The Elephant in the Room

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The Elephant in the room

Every so often we review the latest debt numbers as tracked on the US Debt clock site. These numbers are US based, but the story is similar all over: governments have been racking up massive debts for decades and now with COVID-19, they are accelerating this practice to unprecedented levels

  • The US national debt is $26.8 trillion
  • In the US there are 330.2 million people
  • Therefore, the debt per man, woman & child equals $81,145
  • Of those 330.2 million citizens only 124.4 million pay income tax, so the debt per taxpayer equals $214,845

  • The US also has $154 trillion of Unfunded Liabilities (Social Security, Pensions Plans etc)
  • That adds another $468,217 per citizen & $1.24 million per taxpayer

  • Add the National Debt + Unfunded Liabilities together = $181.44 trillion
  • Which equals $549,485 per citizen & $1,458,520 per taxpayer

These numbers are as of today and are growing rapidly. In the US there are negotiations to add a Phase IV COVID emergency funding of at least $2 trillion. We could easily see the US debt hit $30 trillion in a year and $50 trillion by 2025.

Your family may have sacrificed for years, made smart investments, built up your savings, and now believe you are debt-free, but the reality is you are also citizens and most likely taxpayers. These massive government debts are going to end up on the backs of those who have a job, pay taxes, who own a home and have accumulated some wealth. We are seeing government across the globe use COVID-19 as an excuse to create new programs and fueling what we see as frightening Big Government initiatives that have nothing todo with fighting the virus.

Here in Canada, the federal government throne speech was an incredible 17 pages long, and only six of those pages were actually devoted to dealing with the COVID-19 pandemic. The rest included over 30 new initiatives, with absolutely no mention of what they will cost or how they will be paid for. The only reference to funding was a promise to ‘tax the rich.’ This has become a very popular mantra, as there is a widening wealth inequality, but to suggest that simply taxing the rich will cover all these costs is absurd, there simply are not enough rich people to cover all these costs. And realistically, if you threaten to tax the rich at 75% or more of their income, as France did, they will simply leave the country.

The reality is, it is the middle class, the group every politician claims to be protecting, who ends up paying the price.

Stay tuned!

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Market Notes

Market update – September 23/20

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Equities:

Nasdaq – down 330.65 points or 3.02%

The Nasdaq Index represents the tech sector and includes the world’s foremost technology and biotech giants such as Apple, Google, Microsoft, Oracle, Amazon, and Intel. No surprise to subscribers, this index has blown the doors off all other indexes as these stocks have been the market leaders all the way up. But now that we are seeing the markets turn, it is these same high powered stocks that are being hit the hardest. The Nasdaq has now dropped below its 50-Day Moving Average (purple line on chart).  Note: In early September entered a short position on the Nasdaq with an easy to trade Exchange Traded Fund (ETF)

Russell 2000 – down 2.98%

The Russell 2000 represents American small cap stocks and the broader stock market and economy. We note that the small cap stocks did not come close to exceeding its February all-time high and has been struggling since early August to make any gains. Note that the Russell 2000 has dropped below its 50-DMA (purple line) and is now right on its 200-DMA (blue line), and a break and close below that level suggests a deeper correction.

 

S&P 500 – down 78.55 point or 2.37%

The S&P 500 represents  more retail  domestic investors, which drove up the S&P 500 to new highs in early September, but is now back below its February high. The S&P 500 is also now below its 50-DMA. Note: In early September  entered a short position on the S&P 500  with an easy to trade Exchange Traded Fund (ETF)

Dow Industrials – down 525.05 point or 1.92%

The Dow Jones Industrials reflects big institutional and international capital, and it did not make a new high after the March crash.  Given that it did not rally as strong as the other indexes we expect it will not decline as deeply as the Nasdaq, Russell 2000 or S&P 500.  The Dow has now dropped below its 50-DMA and is approaching key support at the 200-DMA which is 26,287.

Canadian TSX – down 325.78 or 2.02%

The TSX represents most of Canada’s largest companies including many in the mining and banking sectors. The TSX was also not able not make a new high since the February high. The TSX has also dropped below its 50-DMA and is now testing support its 200-DMA (blue line).

 

Precious Metals:

Gold – down 39.20 or 2.05%

Gold closed today at 1868, just slightly above the August 12/20 intra-day low at 1865.  If we see gold break below and close below 1865 we could see a re-test of 1800.

Silver – down 1.42 or 5.78%

Silver is the more volatile of the precious metals, generally moving higher than gold in bull markets, but also moving lower than gold in bear markets or market corrections. That is what is happening right now; while gold declined 2.05% today, silver dropped over double that rate at 5.78%.

Currencies:

US dollar – up .43 or .45%

Despite all the doom and gloom projections for the $US, when investors get nervous and want some safety for their capital, the $US is still the ‘safe-haven’ currency.

Euro – down .005 or .45%

Note: In late August we entered a short position on the Euro with an easy to trade Exchange Traded Fund (ETF)

Canadian dollar -.005 or .61%

If you are not a subscriber but would like to be, we are offering some great discounted rates for our three services.

Trend Letter:

Since start-up in 2002 Trend Letter has provided investors with a great track record, giving exceptionally accurate information about where the markets are going, and it has explained in clear, concise language the reasons why. Using unique and comprehensive tools, Trend Letter gives investors a true edge in understanding current market conditions, and shows investors how to generate and retain wealth in today’s climate of extreme market volatility.

A weekly publication covering global bonds, currencies, equities, commodities, & precious metals.

Timer Digest says: “Trend Letter has been a Timer Digest top performer in our Bond and Gold categories, along with competitive performance for the intermediate-term Stock category.”

Technical Trader:

Originally developed to be a premier hedging service designed to profit in declining markets, Trend Technical Trader (TTT) was evolved into an excellent all round trading service that prospers in both up and down markets. After delivering excellent gains during the March melt-down, TTT steered subscribers into gold trades and a number of long equity positions for phenomenal gains in very short holding periods.

TTT is an online service, updated every Monday, Wednesday and Friday, after the market close.

Trend Disruptors:

Disruptive technology trends will propel our future and the reality is that no industry will go untouched by this digital transformation. At the root of this transformation is the blurring of boundaries between the physical and virtual worlds. As digital business integrates these worlds through emerging and strategic technologies, entirely new business models are created.

Trend Disruptors is a service for investors seeking to invest in advanced, often unproven technology stocks on the cheap, with the objective to sell them when masses finally catch on. Covering Artificial Intelligence (AI), Virtual Reality (VR), Augmented Reality (AR), 5G, Quantum Computing & many more.

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Market Notes

Market update – September 21/20

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The markets opened down on fears of COVID-19 spreading again, the gridlock in Washington, and of course fears that the results of the US election won’t be known for weeks, or even months after the election. In addition, word was out that a number of major financial institutions, including JPMorgan Chase, HSBC, and Deutsche Bank, were allegedly involved in a multi-trillion dollar money laundering scheme between 1999-2017. Over 2,100 counts of “suspicious activity” were reported to the Department of Treasury’s Financial Crimes Enforcement Network and a further investigation will be underway.

As the day progressed stocks pared losses as a rebound in some tech giants tempered concern over cloudy prospects for economic stimulus and a report about suspicious transactions at global banks. Bonds and the US dollar rose, while gold fell with the equities on a strong US dollar.

S&P 500 – down 38.41 or 1.16%

The S&P broke through its 50-DMA (red line) on Friday and continued its decline today. In yesterday’s issue of the Trend Letter we highlighted how a break below 3285 ‘would warn of a potential deeper correction‘.  We need to watch 3260, then 3205 as key support levels. If the 3205 support does not hold, a serious correction could be in the cards. Ultimately, the 200-DMA (blue line) has been a solid support level for the S&P 500 (green arrows. So will need to keep our eye on that level (3104).

US Dollar – up .73 or .79%

Despite all the doom and gloom projections for the $US, when investors get nervous and want some safety for their capital, the $US is still the ‘safe-haven’ currency.

Canadian Dollar – dropped .006 or .75%

With $US strength most currencies retreated, including the $CAD. The $CAD has dropped below its 50-DMA (red line)

Gold – down 51.50 or  2.62%

With the equity market sell-off, capital flowed into the $US and US bonds.  With the $US strength, gold and silver were knocked lower.  Gold has now dropped below its 50-DMA (red line), and a break of the August intra-day low of 1865 would open the door for a test of 1800.

Subscribers to the Trend Letter & Trend Technical Trader have been given recent ‘insurance ‘ plays to protect their portfolios in case we do see a steeper correction here. Both of our models are warning of a market decline into October.

Trend Letter:

Since start-up in 2002 Trend Letter has provided investors with a great track record, giving exceptionally accurate information about where the markets are going, and it has explained in clear, concise language the reasons why. Using unique and comprehensive tools, Trend Letter gives investors a true edge in understanding current market conditions, and shows investors how to generate and retain wealth in today’s climate of extreme market volatility.

A weekly publication covering global bonds, currencies, equities, commodities, & precious metals.

Timer Digest says: “Trend Letter has been a Timer Digest top performer in our Bond and Gold categories, along with competitive performance for the intermediate-term Stock category.”

Technical Trader:

Originally developed to be a premier hedging service designed to profit in declining markets, Trend Technical Trader (TTT) was evolved into an excellent all round trading service that prospers in both up and down markets. After delivering excellent gains during the March melt-down, TTT steered subscribers into gold trades and a number of long equity positions for phenomenal gains in very short holding periods.

TTT is an online service, updated every Monday, Wednesday and Friday, after the market close.

Trend Disruptors:

Disruptive technology trends will propel our future and the reality is that no industry will go untouched by this digital transformation. At the root of this transformation is the blurring of boundaries between the physical and virtual worlds. As digital business integrates these worlds through emerging and strategic technologies, entirely new business models are created.

Trend Disruptors is a service for investors seeking to invest in advanced, often unproven technology stocks on the cheap, with the objective to sell them when masses finally catch on. Covering Artificial Intelligence (AI), Virtual Reality (VR), Augmented Reality (AR), 5G, Quantum Computing & many more.

Special Offers

ServiceRegular PriceSpecial PriceSavingSubscribe
Trend Letter$599.95299.95$300Trend Letter $299.95
Technical Trader$649.95$324.95$325Trend Technical Trader $324.95
Trend Disruptors$599.95$299.95$300Trend Disruptors $299.95
Better Deals
Trend Letter + Technical Trader$1,249.90$524.95$724.95Trend Letter + Technical Trader $524.95
Trend Letter + Trend Disruptors$1,199.90$503.95$695.95Trend Letter + Technical Trader $503.95
Technical Trader + Trend Disruptors$1,249.90$524.955$724.95Trend Disruptors + Technical Trader $524.95
Best Deal
Trend Suite: Trend Letter + Technical Trader + Trend Disruptors$1,849.85$610.45$1,239.40Trend Suite TL =TTT + TD $610.45

Time to Evict the ZOMBIES?

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The average human life span is clearly on the increase, with the United Nations predicting there will be 3.7 million people over 100 (centenarians) by the year 2050.  Many developed countries are reporting more supercentenarians every year, they being people over the age of 110.  Since 1900 the average human life expectancy has risen from 31 years to 72 years, more than a twofold increase.  The oldest of all is in Japan – Kane Tanaka at 117 years old.  Japan is a standout country for supercentenarians, having well over 100 of them.  Given the increasing average life expectancy over the last century, and the development of life saving and life prolonging technology, is there truly a finite upper limit on how long a human can live?  There are some who claim that there are people alive today who could reach the age of 1,000.  That may seem far fetched at this point, but there is technology being developed to take us further down this road.

“Cellular Senescence” is a scientific theory that is growing in popularity and can be briefly described as a biological phenomenon where an organism’s cells stop dividing. “Senescence” is defined as the state of being or becoming old.  Back in the 1960’s, scientist Leonard Hayflick postulated that human cells can divide 40 to 60 times before becoming senescent, and this is now referred to as the “Hayflick Limit”.  When a cell no longer divides or replicates many biologists call it a “zombie” cell.

Much like the mythical zombie, these cells are not technically dead, but they no longer behave like young healthy cells – they are alive but they are physiologically useless.  This may go a long way to explaining why certain afflictions become prevalent in older humans.  The zombie cells are accumulating while healthy cells are becoming fewer and fewer. There are many age related diseases, such as dementia, osteoporosis, cataracts, cancer, hypertension, and arthritis.  These and more may have a significant zombie cell causal relationship.

Also, zombie cells can generate harmful chemical signals that infect nearby healthy cells, thereby increasing the total number of senescent cells.  It is easy to theorize that increased zombie cells can lead to problems, like reduced tissue repair, chronic inflammation, formation of cancer cells, cognitive degeneration, bone weakening, and other age related maladies.  When we are relatively young our bodies can naturally remove senescent (zombie) cells, but as we age this natural shedding process slows down and zombie cells begin to accumulate.  The situation can get especially dire when our Immune system cells become senescent and are unable to control the rapid spread of zombie cells.

Bio-technologists are striving to develop a solution to the zombie cell invasion of aging organisms, positing that aging can be treated much like any other disease.  There is an emerging class of medicines named “senolytics” – molecules that selectively induce the true death of zombie cells, allowing them to then be flushed naturally from the organism. The idea is to kill zombies, then evict them from the body, which could make for a very interesting and uplifting ZOMBIE movie – or would ZOMBIES always be scary?

Here is a snip from the National Institutes of Health (NIH) National Library of Medicine:

“Senolytic drugs are agents that selectively induce apoptosis of senescent cells. These cells accumulate in many tissues with aging and at sites of pathology in multiple chronic diseases. In studies in animals, targeting senescent cells using genetic or pharmacological approaches delays, prevents, or alleviates multiple age-related phenotypes, chronic diseases, geriatric syndromes, and loss of physiological resilience. Among the chronic conditions successfully treated by depleting senescent cells in pre-clinical studies are frailty, car­diac dysfunction, vascular hyporeactivity and calcification, diabetes, liver steatosis, osteoporosis, vertebral disk degeneration, pulmonary fibrosis, and radiation-induced damage. Senolytic agents are at the point of being tested in proof-of-concept clinical trials. To do so, new clinical trials para­digms for testing senolytics and other agents that target fundamental aging mechanisms are being developed, since use of long-term endpoints such as life- or healthspan is not feasible. These strategies include testing effects on multi-morbidity, accelerated aging-like conditions, diseases with localized accumulation of senescent cells, potentially fatal diseases associated with senescent cell accumulation, age-related loss of physiological resilience, and frailty. If senolytics or other interventions that target fundamental aging processes prove to be effective and safe in clinical trials, they could trans­form geriatric medicine by enabling prevention or treatment of multiple diseases and functional deficits in parallel, instead of one-at-a-time.”

 This area of research is still young and may prove to not be a viable treatment for humans, even when animal trials show promising results. Time will tell whether bio-scientists are making a winning investment here.

The aim of TREND DISRUPTORS is to discover, explore, and monitor scientific and technical developments, looking for the brightest ideas – – those that have the potential to “disrupt” a market sector. We publish relevant investment recommendations for our subscribers and publish blog articles discussing a variety of technology developments. The markets today are mired in uncertainty, but as investors looking for “disruptive” opportunities we will seek out companies that are using technology to be useful and profitable. Generally, disruptive technology stock recommendations are speculative and we advise caution and restraint.

TREND DISRUPTORS monitors technology and scientific developments, and identifies investment opportunities that can lead to success for the well informed investor.

Stay tuned!