Generation Z consists of people born after 1995 that are under 30 years of age. They came alive when the internet had already came to dominate society and matured when the cell phone succeeded into becoming an addictive device. They became teenagers as social media amplified that addiction.

A few years ago a series of studies came out showing that social media had a psychological toll on young people, causing depression and suicide, as they compared themselves to what they see in the feeds. Eating disorders proliferated. Studies showed that the more time people spend online the worse they feel.

As one article puts it: “A 2017 study of over half a million eighth through 12th graders found that the number exhibiting high levels of depressive symptoms increased by 33 percent between 2010 and 2015. In the same period, the suicide rate for girls in that age group increased by 65 percent.”

“Smartphones were introduced in 2007, and by 2015 fully 92 percent of teens and young adults owned a smartphone. The rise in depressive symptoms correlates with smartphone adoption during that period, even when matched year by year, observes the study’s lead author, San Diego State University psychologist Jean Twenge, PhD.”

For roughly two years such studies caused some outrage, serious investigative reporting, and talk of doing something in reaction. Congress held hearings. Here is a clip from one of them.

People like Mark Zuckerberg got shamed, but nothing happened and that story – and the worry – has now pretty much vanished.

The parents of Generation Z, I suppose decided that they themselves were too addicted to their phones and social media feeds to want to actually change anything, even if it all damaged their children, and likely themselves. If anything the apps and feeds have only gotten more addictive, with the rise in short-form video, Instagram, and TikTok.

The US government has said that TikTok is a national security threat and people just shrug, because they are too addicted to it to care.

There was a fear, too, too about “fake news” on the internet, that people wouldn’t be able to discern the difference between what was real and not real in their feeds. There was a real concern that Generation Z, in particular, would be vulnerable, as they had no experience of life before the internet, and almost none of them exist without it.

The Google study reveals, though, that something else has happened.

It found that Generation Z can discern the difference between what is fake, false, and the real.

But, it also found that they simply does not care about that.

They do not fact check.

Whereas older users, do, and sometimes express outrage over a fake story in their feed, Generation Z does not care.

It turns out that they look at their feeds and consume information differently than what was expected.

“Within a week of actual research, we just threw out the term information literacy,” said Yasmin Green, who was in charge of the study. They found that they are “not on a linear journey to evaluate the veracity of anything.” Instead, they’re engaged in what the researchers call “information sensibility,” defined as a “socially informed” practice that relies on “folk heuristics of credibility.”

In plain English, what they do is look at the headlines and then rush to read the comments to see how people react to them.

They look to see if the dominant reaction is in alignment with how they already feel about the story.

If they are in agreement with the majority reaction, they feel reassured, and then look down upon those reacting differently.

If they are in disagreement with that majority reaction, they may then decide to study the issue more, by looking for an expert online who will talk more about it, usually someone on Youtube, Tiktok, or some other social media site, or they will just scroll until they see a story or meme that agrees with them for a dose of reassurance.

As a Business Insider article, about this study put it, “Gen Zers approach most of their digital experience in what the researchers call ‘timepass’ mode, just looking to not be bored. If they want to answer a question or learn something new, they might turn to a search engine, but they’re acquiring new information mainly via their social feeds, which are algorithmically pruned to reflect what they care about and who they trust.”

I subscribe to several news industry publications and last year Pew did a study about how Generation Z gets its news. It advocated that news organizations focus on social media and predicted that short-form video would become the future of news. News outlets, even local news, would have to turn its reporters into social media influencers, was one argument made.

What is fascinating, and troubling, is how the Google Study reveals a dominate online mentality that is really focused on following a herd, instead of being focused on learning more information and the truth for the sake of it.

Before the internet, there was a time in which people worried about how television was impacting society and dumbing down the quality of information that people consume, in comparison to print and even radio.

Marshall McLuhan, the father of media studies, coined the phrase “the medium is the message” in his 1964 book Understanding the Media.

What the phrase means is that the form of the media should be seen as just as important as the content of its message.

As a Wikipedia entry puts it, “The main concept of McLuhan’s argument (later elaborated upon in The Medium Is the Massage) is that new technologies (such as alphabets, printing presses, and even speech) exert a gravitational effect on cognition, which in turn, affects social organization: print technology changes our perceptual habits—”visual homogenizing of experience”—which in turn affects social interactions—”fosters a mentality that gradually resists all but a…specialist outlook”. According to McLuhan, this advance of print technology contributed to and made possible most of the salient trends in the modern period in the Western world: individualism, democracy, Protestantism, capitalism, and nationalism. For McLuhan, these trends all reverberate with print technology’s principle of “segmentation of actions and functions and principle of visual quantification.”

Think about the social media meme.

The meme is the declaration of a message visible to all of those seeing it.

You do not see a meme by yourself, but know that others, possibly tens of thousands, are also seeing it.

The meme by its very existence in the feed creates an us versus them dynamic.

Are you in support of the meme’s message or against it?

Memetic engineering is the application of memes to change the perceptions of the masses and the continual consumption of memes and social messages overtime locks the human brain into a style of thought. This is a serious business, with even the Pentagon running secret covert operations as experiments, using countries such as the Philippines as a playpen, to perfect their own processes in “information warfare.”

The Google study of Generation Z shows you this new reality.

We have seen the creation of a new mass man molded by groupthink and primed for an authoritarian order, what the philosopher Frederick Nietzsche, 140 years ago, termed the “last man,” the passive nihilist, who seeks out and is content with constant amusement, but is incapable of self-actualization.

He causes no problems for big-brother, and is the perfect citizen as predicted by the character mogul Arthur Jenson in the movie 1976 Network, ruled over by their faceless global corporate rulers.

Television could not create the world of Arthur Jensen, but social media feeds did, some say.

Social media feeds are filled with drivel and trash that mold your mind into mush and cause you to waste your life away as you spend time looking at them.

One day you may wake up and realize how boring it actually is.

There is a big difference between reading published physical print works and social media feeds.

The social media feed is “instant.”

Something posted is constantly being displaced by a new post, so the feed has the appearance of being real time reality.

The “news cycle” has been sped up.

When you read a physical print work, privately, you are reading something that was published in the past.

This puts the reader in a position of judgement, all by themselves, over what they are reading.

To do that they have to engage in rational thought and can keep their thoughts to themself.

They come out of that process with more knowledge, or understanding, over the topic of what they read about.

Even if the work is a work of fiction they can learn emotionally from the story that they are reading.

Spending time reading published physical works leads one to have an open mind, eager to learn, bettering oneself and growing, while the social media feed is all a messaging of us versus them, causing one to feel stressed, anxious, but no choice but to scroll faster for more to get more stimulation, whether negative or positive, from the feed.

Or one can turn to it off and walkaway from it…and the longer one does that the better…

The impact that memetic engineering has had on your brain can be reversed by turning your social media feeds off.

Elon is wrong, those that own the social media feeds and “control the memes” do not rule the universe, much less the world, because only God does that.

What is more the feeds may be here today, but they are only fifteen years old, and are not going to exist forever. There was a time when people used telegrams to send messages to one another.

No one does that anymore.

Few still use typewriters too.

-Mike

First, let’s talk about what is happening in the US.

We live in a polarized era where internet algorithms deliver up the content that is uniquely catered to their users, putting them in their own personal bubble. That means that when a person is a big fan of one political party or candidate they will see content negative when it comes to the side they do not like, but rarely do they see content created for that side’s supporters.

As a result, they end up not seeing what that other side is truly up to.

This past weekend, when Joe Biden announced that he was dropping out of the Presidential race he did it on Twitter, instead of going on TV, or issuing a press release to do it. The day after his disastrous debate, the first thing his campaign did was do a few events and put up videos to try to show that Biden was energetic, such as this one at a Waffle House.

@hotfreestyletv When you unexpectedly dap up Joe Biden at Waffle House #joebiden #president #wafflehouse ♬ original sound – Hot Freestyle

The day after Biden resigned from his campaign, the Harris camp told reporters that it was going to spend a lot of time creating meme’s that would boost her campaign. The Harris meme creators called themselves the “KHive” on Twitter.

KHIVE moving into the DNC pic.twitter.com/F8jUI1LRZz

— Aiden, Grey Eagle of the Amarican Steppe (@Aiden_CDN) July 21, 2024

As Axios reported:

“Internet users dug up old clips and created fancam edits of the vice president — including of her dancing and explaining how to prepare a Thanksgiving turkey — which quickly went viral.”

“One particularly viral clip, from 2023, featured Harris telling a story about her mother asking her, “You think you just fell out of a coconut tree?” before adding: “You exist in the context of all in which you live and what came before you.” Countless memes involving coconuts followed.”

The memes multiplied.

Here is an example of one of them:

pic.twitter.com/KJ9xuYq0U3

— Kamala HQ (@KamalaHQ) July 24, 2024

Of course, the Trump team has it’s memes that it is creating too.

Meme’s are propaganda and are powerful propaganda.

As Elon Musk wrote:

Who controls the memes,
controls the Universe

— Elon Musk (@elonmusk) June 26, 2020

The coconut meme looks silly when you watch, and I have no doubt that many Trump supporters will mock it and think they are winning by doing so, but there is something subtle behind it.

why did I stay up till 3am making a von dutch brat coconut tree edit featuring kamala harris and why can’t I stop watching it on repeat pic.twitter.com/hqcmerD1Pb

— ryan (@ryanlong03) July 3, 2024

To understand what is really going on here, you have to turn to the February elections in Indonesia that voted into power General Pabowo Subianto, who ran death squads and concentration camps in East Timor in the 1980’s and 1990’s. He ran what he called “ninja gangs” in a military campaign he called “Operation Eradicate.” He was banned from entry into the United States for war crimes and became a hated figure in his country.

That is until now.

Using memes he refashioned himself as a “cuddly grandpa” and younger people liked that image and voted him into office.

In many of the meme videos he showed himself having fun, and dancing, creating disarming memes that people loved.

@vicenews A former military general with a bloody past, now nicknamed “cuddly grandpa” is poised to become Indonesia’s next leader on his third attempt at running for office—with the help of a huge social media rebrand. 72-year-old Prabowo Subianto—accused of kidnapping protestors in the 90s and once known for his “hot temper,” has amassed over 11 million followers on his social accounts. #indonesia #indonesia #prabowosubianto #influencer ♬ original sound – VICE News

It wasn’t just young people who voted for him, because the General won in a landslide, with 58% of the vote, the biggest election landslide in the history of Indonesia.

At this moment of time the masses around the world just want someone that will comfort them and make them happy and the right memes can position anyone to be that person.

There are two take aways from this:

1)Trump supporters who simply think that Harris is a joke and think that by just mocking her laugh, her appearance, and so forth, because it was easy to do that with Biden, and worked, are probably underestimating her and the power of the Harris memes.

To test this proposition, the Trump social media warrior should watch the Harris coconut video twenty times and see what happens to them.

If they do it they may find that they start to feel that they actually start to like her for no good reason, because with the music, with the repetition, the meme programming does its work. She is dancing and smiling, doing it in this meme video too.

@politicalcoconut Our girl has moves! #kamala #brat #kamalaharrisbrat #khive ♬ Look What You Made Me Do – Taylor Swift

Read the comments to the Tweet, look at the number of likes.

same i relate to her on a deep, spiritual level

— ryan (@ryanlong03) July 3, 2024

2)People think in memes now. It isn’t just that memes are powerful propaganda, but years of social media usage of the past ten years have engineered people’s brains to think in memes, talk in memes, and want more memes.

A result, is a deterioration in discourse to the point where rational thought is drowned out on the internet, and people are geared up to want a strong and powerful leader to obey. The giant online tech companies operate in countries that are dictatorships with no problem at all. Social media is not a danger to authoritarian states, but actually assists them in maintaining power by atomizing individuals and tearing apart civil society, by displacing both with the meme.

But in topsy turvy times, some elites see these as necessary changes to keep the world in order, as everyone deep down knows more chaos is to come. Memes are tools of social manipulation and control and people who spend hours on hours consuming them, which so many online do now, are pruned for more, because they are fun, even if they rot your brain out, just like drinking and drugs do. The problem is there are billions of people who don’t remember what it was like to not think in memes, so they can’t remember what it was like not to think in memetic fashion. They can’t tell you the difference. They have to free themselves by getting off the internet, going on something like a fast to stop consuming social media, which is the last thing the big tech companies, and those that own them, such as Elon Musk, want them to do.

-Mike

Don’t worry, I’m not blowing up this website, but I’m doing something that is close to it.

I’m not a fan of Tesla robot cars, crypto, CGI superhero movies, or this “AI” gizmo.

I haven’t said anything about the latter, but today I will, because it has made me come to a big decision.

Everyone is hyping it up, and the creators and people behind it have been telling people things like it poses an existential threat to humanity and must be controlled, while they develop it at the same time, to make you ignore what they are really doing with it right now.

They are playing a game with you.

It is not a threat to humanity like that and it has no thinking ability or intelligence to it.

This “AI” is not HAL 2000 or Skynet, but the people behind it and those that push it may be just as evil.

At the same time that they introduced it, they got millions of people to play with it, so they would think it’s fun and accept it, in the guise of chatbots and programs that will create graphics for you, and write for you.

They hid it’s true purpose from you.

That purpose is to allow the big tech companies to steal and rip off the content created by others and then regurgitate it back to people as their own, often without even sourcing where it came from.

It is all about more big tech control over you and several big tech companies have taken confrontational stances towards various online publishing sites and news organizations of various kinds in the past twelve months.

Twitter, or X as Elon now calls it, did this, for example when he blocked Substack links from his social media site and then banished Matt Taibbi for a period of time from it.

Facebook has downgraded news sites in its feed slowly over the past twelve months. Now, next time you load up Facebook go through the feed and examine it closely and you’ll notice that you’ll see less content from pages and people that you follow and more that their algorithm decides will keep you on the site. Fewer real people are posting on the site and that’s why you see less of your “friends” content on it anymore and more of this seemingly random stuff.

And now some are using “AI” to hurt websites.

This is from Futurism:

“Adweek reports that Google is paying a select group of publishers to quietly test a secretive generative AI platform designed to produce news articles. Per the agreement, Adweek writes, “the publishers are expected to use the suite of tools to produce a fixed volume of content for 12 months” in exchange for a “monthly stipend amounting to a five-figure sum annually.”……

……According to Adweek, the in-beta AI tool allows “under-resourced publishers” to “create aggregated content more efficiently by indexing recently published reports generated by other organizations, like government agencies and neighboring news outlets, and then summarizing and publishing them as a new article.”

In other words, they are paying a few selected publishing companies big money to repackage (do you call it steal?) the content of other companies.

It’s time for people to push back.

Some major newspapers, including the New York Times, and a group of papers owned by Alden Global Capital, are suing Open AI and Microsoft for intellectual property theft. The lawsuit states that the “AI” tools were used to create articles that stripped away all attribution and ripped off millions of copyrighted articles.

Last year, Quora, Amazon, and Indeed.com blocked AI bots from reading their websites.

However, the Financial Times and Associated Press have accepted millions in annual payment to allow the “AI” bot companies to use their articles as sources for new “AI” content.

The head of the News/Media alliance, gave a talk in which he stated, “we undertook a study that we submitted to the Department of Justice that provides ample evidence of the direct nexus between Big Tech’s anticompetitive conduct and the harm to publishers — the anticompetitive conduct in search, exorbitant fees, thwarting of competition, ad tech taking of up to 70% and the list goes on. With AI, this is an exacerbation of an existing problem. Using publishers’ real-time content through a process known as ‘grounding’ or ‘RAG,’ Retrieval Augmented Generation, could satisfy search queries that would obviate users’ need to click through. This could very likely eviscerate our industry. We are calling on lawmakers once again to counter these anticompetitive tactics.”

An article titled Artificial Intelligence is stealthily altering how news is made and how the public finds information, used the experience of Jennifer Bertetto, the CEO of Pittsburgh based Trib Total Media, to describe how this works for the user:

“She recounted the story of a baby alligator named Neo who’d made a home in the Kiski River. Neo was discovered in the late autumn, and collectively the community worried if he could survive the winter. Miraculously, he did, and in mid-February, he was captured and rehomed to a sanctuary. Sadly, two weeks later, there was a catastrophic fire there, and he perished. The community mourned.”

“Trib Total Media’s newsroom followed Neo’s story from first sighting to its sad conclusion. Bertetto was thinking about AI search and Neo, and late one night, she typed “Neo the alligator” into Google’s AI prompt field. The overview produced everything there was to know about Neo’s brief life; however, no part of the search result identified the source of the story — TribLIVE.”

“‘That was our story. We own that story,” Bertetto said. “But we were nowhere to be seen. It also highlighted to me that when people receive a generative AI search result, that’s enough. They don’t need to keep scrolling down the page to see the news results. They don’t need to go past that, ‘ Bertetto said.”

And that means they don’t need to go to the website and the more they do it the more dependent on Google and other “AI” apps in their life they will become. For many, activating their phone and asking for “Siri” or saying “Hey Google” will feel as comforting as asking a parent, or another human, for help.

I decided to see for myself how this worked and grabbed my phone and opened it up to Google and typed in some questions in what I always have thought of as the search bar.

I asked what are the odds of hitting blackjack?

Google AI told me, so I had no reason to go to the website it used to get the answer to my question.

I also asked it what is the inflation rate?

Then I wondered what it would do if I asked it who an obscure, seemingly random, historical figure was.

In the past, Google would put such a person’s Wikipedia entry up at the top of the results, so you would go to their website, or one below it, if you thought the information would be better, to find out what you were looking for.

And I also wondered what it would say if I asked it who I was….

Incredibly, this website was pushed down the list of rankings.

So far, there has been no move by Congress since I first got on the internet to push back against big tech, and it’s hard to believe one will really come.

In fact, as the Financial Times and Associated Press deals show, some giant publishers are more than willing to do deals with big tech against the rest of the news industry, so they can weaponize a segment of the industry against the rest of it.

Internet apps in authoritarian states work with the government approved entities.

In my experience, 2016 marked a turning point for the internet as it marked the mass adoption of Facebook and social people. Now we are at another such evolution.

“In the last month, I have come to the realization that AI will not only impact our industry in journalism, but it’s going to have a rippling effect across our entire social structure,” said the head of Wick Communications, a news organization that operates in eleven states.

What is clear, is that I do not believe the idea of expecting a website to generate revenue by allowing bots to find the articles and bring traffic to it is viable anymore.

The writing is on the wall.

If you have a website then you must decide what you want to do.

About ten years ago I was making over $1500 a month from Google Adsense and would get over 1,000 hits from its search engines and “Google News” every single day. In 2016, after the Trump election, some strange article by an outfit called “Prop or Not” listed around 100 alternative news websites as somehow under Russian control. The Washington Post did a story on it, making it sound credible, agreeing that the sites were all “fake news.” My website wasn’t listed, but dozens of “alternative” financial websites such as Zerohedge were, and at least one person whose articles I have republished on my site was, which was insane. Some of the sites listed were Ron Paul, Lew Rockwell, and Consortium News.

It was all absurd.

But, almost instantly, after that articles publication, the traffic to my website coming from Google SEO fell by 50% and that from Google News went to zero. I could still see my site appear in Google News, but got no traffic anymore from it. It seemed like a shadow ban.

Then in a few months all of a sudden a new outfit called Newsbreak starting to send me traffic, sometimes thousands of hits a day.

They were a new app that was linking to my articles directly.

After a year, though, they suddenly stopped doing that.

It turned out to be a bait and switch, where they want creators, and news organizations, to write directory for them instead of directly linking to their sites.

I looked at my traffic stats a week ago and discovered that I am now getting only 20 to 30 hits a day from Google and $200 a month from the Adwords ads. My traffic from them is now down about 90% from where it was twelve months ago.

Over the past twelve months there has been a collapse in the traffic going to news websites from Google and Facebook.

One article about this, published at OutsidetheBeltway.com, has this graphic:

A media journal, reports that across the board news sites have seen a 48% drop in Facebook traffic and 27% from Twitter in 2023, and one out of five of them are now cutting costs.

One way to put it – Google and these companies used to pay publishers and content creators a nickel or a dime on the dollar for their content and now they want to pay a penny or nothing at all, and basically just keep all of the money.

The practices of big tech has changed from a partnership with websites and publishers – the websites create the content and they send traffic and actually incentivize people into making good content for them – to one of belligerence. They want to keep users on their own platform and AI is simply a way to take the content created by others and feed it back to their users, often without sourcing or attribution. The Associated Press is being paid to help ChatGTP generate its results, but do the users of it know that?

In Canada, the META company blocked Facebook from linking to Canadian news websites for a period of time when Canadian the parliament was considering a bill that would regulate them.

Google has just done that in the state of California and in February actually took away from its navbar for a short-period of time the search results “News” tab – a clear message and warning to those operating and owning news websites.

Back in the day, when Google just came online, there was a trend in the internet world of “article marketing.”

To get search engine traffic to websites people were writing articles and submitting them to websites.

Someone came up with a way to “spin” the articles, so you could make one article and hundreds of unique variations of it, by creating a few different versions of each paragraph.

There was one website, ezinearticles.com, devoted just to storing these articles, and over time the quality of these articles simply degraded and degraded. The site was once of the top 100 websites on the internet in terms of traffic.

Spun variations of the same thing just turn out to become worse and worse content.

That’s one thing “AI” is going to mean for the internet.

The WSJ did a recent investigative story, which showed that for just a few hundred dollars anyone can set up a website of their own that just generates “AI” news articles on any topic for you.

Two paragraphs from it:

“It took me two days, $105 and no expertise whatsoever to launch a fully automated, AI-generated local news site capable of publishing thousands of articles a day—with the partisan news coverage framing of my choice, nearly all rewritten without credit from legitimate news sources. I created a website specifically designed to support one political candidate against another in a real race for the U.S. Senate. And I made it all happen in a matter of hours.”

“With OpenAI’s ChatGPT and a few lines of code, developers on freelancer websites such as Fiverr.com—the site I used to find my developer—can program websites to autonomously rewrite and publish articles from mainstream news outlets according to specific political preferences. Within a few weeks, I could even start earning programmatic ad revenue from my partisan AI content farm.”

What will happen when more and more of these websites are created and people are using their “AI” to make articles off of what are already generated “AI” articles?

You are going to end up with a ton of total garbage on the internet, as if it isn’t bad enough already.

And Google and these big tech companies don’t care, because all they want is more control of people’s time on the internet and to take all the money. If it means less human creativity for dependence on the machine, so be it, as this ad from Apple this week implies. Watch the ad and listen to the lyrics.

Meet the new iPad Pro: the thinnest product we’ve ever created, the most advanced display we’ve ever produced, with the incredible power of the M4 chip. Just imagine all the things it’ll be used to create. pic.twitter.com/6PeGXNoKgG

— Tim Cook (@tim_cook) May 7, 2024

What is sad, is if people come to perceive most websites as garbage content in general than they will simply rely on the Google “AI” even more, even if it isn’t so great.

I subscribe to various media industry publications and the consensus view I am reading of what has happened is, as an AdExChanger article put it, “publishers can build a strong business model on what’s good for Google, Apple and Meta – until working with publishers no longer works for those platforms.”

The solution they advocate is to give up on big tech and somehow “turn inward.”

The leading newspaper industry journal Editor and Publisher, meanwhile, argues that local news outlets need to create websites that won’t depend on Google or social sites for traffic, but will by themselves be such great resources of information for their community that people will regularly come to them on their own.

That’s a tough thing to do when most people are so addicted to various social platforms that they don’t want to stop using them, while younger people are now saying they use Tiktok for news more than anything else. Yep, you heard that right. According to a Pew poll, one third of all people under 30 say that its is their main source of news. That is the world big tech has created. But, in general, the idea that content creators and news sites must free themselves one way or the from Google and the other big tech companies is the right direction to go.

This means that WallStreetWindow is retiring as a news website.

I’m simply going to send out my own thoughts and articles straight to people via email.

So, they’ll need to subscribe to my email list instead of just go to my website to read what I have to say.

I’m going to put this up as a single post on the home page of WallStreetWindow for a few weeks, as a notice, and then simply turn that home page into nothing, but a place to subscribe to the email list.

I am likely to archive all of my posts in a few months and block all future posts from the bots.

I do not want to make content for them anymore.

I’m not doing that yet, because I’m looking at different options first, but I’ll make some change in a few months.

In a way, I’m going back to when I started.

Way back in 1999 I had my first financial website.

All it consisted of was a single page to opt-in to my email list and there weren’t even any archived posts/emails on the website.

To read my thoughts you had to read your email and that’s how it is going to be again.

To subscribe to the email list just click here.

So to summarize:

WallStreetWindow.com is retiring today as a news website and it’s been online since 2003.

Here’s an Internet Archive screenshot of it back in 2004 – twenty years ago.

The basic idea for the site has remained the same since the day it went online until this moment.

The deployment of “AI” against websites means no more.

To communicate my thoughts on the markets I’m going to focus on the people who are already subscribing to my email list.

So, to keep up with my thoughts on the markets, if you aren’t already on my email list then just join it.

To subscribe to the email list just click here.

-Mike

A few weeks ago I wrote about the large managed money/hedge fund short positions in Palladium, corn, and soybeans in the futures market. At the same time, all three of these commodities had net long positions from the large producers, merchants, and swap dealers. Typically, those players in the futures market are always net short, as they use the futures markets to hedge their real world business activities, making a net long position bullish. The pure price speculators tend to be wrong at major market tops and bottoms. So, when you see those people net short, while the real world big business operators are net long typically it is a major bottom being made.

However, that doesn’t mean something is going to instantly rally.

Here is a chart of palladium.

It looks to me that palladium is in a stage one base.

It’ll take a close above the 1090 level, it’s 200-day moving average, to move it into a stage two bull market.

I’m not sure when that will happen, but I do believe it will at some point, and when it does I expect we’ll see palladium prices more than double, and those short forced to cover.

Typically, in a metals bull market gold goes up first and then silver and other industrial metals follow. All of them have now broken out except for palladium and platinum.

For instance, here is the BCIM ETF, which I bought back in March and talked about back then. It owns aluminum, copper, lead, and zinc.

BCIM was in a stage one base when it was trading below $22 and above $20.

It cleared $22 in March and early April and is now in a stage two bull market, with lots of upside.

For me, this position in BCIM is an investment that I hope to hold for long-term capital gains and not a day trade or short-term play.

That’s really how I am thinking about positions in commodities now.

I wanted to put in a buy to play a palladium short squeeze.

The largest palladium mining company is based in Russia.

The second largest is Anglo American Platinum and then Sibanye Stillwater, with operations in Africa.

The latter pays an over 8% dividend and its chart price action is closely correlated to that of Palladium.

I own shares of SBSW.

BTW – I didn’t buy it, but corn, which I mentioned the other week, did indeed break out.

On Friday, it closed right on its 200-day moving average.

Soybeans also are now on the verge of breaking out through their March highs.

I have no opinion on the stock market one way or the other right now.

The China market was closed for the last three days of last week, so there was no gold buying coming from there.

Americans have been net sellers of the GLD ETF all year and have zero interest now in what is going on in the precious metals markets or commodities, judging by Google search data.

I’ll be watching to see if the Chinese stock market breaks out this week.

Also, did this interview with Jim Goddard of www.howestreet.com.

Whenever I post something on a social media website that is critical of what big tech companies are doing – or skeptical of their innovations – it gets zero views, like it’s shadow banned. Either that, or people truly do not respond to such posts so the algos don’t show them. Big tech is going through an evolution to the destruction of news outlets, but no one knows about this or cares it seems.

-Mike

I’m more excited now about making money in the financial markets than I have been in years, but less excited about the online internet world and financial media, which is all being increasingly driven by content drivel pushed by algorithms, which have programmed people who watch news and political videos to always be angry and scared and the financial audience to want to be told that they can buy a crypto coin or a single stock and get rich with zero thinking or work.

It’s why Cathie Wood remains such a big media star, despite her performance. That’s one reason I stopped doing Youtube videos for awhile a few weeks ago. One thing I’ve been doing is going back to some of the books I read when I first started trading in the markets. I’ve been studying the moves of traders of one hundred years ago, such as Jesse Livermore, and a few obscure ones that came before him, that were actually more successful then he was.

Is it time to double down on precious metals and mining stocks?

Here is a video clip, from a few years ago, I found of Stan Weinstein, who is the author of the book Secrets For Profiting In Bull And Bear Markets.

His book had a huge influence on me, introducing me to the concept of stage analysis.

My advice to anyone new getting into the markets is to stop trading, stop watching Youtube or listening to podcasts, and read this book.

Ignore the gurus and develop your own strategy and then come back and start listening to people who help you find ideas that work within it.

Weinstein had a huge newsletter in the 1980’s, but by the time I got into trading he had retired that newsletter and was only consulting with a few clients for $25,000 a piece.

He pretty much disappeared from the internet, except for a few rare interviews – which this video clip is one of those few.

In it he talks about his favorite time to buy – the time where you would “double down” like you would if you were playing blackjack at the most optimal time.

In the markets when this pattern appears is when you can find the most stocks lining up with the pattern I call The Two Fold Formula.

What Weinstein is describing, as his favorite buy point, is the first pullback or consolidation pattern that occurs after the breakout transition from a stage one basing phase to a stage two bull market.

With gold this has taken place, and that first consolidation buy point came in March.

I added to my core 14% metals position on the last day in February and then increased it in March to build my full position during that optimal buy point.

At that time silver was trading under $26 and the consolidation buy point ended when silver closed above that level.

Now, once again, gold and silver and many mining stocks are going sideways and pausing again, to give another entry point.

This time though, as a whole, the big cap gold and silver stocks are outperforming the price of silver and gold.

That’s good confirmation for bulls, but it’s causing some of the mining stocks to just run away from people.

Take a look, for example, at shares of NEM.

On Thursday, NEM reported earnings and when it did explained how rising gold prices are now creating a huge jump in revenue growth.

It’s quarterly EPS jumped from 40 cents to 55.

“Average realized gold price was $2,090, an increase of $86 per ounce over the prior quarter,” the company said. “Gold AISC [All In Sustaining Costs] per ounce was largely in line with the prior quarter at $1,439 per ounce, with a slight improvement from lower sustaining capital spend.”

And now gold is over $2300, so the next earnings report will show another jump.

It’s starting with big cap mining stocks.

We don’t have as good of a buy point now in them, or in gold and silver, as we did in March, but this is still a good one for people who did not get in or need to buy more.

The trick in trading is to buy enough where you can make some good money, but not so much that you end up getting shaken out on any little pullback.

So, anyone who buys here would have to give themselves some room for any pullbacks.

A simple tip is don’t own too much of anything where you have trouble sleeping.

Not all mining stocks have gone up as much as NEM.

There are some that have not broken out yet, but the big cap stocks like NEM are likely to be the sector leader going forward.

Also, not all precious metals have broken out. Palladium, which has a big hedge fund short position on it, and platinum are lagging gold and silver, and industrial metals, and should breakout at some point, but I’m not sure when that will be – it could be weeks or months from now.

Lots of mining stocks are still going sideways this month.

Take a look for example at FNV.

As a way to find an entry point, one could buy FNV and put a stop loss on it below its 50-day moving average, which is at $115, and look for other mining stocks with a similar pattern.

I own FNV.

BTW – the China stock market is on the verge of breaking out.

I mentioned it a few weeks ago and FXI broke out last week.

Meanwhile, Bitcoin has been lagging the performance of the Nasdaq, gold, and silver this month.

That lagging action may be a warning sign that the crypto craze this year is peaking.

Every year that crypto has had a craze when it ends the cryptos totally crash.

Bitcoin will probably go sideways for awhile and then we’ll have to see.

However, I would NOT want to be owning Bitcoin now.

If I did I would sell and move into metals and mining stocks immediately.

I don’t care what Cathie Wood says about crypto – I would get out!

It’s funny – compare how Cathie Wood talks – wild predictions to get people to buy with no strategy – to how Weinstein talks – looking for optimal patterns and using a strategy.

It’s two different ways of thinking about the markets, but it’s Wood technobabble that people want and that’s why the algos promote her.

However, no one will go back to look at anything people like Cathie Wood says two years from now.

And Bloomberg, Yahoo Finance, CNBC, and Benzinga keep pushing her…..

-Mike

The stock market has now fallen another week and that decline sped up a bit as shares of NVDA fell 10% on Friday. Remember, last week, it was JPM that posted a tear drop decline after it reported earnings. Now NFLX did the same thing too after it said that it was going to stop reporting the number of pay subscribers it has on its platform.

Take a look at it’s chart.

And here is NVDA.

Do you remember how everyone was talking about the “magnificent seven” stocks as we came into this year as the seven big cap tech stocks that you had to buy, because their market caps all dominated the S&P 500 and Nasdaq? Well, now many of those have rolled over. Shares of TSLA and AAPL have been trading down all year, but now the NFLX chart is broken too.

When market leaders break down in a bull market it is a big warning sign.

There is a saying when the stock market generals get shot then watch out.

Also, aren’t stocks supposed to have excitement during earnings season?

Last week’s decline in these stocks helped to create the biggest weekly market cap market loss in stock market history.

That’s a testament to how far these stocks went up and how big their market caps became.

Here is a chart of the Nasdaq.

The Nasdaq isn’t really that far from its 150 and 200-day moving averages now.

Is this a mere market correction or the workings of a major top?

Last year, as you can see, the Nasdaq fell to its 200-day moving average.

At that point, the number of stocks on the NYSE above their 200-day moving averages fell below 30%.

That number is now at 60%.

However, stage three topping phases typically come with an increase in market volatility and a flattening out of those long-term moving averages.

That very easily could be what is starting now.

They also come with it a faltering in the stock market leaders and a rally back up to either minor new highs or one that fails.

That rally, though, comes with very weak market breadth and a deterioration of various internal indicators for the market.

That is the key tip off that the bull market is really over, so we’ll watch to see how it all unfolds over the next few months.

Meanwhile, the actual price volatility for gold and silver is actually shrinking.

Remember, the week before last brought with it a Friday “key reversal” day for gold, which made it look like a correction could come in the precious metals markets. In fact, many bullish gold gurus were worried about a drop down to $2200 on gold.

I was thinking it could go sideways in a 100 point range, but it barely fell at all and is just sitting around $2400.

When you see a market breakout and have a big run and then trade with really low volatility you are seeing a very powerful trend, with a lot of underlying buying going on. With gold, that buying is not happening in the United States, where small investors have zero interest in precious metals, still captivated by crypto gurus and technobabble talkers, like Cathie Wood, but it’s going on all over the world.

Gold actually made a new weekly closing all time high on Friday and silver too finished the week at a new 52-week high.

The move in copper, and the BCIM ETF, which I own a position in, has also yet to stop.

Inflation is not going away when copper prices go up like this.

Gold, silver, and commodities are the place to buy now.

The market action of the past two months has been telling us that.

What you want to do is avoid in investing in sectors or ETF’s that are falling worse than the market averages have and are already trading below their 200-day moving averages, because they are likely to lead the market to the downside when the next bear market does actually come.

That’s the case of Cathie Wood’s ARKK ETF.

ARKK is sinking.

But now the rats are jumping ship too.

Tesla announced it is laying off 10% of its global work force last week and several of its top executives, including its top engineer resigned.

He had been with the company for 18 years.

TSLA stock actually lagged the S&P 500 after the stock market turned back up last October.

It lagged on the market rally and lagging action is often a warning to future price drops.

And it happened in TSLA stock, in the last two months of the year, and this year it has been one of the worst stocks anyone can own.

Be wary of any other stocks, sectors, and ETF’s lagging the market so far this year.

-Mike

The nihilists throw all of that out the window.

However, it is a movement that has grown in the financial markets for the past four years – even in the ecosystem of financial gurus.

Fox Business star Charles Payne rejects the movement and he is right, but you need to understand what it is, because of it’s impact on the motivations of so many people who got into the markets in 2020 and afterwards, especially via the mechanism of the trading apps, which encourage people to think like gamblers.

Once you understand it, then you will know the motivations moving the most speculative trading instruments, including Bitcoin.

In order to help you do that I’m going to do something I have never done before and recommend an article written by a bullish Bitcoin guru.

I do not agree with his Bitcoin price predictions, if anything the past few days proves again that Bitcoin IS NOT A SAFE HAVEN, but he lays out the concept of financial nihilism in this article as best as I have yet to see.

You sometimes learn best from reading something written by someone who you disagree with:

-Mike

How, very simply. The FED, through a virtually administrative determination of the rate of the value of money, facilitated the transfer of wealth from American households to econmic agents close to the public resource, mainly through a hidden inflation tax. This process deprived countless American households of the ability to save, save and get rich, as their savings and purchasing power lost value without mind-boggling credit consumption.

For more than two decades of the 21st century, the FED has kept interest rates “administratively” low to finance government spending. In 2020, that spending reached exceptionally high levels and then the FED decided to take extraordinary measures, creating trillions of dollars and accordingly effectively devaluing the currency.

Thus began an unprecedented distortion of wealth redistribution that continues and expands to the present day and which contributes to social and political polarization in the U.S. while generating geopolitical tensions.

The runaway inflation of the past two years has only exacerbated the distortion of the price signals that buyers must pass on to sellers. With grocery prices rising 21% from January 2021, the cost of owning a home has doubled on average over the same period. But we have to remember – it’s still the same house!

Such a process is an illustration of the depreciation of money, namely the main catalyst and indicator of asset value. Housing then becomes a much better means of saving than money or productive assets, even if the real value of the house has not improved.

Household incomes have risen substantially over the past three years, but has their purchasing power increased? As we can see – not at all. Purchasing power has actually declined: you have rising incomes, but you can’t buy an adequate amount of goods, services, or assets with them. This is the price for the forced increase of money in the economy relative to production.

By 2024, incomes are not sufficient to ensure the same standard of living and quality of life, and they are definitely not enough to think about homeownership or other assets with a long return on investment. Speculative interest dominates and this is logical: if you live in an environment of constant inflation and depreciation of money, you shrink your investment and consumption horizons. This is true for households and producers alike.

Middle-income Americans can afford to own a median-priced home in only a few of the nation’s largest cities. In many cities, the cost of ownership on average exceeds wages, a major component of median household income.

Moreover, as prices continue to rise households can save and save less and this makes it harder to save for a sufficient down payment. But even by the time people reach their goal and are ready to buy a house, housing prices are rising again and consumers are once again trapped in a perpetual race with the government: more money and fewer options.

It is necessary to remember the axiom: inflation constantly, although sometimes imperceptibly, reduces the real value of savings. This is an obvious economic law, which says that your purchasing power decreases when the gap in the value of money grows over the value of your production and consumption possibilities. You end up with less than you are able to produce and consume. This gap is covered by the credit that the government creates, and you are caught in a squirrel wheel.

As a result, countless citizens have become permanent renters, and nearly an entire generation of young people have descended from the standard of living their parents had. The Cotillion effect has manifested itself in its entirety: cheap money sucks out the wealth of the population in favor of the social and corporate groups that have direct access to getting that money first. Thus a gulf is created between those who already own capital and assets, particularly real estate, and the rest of the population, who can only possess such assets by taking on significant debt, as is the case with rents and mortgages.

Many homeowners today cannot afford to buy another home like this one. As I noted above, mortgage payments are up 100% relative to the beginning of 2021. If you look at two families with the same income, the one that bought a home three years ago gets a significant advantage over the other family trying to do so today.

The government has created trillions of dollars in federal budget deficits by pumping credit into the economy, thereby continually widening the gap between what you can do and what you want, but encouraging you to satisfy your wants today with credit that will burden you even more tomorrow. In this way a permanent underclass and social group of “perpetual debt” is created, effectively matching Mansur Olson’s “sedentary bandit” strategy.

This does nothing to narrow the inequality gap, but more sadly, it creates enormous social and geopolitical risks, the manifestations of which we see today. Finally, it changes democratic institutions in a bad way, generating a wave of political populism and political stratification. All of these processes are taking place today not only in the U.S., but also in the global world.

Free society and free market economy have approached a state of crisis, if not a state of deadlock, giving birth to global erosions, which are accompanied by intensification and expansion of regional conflicts, growth of social and political tensions.

However, this is not a problem of freedom and the market. It is the result of non-stop state expansionism and short-sighted public consent to it, when the principle “after us, though the flood” becomes a determinant of economic and social behavior.

Atavistic and degradation tendencies of the global society clearly demonstrate a shift to the biological bases of group behavior – the desire of the “pack” for minimum responsibility, maximum security and the possibility to avoid critical choices.

To agree or not to agree with this is your individual, but inevitable choice.

The problem is interest rates are not too high when inflation ticks up.

The stock market took a hit too, posting it’s biggest one day drop all year on Friday.

It looks like it is in a bit of a corrective mode now, but it may just go sideways for a few weeks.

Gold also put on a reversal day on Friday, by at first soaring through $2400, to tap on $2450 and then falling back below it for a $100 point intraday swing.

I got a few emails from people asking if this is the end of the gold run.

I don’t think so, but it’s likely to now consolidate for a few weeks before going higher.

Take a look at the last two times that it had reversal days, which I have circled on the chart, to see how it is is likely to trade for the next few weeks.

In December, gold had a reversal day and then fell into the December Fed meeting, after which it went sideways until the end of February.

Then in the middle of March it had a reversal day, with an almost one hundred point swing, and just started up again in a few days.

Both times it traded in a one hundred point range, with $2100 as resistance and then $2200.

Now it looks like $2400 is the new price resistance level and somewhere in the $2250-$2350 range is likely to become price support.

I don’t think it’s going to pause for a few months here, like it did after that December reversal, but it’ll probably take more than just a week to make another big rally.

I’d guess 4-6 weeks, but we’ll see.

Gold is going to go up again, because the Federal Reserve is now trapped.

This week’s CPI report is so important, because it showed an uptick in inflation instead of a downtick, coming in at an annualized 3.5% rate, with so called “supercore” components well above 4%. The report made crypto gurus like Cathie Wood look completely foolish with her constant “Teslanomics” deflation predictions, which I’m sure she still won’t stop making, but unfortunately it has also put the Federal Reserve in a trap. It can’t raise interest rates anymore, because of the size of the growing government debt, and this report makes it so that it certainly should not lower rates either. Inflation simply failed to go down like the Federal Reserve predicted it would too, even at it’s last meeting in May. On 60 Minutes, a few months ago, Jerome Powell predicted that CPI would fall down below 3% for a few months, and then he would lower interest rates by “mid-year.”

Now that’s thrown out the table.

It creates a scary situation, because what if inflation gets worse and the Federal Reserve feels it can’t hike or if there is a real need to lower rates, with signs of economic weakness, and then inflation just explodes?

However, don’t forget that this years anticipated interest rates cuts have been pushed out into the future before and it didn’t stop the stock market bulls from buying.

I think it’s important to think about the big picture for gold, and not just the action of the past week.

Here is the current chart of the PHYS physical bullion ETF, which I have held a core position in for the past few years.

I had a 14% investment allocation position in my accounts going into the final day of February in gold and silver metals ETF’s, such as PHYS, PSLV, and CEF. In the last hour of Friday I boosted that and then on the first day of March dramatically added more, and also purchased a position in the GDX gold stock ETF, and multiple individual big cap mining stocks.

I did most of this buying in the two areas I circled on the above chart.

I bought BCIM in March too, which is an industrial metals ETF.

I still have a little over 50% of my money in bonds, CD’s, and cash, which gives me flexibility to do other trades or positions outside gold and commodities later.

I have done no more buying in gold, silver, or mining stocks this month and am not looking to do anymore trading in them for a long time. I did buy a small PALL/palladium position, but it doesn’t amount to much, more on that in a moment.

With Friday’s pullback, we may get a nice sideways consolidation period for a few weeks for people who do not yet have a position.

However, the fact that gold, silver, and the GDX have just recently broken above their upper 200-day Bollinger Bands, suggests that this move could be strong all year and last well into next year, and even maybe beyond that.

To see what I mean, gold may trade up like it did back from 2009 to 2011, as an example of how it can get going when it’s in a bull cycle.

Notice the area I circled was a breakout of the $1000 area on gold, which had been a key resistance point for it back then, just as $2100 had been one until recently – and $26 was for silver for almost two years.

Gold simply road up its 200-day moving average during that big rally, on this chart, which lasted for two years.

That’s classic stage two bull market behavior, and during bull markets the 200-day moving average often acts as a great long-term buy point, where you just buy when you get near it and put a 5-10% stop loss order in.

So, if you missed the recent entry points in gold, silver, and mining stocks I’d suggest you take a look at that 2008-2012 chart of gold for ideas on what to do now too.

And here is another example, with gold from 2001 to the end of 2008 to think about.

Also, I’d suggest taking a look at this post by Jordan Roy-Byrne where he looks at not just this 2009 trading pattern, but ones before it, including the 1970’s:

Gold Corrections After Major Breakouts – The Daily Gold/Jordan Roy-Byrne

I’d also grab a copy of Stan Weinstein’s Secrets to Profiting In Bull and Bear Markets.

I’m personally not worried about a gold correction here, because I bought at a lower level, with a good entry point, and am diversified, not on margin, or playing call options or futures or gambling with 2X ETF’s.

As you know, I was doing frequent Youtube videos since New Years telling people to buy gold, and to buy silver, do some silver stacking, below $26.00.

Now that precious metals and mining stocks have broken out and that entry point, in February and March, is gone, right now I have lost interest in doing Youtube videos for the time being and did a video Monday saying I am going away from the platform for awhile.

At this point, I’m actually better off not to look at its trading action very closely in real time, and started to think that right before I did that Youtube video.

I am just holding my positions and am putting myself in a mode of just looking over things every few days to find another great trade.

So, I’m going to slow down and take a little bit of a break in a sense, from looking at things closely and putting out as much content.

Last year, I took a break from July to New Years in doing any Youtube videos at all and only put out two or three emails during that time.

I wrote about two ideas recently – China and Palladium in a post.

I actually would prefer that they enter some sort of stage one basing phase before they really go up, one which goes on for a long enough time to cause the width of the 200-day Bollinger Bands to contract together.

If that happens, then I may buy more and really bang the drum on them, but it would take awhile for that type of setup to materialize, with the China idea perhaps taking into the end of the year or next year for it to really line up.

The China market took a hit Friday, so I may have been early on looking for it to break through its 200-day moving average.

It’s a situation I need to watch and study more.

There is a big “managed money” hedge fund short position on Palladium, but perhaps it can get even bigger if it just trades sideways here for awhile.

I’d like to see it do that for a few months, actually, and then I’d get excited about it.

It’s possible that could happen, because historically palladium has at first lagged the rest of the precious metals complex in past secular bull markets, and it has lagged on this metals breakout too.

As you can see, from the correlation indicator on the bottom of this chart, it has not been trading with the price of gold.

So, if palladium goes sideways for a few months I may buy more, and if it just goes up I’ll simply hold the small position I already have in it.

I’m also just watching the stock market for now and want to see how it trades out for the next few weeks.

I have no real opinion yet of whether we are going to get a simple pause in the big rally, that began last October, or the makings of an important top here.

If I see topping signs I’ll let you know, but I really don’t think much is going to happen for the rest of this quarter.

My guess is the market, may dip a little more here, but is likely to firm up by the end of the week and simply go sideways for awhile.

I took the phrase “The Federal Reserve is trapped” from this Youtube video interview of William Fleckenstein.

I suggest you watch it to understand what is going on in the big picture now.

Let’s see how things trade this week.

-Mike

This is a chart of Bitcoin. For the past several months a lot of people on social media who are Bitcoin people have been telling you to buy it, often trying to guilt trip you – saying things like you will miss out if you don’t buy it, telling you that if you buy you should never sell or worry about it crashing again because it always goes back up.

What this chart shows you is that all Bitcoin has done this year is go back up to where it was way back in 2021 and then gone up another 5-10k. At the same time, the stock market has smoothly made new highs this year and the price of gold is trading at all-time highs. Neither fell as much as Bitcoin did in 2022 and are trading much better than it.

In fact, the plot on the bottom of this chart is a relative strength ratio dividing the price of Bitcoin with the Nasdaq 100 QQQ ETF. It has not made an all-time high. What this means is the Bitcoin has underperformed the QQQ ETF on this chart. People in QQQ’s and normal stock market investments have been doing better than Bitcoin people since that nasty top of 2021. And so are gold investors.

When Bitcoin people talk like Amway salesman walk away from them and just realize they have trapped themselves in a silly cult, listening to crypto gurus. If you want to give them advice tell them to go and visit any of the good brokers and investment advisors in the area. There are investment advisors everywhere and they can guide them out of risky scammy virtual crypto coins and into more safe investments that will help them actually get to retirement instead of gambling in things that go up and then totally crash again and again. If you put all your money into something like that I don’t see how you’d be able to sleep at night. It’s like someone saying their retirement plan is to go to the casino and put all their money into slots and you tell them don’t do it and they talk about the pictures of the jackpot winners they see on the internet.