Category Archives: Economy

Inflation Is The Kryptonite That Will End Our Decades-Long Monetary Policy Ponzi Scheme, by QTR’s Fringe Finance

There is no pain-free way out of the inflation mess. From QTR’s Fringe Finance via zerohedge.com:

The linchpin that allows the world’s nefarious central banking model to be so effective is that the commonfolk – the plumber, the electrician, the teacher, the bartender, bus driver or barber – don’t understand it.

Countless times, I have reminded my readers and listeners that the inflationary “machinery of night” blankets the most regressive tax possible upon the people who can least afford it, and does so in an extraordinarily convenient way for elites, politicians, central bankers and central planners whose titles and “jobs” hinge upon nobody questioning them and/or figuring out how the system works in the first place.

Today, the fabric of our modern banking world is held together by a logical fallacy of a system, wherein central banks are afforded the asinine luxury of being able to print infinite amounts of “money”, which is then disproportionately distributed toward the ruling class, billionaires, and elites, instead of the people who need it the most.

This shows up, literally, as a widening gap between the “haves” and the “have nots” that has widened consistently since the late 1970’s.

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Commodus Americanus, by The Zman

The U.S. government (I don’t say “our government” anymore) is filled with people who have only had jobs in politics, law, academia, media, and lobbying. They’ve never held a real job and have never had to deal with the routine concerns of middle-class life. From The Zman at thezman.com:

There is an old expression, “shirtsleeves to shirtsleeves in three generations”, that has haunted powerful people since forever. A variation on this is “The first generation makes it. The second generation maintains it and the third generation blows it”. While not an iron law of the universe, it is an observation that has held up over time. Whether it is business empires or political empires, the work of the great man somehow turns into a curse that plagues the lives of his descendents.

The funny thing about this bit of reality is that it is well known and many very smart people have tried to come up with a solution, but the problem remains. In the business world, expert planners work with business owners to help them mitigate this disaster, but only about 10% of family business make it to the grandchildren. The trust system was designed with this in mind. The grandchildren will never amount to much, but at least they will have an allowance to sustain them.

It is fair to say that popular forms of government were invented to address the problem of private rule going sour by the third generation. Caesar Augustus was the great founder of the empire. Tiberius Caesar Augustus was solid, but he suffered from the predictable maladies of every second generation ruler. Caligula is arguably Rome’s most famous lunatic. Of course, we have Claudius, an interregnum of sorts, before we get to Nero, who was literally the end of the line.

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Bitcon . . .? By Eric Peters

Call Eric Peters Bitcoin skeptical. From Peters at ericpetersautos.com:

One of the problems with “crypto” is just that – no one seems to know exactly what it is.

Or at least, no seems able to explain what it is.

Somehow, a digitized online representation of a “coin” has immense value, though what gives it any value is difficult to understand. It is not backed by precious metals. It is not issued by a bank.

It’s just there, on the screen.

The willingness of a sufficiency of people to accept that it has value is what gives it value. Dirt could work on this principle. To be fair, crypto is not materially different from U.S. dollars, which have value chiefly because people accept them as having it.

The pieces of paper themselves, have no more intrinsic value than the digitized representation of a “coin” online.

And that of course is the primary danger of both. They have value only because someone (speaking figuratively here) assigned it to them and because others agree to that estimation of value, which isn’t moored to anything, really.

We all pretend the “dollars” – or “coins” – themselves are things of tangible value. That works just as long as it does. Which probably won’t be for very long.

Now, the pieces of paper issued by the private cartel of banks that control their supply are “backed” by the “full faith and credit of the United States,” for whatever that’s worth. And it is probably worth something. Not much, given the value of a “federal” dollar has declined by more than 90 percent since the “federal” reserve began issuing these pieces of paper more than 100 years ago. The value of “crypto” has generally tracked in the opposite direction, a phenomenon that has made it very attractive to people trying to figure out a way to staunch the seemingly unstoppable bleeding out of the value of their money. It’s tempting to transfer “dollars” into “coins” when “coins” seem to hold rather than hemorrhage value.

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These people hate you and think you are beneath them, by Marty Bent

The rulers always despise the peasants. From Marty Bent at tftc.io:

This is the epitome of what is wrong in the world right now

 

Fourth Turning 2022 – Bad Moon Rising, by Jim Quinn

When does a society hit bottom during a Fourth Turning? From Jim Quinn at theburningplatform.com:

In Part 1 of this article I laid out how the global elite have used this covid flu to manipulate the weak minded into a fear induced mass psychosis as a key element in their Great Reset plan to control the world and keep you technologically enslaved under lock and key. Now I will try to decipher how this mass hysteria might play out over the course of 2022 and beyond.

“Americans today fear that linearism (alias the American Dream) has run its course. Many would welcome some enlightenment about history’s patterns and rhythms, but today’s intellectual elites offer little that’s useful. Caught between the entropy of the chaoticists and the hubris of the linearists, the American people have lost their moorings.” Strauss & Howe – The Fourth Turning

Federal Reserve Just Declared the American Dream is Dead for Most Americans

“The most effective way to destroy people is to deny and obliterate their own understanding of their history.” ― George Orwell

The American Dream, where all Americans, no matter the circumstances of their birth, had a legitimate opportunity to live a better life than their parents, based upon their own intelligence, work ethic, and good fortune, is an illusion in today’s world. The ruling elite have stolen the wealth of the nation and its citizens. This was not an accident, but a plan implemented over many decades, accelerating after Nixon closed the gold window and opened the door to unlimited amounts of debt being created out of thin air and backed by nothing.

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Newsom Likens Railcar Thefts To “Third World Country” As Liberal ‘Law & Order’ Agenda Implodes, by Tyler Durden

Having turned California into a third-world country, California’s governor is upset that Los Angeles rail yards look like a third world country. From Tyler Durden at zerohedge.com:

Having shrugged off ‘mostly peaceful’ protests and reclassifying nonviolent felonies like shoplifting and drug possession as misdemeanours, it appears the increasingly progressive policies of Soros-sponsored DAs – especially in California – have come back to bite as a tsunami of violent crime has forced woke liberal leaders to face up to the reality that their voters (and more importantly donors) are facing every day.

California Gov. Gavin Newsom and his left-leaning comrades in the Golden State spearheaded the move to reform police departments and the state’s criminal justice system that allows people who shoplift or are in possession of drugs to be released from jail (or avoid it all together) with minimal consequences for their actions.

Newsom’s acquiescence to ‘progressive’ DAs has single-handedly transformed numerous metros areas into hot spots for violent crime, resulting in businesses and people packing up their bags and getting the heck out of dodge. 

For the longest time, progressives have denied their social policies contributed to the rise in violent crime.

But that is changing fast. Along with NYC’s new mayor demanding federal aid to deal with that city’s crime wave, it appears Newsom’s statements about the wave of freight train looting in Los Angeles are very suggestive that his party is quickly recognizing their ‘law and order’ policies are miserably failing.

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Iran-Russia Hit Maximum Strategy, by Pepe Esobar

A lot of countries on the receiving end of U.S. hostility are making common cause together. From Pepe Escobar at unz.com:

Three ain’t a crowd: The Iran-Russia summit this week, concurrent with RIC military drills in the Sea of Oman, in advance of a Xi-Putin meeting in two weeks, suggests a rapidly-advancing strategic vision for the three Eurasian powers.

The official visit to Russia by Iranian President Ebrahim Raisi, at the invitation of Vladimir Putin, generated one of the most stunning geopolitical pics of the 21st century: Raisi performing his afternoon prayers at the Kremlin.

Arguably, more than the hours of solid discussions on geopolitical, geoeconomic, energy, trade, agriculture, transportation and aerospace dossiers, this visual will be imprinted all across the Global South as a fitting symbol of the ongoing, inexorable process of Eurasian integration.

Raisi went to Sochi and Moscow ready to offer Putin essential synergy in confronting a decaying, unipolar Empire increasingly prone to irrationalism. He made it clear at the start of his three hours of discussions with Putin: our renewed relationship should not be “short-term or positional – it will be permanent and strategic.”

Putin must have relished the torrents of meaning inbuilt in one of Raisi’s statements of fact: “We have been resisting the Americans for more than 40 years.”

Yet, much more productive, was “a document on strategic cooperation” between Iran and Russia that Raisi and his team presented to Russian officials.

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Bad News, I’m Afraid, by James Rickards

It will be a long time before supply chains get any better. From James Rickards at dailyreckoning.com:

The breakdown of global supply chains is well-known by now. Whether it’s finding groceries in your supermarket, buying a new car or buying appliances like dishwashers and refrigerators, goods are scarce. Also, deliveries take forever and choices are limited.

Many people wonder why the problem isn’t going away. Here’s the answer:

The supply chain is a complex dynamic system. When any complex system collapses, you can look for specific causes but that’s usually a waste of time. Systems collapse internally because they are too large and too interconnected and require too many energy inputs to keep going.

Any specific cause is more likely to be a symptom than a true cause. It’s frustrating, but that’s the answer.

Most Americans’ first encounter with the supply chain meltdown was in the spring of 2020 during the first wave of the coronavirus pandemic. Shoppers noticed that items like hand sanitizer and paper goods at Costco and other big-box stores were cleaned out.

It seemed that Americans who were locked down and quarantined at the time were hoarding these products because they had no idea when they would be allowed to venture out again.

The shortages were real, but were limited to specific products. The other aisles at Costco were stocked and so were all the other stores around (at least those that were allowed to remain open).

Now It’s Everything

But it’s not just Costco this time. It’s every supermarket, convenience store and other retail outlet from coast to coast. And it’s not just cleaning products and paper goods. Your local supermarket might have bare shelves for eggs, peanut butter, milk and other staples.

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The Mayhem Below the Surface of the Stock Market Seeps to the Surface: Now it’s the Giants that Topple, by Wolf Richter

Eventually even the market stalwarts get sold in a bear market. From Wolf Richter at wolfstreet.com:

The market finally gets it: The Fed is going to tighten to get a handle on its massive inflation problem.

Since February last year, the hottest most hyped stocks, many of them recent IPOs and SPACS, have been taken out the back and brutalized, either one by one or jointly. The stocks that have by now crashed 60%, 70%, 80%, or even 90% from their highs include luminaries such as Zoom, Redfin, Zillow, Compass, Virgin Galactic, Palantir, Moderna, BioNTech, Peloton, Carvana, Vroom, Chewy, the EV SPAC & IPO gaggle Lordstown Motors, Nikola, Lucid, and Rivian, plus dozens of others. Some of these superheroes are tracked by the ARK Innovation Fund, which has crashed by 55% from its high last February.

This mayhem has been raging beneath the surface of the market since February last year, and in March, I mused, The Most Hyped Corners of the Stock Market Come Unglued. They have since then come unglued a whole lot more. But the surface itself remained relatively calm and the S&P 500 Index set a new high on January 3 this year because the biggest stocks kept gaining or at least didn’t lose their footing.

But now even the giants too are going over the cliff. Combined by market cap, the seven giants, Apple [AAPL], Amazon [AMZN], Meta [FB], Alphabet [GOOG], Microsoft [MSFT], Nvidia [NVDA], and Tesla [TSLA] peaked on January 3, and in the 13 trading days since then have plunged 13.4%. $1.6 trillion in paper wealth vanished (stock data via YCharts):

The Cult of Speculation Is a Cult of Doom, by Charles Hugh Smith

We can’t all gamble our way to prosperity. From Charles Hugh Smith at oftwominds.com:

Surely the Fed gods will affirm the cult’s most revered articles of faith. But false gods eventually fail, even the Fed.

Every once in awhile the zeitgeist sets up an either / or: either the zeitgeist is crazy or I’m crazy. (OK, let’s agree I’m crazy; see, it’s not that hard to find something to agree on, is it?)

What strikes me as crazy is the global Cult of Speculation which has recruited virtually the entire human populace in a bizarre cult in which speculating wildly is now the accepted norm, a norm papered over with fine-sounding phrases such as “investing for the future,” “hold on for dear life,” “conviction trade,” “new paradigm,” and so on, all variations on the time-honored “this time it’s different.”

But speculative frenzies that sweep up everyone with a few quatloos to place on the gaming table are not different, they are the norm. Humans love gambling, winning, windfalls, something for nothing, being ahead of the pack (“the new paradigm,” etc.) and the excitement of running with the triumphant herd, all of which are fulfilled by speculative frenzies.

All the speculative free-for-all is lighthearted fun on the way up, but there is a much bleaker reality that few are willing to recognize, much less discuss: now that the global economy is in thrall to the top 0.1% and the foundations of widespread prosperity crumble into dust, the ladder to wealth, power and prestige has few rungs left.

Most of the few remaining open slots in the top tier have already been taken by insiders and the offspring of the already-wealthy, and so the only way to get ahead is to speculate and win–not just win, but win big.

In other words, the fundamental driver of this speculative frenzy isn’t just greed, it’s desperation. For the vast majority of the world’s population, speculating and winning is their only chance to escape debt-serfdom or wage-slavery.

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