In the span of 2 years, the US Federal Reserve created 50% more money than had ever existed in the previous 256 years.
Taking Stock of the Pointless
The United States is facing the highest inflation rate in four decades, an inverted yield curve, and the highest debt levels in its history. However, Wall Street just had the biggest relief rally since 2020 after the “bad news” of yet another Fed rate hike of 75 basis points into a brewing liquidity crisis.
It’s no longer a bad thing to hear bad news in this Fed-controlled dystopia. There is a sell-off when there is good job data and a rise in interest rates. It’s just so twisted and depressing, really.
Our central bankers have been dishonestly telling us for the past year and a half that a recession isn’t a recession but rather a “transition,” despite the fact that we and many other market observers have been warning of crippling inflation in the near future.
Insider deal-making and open disregard for truth in DC is shameless. Is politics about total service or total control? These factors compel us to ask this question.
There has never been a greater disparity in wealth in the United States than there is now, pointing to the gradual and empirical demise of the middle class.
With the purchase of concessions and second homes from politicians who openly sell their souls for reelection, the suburbs around Washington, DC, are becoming richer as a result of their close proximity to the capital city.
During the same period that a millionaire executive from Raytheon (America’s second-largest defense contractor) accepted a leadership position at the Department of Defense, a former FDA tobacco tsar took a seven and a half figure executive salary in the private sector at Philip Morris.
As the Governor of New York exchanged a $300,000 political “donation” for a $1 million no-bid contract, the headlines in North Carolina are now filled with politicians stuffing their pockets with casino deals.
Is this the land of the free and the brave?
As long as Mussolini’s definition of fascism is “the perfect merger of state and corporate powers” (circa 1936), the United States may still be a land of the brave, but it no longer feels like a land of freedom.
That JP Morgan Chase paid a $96 million “fine” for $20 billion in profits earned by openly manipulating the gold market is further proof of the fusion of private enterprise and degraded government “leadership.” JP Morgan is led by a $35 million-per-year Jamie Dimon.
As a result of historically disastrous COVID lockdowns that caused far more psychological and financial damage ($7T and counting) to America than the flu with a case fatality rate of less than 1%, once great (and now police-defunded) cities like Chicago, NYC, and San Francisco are witnessing tumbleweeds blowing past office vacancy rates of up to 40%.
When it comes to American foreign policy, one wonders why $60 billion has been spent by the United States to bring “freedom and democracy” to Ukraine, which is run by an ex-sitcom actor and puppet thug who has appeared on the cover of Vogue magazine while censoring the press and imprisoning political opponents.
According to the so-called “media,” many Americans are swayed to wave Ukrainian flags in moments of “ad water, instant virtue signaling,” even though they cannot locate Ukraine on a map nor do they bother to investigate the country’s long history of Russian tensions.
President Joe Biden has been seen as acknowledging that he has no idea what the Democrats’ massive Inflation Reduction Act entails.
After seeing the flood damage in Kentucky,President Biden admitted, “What we’re doing today, what we passed yesterday, helping to take care of everything from health care to God knows what else.”
VP Kamala Harris was sent to Ukraine with a NATO narrative prior to war only accelerated the February drums of war (and the financially disastrous sanctions that followed) in the same way that Pelosi’s recent trip to Taiwan seems to be more about flaming rather than cooling the war cries, as evidenced by her recent appearance in Taiwan.
With more than 800 military bases in 70 countries, does the United States actively seek war or peace?
Since Eisenhower’s warning in 1961 that the military industrial complex was a threat to freedom, democracy, and the rule of law, has it become more about distraction, debt, and dollars?
Fauci and other “experts” in the war against COVID have pushed the American monetary and fiscal policies to new levels of open insanity in the seemingly deliberate fear campaign led by “experts” like Fauci in the war against climate change.
On Biden’s desk (or pillow) sits “The Inflation Adjustment Act of 2022,” a bill that the White House insists won’t raise prices if it is passed.
At least some of these questions and issues are worthy of some cold analysis and open debate; isn’t that what we’ve come to expect from our elected officials?
Whether or not the policies, conditions, and facts cited in the preceding paragraphs are evidence of open stupidity or something more systemic and sinister is a question that needs to be answered.
A Thieving Den or an Honest Broker: The Federal Reserve
It’s safe to say that many people won’t be surprised by my views on the Fed. However, this is just my opinion.
My view is based on the premise (and bias) that the Federal Reserve is motivated to serve the few at the expense of everyone else.
An in-depth study of how the Federal Reserve operates, its practices, and its origins has led to this presumption, which is based on more than just personal observations.
One of the Biggest Lies About Inflation
Inflation and the Fed’s current “solution” are as obviously false as a 42nd Street Rolex, as I have been writing and saying for months.
Powell’s current and projected anti-inflationary policies pale in comparison to the so-called “Volcker solution” or era of 1980, both in terms of the inflation narrative and policy implementation.
Nevertheless, I find it fascinating that so much time, thought, and commentary has been devoted to attempting to explain the current state of inflation, from its disputed causes to its likewise disputed (and rate-obsessed) remedies.
DC’s “Volcker-like” inflation rate of 9.1% is explained by a slew of “fancy” concepts, including “demand-pull,” “supply shocks,” “extraneous shocks,” and “accelerants,” as well as the use of “black swans” (COVID or Putin?).
There was and is nothing more to inflation than the direct result of years of criminal negligence and openly addictive mouse-click money (up more than 10X since 2008) out of the Eccles Building and, 2) fatal fiscal spending from the White House, whether led by a red or blue president. Inflation was and is nothing more than a direct result of the debasement and debasement of the USD.
The US Federal Reserve has created half as much money in the last 24 months as it has in the previous 256 years of the country’s existence.
To put it simply, things are more expensive because the dollar is devalued and inflated.
A dollar was once a dollar between 1776 and 1913, when the Federal Reserve was still in its infancy (as argued against by Tom Jefferson, Andy Jackson, and even Woody Wilson).
Nevertheless, since 1913, a US dollar has been worth no more than five pennies or a nickel.
Huh? What’s going on?
As economists like Alfred Lansburgh, Ludwig von Mises, and Andrew Dickson White argued, when a central bank prints trillions of dollars with no connection to underlying assets or an equivalent exchange for goods or services, the dollar becomes nothing more than a symbol of betrayed trust rather than a store of real value.
The dollar’s value is diluted as if it were a wine glass filled to the brim with water. Taste, color and value are all lost. The US dollar, like all other fiat currencies, has lost over 95% of its value since 1971 when compared to a single milligram of gold.
The Fed is a master at pointing fingers, but they are deaf before a mirror.
They first tried calling it “transitory,” but that failed, so they switched to calling it “Putin’s inflation,” rather than admit the toxic reality (and complicity) of years of fatal and inflationary growth in the broad money supply.
Others will point the finger at COVID as well.
We can be sure of one thing: The Russian sanctions against Putin pushed up gas prices in Europe and the Consumer Price Index (CPI). Without a doubt, the trillions of dollars spent to “fight” COVID were CPI positives.
However, a tailwind does not imply a cause.
Did COVID Really Do It? Is Putin to blame?
As an example, how about the “war on COVID” and the $7T+ in combined financial and monetary resources dedicated to its eradication? There is no doubt that that was a war worth waging, is there?
With no medical or scientific expertise, I’m not here to settle the COVID debate. The CDC and NIH, on the other hand, were, in my opinion (as well as Rand Paul’s) completely wrong.
Everyone has been infected by the virus, whether they’ve been vaccinated or not, masked or unmasked, and it’s clear that shutting down the country and the world for nearly a year was a waste of time and money that we couldn’t afford.
No crime (or psychological ploy) has been perpetrated against American citizens or their inalienable rights and civil liberties since the oxymoronic Patriot Act, in my legal, historical, and financial-educated opinion.
What a disgrace they are. Period. That’s it.
Locked down critical thinking
I learned the inspired art of critical thinking, which anyone can learn, with or without a shiny diploma, as a kid who won athletic scholarships to some of the most prestigious schools in the United States (from Choate to Harvard).
This sickens me because the very schools (prep to grad level) that had taught me about critical thinking and open-mindedness are also the ones that have shut their doors to the un-vaxed while censoring sound, alternative views.
The phony war on COVID cost a lot of money, and because it was paid for with mouse-click money rather than GDP, it was definitely inflationary.
Was it, however, a prudent course of action or an unnecessary expenditure? Lockdowns: evidence of humanitarian concern or a prelude to total control of national and international markets, currencies, and populations?
I’m not here to provide an answer; rather, I’m here to raise issues and provide a different point of view.
Throughout the entire pandemic, experts in virology, medicine, and even vaccine creation were openly censored, gas-lighted, and painted by the media as flat-earth “conspiracy theorists”—DC and the corporate media’s now favorite term of art for anyone or group who disagrees with their often comically official narrative on anything from WMD in I to the AIDS pandemic—as evidenced by the meetings at the AIER in Great Barrington.
Was the US simply being stupid when it imposed financially crippling lockdowns to push the masses into dependency while printing more dollars to save the repo and bond markets rather than Main Street, in light of today’s inflation narrative and its causes?
Once again, we must weigh these questions against our own perspectives, instincts and critical thinking.
Did Saudi Arabia Do It?
Others may point the finger at Saudi Arabia and the country’s high oil prices as the source of the current crisis of high inflation.
Recall that the current price of oil is about the same as it was back in April of 2020.
The Story of How We Got Here
In the fight against inflation, there’s a lot of room for debate, mistakes, and humor, too.
To stop inflation, many people, including the Fed’s James Bullard, advocate for rapid increases in interest rates.
That’s a lot of money.
A “neutral” interest rate of 10.1% in an honest world would be required to reach the IMF’s recommendation of an interest rate of at least 1% above inflation, and this would bankrupt Uncle Sam immediately. Inflation is currently at 9.1%t.
When it comes to the fight against inflation, Powell’s aggressive 2.25-50% Fed Fund Rates are like sending pea-shooters onto the beaches of Normandy.
According to my recent articles, the Cleveland Fed uses extremely clever math to tell the public that the US is enjoying +1% real rates, despite the fact that when measuring even a 3% yield on the 10-year US Treasury against an inflation rate of 9.1%, the US is actually living in a world of at least -6% real rates rather than +1%.
In other words, the Fed appears to be lying openly about negative real rates, just like the CPI scale itself.
Sadly, clever math and outright lies are now the norm in DC. Their true thoughts are hidden from view, and the only weapon against Fed-induced inflation is a Fed-induced recession, both of which they will deny outright.
It’s known as the Recession Story.
This is the latest lie from above: Powell, Biden and Yellen have made a valiant effort to play down the significance of the fact that two consecutive quarters of negative GDP were not considered to be recessionary. However, this data effectively confirms the definition of a recession itself.
Positive data on employment and unemployment, on the other hand, is now considered non-recessionary by the wise people in Washington, DC.
In July alone, the District of Columbia added 528,000 jobs (and 2 million year-to-date), exceeding expectations and putting the unemployment rate in the United States at a record low of 3.5%, the lowest in more than 50 years.
Good news on the labor market could give Powell the “data” he needs to raise rates in September, putting the economy and markets even closer to their inevitable “uh-oh” moment. Powell may raise rates in September.
A little honest math, however, shows that those “new jobs” do not represent new people finding work, but rather more people who are already employed having to take on additional jobs in order to make ends meet as a result of rising inflation.
Labor participation rates have actually decreased since July despite the headlines to the contrary.
It’s been a long time since I’ve done a comprehensive report on the DC math used to artificially inflate U3 and U6 labor data, which is far worse than the official numbers.
Ahh. DC’s comforting words are better than real math, right?
However, we must question the intelligence and desperation of our financial and political leaders when we see such consistent trends of dishonesty.
What’s more, are they so incompetent that they have to dishonestly manipulate the economy in order to stay in power, or is there something more sinister at play?
Mathematical Frauds To Real War
For years, I’ve written and spoken extensively about how Western sanctions against Vladimir Putin and the resulting conflict in Ukraine were both avoidable and foreseeable. All of which have empirically backfired at every level, from weakening the petrodollar to the rise of a stronger, Eastern-lead trading bloc among the BRICS.
The petrodollar is a serious issue, and it’s not a joke. As a result of its gold standard demise, the US relies on the forced purchase of oil in USD in order to keep its currency from losing even more value and power.
Until recently, only two world leaders had the courage to challenge the petrodollar’s sway over the global economy. Khadaffi wanted to buy oil in gold, while Saddam Hussein favored the purchase of oil in euros.
China and Russia both have nuclear weapons, which complicates the US strategy of fighting wars or assassinating leaders in order to protect its financial interests.
An Open Lie from On High: The Dollar Fairy Tale
DC continues to boast about the relative strength of the USD on the DXY, despite openly objective evidence of an increasingly unloved dollar.
According to the DC, this “strength” can only be compared to the weakening Japanese Yen and Western Euro, both of which lack the reserve currency clout to afford an interest rate increase.
The US has less to brag about when it comes to the Chinese Yuan…
In other words, the USD is far from strong. Over the past century, its inherent purchasing power has been devalued, and it is now little more than the best glue factory horse rather than a Derby-winning thoroughbred.
War Drums That Make Money.
To put it another way, why on earth would the United States now be so reckless in sabre-rattling over Ukraine or squeezing the Chinese bear in Taiwan, given all of the failings and open lies discussed above?
Is it because we, as a nation, have a deep-seated desire to help those in need, no matter the cost?
That’s what George Washington, one of our most famous underdogs, military generals, and presidents, warned us about more than two centuries ago.
“Truly enlightened and independent patriots,” he argued, “focused on prosperity within their borders, not peripheral wars outside them,” he wrote.
Despite these warnings, the United States has spent a great deal of time-fighting outside its borders rather than building unity within its own borders.
Well, one sad but empirically proven argument is that war is historically good for lowering GDP and weakening the stock market….
As recently as March of this year, I wrote an in-depth but eerily prescient analysis of how US stocks love global war and predicted escalations against Russia and China.
“War dividend” was a term I coined back in 2002 to describe how US markets reacted positively to instability outside its borders.
Wall Street and the defense contractors in Washington, DC, love a good war, even though Generals Washington and Eisenhower warned against it.
Why? Conflicts in other countries often lead to a massive inflow of capital into the United States, which is a safe haven for investors.
The Iraq War, for example, saw the influx of hundreds of billions in Middle Eastern assets into US markets as NATO bombs were being dropped on the nation. The Dow Jones Industrial Average rose steadily from 2003 to 2008.
58,000 Americans and 1.2 million Vietnamese were killed in the Vietnam War, but the Dow gained 53%. After the end of the war, the markets fell hard.
A near-tripling of the Dow Jones Industrial Average occurred during World War I (1914-1918). Between the attack on Pearl Harbor in 1941 and VJ Day in 1945, the Dow gained 164%.
One might defy logic and become bullish rather than bearish during wartime, especially in our modern version of perpetual war, if one adhered to such a simplified version of history and correlations.
Were the recent plans to send a kindergarten-level intellect like Kamila Harris to negotiate peace with Putin in early 2021 just a dumb idea, or was it more deliberately set up to fail, in light of such developments?
Was Nancy Pelosi’s recent trip to Taiwan a symbol of freedom being spread throughout the region? Is this an idiotic notion? There may be an ulterior motive for pushing for war in the midst of a domestic economic crisis.
History Raises Serious Issues
Historically, every debt crisis is followed by a financial crisis, which is then followed by market and currency crises and social unrest and finally a political crisis that leads to extreme authoritarianism and central control from the political left or right.
In light of how centralized our openly broken yet centrally controlled markets, economies, and politics have become, is it possible that the United States is headed toward a similar authoritarian fate in the wake of the COVID and post-sanction new normal?
Inflation, recession, and domestic foreign policies that are clearly failing are not just a list of stupid mistakes but symptoms of a set-up for something more sinister, is it possible?
To what extent will individual liberty be surrendered in the name of safety and security in order to maintain the status quo?
Is the District of Columbia intentionally creating a class of American lords and serfs who hand out stimulus checks to keep the latter from reaching for pitchforks?
An angry and debt-sodden peasant poses a greater threat to his master’s safety than a submissive one.
Fear is a powerful tool of control, as we learned in Europe in the 1930s or in the lockdowns of the 2020s. It transforms revolutionary rage into subservience. Governments can act as if they have answers when, in reality, all they are doing is creating dependency by instilling fear and chaos.
- Senate Democrats. “Inflation Reduction Act One Page Summary.”
- DemocratsSenate.gov. “H.R. 5376.”
- Congressional Budget Office. “Estimated Budgetary Effects of H.R. 5376, the Inflation Reduction Act of 2022.”
- Committee for a Responsible Federal Budget. “What’s In the Inflation Reduction Act?“
- Penn Wharton. “Inflation Reduction Act: Preliminary Estimates of Budgetary and Macroeconomic Effects.”