Good afternoon, everyone. I’m Lynette Zang, chief market analyst here at ITM trading, a full service, physical gold and silver dealer specializing in custom strategies because everybody’s different. Everybody has different goals. Everybody has different needs, and that’s what we like to do best. But you know, going on that theme, let’s talk about what’s happening in headline news. So I’m going to start with debt limit in Europe. It’s the sky you think because actually government aid has cushioned the financial toll of COVID-19, but as the trillions pile up many wonder who will pay for it all. Now, I know I’m talking about Europe, but the reality is, is we’re doing the same or a similar, not exactly the same, but a similar kind of thing here with all of the stimulus, we’re trying to cushion it. But at some point we have to pay the price, and as we saw last week, once yields breach that one and a half percent, it threatens the level of dividends that S&P that stocks pay, and so it was challenging and I’m pretty sure that the fed went in and did a whole bunch of buying. Because look, since 2008, they’ve been talking about managing the markets. They have managed it into a ditch and before I go onto the other ones, just to make a point on how we really are the same markets rise as fed chief says, support will remain. Now look, do you really think that all of this money for free printing that has been going on since 2008, has that fixed anything? No, it has just made the markets a whole lot more vulnerable. I’m not talking about the stock market. I’m talking about everybody’s market, including their food, including everything, the whole social system, the whole system.
But guess what came out today? Negative rates push German banks to tell depositors to pay or leave. Now I’m reading this, not only because it’s happening, but it’s coming, it’s coming here. This is global. This is global, interest rates been negative in Europe for years, but it took the flood of savings that swelled in the pandemic for banks finally, to charge depositors in earnest Germany’s biggest lenders, Deutsche bank, and commerce bank. I’ve told new customers since last year to pay a half a percent annual rate, to keep large sums of money with them, the banks say they can no longer absorb the negative interest rates, European central bank charges them. The more customer deposits bank banks have, the more they have to park with the central bank. We saw something similar to that here. Savings has soared, which means that banks are limited because they have to hold back a certain level of reserves.
Then that makes them less nimble and obviously that’s happening in Europe as well as here as well as everywhere else. There is more money to lend than there is demand for loans. So usually in a Fiat system, they can create the money as the demand goes up. But what we’re seeing here is all of this free money that’s being pumped into the system is not all of it, because some of it’s certainly being used to speculate, but a lot of it, because people are not secure in their income is going into savings. You know, the pandemic has changed the equation savings rates skyrocketed with consumers at home and huge relief programs from the ECB and the fed. Even though that doesn’t say it here, but I’ll add that, have flooded banks with excess deposits. Shocker! But here’s the task, and again, I think it is the same here as it is in Europe, future Europe task, unlocking the economy, trillions in state backed subsidies and inexpensive loans have kept businesses alive while governments pay millions of furloughed workers to stay home. So they’ve done that a little bit different than we’ve done it here, but still, as I showed you last week with the new package, that could be a windfall of 14 grand, more than a thousand a month. Pursuing such policies, European leaders have bet that once the pandemic subsides, they can defrost the regions 18 trillion economy, allowing businesses to fire up quickly and bring back workers. It’s an intentional effort to slow an economy, an economic deep, clean dubbed by many economists as creative destruction. I have to tell you that I think there has been a lot of creative destruction that has happened, which is what positions us for the reset that frankly we’re already walking through.
I mean, I just don’t think it takes a whole lot of even paying attention to see the insanity that is happening out in our economy, whether it’s in the markets, whether it’s in, you know, 10% of the labor force that is not working, and yet buildings are going up all over the place. Well, these things don’t really turn on a dime. After all, all that building is securitized turned into securities and then sold back to investors. But this just points, sit out, income rise, teas up fast growth. So what are we going to see? Right? We’re going to see all of this excess money sloshing around the system and now look at this GDP growth is so great, but we still have to service the debt who is going to pay for all that debt, taxpayers, you and me. We are the ones that are going to be forced to pay for everybody, our children, our children’s children, because the debt is not payable.
It isn’t that it’s unsustainable. They’ve been saying that for years and it’s been true for years. It is not payable and it’s kind of like if you know, you’re going to declare bankruptcy anyway, and you get some credit cards in the mail. I mean, there are actually some, some people, some companies that will still lend to you, well, what are you likely to do? Go out and spend on those credit cards and that really is what’s happened. Okay. Aid package drives 10% gain in household earnings. Consumers also boost spending pandemic aid to households is pouring money into the U S economy, priming it for rapid growth. This year, the increase was the second largest on record eclipsed only. I love this only by last April’s gain. When the federal government sent an initial round of pandemic relief payments, household income has risen 13% since February, 2020, the month before the pandemic shut down, large segments of the economies January’s increase in household income was almost entirely due to federal pandemic relief aid included in a 900 billion program, signed into law in late December.
There will likely be more government money flowing to the economy soon. Whether they call it UBI or they just keep sending the money until people feel confident enough and a lot of these systems now where a lot of these payments rather are being broken down to monthly. We’ll get to that in a second. Americans last month spent a chunk of their income boosting spending by 2.4%, the first gain in three months. But households also stashed much of the money household savings. Total 3.9 trillion last month up from 1.4 trillion last February. So you see what we’re talking about here. This money is going into the banks. The demand, the demand for borrowing is not as high as the demand for savings because people are still not comfortable that their income is going to be consistent. I don’t know why they just, frankly, I don’t know why they just don’t do UBI. Just do it. Just do it. You’re doing it anyway, but you’re doing it in dribs and drabs. Just go ahead and do it. Let everybody feel confident. Let them all go out and spend. But my question to you is, is that really a healthy economy dependent upon government giving away money. That is how they’re going to do the central bank digital currency, which I’m going to talk about Thursday, for sure. But consumer spending is the biggest factor behind growth in the U.S. spending sword and the summer.
Are we creating anything new? Are we building anything new? No, we’re just getting money for free and they’re giving it well, look, we know that the billionaires are now trillionaires so they have certainly benefited a lot more than the guy on the street, but the guy on the street is more likely to spend the windfall than the billionaire trillionaire. Cause how many planes do you really need? You could be saying, well, at least they’re getting some of it and some people really feel that way, but I don’t know. I mean, I, I just think it’s really, it’s a completely a mess, no matter what, this is why we have to reset the whole system and it’s not just the social system, but that’s certainly been reset the financial system, the economic system, everything stock slide as treasury yield shoot up. But no worries about that because after all the government went in and bought a whole bunch of treasuries and now they’re below 1.5. So it must be fine. Right? Mark is up. Must be fine.
Okay. But this is really the piece that I want to talk about as well. China’s plan to assimilate Hong Kong is working just eight months after Beijing imposed a new national security law to quell a pro-democracy movement. This free willing former British colony has all been brought to heel, moving with a scope and speed. Few here anticipated authoritarians have used the law to stamp out street protests, ban activists from lobbying foreign governments, gut the city’s legislature and arrest. Most of the opposition, everything that’s happening in Hong Kong today was unimaginable. A year ago. Beijing is signaling that this is just the start outlining more institutional changes to ensure complete control over the city’s governance and Egypt, opponents. Now, you know, I love how all of these articles we’ll talk about walls, that’s happening over there. But what about over here? When we certainly know people that you know, and YouTubers that are not on YouTube anymore,
You know, China, is definitely showing us the way governments have already come out with it and they’re testing it more broadly, their central bank digital currency that gives them absolutely complete control. We’re going to talk about that on Thursday, but I’m telling you that nobody, nobody is immune from this, and you really need to pay attention to what’s happening in China and in Hong Kong, because I think coming to a theater near you, so you need to be, this is why you got to have gold and silver because everything else is online and very easy to control. In Hong Kong, history edited to exalt China. The orders seemed innocuous, even obvious primary school students in Hong Kong should read picture books about Chinese traditions and learn about famous sites such as the forbidden city in Beijing or the great wall. But the goal was only partially to nurture it, nurture an interest in the past, the central aim of the new curriculum guidelines unveiled by the Hong Kong government. This month was much more ambitious to use those historical stories to instill in the city’s youngest residents, a deep rooted affinity for mainland China and with it and unwavering loyalty to its leaders and their strong arm tactics. I had to bring a couple of coins home because you got to have gold. You need to have silver in any form. It is monetary at its base and it is invisible
CBD seas. Yeah. China’s ahead of the, uh, is ahead of everybody out there and what are they doing? They’re giving it away. That’s what we’re going to do here too. We’re going to give it away. It’s going to seem like money for free, but the cost is your freedom. That should cost. What’s that worth to you? I mean, I’m reading in here. I don’t know where I had it now, but reading in here that a well-educated person says, well, yeah, I mean, I’m giving up some of my freedom for the convenience. It’s always about convenience. It’s always sold as convenient, but how is the loss of your freedom convenient for you? We’ve experienced a lot of that over this past year with all the lockdowns, you know, I mean, are you going out as freely as you once? Did I know I’m not. I mean, I’m doing more than I was doing because it gets to a point, but you know, they’re training us really well.
This is your weapon. That’s your weapon. This is the main weapon against the inflation that they are intentionally creating that they’re talking about. We need more inflation. No, we don’t need more inflation. We need a new system that is fair and equitable because what people don’t understand is that you, it is your time, your effort and your labor, that you are trading for money. If it’s the Fiat money, well, inflation was built by design into this system for most workers to never keep pace with inflation. It’s about the purchasing power. Doesn’t matter how many dollars you have. I mean, you can be a gazillionaire in Zimbabwe and maybe two eggs, and that’s the point. It’s what the money will buy you. That’s why you need gold. That’s why you need silver and you need it. Now, if you haven’t done it, you need to get set and look at what’s happening with the food supply chain that has not been fixed.
So here’s the mantra and you need to write this down and you need to practice it and see, where am I the most vulnerable and start to fill that hole and then go on to the next place. Where am I the most vulnerable and start plugging those holes. I’m grateful that I was able to plug all those holes, but frankly, I’ve been working on it for a lot of years. If you haven’t, start today, you don’t want to wait: food, water, energy, security, barter ability, wealth, preservation, community, and shelter. Get it done today.
I had a great conversation with Chris Rice over at RiceTVx channel, as well as Pimpy from Pimpy’s Investment Chat channel. This was the second one we did and it was a lot of fun. We covered a lot of ground today. So you want to make sure and go over and view that. We have the links in the description and next week I’m going to be on Crush the Street. That’s on March 9th. Follow our socials. We’ll let you know when we’re going live behind the scenes. Look, I was trying to show you all of her today, cause he can barely fit underneath his desk, but that’s all I can get him to do was go under the desk. Edgar said that he’s going to take upload some pictures of Oliver so you can see how much he’s grown he’s seven and a half months old. He is bigger than my dog, Daisy, who is a Mastiff. Oliver will probably be around 170 pounds.
If you liked this, please give us a thumbs up, make sure you leave a comment below and share, share, share with anybody and everybody that you know, and that you love. Just keep in mind that it is absolutely time to cover your assets and here at ITM trading, we do that with the wealth shield, which is based upon studying those currency lifecycle patterns I started studying in 1987. It’s important for you to be able to recognize these patterns, to help you make those educated choices that can save you and your family’s financial future. So having said that until tomorrow, please be safe out there. Bye bye.
We believe that everyone deserves a properly developed strategy for financial safety.
Chief Market Analyst, ITM Trading