GOOD NEWS, BAD NEWS…HEADLINE NEWS with LYNETTE ZANG

Breaking News Jan 18, 2022

TRANSCRIPT FROM VIDEO:

I have some great news to tell you about Venezuela. The question is, can they make it last coming up?

I’m Lynette Zang, Chief Market Analyst here at ITM Trading of full service, physical gold, and silver dealer, specializing in custom strategies to help you survive. And even thrive the reset, that should be pretty obvious, has already begun. And it’s a full reset socially, economically, as well as financially. And, you know, Venezuela has been going through a hyperinflationary period actually for quite some time. And they even recently reset their currency for the third count it, three times. And now they seem to have a better control over the hyperinflation where at least that’s what they want us to think and what are they doing different?

Well, they are creating a little bit less, but they are also basically using the U.S. Dollar as their currency of record there. Now more than 60% of all transactions are transactive with the U.S. Dollar. So essentially they’re not using the, and by the way, this is what it’s called digital bolivar as much the central bank has upped its intervention. So, you know, they all, all of the central banks intervene in the foreign exchange market. So frankly, you know, it’s not like Venezuela is doing anything different, but they are working really hard to keep this new currency, the digital bolivar relatively stable for 40% of the prices for 40% of the transactions, rather. And according to the cafe con leche index coffee, the price of a coffee has risen 10.6% since their currency changed. Let’s see, when was that? Oh yeah, October, October. So in the last couple months of the year, it’s only gone up 10.6%, but on an annual basis. And they’re saying that this is a 12 month in a row. We’re inflation has not topped 50%, which is the official, the official rate for hyperinflation. However, on an annual basis, they still ended 2021 with 686.4% Inflation. That means the bolivar is losing purchasing power value really rapidly and the trouble is, is they’ve gone out of the frying pan into the fire because by basing it on or basing most of the transactions on U.S. Dollars. Well, what they’re hoping for is a stable dollar, which is more stable than their bolivar. However, we are in a world these days where it’s pretty apparent to everybody that the global currencies, including the dollar is losing value very rapidly. And that’s a problem that we’re gonna talk about, but they do say in here with all of these tricks that they’re using to try and stabilize that inflation sooner or later, we are going to see an important adjustment in the exchange rate. And that is going to have an impact on prices. In other words, they’re going back through the roof because all of this artificial suppression does not really suppress the truth for very long. And actually probably if you’re living there, you already know what the truth is.

But you see here in the U.S. Inflation hitting 7% in December, the fastest pace since 82, we’re gonna look at that a little bit more closely, because different things were happening in the eighties. However, what I want you to keep in mind is that during the seventies and eighties, we were transitioning into a completely new purely debt based system and we are transitioning yet again. So there are a lot of parallels that you’ll see between the seventies and the eighties in today. But one of the things that I really wanted to point out, oops, I need to grab my laser pointer are these empty shelves because we have been told, and I’m just gonna remind you if you hadn’t heard it, that we will see more and more and more barren shelves. And there are a number of reasons for that, but all the more reason for you to be as independent and self-sufficient as possible. And frankly food is the single biggest issue during these transitions for most people. Now, for me personally, because of the gardens that I’ve set up in my yard, this kind of barren shelf doesn’t really have a whole lot of impact on me. Other than if I’m gonna buy something else, obviously the prices go up, but we want it not to have an impact on you or anybody else. We need to make sure. And no matter what your circumstances are, that you can grow some of your own food so that you don’t have to worry about barren shelves because there’s been a lot looting, etcetera. The supply chains are still broke from what I’m hearing. The barren shelves are here to stay. In the meantime, we’ve got wholesale prices that jump nearly 10% in 2021. And that has not yet fully trickled down into the consumer prices. These are the wholesale prices, but guess what? When people see all of this inflation, now, if they can keep it at 2%, they’re still getting it, but they’re doing it slow enough that people don’t notice it at these levels because even 7%, quite honestly, doesn’t reflect the real inflation that we’re all feeling in rent, especially etcetera and housing. This is huge food, housing energy. The things that we use every single day are not fully reflected in that 7% rate, but it does have an impact on consumer sentiment. And remember that’s what, that’s what the central banks and the governments look for. They look at sentiment, they look at expectations because as Henry Kissinger once said, it is not and I’m, I’m paraphrasing this, okay? It is not what is true. That matters. It is what is perceived to be true. That matters. And this is a con game. So as long as they can keep us naive and just believing them, then we’re in, they’re in great shape. They remain in control.

But let’s look at what they were talking about with inflation being as high as it was in 82, because in 82, that was after Paul Volker shifted interest rates all the way up intra day, it was over 21%. You won’t see that in the next graph because it doesn’t reflect intra day. So this was as inflation rates were starting to come down from that demand driven inflation. Now we’ve got inflation. That’s much stickier with wages going up, but they’re still not keeping pace with inflation. So this catches the attention and what happens? They buy less. This is consumer sentiment. You can see that it’s near all of the lows in history. And if consumers are, concerned about their ability to pay their bills, their jobs, etcetera, they will indeed consume less. And they have, according to the savings rate at the Fed, which I didn’t put in here, but we’re back to pre pandemic levels and savings rates. So that’s gone and now consumers are starting to use more credit cards, but three quarters of consumers ranked inflation as the biggest problem facing the nation facing the U.S.. But again, this is global because this is a global Fiat money reset that we are walking through and you need to be prepared because inflation can put a damper on consumption, mean if you’ve gotta buy eggs or you’re gonna buy a blouse, guess what’s gonna get, guess what’s gonna get purchased? The eggs are. And so if you have to put all your money into food and energy, you just really don’t have that much money left over for retail therapy and remember 70% of the economy. And this is pretty much true globally. Give, ever take a little bit is consumer driven. They want consumers to be able to consume, but retail sales fell in December. Oh my goodness. Now they’re saying that’s because there was all that shopping done ahead of time. Is that really the reason? Or have people gone through all the stimulus money that they had in savings and the prospects don’t look so good. Because if consumers slowed down their consumption, then guess what happens to corporate earnings? Now we saw last time that corporate earnings are at the highest levels that they’ve ever been. So they have widened their profit margins because they could, because the government had given consumers, lots of discretionary money to spend and spend they did. But with stocks at these ridiculously lofty levels, you know, they’ve been a little iffy since the beginning of the year. And when earning seasons come in, are they still going to be able to charge the same level? Or is that going to have an impact on consumption? Because frankly in their theory, right? Now, we’re watching this in real time. But in their theory, in order to fight inflation, the interest rate has to be higher than the inflation rate. So even if we’re going to use that low 7% number that just came in and we know that that’s low, well, let’s see, can the federal reserve raise interest rates to over 7%? I don’t think so.

And listen, all you’re hearing is this rhetoric from all the central banks, how they’re gonna have two to four to three rate increases and blah, blah, blah. And here Bill Ackman is advocating for an increase. That is really what ‘shock and awe’ in one big rate hike to restore its credibility. Well, that’s what Paul Volker did, but he did at a much, much higher rate, like over 18% and then intra day it did go over 21%. So what would 50 basis points look like? Because this, the fed funds rate that the central bank can fully control. They just say, okay, this is the rate. And right now it’s at .08% so if he did indeed raise the rates by 50 basis points that still only gets us to a little bit more than a half, a percent way shy of the 7% plus that would be required in their theory to fight this inflation, which is garbage because I mean, we all know what causes the inflation, you know, I mean, we all know that really who got, who got saved, oops, I gotta move that. And I can’t see who got saved were really the corporations, not the individuals. And even when you’re looking at the FOMC meeting minutes and this dot plot. So this is where the voting members sit around and say, well, I think interest rates should be here or there, etcetera. So for 2022, they’re not even going up to one end. You know, I’m thinking they’re gonna have a problem here. 2023, That’s still bringing it up to a little bit more than 1.5%, 2024. Well, you do have some dot plots that are going to 3% but longer rate. They top out at 3%. Do you see my point? So even to their theory, they cannot, nor will they nor do. They intend to raise interest rates enough to really fight that inflation. This would still be an easy money policy. And frankly, I think that the fed is behind the eight ball shocker. What they gonna do? They’re gonna talk about it. We just lost visual Meg. Um, so excuse me, we’re having a little bit of technical difficulties…definitely behind the eight ball, because look at all of this debt and between a rock and a hard place, because can they really raise interest rates into this massive amount of debt? And look, you’ve got 480 trillion in notional value on interest rate derivatives that need to be reset restructured into by 2023. You know, now look, all of this talk is enabling those that are in power or the smart guys to reposition their wealth. That’s why you see interest rates moving up like you are. This is the two year, the 10 year and the 30 year. This is the two year. You could see how quickly those interest rates have run up. But this is the one that is really puts us in jeopardy is the, the interest rate to derivatives because that’s just 480 trillion?! Is way larger than the global GDP. So I mean by many, many times, and that doesn’t reflect the true value at risk. Remember notional, you don’t really know what is at risk. Know this interest rate time bomb has been brewing for a long time. And you know, if this is 2008, which it is, you can see that it’s a much bigger issue than it was in 2008 when the system actually died. And by the way…And by the way, take a look at the gross market value and the credit exposure, how that looks like that’s gone down. When in reality, there have been more derivatives written and that’s because of a very nice accounting trick called netting. Making it look like there are less when in reality, there are a lot more. So we are definitely not out of the woods with this. I personally think that this is what’s going to overwhelm the central banker’s ability to keep all of this garbage hidden as it should, frankly.

But of course, they’ve gotta distract us. So possibly some more war going on, you know, Russia, along with the Ukraine, Poland, Warrens risk of war. Well, that can be pretty distracting, just like that can be pretty distracting. Just like the cerveza virus has been pretty darn distracting from all the money printing and everything, all the other shenanigans that have been going on. But the Russian deputy foreign minister Alexander whoever’s also noted a large number of differences on fundamental questions. And if the situation worsens, it could lead to the most unpredictable and serious consequences for European security, which frankly would be for the whole world. And it would be a pretty big distraction. So we’ve gotta keep our eye on that. So many moving parts it’s ridiculous, and in the meantime, the cost of mining gold is inflating too, but let’s see. Does the spot price reflect that? No, it does not. But what it does reflect is a wedge formation. Remember this is just a contract. So this bottom graph is the actual cost to mine the physical gold, the physical gold right here, right? The top graph is the spot chart. And what we see is a wedge formation, where you have a series of higher and higher lows, as well as series of lower and lower highs. So it’s going into this little funnel here. And at some point soon, probably within the next week, it will either break out, out, above, and then we’ll see a run up in the spot price or a breakdown below. And we’ll see it go and test some lows. We’ll see we, we will absolutely see because that’s such an easy market to manipulate, but this is more reflective of the real market because you have to ask yourself, will miners continue to mine? If they are losing money? And the answer is no, they can’t. They can’t stay in business. Only if you’re Amazon, can you stay or other Wall Street darlings that can stay in business, even though you’re losing money so that you can run somebody, the else out of business.

But you know, people ask me all the time. So when is it gonna be reflected? Well, it’s really simple. Okay. When all confidence is lost in the central banks and in the governments and the currency goes into full blown hyperinflation, then they do an overnight revaluation, Fiat money that has no intrinsic value against gold money. That is all intrinsic value. That’s how it happens. I don’t really care what happens so much with spot. In the meantime, all this does is help me buy it cheaper, just like the central banks are doing, but it’s not getting cheaper to mine. So the pricing has to go up, get it while you can, while it is cheap. And you need to get this done as quickly as possible. Because here we are in 2022 and I consider 2022 to be a really a pivotal year because presumably they’re going to have to transfer really over 610 trillion in notional value, derivative contracts onto the new benchmark. And while that may sound like gobble-dee-goo and oh, no big deal because they can do it. First of all, it’s never been done before ever, ever, ever. So this is a grand experiment. And remember when they tried it with 80 trillion a year ago, last October, and then they moved the date to change it because it couldn’t, they couldn’t do it. You’ve got over 410 trillion notional value interest rate derivatives. Can they raise interest rates? No, but they have to, they have to for the credibility. And even if they did it to the max, they are totally behind the eight ball. I don’t want you to be behind the eight ball. I want you to focus on food, water, energy, security, barterability, wealth preservation, community, and shelter. Please get it done, please, please, please. While you still have a chance to do it because the problem is once the crisis becomes obvious to everybody, it’s too late to do anything. And that noose is tightening, that noose is tightening so much. Look around you, look at what you see. We are losing our freedoms. You know what this really does? This helps you keep some semblance of freedom and we need to, we really need to it’s the scariest part is the world that I’m leaving my children and my grandchildren. I’m gonna make sure I’ll do my best to make sure that they can be as independent and self-sufficient and have choices as possible. That’s what we have to fight for. So until next we meet, it’s really good to be back with you guys again, please be safe out there. Bye bye.

SOURCES:

https://finance.yahoo.com/news/venezuela-breaks-one-world-longest-211054411.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAN2wFbnekbKp2_D9twFX4eCNsZ121aPBtsBMU3dCUzY35aYGgT5A8RsPDUmTElDf2i2Yf9pODj9SqgSHkATNC291scVBZD7PLlq0G7S00RQEUuFXkgroSjrW3-SPPupBiLt-m8ChZHqbPipoqEQskS9VoRgkAsQV4iYI5i3sA9K1

https://www.cnbc.com/2022/01/12/cpi-december-2021-.html

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https://www.marketwatch.com/story/consumer-sentiment-falls-in-january-due-to-omicron-and-inflation-worries-11642172660

https://tradingeconomics.com/united-states/consumer-confidence

https://www.reuters.com/business/investors-ready-us-earnings-inflation-worries-run-high-2022-01-12/

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https://www.marketwatch.com/story/the-federal-reserve-needs-to-shock-and-awe-the-market-with-one-big-rate-hike-to-restore-its-credibility-says-hedge-fund-star-bill-ackman-11642357378?mod=MW_article_top_stories

https://www.ft.com/content/b0729d5a-7142-4568-9577-d8ba3d6afb20?desktop=true&segmentId=7c8f09b9-9b61-4fbb-9430-9208a9e233c8#myft:notification:daily-email:content