Will the market be terrified by the ghosts?

We are seeing ghosts everywhere today and the market seemed to be terrified by the ghosts today and retreated from last week's bullish run.... 😜😱👽

Happy Halloween! Here is an amazing champion to celebrate the Ghost Evening:

Weighing in at 2,560 pounds, "Maverick" was a sight to behold at this year's Safeway World Championship Pumpkin Weigh-Off in Half Moon Bay, California.

The biggest pumpkin seems to have added its weight every year in the past decade.  But it raises a question… What's the limit? These distorted and ghoulish gourds certainly can't grow as big as a house, can they? No, they can't. When a farmer "pumps" too much water into the pumpkins and they become too heavy, the burden results in an ugly split, or fracture, and ultimately it collapses under its own weight.

This process reminds us of the world's central banks, which have been printing money and pumping their economies with a seemingly endless and monstrous level of debt for decades.

Largely, they've gotten away with it. There have been a few bumps and bruises along the way, but this monetary trick has lasted longer than most thought it would. And the treats have been far too tempting to stop.

And here we are on All Hallows' Eve, where we can sense the horrors of what's to come. 

There's a limit to how long the U.S. government can trick us before its current monetary and fiscal policy collapses under its own weight. And there's not much time left. In fact, something massive will break – most likely the bond markets – within the next six months.  -- Jeff Brown

We will see how far Halloween's ghost impact will last for the market!

For now, enjoy the Happy Halloween!!😍

Important information to be aware of.....

中资企业转账千万美元到拜登家人账户 银行纪录曝光

      美国总统拜登的胞弟詹姆斯（James Biden）与儿子亨特（Hunter Biden）此前多次被媒体揭发与中方企业有生意来往，就在美国中期选举不到两周之际，美国会共和党2名参议员最新再披露200页银行纪录，指责亨特从中国商业伙伴处，短短1年间收取近1100万美元，大部分以"月薪"名义转入拜登家人的手中。共和党人质疑，美国司法部至今没追查案件，令人怀疑故意纵容。

      英国《每日邮报》报道，共和党参议员格莱斯利和约翰逊公开大约200页银行纪录，要求联邦检察官立案，调查亨特与詹姆斯是否与外国实体有非法业务往来。根据这次新公开的银行纪录，亨特的律师事务所与中国能源巨头中国华信的子公司，共同设立了另一家公司"哈德逊西部III有限公司"，然后在国泰银行开设户口，而亨特的中国商业伙伴则向户口入账，由2017年9月至2018年11月间，累计转入高达1073万美元。至于亨特和詹姆斯透过这个户口，各自每月提取10万美元和6.5万美元作为薪金，亨特还获得一笔过50万美元的聘请费。此外，亨特、詹姆斯以及詹姆斯的妻子3人，均获得由中国华信负责结账的信用卡，涉及金额逾10万美元，纪录显示3人曾以此购买苹果电子产品、入住酒店及在餐厅消费。香港民政事务局前任局长何志平被捕后，曾聘用亨特为代表律师，也向亨特支付了100万美元酬劳。

      两位参议院在报告中指出，亨特与詹姆斯从哈德逊西部有限公司至少提取496万美元，名义上是亨特协助中国华信在世界各地洽谈能源合作而获得的报酬，但大量电邮、信息和照片证据均显示，这笔钱可能是向拜登的利益输送，借此等候拜登成为总统，让北京可施加影响力，文件显示拜登家族与中共当局颇有联系，也与解放军及中共情报特工也有来往，要求美司法部门深入调查此事。

The Great Blowback

Elon Musk just lived out all our wildest business fantasies. He threw around tens of billions to buy one of the world's most powerful communication/media tools. He walked into the front door carrying a sink: "let that sink in," he Tweeted.

Later in the day, he fired all the top dogs at the company: the CEO, CFO, and the top censor. They were escorted out of the building never to return.

Return those keys! Your parking pass: revoked! Cell phone: dead! It was a total humiliation.

Wow, what a dream! Musk has long envisioned manned missions to Mars. This is actually better. It's what we have all wanted to do. We have suffered for three years under the yoke of these woke creeps and their powers over the public mind. They force-fed us CDC propaganda and blocked our accounts when we doubted the merits of the jab.

They absolutely abused their powers, playing footsie daily with government bureaucrats. It gave them a wonderful rush! Truly, there is nothing more insufferable than geeks backed by governments with the ability to cancel whole bodies of philosophy with a few clicks. That's what they did.

I'm glad that Musk thought to make this move on the company. What if he hadn't? How long would the suffering continue? Possibly forever. It's all intriguing: freedom of thought and press saved by a capitalist billionaire. Such people must exist and they must act else we would forever live in Orwell's world.

So let us please take a few hours or a day or two to revel in the justice unfolding before our eyes. Such moments in life come too rarely.

The symbolic importance of this is even more powerful. Twitter has been the vanguard of despotism, the machinery that made Orwell too real. Their power in the heyday was enormous and unfathomable. They silenced a former president. They took down scientists. They would blast away anyone who dared so much as to post data that contradicted their myths.

And keep in mind: they worked DIRECTLY with Fauci and the whole lockdown gang. Today, they are all out on their ears. Some 5,000-plus employees will be fired. It might require tossing out 95% of them. Musk has to rebuild the whole place. This will take some time. But it is truly a labor of love.

Just the Start

It so happens that all this glorious news unfolded the same day as the rotting beast once known as Facebook reported dreadful earnings on its new preposterous scheme. The idea of the Metaverse is promising with business applications and more. But Zuckerberg used his market power to grab the word Meta and had the ridiculous idea of renaming the whole company.

What was his business idea? He would sell everyone a headset to wear that would allow people to walk around in his cartoon land and yammer with other fools with time to burn.

It's astounding that he thought this would be profitable. You can hardly get people to go to 3D movies at the theater anymore. Generally, people don't like strapping things on their heads that distort the reality around them. Pokemon came and went and so did Second Life. Google tried something like this with its Glass.

All of these fads flopped. Zuckerberg's cartoon land experience has had very few takers at all. And so it is killing profitability. The stock price is falling like a stone and deservedly so. Again, this was another company that bedded down with government over these three years to scream lockdown propaganda at us.

Facebook has been an enormously evil actor throughout. So at least we are seeing justice unfold.

Amazon Too

We all used to be fans of Amazon. Then came the lockdowns, from which they massively benefitted. That too might have been fine, except that the CEO and owner also owns the Washington Post which became a government propaganda organ throughout the years of winter. Amazon became too rich and too powerful, and then also joined in the deplatforming game, unplugging whole institutions from its servers.

So it too is getting its just return.

Keep in mind that Amazon has been a huge promoter of woke philosophy in general, including endless "diversity, equity, inclusion" drivel plus climate change fake science thrown in. It led the way of corporate America from its one-time attachment to the general idea of free enterprise to become a voice for the World Economic Forum.

Oh and look at this! Alphabet, the parent company of Google, is getting creamed too. This company, along with all the other tech giants needs to be cut down to size. And it looks as if the market itself — the thing that made these companies rich but which they also taught the public to hate — is what is going to do it.

Five years ago, George Gilder began speculating that there would be Life after Google. He predicted that all these companies were going to die and be replaced by better technologies that were decentralized and more responsive to their stockholders and the consuming public.

The lockdowns made it so. All these tech giants threw themselves into the great crusade and look at them now! They are dominos falling in slow motion, hoisted on their own petard.

The great reset has become the great blowback. Look around at what's thriving today! It's homeschooling, private school, religious colleges, small businesses, small towns, gas cars, friends and family, beef and potatoes, God and country, country music and rock, manners and marriage, and the whole battery of non-woke institutions that the lockdowns tried to wreck.

The Blowback Portfolio

There ought to be a portfolio labeled: blowback. It would invest in startups that are decentralized and wholly reject anything and everything having to do with ESG and DEI. It would unashamedly celebrate fossil fuels and grass-fed beasts. It would reject the whole machinery of HR-driven propaganda and imposition. It would love the physical world and reject the whole of politicized commerce.

Listen, we are headed toward some terrible times. Inflation is going nowhere, credit card debt is soaring, the housing market has further to fall, and savings are depleted. The kids are as dumb as chickens. We could be in a greater depression that has already begun. It will be a long time before the world is fully righted after the disaster of the last three years.

But in the meantime, let's please have some fun enjoying seeing the mighty fall of the bad guys. May the coup d'etat at Twitter be just the beginning. After all, even the darkest times have points of light. Some of the best dance music ever written came about during the Great Depression. Today is a day for dancing too, this time on the professional graves of woke CEOs and CFOs.

Jeffrey Tucker

Will Fed signal a slow down at the Nov meeting next week?

If you follow the mainstream media, you likely saw the headlines last week…

"Traders Raise Chances for a Lower Fed Rate Hike in December"

– CNBC

"The Federal Reserve Pivot Is Coming in December"

– Investor's Business Daily

"Fed Set to Raise Rates by 0.75 Point and Debate Size of Future Hikes"

– The Wall Street Journal

The WSJ piece made the biggest splash.

In the past few days, the market has been extremely bullish, a drastic change of mood as compared to just a week ago. Apparently there is a big hope that the Fed will slow down soon, or at least will signal that at the meeting next week. The million dollar question is how likely this will be true. I think there is a good chance. 

There are various reasons but one important factor for the Fed to consider is a special type of yield curve inversion. An inverted yield curve warns the Fed it's starting to enter the danger zone. And one curve in particular could stop the Fed in its tracks and turn the stock market around. In fact, it has preceded every recession in the last 60 years…

The mostly discussed yield curve inversion is about the 10 year vs 2 year Treasury yield. But actually the most important one is about the spread between the 3-month and 10-year Treasury yield. I believe Fed members closely follow this curve when making policy decisions. The central bank even wrote a paper about the predictive ability of this metric.

As Fed researchers stated, "it is simple to use and significantly outperforms other financial and macroeconomic indicators in predicting recessions two to six quarters ahead."

And here's what it's signaling now…

On the chart below, you can see how this curve inverted below zero (black line) just last week for the first time since heading into the 2020 recession. The last recession periods are shaded in grey…

This is a clear signal rate increases are starting to have a major impact on the economic outlook.  By triggering this recession signal, the Fed may finally take a pause and assess their actions. As we have experienced so far, the rapid pace of increases has been a major catalyst for falling stock prices, so a temporary halt can act like a pressure relief valve for stock prices. The likely power redistribution in the DC post the midterm elections will likely further help the rally. 

Of course,  don't mistake a "pause" for an outright "pivot" to easier monetary policy. While I think there is a good chance we will see a good relief rally (with fluctuations) probably lasting toward the year end,  I still believe it will just be a bear market rally!  

 

Market Catalyst Events - November 2022

Forwarded as FYI.

Not specifically listed below but don't forget the big date of the midterm elections on Nov 8. Any surprises may also move the market dearly. Currently it is nearly a certainty that the GOP will control the House. For the Senate the odds are overwhelmingly in favor of the GOP as well per the real money betting:

This is the perfect result the Street wants to see. But we have seen how Dems may steal the votes from the last presidential election and we cannot be sure this time as well that they will not make a nasty stealing again. If that happens, I'm pretty sure the market will tank!! So watch the dirty hands of Dems!! The Dems' leadership has no morals and they won't hesitate to cheat whenever possible.  

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Below are the market-moving catalysts till the end of Nov. As always, remember that the market has already baked expectations for all of these into asset prices. So what's most important is whether they come in above or below estimates. Big surprises will move share prices.

Note: Earnings dates are often estimated on the date the company reported a year ago and are subject to change.

Market Catalyst Events - November 2022

Tuesday, November 1: The JOLTS (Job Openings and Labor Turnover Survey) data for September will be published before market open. Because the mismatch between job openings and available workers is so important now (it's driving inflation and Fed rate hikes), this indicator is increasingly critical. The forecast is for 10.2 million job openings. Anything larger will bode ill for markets.

Eli Lilly (NYSE: LLY) and Pfizer (NYSE: PFE) will both report earnings and will give an indication of how the drug industry is holding up.

Wednesday, November 2: It's FOMC day! FOMC stands for the Federal Open Market Committee, which sets the Fed's target interest rate. As I mentioned above, it seems a 75-basis-point hike is in the cards this time, and markets expect it. But what will the committee's statement say about inflation? And what will Chairman Powell's tone be regarding future rate hikes? We'll be watching closely for any suggestion that the Fed is prepared to "pivot" to a less hawkish stance by early 2023.

Thursday, November 3: Starbucks (Nasdaq: SBUX) will report earnings. If consumers continue to dish out $2.95 for a regular coffee and $4.55 for a cappuccino, it's a good sign they're not cutting spending.

Friday, November 4: The October employment data will be released before market open. An ideal report for markets would see the unemployment rate tick up a notch - and 220,000 or fewer jobs created. Even better would be an uptick in the labor force participation rate (meaning more people are going back to work), filling all those available jobs and keeping wage inflation in check.

Tuesday, November 8: Disney (NYSE: DIS) will report earnings - always a good sign of consumers' health and outlook. Occidental Petroleum (NYSE: OXY) also reports - telling us how Warren Buffett's biggest bet of the year is performing.

Thursday, November 10: It's CPI day! The consumer price index for October will be released before markets open. Core inflation, which excludes volatile food and fuel prices, hit a four-decade high in September. The hope is that it started to drop, however slightly, in October. This data point is currently as important as it is difficult to predict. A bad number could decimate markets... again.

Friday, November 11: As tracked by the University of Michigan, consumer sentiment for October will be published. This offers some insight into how consumers are feeling. A very big drop here would move asset prices and would suggest the Fed's hoped-for "soft landing" is out of reach.

Tuesday, November 15: Walmart (NYSE: WMT) and Home Depot (NYSE: HD) are set to report earnings. These two giant retailers will give an indication of consumer health.

Wednesday, November 16: Retail sales for October will be released. This data is a more reliable guide for consumer spending and sentiment. Consumers continued to spend in September. Again, the hope is that they continued to do so in October. If not, a recession is more likely.

Lowe's (NYSE: LOW), Target (NYSE: TGT) and TJX Companies (NYSE: TJX) will report, providing more information about consumer spending and the outlook for the economy.

Thursday, November 17 - Friday, November 18: These two days will bring us October building permits, housing starts and existing home sales data. Home sales fell to a 10-year low in September due to rising mortgage rates. This probably continued in October as Fed rate hikes continued to bite and average 30-year home loans topped 7.2%.

Tuesday, November 22: Best Buy (NYSE: BBY) and HP (NYSE: HPQ) will report earnings.

Wednesday, November 30: The gross domestic product (GDP) report for the third quarter will be released. This is the second estimate of third quarter economic growth. The first (advance) estimate, released today, showed that GDP rebounded in the third quarter, which is good news. Also on this day, Deere & Co. (NYSE: DE) will report earnings, an indicator of the health of business spending.

This cannot be faked!

While these days everything can be faked, even the president of the United States, one thing cannot be faked for sure: the value of your own money! 

Here is the information I just got from my friend about how much the retail investor's portfolio is down this year on average. I guess this should not be too surprised by anyone with normal mind: when the fake president and his team only knows how to spend and control and knows nothing about how to earn, how could the society as a whole be prosperous!b If this trend continues without restraint, the US is definitely on the way to become the next Venezuela. So the pain you are feeling right now will be just like a mosquito's bite. Be ready and vote for the sake of your money in two weeks!!

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With the S&P 500 down 19% and the tech-heavy Nasdaq down 28% this year, I would have guessed that the average retail investor's portfolio would be down a lot as well, but I was shocked to learn just how much...

According to JPMorgan Chase (JPM), personal portfolios in the U.S. fell a horrifying 44% between early January and October 18, as you can see in this chart (from this Financial Times article):

I suspect the underperformance is due to the same reasons why the vast majority of mutual funds and hedge funds underperform the indexes: overweighting the most popular stocks and sectors at their peaks (i.e., chasing performance), selling winners while holding onto poorly performing stocks, trading costs, etc. Some good lessons here...

Biden Drains Our Oil Reserve For Partisan Gain

The Strategic Petroleum Reserve (SPR) was established by President Ford in 1975 in the wake of the first Arab Oil Embargo in 1973 and a quadrupling of oil prices from 1973 to 1974. The idea was to protect U.S. national security by building up a reserve that could be used in emergencies. These emergencies might include a new oil embargo (less of a threat today because the U.S. is capable of energy independence), a natural disaster, an infrastructure failure, war, or other calamities. The SPR has a total capacity of 714 million barrels. The actual amount of oil in the SPR has varied over the years. It is sometimes drawn down and then refilled. The reserve was at 100% of capacity in 2010. A series of drawdowns lowered the level to 600 million barrels in 2021. This year, Joe Biden implemented a wholesale drawdown of reserves so that the current level is approaching 400 million barrels. That's a 44% decline in this national security resource in just ten years and a 33% drop in just the last year alone. This article describes the recent actions of the Biden administration in this regard. Biden's drawdown might be acceptable if there were an actual emergency that required it. There isn't one. The U.S. achieved energy independence under President Trump and could easily do so again if Biden were to reverse his anti-energy policies including killing the Keystone XL pipeline, shutting down new oil and gas exploration permits on Federal lands, and other steps to handicap the fracking industry. If the U.S. has energy independence or is close to it, there's no justification for draining the SPR. Biden is doing this for purely partisan political reasons. He's trying to keep the price of gasoline down in advance of the mid-term election on November 8. This is stupid in two respects. In the first place, it's not working. The national average price of regular gasoline has risen from $3.69 to $3.80 over the past month, a 3% price increase. The second reason is that there is no shortage of crude oil. There's a shortage of refined products such as gasoline, kerosene, and diesel fuel. Releasing oil from the SPR does nothing to alleviate the bottlenecks in the refining industry. In fact, much of the oil from the SPR is being sold to China and Europe and not used in the U.S. at all. Finally, the SPR will have to be replenished at some point. Oil in the reserve that was purchased at about $24.00 per barrel will have to be replaced with oil that is likely to be priced at $80.00 per barrel or higher. That's a dead weight loss for U.S taxpayers. Biden has damaged U.S. national security from Afghanistan to China to Ukraine. Now you can add the SPR to the list of Biden policy fiascos.

Jim Richards

How bad can the market become?

 

We are deeply in the bear market right now and the Market God will do a lot of fooling around to trap people in either direction. Here is the current status of the bear market we are experiencing. 

Are we done with it? Think about some extreme bear markets in history:

• A negative 89% bear market and a 25-year sideways market followed the September 1929 Dow Jones Industrial Average mega-bubble peak.

• A negative 78% bear market and a 15-year sideways market followed the March 2000 Nasdaq mega-bubble peak.

• A negative 76% bear market and a still ongoing 33-year sideways market has followed the December 1989 mega-bubble peak in the Japanese stock market.

Actually, a bear market during a recession is generally more devastating than others: 

"There are three principal phases of a bear market: the first represents the abandonment of the hopes upon which stocks were purchased at inflated prices; the second reflects selling due to decreased business and earnings, and the third is caused by distress selling of sound securities, regardless of their value, by those who must find a cash market for at least a portion of their assets." Robert Rhea

Per this definition, I think we are just in the 2nd phase and a more painful and miserable wash-out phase will likely come in the months ahead. 

A silver lining: there is increasing evidence suggesting that the GOP will not only control the House following the midterm election, but also the Senate. If that's the case, the fake government under the mentally disabled Biden will not be able to do further harm to the economy, which will likely be a positive for the market. Maybe that will shorten the bear market course and lessen the magnitude of the washout at the final phase. So do vote for the GOP for the sake of your 401K or your wealth in general!!

How bad can the market be?

We are deeply in the bear market right now and the Market God will do a lot of fooling around to trap people in either direction. Here is the current status of the bear market we are experiencing. 

Are we done with it? Think about some extreme bear markets in history:

• A negative 89% bear market and a 25-year sideways market followed the September 1929 Dow Jones Industrial Average mega-bubble peak.

• A negative 78% bear market and a 15-year sideways market followed the March 2000 Nasdaq mega-bubble peak.

• A negative 76% bear market and a still ongoing 33-year sideways market has followed the December 1989 mega-bubble peak in the Japanese stock market.

Actually, a bear market during a recession in generally more devastating than others: 

"There are three principal phases of a bear market: the first represents the abandonment of the hopes upon which stocks were purchased at inflated prices; the second reflects selling due to decreased business and earnings, and the third is caused by distress selling of sound securities, regardless of their value, by those who must find a cash market for at least a portion of their assets." Robert Rhea

Per this definition, I think we are just in the 2nd phase and a more painful and miserable wash-out phase will likely come in the months ahead. 

A silver lining: there is increasing evidence suggesting that the GOP will not only control the House following the midterm election, but also the Senate. If that's the case, the fake government under the metntally diabled Biden will not be able to do further harm to the economy, which will likely be a positive for the market. Maybe that will shorten the bear market course and lessen the magnitude of the washout at the final phase. So do vote for the GOP for the sake of your 401K or your wealth in general!!

What a total disgrace!

 Congress needs to act quickly to rein in not just itself, but every senior person in government: As COVID Hit, Washington Officials Traded Stocks With Exquisite Timing. Excerpt:

Federal officials working on the government response to COVID-19 made well-timed financial trades when the pandemic began – both as the markets plunged and as they rallied – a Wall Street Journal investigation found.

In January 2020, the U.S. public was largely unaware of the threat posed by the virus spreading in China, but health officials were on high alert and girding for a crisis.

A deputy to top health official Anthony Fauci reported 10 sales of mutual funds and stocks totaling between $157,000 and $480,000 that month. Collectively, officials at another health agency, Health and Human Services, reported 60% more sales of stocks and funds in January than the average over the previous 12 months, driven by a handful of particularly active traders.

By March, agencies across the government were working on wide-reaching measures to prop the economy and markets. Then-Transportation Secretary Elaine Chao purchased more than $600,000 in two stock funds while her agency was involved in the pandemic response and her husband, Republican Sen. Mitch McConnell, was leading negotiations over a giant, market-boosting stimulus bill.

And as the government was devising a loan package aimed specifically at helping companies including Boeing and General Electric, a Treasury Department official involved in administering the aid acquired shares of both companies.

Federal officials owned millions of dollars of stock in industries most affected by the pandemic and the government's response. About 240 officials at health agencies and at the Pentagon, a key player in the vaccine rollout, reported owning a total of between $9 million and $28 million in stocks of drug, manufacturing and biotechnology companies that won federal contracts related to COVID-19 in 2020 and 2021, the Journal's analysis found.

Nearly 400 officials across 50 agencies reported owning stocks in airline, resort, hotel, restaurant, and cruise companies in early 2020, the review found.

By March, every major agency was drawn into the pandemic response. That month was the most active for trading by officials across the federal government, including at HHS, in the Journal's analysis of financial disclosure forms for about 12,000 officials spanning 2016 to 2021. Federal officials reported more than 11,600 trades that month, 44% more than in any other month in the analysis.

Market crash under Biden's watch!

Watch your portfolio if Biden wins. A 50% tank is not unexpected!!
This was my warning over 2 years ago, in Jul 2020. Well, we have all felt how much
pain from the market crashes this year. Yes, not yet 50% down but don't believe we
have seen the bottom yet. We may very well see another major leg down in the months
ahead. All the pain is coming from the dumb fake president and his team implementing
all kinds of stupid policies killing the economy and social stability: high taxes/green
energy leading to high inflation, allowing illegal immigrants to rush into the country for
a deteriorating society, defunding police to encourage crimes.....just to name a few.
By the way, these three are also the most concerning topics for the upcoming midterm
election. I think reasonable and wise voters will give enough color to the insane Biden
and the Dems to see.

Since the situation has become so miserable, in recent market sessions, a trader

bought 50,000 VIX March $150 call options (the VIX is the Volatility Index). They're

trading for around $0.19 per contract. In other words, this person spent $950,000 to

essentially protect themselves against Armageddon.

Just to put into some perspective, at the height of the COVID-19 crash in March of 2020, it broke 80. At the very peak of the Great Recession, it broke 80 as well (in November of

2008). In other words, the VIX has never gotten to 150. The two biggest market panics

over the last two decades saw the VIX spike to 80.

But right now, someone thinks that it won't merely spike to those all-time highs but will

DOUBLE the highest levels we've ever seen.

 

How much worse can we see? No one knows for sure of course. Here is the current
status of the market.


If you look at the general course of a bubble formation and burst, we may be just at the
middle of the course and a lot more downside is still ahead of us, probably, before the
final bottom settles in!




Be clear, I don't mean a major crash is imminent. On the contrary, I think a relief rally
is very likely and potentially powerful enough to turn the extreme bearish sentiment to
an euphoric state in the weeks ahead. The next couple of months towards the year
end is actually bullish in general. A major crash may be coming early next year after
we see another euphoria in the air! Stay tuned!!

Why it is necessary for Bitcoin to consume high energy

If bitcoin were a country, it would be the 24th-largest country by power consumption. That would put it ahead of Poland – a country with 40 million people. Here's what this means… The bitcoin network consumes an enormous amount of electricity. For example, bitcoin's estimated power consumption soared from an annual rate of 6.6 terawatt-hours at the start of 2017 to 150 terawatt-hours in early 2022. That's more than a 2,000% increase. Of course, this staggering growth triggered headlines in the mainstream media about how bitcoin wastes energy and harms the environment. If you follow bitcoin, you have certainly heard these claims. So today, I want to take a moment to address bitcoin's "energy problem…" and show you why there's more to this issue than meets the eye. A Feature, Not a Bug In 2020, Stone Ridge Holdings announced it had bought over $115 million worth of bitcoin as part of its cash reserve strategy. Stone Ridge Holdings is an asset manager with over $10 billion under management. In a letter to shareholders, the company addressed bitcoin's energy consumption: Bitcoin is a better technology for performing central banking than the current government monopolies on central banking. In the same way that cars consume far more energy than the bikes and horses they replaced, and electric lights replaced candles, and central heating replaced chimneys, and computers replaced typewriters, bitcoin's better monetary system consumes far more energy than the current central banking system. In other words, the amount of energy bitcoin consumes is a feature, not a bug. And that feature represents the security of the network. Remember, the bitcoin blockchain is simply a public database of transactions distributed across thousands of computers worldwide. About every 10 minutes, bitcoin miners add a new block – or set of transactions – to the existing database (blockchain). Miners play a crucial role in the bitcoin network. First, they constantly validate the entire transaction history. Second, they verify that new transactions are legitimate and follow the bitcoin protocol. Before a bitcoin miner can submit a new block to the network, they must compete to solve complex math problems. The first one to solve the math problem earns the reward – which is approximately seven bitcoin (worth around $140,000 as of writing). Then, the process starts again. But solving the problem requires an enormous and increasing amount of computer hardware, processing power, and electricity. It may all seem unnecessary at first, as the math problems are unrelated to the transactions. But it's a crucial part of ensuring the bitcoin network is secure and self-sufficient. Miners must incur actual costs – expensive computer hardware, electricity, etc. – to solve difficult math problems and submit a new block to the network. If the block they submit doesn't follow the bitcoin protocol or is otherwise invalid, the network will reject it, and the miner will not earn the transaction fees and block subsidy. Now, the genius of bitcoin is that it is hard and expensive for miners to submit a new block… But it's easy, cheap, and fast for the network to verify whether that block is legitimate or not. This means that if a miner ever tried to stray from the bitcoin protocol or include invalid transactions in the block, it would be very expensive for them to do so. They would need to use an enormous amount of electricity and processing power to solve the math problem in the first place. In other words, it would be nearly impossible. And that's why bitcoin's energy usage is a feature, not a bug. Simply put, the more energy that's required for miners to solve the math problems, the more difficult it becomes to attack the bitcoin network, and the more secure it becomes. Bitcoin's energy consumption is not only worth it, but there is arguably no better use of energy. Here's why… The Energy Buyer of Last Resort When it comes to a bitcoin miner's profitability, the most important factor is electricity costs. Some estimates put electricity costs at over 90% of a miner's operating costs. So only miners with reliable access to the cheapest electricity in the world can mine bitcoin profitably. You can think of bitcoin mining as the "energy buyer of last resort," a guaranteed buyer of cheap energy. That's the reason why renewables and energy that usually gets wasted have come to power a large portion of bitcoin. Nomi Prins

Be careful about Google's next move

I have long been advising my family and friends to try best not to use real names or other personal information online. It is simply too risky nowadays to allow others to manipulate your data for harmful actions, even without you knowing it. Here is one thing coming up from Google. Be careful!

Google's underhanded health care ambitions are becoming clear…

Longtime readers may remember Google's life sciences spinout called Verily. We talked about this company back in March 2020.

Verily just raised $1 billion in a recent funding round. And sure enough, Google was the lead investor.

This seems counterintuitive. Google makes nearly all its money from advertising revenues. Why is it investing so heavily in biotech and health care technology?

Well, the picture is becoming clearer. This $1 billion raise will fuel Google's aspirations for elevated data collection in the health care industry.

In fact, Verily is now hiring ex-public health officials from the Food and Drug Administration (FDA). The startup has brought in several top people from the FDA. And no doubt it's paying them very well.

These are former regulators who know their way around the system. And their job is to "grease the wheels" to help Verily gain access to patients' medical records – with or without their consent. They do this by working out deals with hospitals and health care organizations.

Obviously, this should make us all suspicious.

We've seen how Google manipulated search results to push a political narrative during the COVID-19 pandemic. It actively worked to present information around COVID-19 and the mRNA shots that we now know to be either completely false or misleading. And Google suppressed any information suggesting there were risks or side effects to the experimental injections, something that we now know is common.

Now Google is pouring $1 billion into its life sciences spinout to get former FDA employees on its payroll. And their job is to enhance Verily's data collection ability.

Of course, Verily says that it will use this data to improve the clinical trial and drug development process. And that all health care data will be anonymized. But can we trust this company?

I certainly do not.

Like Google, Verily's business is built around collecting and selling access to data. Companies working within the biotech industry are a prime target. Insurers could be as well.

What if Verily could identify pre-existing conditions in patients – perhaps conditions the patients themselves didn't even know about – and sell that data to insurance companies?

Suddenly, those patients would be locked out of affordable insurance coverage. And they may not even know why.

And then if we think about all the economic and personal data Google has on everyone… if it could combine that with our sensitive medical data, then suddenly it has a comprehensive picture. And it may be able to use this picture to influence consumers' health care decisions.

So I think this is something we need to be very wary of. Should we trust Google or other Big Tech companies with our health records?

To me, the answer is clear.

Jeff Brown

The Boring Co isn't that boring, right?

Let's have some fun in this not so fun but scary market.

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This is Elon Musk's latest creation:

Burnt Hair Perfume

Source: The Boring Company

Believe it or not, Burnt Hair is a perfume available today on The Boring Company's website for $100 a bottle. And it will start shipping next quarter. 

I'm not making this up. Musk has already sold more than 20,000 bottles of Burnt Hair, generating more than $2 million in revenue for the private company.

This isn't the first time Musk has sold a quirky product.

First it was the Tesla Tequila – bottles of which now sell in the aftermarket for well over $1,000. And who could forget The Boring Company flamethrower? Who needs a grill when you have a flamethrower to cook with in your backyard?

But perfume? And with a tag line like: "Just like leaning over a candle at the dinner table, but without all the hard work." That takes the cake.

Maybe this is all part of Musk's quirky magic. SpaceX is now the most valuable aerospace company in history. Starlink is the most successful satellite-based internet service ever. And Tesla's not only the most successful electric vehicle company in the world… it's also the most successful publicly traded artificial intelligence company on the planet.

Soon, Tesla may very well become the most important robotics company. If anyone can make The Jetsons a reality, it's probably Musk.

The Boring Company itself has turned the tunnel-digging business on its head. It can do this in a fraction of the time and for a fraction of the cost compared to any other boring technology used in the past. Musk literally moves dirt better than the best in the business.

And now The Boring Company has added perfume to its consumer product lineup of flamethrowers.

One almost has to wonder if the perfume idea came about from a mishap involving a flamethrower: "Oops… Sorry about that. Oh, what's that smell? It smells really good. What should we call it?"

Jeff Brown

This is how a capitulation looks like

The American Association of Individual Investors weekly survey has found that for two weeks in a row, the percentage of bearish investors in America has outnumbered the percentage of bullish investors by more than 40%. That's an unusually high number which marks "peak fear." Indeed, the net bull ratio has been this low only once before, in early March 2009 – the exact same week stocks bottomed after the 2008 financial crisis!

Let that sink in for a moment…

There's nothing but fear out there. Buffett would tell us to get greedy here. But should we heed those words of advice?

I obviously don't know what you feel but I'm happy to see the panic selloffs like early today. Here is what I told my DW Family before opening today.

Luckily I indeed added more SSOs but I wish I could be more greedy by adding more!

Today definitely feels like a capitulation day, when most people have thrown in the towel and run. When no one is left for selling anymore, the only ones left are those who want to buy, like me💪🤓 That's the reason why we see such a powerful and gigantic turnaround within the day, from crashing down over 80 points early today to close nearly 100 points up. What a day!

Why it is so critical to own gold and bitcoin

I'd add Bitcoin, in addition to Gold, as the only ways to protect yourself in anticipation of ever strengthening government's invasion of our personal life and privacy!

The Coming End of Privacy The White House recently released a statement by NEC Director Brian Deese and National Security Advisor Jake Sullivan on Digital Assets Framework "At the direction of President Biden and after 180 days of determined work across the Biden-Harris administration, we are releasing the first-ever comprehensive federal digital assets framework– positioning us to keep playing a leading role in the innovation and governance of the digital assets ecosystem at home and abroad and in a way that protects consumers, is consistent with our democratic values, and advances U.S. global competitiveness." Consistent with our democratic values? Which values are those? The right to privacy? The right against unreasonable seizure? Do those sound familiar? Now, you might say this couldn't happen in a democracy like ours. Well, it's already started. And if you don't think the government will infringe on your rights, just look at what happened to the tuckers in Canada. Their Prime Minister Trudeau was granted "special emergency powers" during the peaceful trucker protests over his forced vaccination law… He then ordered all banks to freeze the accounts of the protestors… The Biden administration is moving forward with their government-backed digital currency I predicted that the U.S. dollar would be made obsolete, your cash would be confiscated – or simply become worthless paper. I fear this will become the basis of a new system of full citizen control through the financial system, something akin to China's social credit system that controls the entire population based on political loyalty. The cash currency we have now will be replaced with a new, programmable digital tokens. This is already happening in China. The digital yuan is already here; it was introduced in China last February during the Winter Olympics. Visitors to the Olympics were required to pay for meals, hotels, transportation, etc. using QR codes on their mobile phones that linked to digital yuan accounts. Nine other countries have already launched CBDCs. Europe is not far behind and is testing the digital euro under the auspices of the European Central Bank. The U.S. was lagging but is catching up fast. This new currency will allow for total control of all American citizens. Because every "digital dollar" will be programmed by the government. That means they will be able to "turn on or off" your money at will. Not only that, but they'll be able to track and record every purchase you make. Say the "wrong" thing on social media. Buy the "wrong" thing. Subscribe to the "wrong" news channel. Give money to the "wrong" candidate. And your rating drops... Suddenly, your Biden Bucks are frozen or disappearing from your account. And this is not speculation. I predict the U.S. will soon be a surveillance state like China. China is already using its CBDC to deny travel and educational opportunities to political dissidents. These kinds of "social credit scores" and political suppression will be even easier to conduct when Biden Bucks are completely rolled out. You might not be able to fight back easily in the world of Biden Bucks, but there is one non-digital, non-hackable, non-traceable form of money you can still use. It's called gold.

Jim Rickards

The sliver lining......

It is a brutal day, no question about it! The good news (about the jobs report) is bad news for the Street. Today's plunge of over 100 points of S&P has nearly wiped out all the gains we got early this week. 

While it is indeed a very bad feeling for anyong long the market, I cannot help but see some silver lining that may set up for the next leg up for the near term. It is purely technical but still it is very compelling.

See the blue cycles in the chart below in comparison to the Jun bottoming process. Do you see the similarity between the two? I do and I think this is another setup for the emerging dead-cat bounce. 

I'm buying.... AGAIN!

It's YODO Time!

Forget HODL, TINA and YOLO... here's an acronym for our age... (Source: Getty Images) Bill Bonner, reckoning today from Baltimore, Maryland... In the fever and fury of the Great Bubble Epoch a number of short-hand messages were developed. YOLO – you only live once, was enough to convince risk takers to make their move.   TINA – there is no alternative, described the lack of yield from 'safe' treasury bonds, leaving investors with no other choice but to buy stocks HODL – 'hold on for dear life' was what believers in crypto coins were supposed to do, ignoring the ups and downs of prices But now, it's a new market. You still only live once, but now there's no guarantee that stocks will go up.   As for TINA, now there is an alternative. The 10-year Treasury is paying 3.6%. Not much. But better than losing 10%- 20% more the next drawdown.  And HODL if you want… but there are some things you can HODL forever… and they'll still be worthless. The world is still the same… humans haven't changed; we are as dumb and as credulous as ever. But new market conditions require a new anthem.   So, we introduce: YODO – you only die once. Today, we explain why this is a YODO market, not a YOLO market.   The Big Pivot Yesterday, the dead cat bounced again. Market Watch: The Dow Jones Industrial Average surged more than 900 points at its session high and remained on track for its biggest one-day percentage jump since June 2020 as equities kicked off the new month and quarter with a sharp bounce. The Dow remained up 890 points, or 3.1%, which would be its largest percentage rise since June 5, 2020.  What's behind it? Investors saw the Bank of England 'pivot.' They saw the Reserve Bank of Australia almost pivot. They saw the government of the UK pivot.   Perhaps a bit dizzy, they believe the Fed will soon pivot too. Markets Insider: The Fed will hike rates once more in November and then stop because the soaring dollar risks breaking markets, market veteran Ed Yardeni says That point of view runs counter to market consensus, which currently expects a 75 basis point rate hike in November, followed by a 50 basis point rate hike in December. Some even expect the Fed to raise rates by another 25 basis points in early 2023 before it ultimately pauses, with the Fed fund rate sitting around 4.50%.    Apparently, everybody thinks the Fed will pivot – including us. But we do not see it as a buy-the-dip opportunity. Instead, it's merely a way to lose more money. In this opinion, we are joined by Morgan Stanley analyst Mike Wilson. Markets Insider again: It appears increasingly likely that the Federal Reserve will pivot away from its currently hawkish monetary policy as global US dollar liquidity is now in the "danger zone where bad stuff happens," Morgan Stanley's Mike Wilson said in a Monday note. But investors shouldn't put too much stock into a potential pivot by the Fed,  he added. That's because an earnings recession is imminent, and potential stock market downside from a sizable earnings decline would likely outweigh the potential upside from a Fed pivot. The Cat is Dead The pivot is just part of the trap. If the Fed stops inflating, the bubble economy dies – and stocks along with it. But if it continues to inflate, consumer prices go up… the damage is delayed… though more widespread and unpredictable. Once on the loose, inflation is a hard thing to get back in the barn. People need more and more money just to stay in the same place. Then, it's almost impossible to tighten the money supply without setting off a depression, probably accompanied by riots and a revolution.   Pivoting will signal to novice investors that the Fed is going to let the good times roll again. But the problem is this: the bons temps are over. The cat is dead. Sales and profits are falling. Stock values will go down. Lowering the Fed Funds rate (still not even half the rate of consumer price increases) will make little difference. Yes, Wall Street may rally for a while. But then, the reality of a recession…or stagflation… is likely to nest in investors' minds. Nominal prices may go up, but real prices – reduced by inflation – will probably fall. And it's not as if investment markets operate in a germ-free laboratory. Not at all.  Inflation, recession, war… productivity in reverse, real wages falling, house prices declining… the US empire rolling over… climate alarmists threatening to cut off fuel… warmongers threatening to start WWIII… the most blockheaded Washington in memory… $31 trillion in US federal debt… and $300 trillion in worldwide debt –yes, it's YODO time now. As the old timers put it: "your first loss is your best loss." Because, when your money dies, it is dead forever. It won't be resurrected.   And a U-turn by the Fed won't take you back where you started. It's just a different route to Hell.   Regards, Bill Bonner