What Has Gone Wrong In America?

Americans pride themselves that during the 20th century they developed the United States of America to firstly equal all the world’s major powers and, after WWI, became pre-eminent in practically all aspects of human endeavour. With the US as the world’s leading economy, Americans had also become world leaders in such diverse fields as science and industrial innovation, in aviation and in sport of all kinds, in the standard of living of the common man and a dominant force in literature and art. Then Covid happened and the US was again top of the ranks, but this time not in a flattering way.

What went wrong to cause this situation?

As someone who lives in South Africa I cannot presume to answer that question; it is something only Americans are able to do with their intimate knowledge of the country and their society. What I can do as an observer who has read widely and also written about aspects of the US economy and markets for longer than two decades, is to use a pertinent example of the symptoms of whatever has afflicted the US.

Since the early 2000s I have commented on various trends in the US economy that I considered were portents of serious trouble in years to come. These topics included the housing and mortgage bubble in predominantly California, as well as the increase in all levels of debt. Applying Herb Stein’s Law that anything which cannot continue indefinitely will stop – and probably reverse trend – it was logical to expect bad news. However, it is not the state of the economy that motivated the above comments and question, but the manner in which the Covid pandemic is playing out in the US.

The Omicron variant of the Covid virus is a key player in what follows, firstly because it is less virulent than the previous major delta variant, but it also spreads so fast that it replaces delta in a population within a matter of a week or two, as the experience in South Africa has shown. The number of infections spikes higher, yet this has little or low effect on the number of hospital admissions and with proper treatment deaths are rare. Omicron had already peaked in South Africa and was established in many other countries before the first death ascribed to Omicron occurred.

Thirdly, Omicron also triggers natural immunity that is expected to last a long time as has been found in the case of the delta variant. Since it is rather like having a cold, but spreading even faster, its arrival means that true herd immunity is within reach. Further since it has spread globally within a matter of only very few weeks, the new Omicron wave enables comparison between countries, as below where Japan and the US are compared to illustrate the nature of the problem in the US.

The chart below shows the number of Covid cases in Japan since October 2020. After two earlier medium-sized peaks in the number of infections, Japan saw an increase in the number of cases starting in July 2021 that reached a new higher peak by August. This delta wave hit a high of 26 184 new daily cases for Japan on 22 August, less than 2 weeks after doctors were authorised to employ Ivermectin for both treatment and prevention of infection. As shown in the chart below, when Omicron erupted in Japan, there was an immediate increase in the number of cases in Tokyo, yet off such a low base to remain below 40 per day, according to the Japanese health ministry.

https://t.me/juanchamie/151

Japan, with a little more than a third (37%) of US population is reasonably on a par with the US as far as living standards and facilities are concerned. It has a different culture and is more isolated from the rest of the world. This might explain why the earlier Covid waves in Japan were not as widespread as the virulent wave of the delta variant that spiked much higher than before. As can be seen from the charts and data below, after the use of Ivermectin was authorised on 13 August, the number of cases dropped steeply. The link also shows that the number of deaths in all of Japan had decreased from more than 100 per day during the previous waves to fewer than 10 per day in late November/early December and even a day with no deaths at all.

Japan is not an isolated case of the change in the nature of the pandemic with the use of Ivermectin to dramatically reduce the number of infections and deaths. Countries such as India, Mexico and Brazil and others, have also shown that its widespread use to prevent and treat infections delivers significant results in a matter of days to weeks, saving lives and often allowing relaxation of Covid regulations. The table and charts below illustrate the difference between the pandemic in Japan, representative of a country using Ivermectin yet otherwise similar to the US, and the situation in the US where Ivermectin is actively and covertly being excluded as treatment while it and its successes are being censored by the social media.

In the table below pay specific attention to the current state of the pandemic in the two countries: compare the number of new daily cases and also the number of active cases and the number of serious cases as on December 25, last full day of statistics at time of writing. These numbers highlight the difference made by the use of Ivermectin as part of a protocol to prevent infection and for early treatment of patients who have contracted the virus. Note the difference in the new deaths on Christmas day!

In the two charts below, look at the trend during the past 2-3 weeks during which Omicron began to dispel delta as the dominant cause of infection. Think on what the numbers will be like by mid-January when Omicron is in full swing and causing – as in South Africa – 95% of all new cases. Yes, the very steep increase soon results in an early peak in the rate of infections, but that might not be reached in the US until late January. Meanwhile the media will be out in force to create such a panic that queues will form at the vaccination stations. To protect against something that for a majority will be similar to the usual cold with a runny nose and not even the normal winter flu. The charts below are of the US and Japan up to December 25.

Keep in mind when looking at the 26 184 new cases in Japan on August 22 and the 267 269 new cases in the US – and only starting to spike - that in Japan it is now often less than 300 new cases per day with fewer than 10 new deaths.

Perhaps the question that has been asked in the title should have been, “What is wrong with Americans?” It is evident circumstances in the US have resulted of from the capture of government and the media by Big Pharma. Acting on behalf of Pharma, decisions and regulations are enforced by the authorities and are all heavily promoted by the social media – with rigid censorship of dissenting views. The relatively low full vaccination rate and widespread dissent and use of alternative treatments, are good evidence of a significant minority of the population who does not accept the official narrative despite the innovative marketing of the ‘jab’. But they are not yet enough.

The fact that despite strong evidence that other countries are using a more effective protocol to prevent infection and for treatment of the sick to prevent death, the US authorities remain adamant that the WHO prescribed protocol must be applied with no alternatives being sanctioned – this despite the protocol being patently unsuccessful in preventing a much higher mortality than experienced in Japan, for example. Almost as if American lives no longer matter when more profit is on the table.

Americans, like the French, have a history of accepting high taxation, poor treatment and gross exploitation by government up to a point only. Then they revolt. Yet now in the pandemic they mostly accept the regulations and the prescribed protocol with little sustained and coordinated action to enforce a change for the better. Is it the power of the media, which has been ranged? fully in support of the official narrative?

The US is not the only major country where the authorities are actively preventing access to Ivermectin, perhaps more so in some of the states than in others. As in most other countries, despite all attempts to close the borders, the Omicron variant is also becoming widespread in Australia. Compare the numbers with the above table for Japan and the US. The chart below shows that Australia’s efforts to isolate itself from the pandemic, quite similar to Japan’s experience, have been very successful until July this year. Then the delta variant broke through and the number of daily new cases increased rapidly, from rarely above 400 to the 9947 on Christmas day after Omicron also took off.

Should this be the beginning of an accelerating trend, the Australians, who have so far escaped the worst ravages of the pandemic (at least until early July; refer their low numbers in the above table for cases and deaths per million of population, of which most are since July), are due for a rude awakening. Protests there are consistently well attended by people unhappy with the government, which gatherings are very physically controlled by the police. When it becomes clear during the next weeks that the official policies and measures have failed utterly to contain the virus, it is quite conceivable that they might react much like the French and Americans of old.

If they do so, that will also be a benefit brought by Omicron and then, with Australia as an example, enough Americans might wake up to take action and fix the problem..

Euro–Dollar

Euro–dollar, last = $1.1317 (www.investing.com)

Little change from last week’s USM report. The euro’s reversal higher off lines W, E and S soon ran out of steam and at first failed to recover from the break below bull channel KL. The break was bearish, but with recent turbulence in many markets this was not a surprise that it did not last. Last week the euro recovered above line L and held there until Thursday, the last date with an official exchange rate.

This new week should show whether the break was only a slight misjudgment by the market or whether it will be the recovery that is only a brief reflex move.

DJIA daily close

While Monday was a very poor day for Wall Street – the DJIA down by 1.23% after a loss of 1.48% on Friday – the rest of the shortened week had the DJIA closing on Thursday at 35950.56, which is up by 2.9% from Monday’s close at 34932.16.

When the markets open tomorrow – again for a shortened week before 2022 kicks off – there will be a stand-up battle between forces (including many fund managers who are trying to improve their year-end standings) intent on maintaining the momentum on Wall Street. On the other hand, there will be investors under stress because of the official warnings about the coming Omicron wave who would prefer to be out of any equities that could spoil their year-end celebrations with bad news about the economy and the markets. Time will prove which side will prevail.

DJIA last = 35950.56 (money.cnn.com)

Gold London PM fix – Dollars

Another chart that shows little change from the previous report. Since the price data is the London PM fix and London closes down at noon on 24 December, the last price fix is from Wednesday. On that date, the price of gold at the time US markets closed was $1811.20, up another $6 from the London fix earlier that day.

Investing.com had the gold futures priced at $1810.10 at Thursday’s early market close, which implies that the minor rally on Wednesday has held through to Thursday. Now we need to wait and see what happens to gold as 2021 rushes to its end, with the possibility of large OTC contracts expiring, probably with the last London fix on Wednesday as the strike price.

Little surprise if the price runs into headwinds by then, but perhaps also a wellspring of hope should the little gold rally continue until then to end well above $1800.

Gold price – London PM fix, last = $1805.20 (www.kitco.com)

Euro–gold PM fix

Euro gold price – PM fix in Euro. Last = €1595.98 (www.kitco.com)

The rally in the euro price of gold is also holding up quite well, assisted at least in part by the euro’s sideways move against the dollar. The outlook remains bullish as long as bull channel QR holds and the price continues to move higher. There is not much room to maneuver sideways and still remain in the channel; however, dollar gold ended on a promising note in US trading on Thursday, better than the Wednesday PM fix, perhaps to maintain the momentum over the three day break. But with the caveat of the looming year end and what it may bring.

Silver Daily London Fix

Silver issued a warning of weakness when line D failed to hold. However, the break lower held at line Q and reversed higher to break back above line D. On Thursday, the silver fix was getting close to the $23 dollar ceiling that has been in place since the break below line R at the end of November, but was pulled back a little on Thursday when gold also slipped lower in London.

Like gold, silver also improved during later US trading and managed to end at $22.91, not far below the $23 barrier. However, silver is perhaps even more likely to be facing the headwind of OTC contracts that expire this week, so we should not be surprised if the $23 resistance level holds into 2022.

Silver daily London fix, last = $22.665 (www.kitco.com)

U.S. 10–year Treasury Note

The break below steep channel JKL is still intact, but the recovery to above line B after the small spike lower is also holding. Earlier speculation that funds are being switched out of equities and into bonds may have been valid at the time of the minor spike to below line B.

However, as Wall Street recovered from the steep declines on Friday and on Monday, this appears to have settled the fund managers’ nerves. The steady support for Wall Street from many quarters as 2021 rolls out, makes it unlikely that there will be any fireworks on Wall Street this week that could affect the bond market. That is, unless the bond market has its own hidden problems into the year-end to cause unexpected turbulence, or if there is true panic on Wall Street to cause a major sell-off.

10–year Treasury note, last = 1.493% (Investing.com )

West Texas Intermediate crude. Daily close

The second break below bull channel KL in a matter of a week or two again reversed immediately to break back into the channel. The influence of the price of energy on the economy and specifically on inflation is so pervasive that it might be subject to higher volatility than usual now that inflation is beginning to scare investors and the markets.

This is likely to continue into 2022, with the potential of a break above the channel ABCDE as a signal that inflation is beginning to have a life of its own.

WTI crude – Daily close, last = $73.79 (www.investing.com)

©2021 daan joubert.

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