Weekly Column: Eventual return to a more stable economy

Review and preview

The employment picture started off 2023 on a stunningly strong note, with nonfarm payrolls posting their biggest gain since July 2022. Nonfarm payrolls increased by 517,000 for January, above the Dow Jones estimate of 187,000 and December’s gain of 260,000, according to a Labor Department report Friday. “ The unemployment rate fell to 3.4% versus the estimate for 3.6%. That is the lowest jobless level since May 1969. The labor force participation rate edged higher to 62.4%. – Jeff Cox, “Jobs Report Show an Increase of 517,000 in January, Crushing Estimates as Unemployment Rate Hit 53-year Low,” February 3, 2023.

The Federal Reserve nudged up short-term interest rates by a quarter-percentage point and signaled it was on track to do so again at its meeting next month while officials consider whether and when to pause increases late this spring.  “We’re talking about a couple of more rate hikes to get to that level we think is appropriately restrictive,” Fed Chair Jerome Powell said. – Nick Timiraos, “Fed Slows Its Tightening With Quarter-Point Interest Rate Hike,” Feb 1, 2023, Wall Street Journal.

Punxsutawney Phil, the revered groundhog of Groundhog Day fame, saw his shadow on February 2. It means we will have six more weeks of winter. But don’t tell that to the stock market, which saw the S&P and NASDAQ soar well above their previous primary cycle highs of August 16. In an interesting twist, the DJIA could not exceed its current cycle high of December 1, or even its half-primary cycle high of January 13, after it had previously rallied above its August 16 high back in November. On Friday, February 3, the S&P and NASDAQ pulled back sharply, along with the DJIA. So, for Punxsutawney Phil, seeing his shadow on a sunny day, was so far the end of the stock market rally in 2023, and a set up for a case of intermarket bearish divergence in a geocosmic critical reversal date time zone. Since we are market timers, this is important.

The performance was similar in Gold and Silver. After soaring to 1975 on Thursday morning, February 2, its highest mark in several months,  Gold plunged below 1875 the next day, a loss of $100. Silver made a triple top at 24.75 on Thursday, February 2 but it was still below its most recent cycle high of 24.77 on January 3. But after Phil’s shadow appeared, Silver lost its shine and was down to 22.32 on Friday, a drop of over 2.40. That’s huge, but it fits with the transits underway now.

Short-term geocosmics

Something remarkable happened last month. On Jan. 9, Georgia Rep. Buddy Carter introduced the “Fair Tax” bill to the House of Representatives, and secured a promise of a floor vote. The bill eliminates the personal and corporate income tax, estate and gift tax, payroll (Social Security and Medicare) tax and the Internal Revenue Service. It replaces them with a single national sales tax. A consumption tax, with none of the absurd complexity of our current taxes, is the answer. It funds the government with the least economic distortion. A consumption tax need not be regressive. It’s easy enough to exempt the first few thousand dollars of consumption, or add to the rebate.– John H. Cochrane, “A Consumption Tax is the Shock Our Broken System Needs,” Feb 2, 2023, Wall Street Journal.

The Groundhog Day top and sell off in stocks and metals fit very well with geocosmic studies. That is, the Sun squares Uranus and Venus squares Mars this weekend. The orb of influence for a reversal can be three trading days on either side. And when Uranus is involved, the price movement can be very sharp as especially witnessed in Gold and Silver over the past two days. 

As pre-warned last week, “The Sun will square Uranus on February 4, while Venus will square Mars the next day. Both are disrupters. The Sun/Uranus square can disrupt financial markets, especially those that pertain to interest rate gyrations like Treasuries and currencies.” Hard aspects involving Venus can also disrupt financial markets like stocks, Treasuries, and currencies. They all had sizeable setbacks on Friday following highs on Thursday. The planet of disruption is doing its job well. But for how long? Will end this week or continue into the next geocosmic critical reversal date zone? These are questions we address in our weekly subscription reports.

For this week, the major event is probably the Full Moon on Sunday, forming a T-square with Uranus. Everybody thinks they know best, so don’t expect brilliant ideas or solutions to be accepted by those in positions of power who may see such innovative ideas as a threat to their own self-perceived brilliance. We will be seeing a lot of power plays over those ideas are most brilliant once Pluto enters Aquarius on March 23 and through the following 20 months. We will discuss that in detail in our February 19 webinar on “Forecast 2023 Updated.” 

Longer-term thoughts (and opinions)

Many central banks around the world have leaned against inflationary pressures by raising short-term rates even in the face of weakening growth. This dynamic suggests the eventual return to a more stable economy, which is a welcome development for savers, who have lost out relative to debtors for nearly two decades as short-term rates have often failed to keep up with the rising cost of living. Joe Davis, “Savers Will Benefit From a Return to Sound Money,” February 1, 2023, Wall Street Journal.

Sound money. What a quaint concept. It was very much in vogue until Pluto began its 15-year jaunt through Capricorn in January 2008. Now as we prepare for Pluto leaving Capricorn for its next 20-year journey through Aquarius, those days of experimentation with never-tried-before monetary and fiscal policies have served their purpose. They won’t be back for quite some time, maybe 70-80 years based on the Saturn/Pluto synodic cycle. The good news is that savers will once again accrue monies for parking their funds in T-Bills, T-Notes, and other Treasuries. They will be able to buy presents for their grandchildren again, and not be such a financial burden on their children. Maybe they can buy junior a groundhog for a pet.

Of course, the downside of these Pluto-in-Capricorn monetary and fiscal policies has put the government on a dangerous debt course towards a possible default. The Fed seems to be leaning into sound monetary policies, but the same cannot be said for Congress and the White House, which is now up against its debt ceiling limit. Of course, no one wants to see the government default on its financial obligations. The debt ceiling limit has to be raised because the consequences of not doing so are catastrophic. On the other hand, the government cannot just continue to “kick the can” down the road and spend recklessly as it has been doing the past two years (and even the past 15 years).

Treasury Secretary Yellen says she can stretch the payments out until early June. This is interesting because in the second half of May, Mars-Jupiter-Pluto will form a T-square. Jupiter/Pluto, in hard aspects is often a time of a financial panic nearby. If you are thinking about purchasing short-term Treasuries, perhaps it would be best to avoid those coming due May-July. On the other hand, that may be the best time to purchase Treasuries that come onto the market then, for their rates may be briefly and sharply higher than normal as fear of a selling frenzy could engulf the financial community. It’s good to lock in rates when holders are in a panic. They want the comfort of getting out and you want the opportunity to maximize the return on your investment. Be smart and plan your investment strategy with that period in mind.

The U.S. is not going to default. Transits and progressions to the U.S. founding chart (July 2, 1776) are mostly positive (listen to the audiobook of Forecast 2023 Abridged edition). The only geocosmic aspects that show this possibility are the transits to the natal chart of President Biden, who has transiting Pluto in opposition to Jupiter, his ruling planet, in the 8th house of debt. This will be followed by Pluto in a square to his natal Moon, which rules his 8th house of debt. Pluto rules debt and a few other terms that start with “D” (downgrade, deficit, and default). Once again, the U.S. isn’t going to default. But the president may have some explaining to do about his fiduciary duties and spending sprees regarding the U.S. Treasury in 2023-2024. He may also have some explaining to do about the activities and possible coverups of his family members, as the Moon pertains to one’s home life. In the fifth house, it can pertain to his children. His (in)ability to get a grip on the financial well-being of the U.S. as well as his family’s missteps will probably tell the tale as to whether he will be the choice of the Democrats to run again for the presidency. He is lucky right now with the transit of Neptune making a grand trine to his natal Sun/Venus and Jupiter. But no one escapes Pluto unscathed.