends. Everything we have heard about what’s happening in Ukraine is a lie. The reality is darker, bleaker, and unequivocally hopeless.
There is no such thing as Ukraine "winning" this war. - By their estimates, they have lost over one million of their sons, fathers and husbands; an entire generation is gone.
- Even in the Southwest, where the anti-Russian sentiment is long-standing, citizens are reluctant or straight-up scared to publicly criticize Zelensky; they will go to jail.
- In every village and town, the streets, shops, and restaurants are mostly absent of men.
- The few men who remain are terrified of leaving their homes for fear of being kidnapped into conscription. Some have resorted to begging friends to break their legs to avoid service.
- Army search parties take place early in the morning, when men leave their homes to go to work. They ambush and kidnap them off the streets and within 3-4 hours they get listed in the army and taken away straight to the front lines with minimal or no training at all; it is "a death sentence."
- It's getting worse every day. Where I was staying, a dentist had just been taken by security forces on his way to work, leaving behind two small children. Every day, 3-5 dead bodies keep arriving from the front lines.
- Mothers and wives fight tooth and nail with the armed forces, beg and plead not to have their men taken away. They try bribing, which sometimes works, but most of the time they are met with physical violence and death threats.
- The territory celebrated as having been "won back" from Russia has been reduced to rubble and is uninhabitable. Regardless, there is no one left to live there and displaced families will likely never return.
- They see the way the war has been reported, at home and abroad. It's a "joke" and "propaganda." They say: “Look around: is this winning?”.
- Worse, some have been hoaxed into believing that once Ukrainians forces are exhausted, American soldiers will come in to replace them and “win the war”. There is no ambiguity in these people. The war was for nothing - a travesty. The outcome always was, and is, clear.
The people are hopeless, utterly destroyed, and living in an unending nightmare. They are pleading for an end, any end - most likely the same "peace" that could have been achieved two years ago. In their minds, they have already lost, for their sons, fathers and husbands are gone, and their country has been destroyed. There is no "victory" that can change that.
Make no mistake, they are angry with Putin. But they are also angry with Zelensky and the West. They have lost everything, worst of all, hope and faith, and cannot comprehend why Zelenky wishes to continue the current trajectory, the one of human devastation. I didn't witness the war; but what I saw was absolutely heart-breaking. Shame on the people, regardless of their intentions, who have supported this war. And shame on the media for continuing to lie about it.”
In the clarification department, Lloyd Austin has finally appeared in public again. It was a fun fantasy while it lasted!
That is about it for this issue of the newsletter.