Author Topic: Political Economics  (Read 799340 times)

DougMacG

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Re: Gramm & Solon: Stagflation coming
« Reply #2050 on: December 14, 2021, 03:32:54 PM »
Stagflation is the optimistic outlook under these policies.  Total, downward spiraling, freefall collapse is the pessimistic possibility.

DougMacG

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Re: Political Economics, Boris Yeltsin knew the difference
« Reply #2051 on: December 14, 2021, 04:04:07 PM »
I am amazed at what is not on the shelves in stores today.  No white grout at Home Depot?  Adhesives, out.  Tennis ball shortage.  Dollar Tree already announced a dollar will buy nothing next year, and the shelves are already bare in some locations.  Besides Venezuela under the tyrants of socialism, what does that remind you of, the Soviet socialist system, of course, deep in the ash heap of history.
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http://blog.chron.com/thetexican/2014/04/when-boris-yeltsin-went-grocery-shopping-in-clear-lake/

Boris Yeltsin had the very same response when he visited a Houston supermarket in 1989; he immediately knew the Soviet Union was dead when he saw its shelves stocked to the brim. Bernie Sanders considered this a bad thing — both the abundant selection of the typical supermarket and the fall of the Soviet Union.* Or as Lindsey Graham joked in October of 2015, Sanders “went to the Soviet Union on his honeymoon,” and never came back.

Look at Yeltsin’s reaction below, the photos are from 1989.  Yeltsin was the Moscow delegate to the Soviet Politburo.  He knew and admitted aloud, socialism doesn't compete with freedom:



« Last Edit: December 14, 2021, 05:24:59 PM by DougMacG »

Crafty_Dog

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WSJ: Kerry's Crusade against Oil and Gas
« Reply #2052 on: December 16, 2021, 12:03:47 PM »
ohn Kerry’s Financial Crusade Against Oil and Gas
Public officials have told the climate envoy to stop trying to raise energy costs for U.S. consumers.
By Andy Puzder
Dec. 15, 2021 6:29 pm ET


‘The reality is the Biden administration is not standing in the way of increasing domestic oil production to meet today’s energy needs,” Deputy Energy Secretary David Turk asserted at the World Petroleum Congress in Houston last week. Really? He might want to check with John Kerry.

The president’s climate envoy has been pressuring banks and financial institutions to reduce their commitments to U.S. oil and gas companies and join the Net-Zero Banking Alliance, which would hobble the ability of oil and gas companies to increase production. Citi, Wells Fargo, Bank of America, Morgan Stanley, Goldman Sachs and JPMorgan Chase signed on to the alliance this year.

Mr. Kerry’s efforts didn’t go unnoticed. In April, members of the Senate Banking Committee sent him a letter expressing concern that he had “been pressuring banks to make extralegal commitments regarding energy-related lending and investment activities” that would result in “higher energy costs for American consumers.”

In May, 15 state treasurers sent a letter to Mr. Kerry observing that he and other members of the Biden administration are “privately pressuring U.S. banks and financial institutions to refuse to lend to or invest in coal, oil, and natural gas companies, as part of a misguided strategy to eliminate the fossil fuel industry in our country.” They urged banks and financial institutions “not to give in to pressure from the Biden Administration.”


It will take more than letters to halt the Biden administration’s war on fossil fuels. Responding to the Dallas Fed Energy Survey for the third quarter, one oil-and-gas producer identified “expanding credit” as a major headwind because “the money center banks continue to seek to reduce their commitments to oil and gas borrowers.”

On Nov. 22, another group of 16 state financial officers signed an open letter to the U.S. banking industry with some teeth. The letter states that the signers will take “concrete steps” to “select financial institutions that support a free market and are not engaged in harmful fossil fuel industry boycotts for our states’ financial services contracts.” If these officials follow through, noncompliant banks would lose lucrative state contracts. According to the letter, these officials are responsible for a combined total of more than $600 billion in assets.


Texas went a step further in June, enacting a law banning state investments in businesses that boycott oil and gas companies and another law that blocks state investments in companies that restrict business with the firearms industry. Since the laws took effect, two of Wall Street’s biggest municipal-bond underwriters—Bank of America and JPMorgan Chase—haven’t managed a single municipal-bond sale in Texas, the second-largest issuer of state and local government debt with some $58 billion sold last year.

The antiboycott approach is a good start, but it fails to address a significant threat. Under the Texas law, state agencies can still do business with financial firms such as BlackRock, Vanguard and State Street that advocate transforming our economy to net-zero carbon emissions by 2050 because they own—rather than boycott—oil-company stocks.

That is a problem. Exxon Mobil is the largest energy company in Texas. Climate activist hedge fund Engine No. 1 recently waged a proxy war to put insurgent directors on Exxon’s board. Reuters described it as “the first major shareholder contest to make climate change the leading issue for choosing directors.” Engine No. 1 gained the support of BlackRock, Vanguard and State Street Global Advisors, which voted their combined 21% of Exxon’s shares in favor of two insurgent directors who won election to Exxon’s board. BlackRock supported a third insurgent who was also elected.

The Employees Retirement System of Texas and the Teacher Retirement System of Texas also voted in favor of the three successful insurgent director nominees and a shareholder proposal requiring a report on corporate climate lobbying aligned with the Paris agreement, which passed.

Engine No. 1’s proxy fight was about altering Exxon’s business model away from oil and gas production. By October Exxon’s board was debating whether to continue some major projects despite the world’s oil shortage and rising prices.

A more comprehensive state legislative solution might have produced a different result. The Texas law could have included a provision placing the voting rights for shares purchased by Texas entities, or the financial advisers those entities employ, under a committee that includes individuals answerable to Texas voters, rather than climate-change activists.


The Biden administration will pursue its nonstop war against America’s oil and gas producers for at least the next three years. Unless it meets resistance, prices will increase and the U.S. energy industry will continue to shrink. While state legislatures can’t stop Mr. Biden from pursuing his agenda, they can discourage the financial sector and institutional investors from supporting it.

Mr. Puzder is a former CEO of CKE Restaurants, chairman of 2ndVote Value Investments, Inc., and a visiting fellow at the Heritage Foundation.

DougMacG

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Re: Political Economics, 'strong consumer spending'
« Reply #2053 on: December 17, 2021, 08:59:24 AM »
The driver of 'strong consumer spending' is the reality you won't buy things at pre-Biden prices ever again.  Buy now or pay more later for basics and essentials and everything else.

If you can't remember gas more than a dollar a gallon cheaper under Trump, there is always Dollar [Twenty Five] Tree:

https://abcnews.go.com/Business/wireStory/dollar-tree-makes-official-items-now-cost-125-81361316

Strange to call prepping for collapse a sign of 'consumer confidence'.  Would you rather have a dollar in your pocket or something you can eat when there is no food left on the shelves?

https://www.cnn.com/2021/12/08/business/dollar-tree-1-dollar-price-dollar-stores/index.html

No, $1.25 won't sink 'Dollar Tree'.  Hardly anything really costs the consumer a dollar anyway; 40 states have a sales tax 6% or greater, 6 more at 5% or more.  Only 2 states have no sales tax:
https://www.salestaxhandbook.com/highest-salestax-states

The 'dollar menu' at McDonalds doesn't have food on it and the "$5 footlong" at Subway is now $9?

And a median house doesn't cost 175k anymore except maybe in the heartland.
"Between 1999 and 2021, the median price has more than doubled from $111,000 to $269,039."
What's political about economics?  The more Democrat a state is, the more a house costs.  That's strange.
https://worldpopulationreview.com/state-rankings/median-home-price-by-state

Bidenflation reportedly added $3500 to the cost of goods and services in 2021:
https://townhall.com/columnists/christalgo/2021/12/17/bidenflation-translates-to-3500-in-added-costs-for-average-family-in-2021-n2600711
https://budgetmodel.wharton.upenn.edu/issues/2021/12/15/consumption-under-inflation-costs
So is consumer demand up or are they just spending more to stay afloat?

The FUSD (former US dollar) is f'd.
« Last Edit: December 17, 2021, 09:48:51 AM by DougMacG »

DougMacG

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Re: Political Economics - productivity reversals
« Reply #2054 on: December 20, 2021, 09:42:23 AM »
Productivity gains are what make wage gains and a lot of other positive economic things possible.  Now read and watch the business reaction to supply chain failures.  "Just-in Time" (JIT) manufacturing, where everything gets to just the right place at just the right time, now gives way to just in case purchasing and stocking, setting that part of the economy back 40+ years when people had to win a lottery to buy gas.
https://www.nytimes.com/1979/10/24/archives/carter-empowered-to-establish-plan-for-gas-rationing-final-house.html

A cave man didn't need a computer to know he will need a big pile of firewood for winter.  Welcome to the Biden economy.

https://www.ft.com/content/8a7cdc0d-99aa-4ef6-ba9a-fd1a1180dc82?segmentId=b385c2ad-87ed-d8ff-aaec-0f8435cd42d9
[Financial Times - Paywall blocked but there are plenty of articles out there on companies coping with supply chain unreliability and all of it revolves around operating less efficiently.]

DougMacG

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Political Economics - Warren blames Big Food
« Reply #2055 on: December 21, 2021, 09:50:56 AM »
You can't make this up.  Democrats blame the victims for the problems THEY cause.

https://thehill.com/homenews/senate/586710-warren-accuses-supermarket-chains-executives-of-profiting-from-inflation

Blame grocery stores.  Great.  They should consider closing if proving her wrong was of any interest.  What's the price of food WITHOUT producers and suppliers, seeking a profit or not?

Talk about a never-thanked industry, like housing, if grocers were greedy, then the only thing that remained constant during BidenDemflation was grocer greed.  It is HER people, Harvard elite liberal brats, that are fucking with monetary policy and it's her people who can't balance a budget, won't let you pump gas, heat your home, eat without a federal subsidy, or breathe, cf. mask mandates.

If you ate today, thank a farmer and grocer.  If you ate in the Soviet Union today, thank a 'democratic' socialist - in the ash heap of history.

DougMacG

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Re: Political Economics - Warren blames Big Food
« Reply #2056 on: December 22, 2021, 08:39:42 AM »
Famous people caught reading the forum, John Hinderaker at Powerlinblog:

https://www.powerlineblog.com/archives/2021/12/big-grocery-seriously.php
"Big Grocery?  Seriously?!"
"The idea that there is such a thing as “Big Grocery” is so laughably stupid that only a far-gone ideologue like Elizabeth Warren could take it seriously."

You can't make this up.  Democrats blame the victims for the problems THEY cause.

https://thehill.com/homenews/senate/586710-warren-accuses-supermarket-chains-executives-of-profiting-from-inflation

Blame grocery stores.  Great.  They should consider closing if proving her wrong was of any interest.  What's the price of food WITHOUT producers and suppliers, seeking a profit or not?

Talk about a never-thanked industry, like housing, if grocers were greedy, then the only thing that remained constant during BidenDemflation was grocer greed.  It is HER people, Harvard elite liberal brats, that are fucking with monetary policy and it's her people who can't balance a budget, won't let you pump gas, heat your home, eat without a federal subsidy, or breathe, cf. mask mandates.

If you ate today, thank a farmer and grocer.  If you ate in the Soviet Union today, thank a 'democratic' socialist - in the ash heap of history.

DougMacG

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Political Economics, Ray Dalio continued, Marketwatch
« Reply #2057 on: December 22, 2021, 01:41:07 PM »
Ray Dalio sees economic collapse coming.  I believe decline/collapse is a choice.  Seems to me he is coming to my way of thinking, writing about what we can do to avoid catastrophe.  Earn more than you spend, for example.

https://www.marketwatch.com/story/ray-dalio-warns-the-feds-hands-are-tied-and-that-higher-u-s-inflation-is-sticking-around-democracy-maybe-not-11639578847

Ray Dalio warns Fed’s hands are tied and higher U.S. inflation is sticking around. Democracy, maybe not.
Last Updated: Dec. 18, 2021
Founder of the world’s largest hedge fund tells investors to avoid holding cash and keep an ‘all-weather’ portfolio — just in case

Ray Dalio is the founder of Bridgewater Associates, the largest hedge fund in the world.

As an investor, Ray Dalio eyes the rearview mirror to see what’s ahead. If this paradox makes sense, then you likely agree with the view of history that those who cannot remember the past are condemned to repeat it.

Put another way, it’s hard to know where you’re going if you don’t know where you’ve been. In his latest book, “Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail,” Dalio, the founder and co-chairman of hedge fund Bridgewater Associates, shows investors their future by taking them back in time to study the rise and fall of great countries and powerful currencies. Because one question you never want to ask about either your money or your situation in life is: “How did I get here?”

In almost 600 pages of narrative and charts, the book paints Dalio’s interpretation of the tectonic shifts now reshaping global politics and financial markets in ways that loudly echo the past but are yet to be determined — namely the competitive, complex relationship between the U.S. and China.

How the world’s two most-formidable nations coexist — or not — is affecting and will continue to impact not only your wealth and opportunities in the 21st century but your children’s and their children’s as well. Says Dalio: “[Americans] have to do three things: We have to earn more than we spend by being productive and get our finances in order; we have to work well together economically and politically, and we have to avoid war with China.”

In this interview, which has been edited for clarity and length, Dalio offers insights about the similarities between the current economic and political cycle and previous ones, the disturbing external and internal threats to American democracy and influence, and how to and what to hold in your investment portfolio, including bitcoin, as history unfolds.

MarketWatch: Your new book is the latest in a series where you share your fundamental principles for investing in and living with the world as it is — essentially ways to accept and play the hand you’re dealt. What conditions and circumstances concern the United States right now that you want investors to understand, and why look to the past for answers?

Dalio: In my investing, I learned a lesson that many things that surprised me hadn’t happened in my lifetime but had happened before. The first time that happened was in August 1971 when the U.S. broke its promise to exchange dollars for gold so that it could print a lot of money, which led to the devaluation of the U.S. dollar. I was working on the floor of the New York Stock Exchange. I was surprised that the stock market rose a lot, so I looked into history and I found that same thing happened in March 1933. And I learned why.

As a result of that, I always study what drove major economic and market movements in history. My study of the Great Depression is the reason we anticipated the 2008 financial crisis.

Many people are interested in the news of the day, but they’re not interested in the history and lessons of the past. But you won’t understand what’s going on if you just react to the news of the day. My approach has always been like [that of] a doctor, that if I haven’t seen many cases of it before I want to go back and study all the cases in history so I can make decisions today.

There are three things happening now that I needed to study:

Zero interest rates with the creation of a lot of debt and a lot of money printing to finance that debt.
The internal conflict between left and right, rich and poor, Democrats and Republicans, which is producing a level of conflict in the U.S. that is the highest since 1900. This also has tax implications. There is an anti-capitalist swing under way that will affect U.S. tax policy, where people live, and how they are with each other.
The rise of a great power to challenge an existing great power and the existing world order. The existing world order began in 1945, and it was the American world order. Now China is rising to challenge the United States.
These things are big. Almost every day we’re going to be talking about these three things and what’s happening with them. The last time that happened was in the 1930-1945 period. They happened many times in history basically for the same reasons in the same way.

MarketWatch: The political and social divisions in the U.S. affect so much of what Americans take for granted, and maybe it’s because they’re taken for granted that they confront us now. Can this country move forward together?

Dalio: The fundamentals are clear. We have to do three things: We have to earn more than we spend by being productive and get our finances in order, we have to work well together economically and politically, and we have to avoid war with China. When I look at different countries, I judge them based on whether they have good finances, internal order and external peace. 

‘If the causes people are behind are more important to them than the system, the system is in jeopardy. I worry that’s where the U.S. is now.’

We have the ability to do these things, but I worry about us being our own worst enemy. History has shown that if the causes people are behind are more important to them than the system, the system is in jeopardy. I worry that’s where the U.S. is now.

There is a great polarity, a fight-and-win-at-all-costs mentality. Looking ahead, in the 2022 elections we will see the primary battle between the extremists and the moderates in both political parties and probably see moves to greater extremism. In the general election, there is a good chance that neither side will accept being the loser.

This type of fight-to-the-death mentality could lead to some form of “civil war.” What I mean by civil war is a series of battles not resolved by the law or the Constitution, in which power is used instead — including the failure of our democracy to work.

Barron’s on MarketWatch: Ray Dalio on the possibility of U.S. civil war

Also, as I look ahead economically for the U.S., I see a worsening of the situation. Because of all the money that has been pumped out we’re now on a sugar high, but we are beginning to see that inflation will pick up, and the stimulus checks that came in won’t come in at the same rate, causing conditions to worsen.

It all comes down to a couple of basics. To be successful we have to be financially strong and be good with each other. That’s it. 

MarketWatch: Easier said than done. There doesn’t seem to be much political will right now in Washington or among the U.S. states to work together.

Dalio: I know. In these cases — the French Revolution, the Russian Revolution, the Chinese Revolution, for example — the divides became greater and greater. And then you have to pick a side and fight for that side. We are starting to see this in the U.S. by the movement of Americans to different states. It’s not just a tax issue. It’s a values issue.

Most likely you’re going to see disagreements between the federal government and state governments on the matter of what is states’ rights that probably won’t be all settled legally, so they will be settled through tests of power. There will be places that people won’t want to be because it’ll be threatening. People will want to be with their own kind.

See: I’m done with Illinois! I want to retire in a small town in a neighboring state — so where should I go?

Also: I want to move to the South, I want the beach — and a liberal mindset. Where should I retire?

I want individuals to understand the mechanics of this, which is why I wrote the book. For example, I’d like them to see historical cases and fundamental cause-effect relationships to understand what it means to produce a lot of debt and a lot of money, so I wrote a chapter on the value of money. 

MarketWatch: What could this situation mean for U.S. investors? You’re describing a very different America to consider.

Dalio: Right. I want people to be well-informed and worry about what they should worry about.

I have a principle: If you worry, you don’t have to worry. And if you don’t worry, you have to worry. If you worry, you’ll take care of the thing you’re worried about. If people worry about the fighting and they worry about the finances, then they can work together and deal with these things.

‘People think the safest investment is cash, but they don’t look at the inflation-adjusted return.’

Financially, the way it works is when the government needs to send out checks, it could either get the money from taxes or from borrowing. If it can’t get all the money it needs from borrowing, the central bank can print the money. That devalues the value of money.

Central banks can create a lot more money and debt, but that won’t raise living standards. I’d like to help people see how money and credit move through the system to drive things. I’d like to show people how money and credit are created and how a person who gets the money and credit buys goods, services and financial assets, which makes those things go up in price.

I’d like to help them understand the reasons why cash is so bad in this type of environment. People think the safest investment is cash, but they don’t look at the inflation-adjusted return.

Don’t hold cash. It’s better to hold a liquid, diversified portfolio of assets — if it’s balanced. Make sure you’re well-diversified outside of cash — stocks SPX, 1.02%, bonds TMUBMUSD10Y, 1.455%, inflation-indexed bonds, commodities and gold GLD, +0.94%, and across many countries, particularly those with stronger income statements and balance sheets. An “all-weather” portfolio has currency diversification, asset-class diversification, country diversification and industry diversification.

MarketWatch: So you’re thinking that higher U.S. inflation is not transitory. It’s going to stick.

Dalio: Yes. There’s two types of inflation. There’s inflation when the demand for goods and services rises against the capacity to produce them. That’s normal, cyclical inflation. Then there’s monetary inflation — the creation of a lot of money and credit relative to the quantity of goods and services. The U.S. is having both.

When I look at the country’s financials going forward, what the size of the deficit will be and how much money is produced, that’s a concern. There’s also the risk, or even the probability, that those who are holding cash and bonds will choose to sell those to move into other things. If that happens, the U.S. central bank will have to decide if it raises interest rates, which will hurt the economy — and I don’t believe they can do that in a significant way. It would be bad for the economy, politics and the markets if they tried to rectify that by allowing interest rates to rise. So they’re probably going to have to print more money, and that causes more monetary inflation.

Today it doesn’t cost anything to borrow. Right now if you take out debt, you have practically no interest rate and principal payments can be deferred, so money is essentially free. With the cost of money negative and below the nominal growth rate, it’s very profitable to borrow and invest in anything that can grow at the inflation rate or more. That’s what’s priced into the markets now. And if they change things — raise interest rates to be higher than is priced into the markets — asset prices will go down and there will be more of an economic problem.

Central bankers, especially the Fed, are between a rock and a hard place. They need to tighten quite a lot to restrain inflation, yet if they do they will hurt the economy.

Central bankers, especially the Fed, are between a rock and a hard place. They need to tighten quite a lot to restrain inflation, yet if they do they will hurt the economy. Imagine what would happen if there was a tightening of monetary policy in the classic way of first causing asset prices to go down and then the economy to contract.

Politically, imagine what that would be like. People are at each other’s throats and they’ve been given a lot of money. I’m afraid of another economic downturn. We can’t even get along on whether we can wear masks or not. You can’t allow another economic downturn. You can’t raise interest rates enough to bite. Interest rates have to be significantly below both the inflation rate and the nominal GDP growth rate.

It’s easy to see what type of policy biases will exist by looking at whether circumstances favor debtors or creditors being favored. High real interest rates will exist when circumstances make it better for the creditor to be helped and credit growth to show while low real rates will exist when central banks want to help debtors and want to stimulate credit growth.

History shows that when countries need more money and don’t have other ways of getting it that they will produce more money. Producing money doesn’t take money away from anyone so it’s politically easier because it’s a hidden tax. Nobody’s complaining about where the money came from. If you get it through taxes, everybody squawks. History has shown that the easiest way is to print more money and give it out. If instead you tighten, it has consequences.

MarketWatch: Bitcoin and other cryptocurrency also is politicized. Crypto has become a political statement as much as a way to make and lose money.

Dalio: There’s a lot of money chasing all sorts of things, crypto among them. It has been an amazing accomplishment for bitcoin BTCUSD, -0.13% to have achieved what it has done, from writing that program, not being hacked, having it work and having it adopted the way it has been. I believe in the blockchain technology; there’s going to be that revolution, so it has earned credibility.

I’m not an expert on bitcoin, but I think it has some merit as a small portion of a portfolio.

I’m not an expert on bitcoin, but I think it has some merit as a small portion of a portfolio. Bitcoin is like gold, though gold is the well established blue-chip alternative to fiat money.

However, bitcoin has a number of other issues. If it is a threat to governments, it will probably be outlawed in some places when it becomes relatively attractive. It may not be outlawed in all places. I don’t believe that central banks or major institutions will have a significant amount in it.

I have a little bit of it because I believe a portfolio should start off with, under a worst-case scenario, what assets protect it and make sure it’s diversified. It’s almost a younger generation’s alternative to gold and it has no intrinsic value, but it has imputed value and it has therefore some merit.

MarketWatch


DougMacG

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Political Economics, Trump (GOP) economic record looking better everyday
« Reply #2059 on: December 28, 2021, 05:13:09 PM »
Another news omissions story. Pre-covid, the  media never really dwelled on the great, Trump GOP-led American economy, did they?

https://townhall.com/columnists/stephenmoore/2021/12/28/the-trump-economic-record-looks-better-every-day-n2601117

DougMacG

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Political Economics, Economic Growth draws Hispanics to the GOP
« Reply #2060 on: December 30, 2021, 06:29:49 AM »
Source:  WSJ
Economic success changes lives and changes votes.  Who knew?

Replicate success.

https://unleashprosperitynow.us19.list-manage.com/track/click?u=dc8d30edd7976d2ddf9c2bf96&id=7df3b08a8a&e=17d44a0477

"The social constraints that were once a barrier to voting Republican have eroded, in large part because the strong economy during much of Mr. Trump’s term caused many Latino voters to give the party a second look."
-------------
Same phenomenon applies to black males and other groups not benefiting from failed Democrat economic policies.
« Last Edit: December 30, 2021, 06:35:57 AM by DougMacG »

DougMacG

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Political Economics: 'The Nation' comes out in favor of economic growth?
« Reply #2061 on: December 30, 2021, 07:43:11 AM »
(link below) "Averting climate catastrophe will be expensive"

Yes.  Only prosperous nations and a more prosperous world can truly clean up the environment, proven true over and over throughout history and around the world.  You don't address higher needs when you are starving, freezing or sick, or have half the people out of the workforce.

"The Nation" is one of the most leftward websites I can think of.  I might agree with them on nothing, but let's face it, all the great things liberals want to do cost money, lots of money.  Isn't the first step in that all-important process to ignite the economy into a robust economic growth machine?  Unleashing free market capitalism that spreads to all is the only known way to do that, to allow us to afford all these expensive fixes. Can't we all agree on that?

https://www.thenation.com/article/society/averting-climate-catastrophe/
« Last Edit: December 30, 2021, 09:40:36 AM by DougMacG »

DougMacG

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Low to middle-income hit hardest with inflation
« Reply #2062 on: December 31, 2021, 06:46:42 AM »

DougMacG

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Re: Political Economics, Supply Precedes Demand, Mises
« Reply #2063 on: December 31, 2021, 04:20:46 PM »
Government pending (cf stimulus checks) plus monetary expansion equals increased demand without increasing supply.  More money per goods and services, result is increased prices, not increased supply.

Is THAT what we want?

https://mises.org/wire/why-doesnt-increased-demand-bring-more-supply



Percentage change in AMS, a measure of monetary supply:

AMS is defined as currency plus demand deposits with commercial banks and thrift institutions plus saving deposits plus government deposits with banks and the central bank. See Shostak, Making Sense of Money Supply Data.
--------------------------------------------
Supply side policies increase supply first, meaning you ease the disincentives to produce, produce more goods nd services, increasing supply, income, wealth and demand for goods and services.  Not the other way around.  Thus is an important distinction.

« Last Edit: December 31, 2021, 05:18:11 PM by DougMacG »

DougMacG

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Re: Political Economics, Bidenflation explained, Clueless in the DC Bubble
« Reply #2064 on: January 01, 2022, 07:15:33 AM »
Imagine you're an Econ prof grading this answer.

Softball question from a softball "journalist", Margaret Brennan, host of Meet the Press:

Q:  "Was it wrong to consider inflation transitory? These price spikes seem like they’re going to be with us for a while," Brennan asked.

A:  "We have to address the fact that we have got to deal with the fact that folks are paying for gas, paying for groceries, and are -- need solutions to it. So let's talk about that," Harris said. "Short-term solution includes what we need to do around the supply chain, right? So, we went to the ports of Los Angeles, Long Beach, Savannah, Georgia, and said, 'Hey, guys, no more five days a week, eight hours a day; 24/7, let's move the products because people need their product – they need what they need.' We're dealing with it in terms of the long term. And that's about what we need to do to pass Build Back Better. It strengthens our economy."

     - US VP Kamala Harris, Dec 2021

https://www.foxnews.com/media/kamala-harris-struggles-question-inflation

Not much from either Milton Friedman or John Maynard Keynes, whomever you prefer, in that answer. 

Like I used to ask of candidate and President Obama, name a book on economics you've read that wasn't about Marxism and class struggles.  How about George Gilder's 'Wealth and Poverty' or 'Spirit of Enterprise' just for exposure to another view?  No such thing.

Clue to the clueless:  Lady, you and yours are the cause of the modern class struggles, and inflation is a monetary phenomenon, not solved with spending programs.  Join the forum for nothing and read up on it.  )
-----------------------------------------------
One more time with this, annotated.  This isn't a gaffe.  This is her answer.

"We have to address the fact that we have got to deal with the fact [Filler, nothing said so far]

 that folks [the term that worked for Obama] are paying for gas, paying for groceries, [word intentionally omitted TWICE, paying MORE for gas, food, housing, healthcare.  Can't say that aloud!] and are -- need solutions to it [Yes, throw the bums out].  So let's talk about that," Harris said[Liberal-speak drivel, we need to have a discussion.  No, we need to end failed policies and return to those that worked.].

"Short-term solution includes what we need to do around the supply chain, right? So, we went to the ports of Los Angeles, Long Beach, Savannah, Georgia, and said, 'Hey, guys, no more five days a week, eight hours a day; 24/7, let's move the products because people need their product – they need what they need.' [Brain dead doomed to repeat the mistakes of history, cf Nixon Ford, Carter.  Paul Volcker ended inflation, look it up.]

We're dealing with it in terms of the long term. [Meaning you won't see any improvement anytime soon]  And that's about what we need to do to pass Build Back Better. [Blather and pivot, just like her handlers advised]  It [massive new government programs, spending and debt] strengthens our economy." [Pure Bullsh*t.
 Increased individual freedoms are what strengthen our economy.]
« Last Edit: January 01, 2022, 10:13:11 AM by DougMacG »


DougMacG

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Re: Political Economics, with Left slant
« Reply #2066 on: January 04, 2022, 09:35:23 AM »
For lack of opposing views on the forum, I took a look at this one:

https://outline.com/4FKX8x

Cassidy at the New Yorker.  He mixes facts and questions with distortions and omissions and the Dem politicians will most certainly follow this spin.

1. Unemployment claims are now amazingly low.  Wow.  But no mention of the tsunami of people leaving the workforce.

2. We had good GDP growth last year, but that is year over year (that the economy was shut down) not compared to the robust Republican-led economy we had just before covid.

3.  Economic analysis under Biden without mentioning inflation, gas costs, heat costs, food costs or purchasing power parity? Did your income rise if your costs rose more?

4.  No mention of massive, unsustainable stimulus payments.

The Democrats will argue the economy is fine, but the people already seem to know better.

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Re: Political Economics, Steve Moore’s new book Govzilla
« Reply #2067 on: January 04, 2022, 09:47:17 AM »
Steve Moore’s new book Govzilla: How the Relentless Growth of Government Is Devouring Our Economy – And Our Freedom
...
don’t want to spoil the ending, but among the key findings, if the Biden Build Back Better bill is enacted, on top of the $3 trillion in spending already authorized this past year:
Federal government spending will rise much faster than the private economy and will exceed 50% of GDP by 2049.
 
The debt to GDP ratio catapults from 105% today to above 300% of GDP by 2049. These are debt burdens that are associated with bankrupt nations like Argentina, Venezuala, and Zimbabwe.
 
Paying for all this added spending would require tax rates for EVERYONE – not just the rich – of 50%.

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Re: Political Economics, Steve Moore’s new book Govzilla
« Reply #2068 on: January 04, 2022, 09:49:42 AM »
Steve Moore’s new book Govzilla: How the Relentless Growth of Government Is Devouring Our Economy – And Our Freedom
...
don’t want to spoil the ending, but among the key findings, if the Biden Build Back Better bill is enacted, on top of the $3 trillion in spending already authorized this past year:
Federal government spending will rise much faster than the private economy and will exceed 50% of GDP by 2049.
 
The debt to GDP ratio catapults from 105% today to above 300% of GDP by 2049. These are debt burdens that are associated with bankrupt nations like Argentina, Venezuala, and Zimbabwe.
 
Paying for all this added spending would require tax rates for EVERYONE – not just the rich – of 50%.

At this point, what difference would it make?

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Record no. leave job in Nov
« Reply #2069 on: January 04, 2022, 01:56:55 PM »
https://www.cnn.com/2022/01/04/economy/us-job-openings-november/index.html

What says success like a disappearing Workforce?

Still haven't needed a Biden Accomplishment thread.

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Political Economics, John Stossel, Bernie, Sweden?
« Reply #2070 on: January 05, 2022, 05:23:48 PM »
https://twitter.com/JohnStossel/status/1477767659290693635
John Stossel
@JohnStossel
.
@SenSanders
 say America should become more like Sweden. I agree. Sweden has a private pension system, school vouchers, and no minimum wage law:

Watch the video at the link.

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Re: Political Economics
« Reply #2071 on: January 06, 2022, 04:15:32 AM »
"But no mention of the tsunami of people leaving the workforce"

Can someone rustle up a chart with labor force participation numbers over the years? 


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Re: Political Economics
« Reply #2072 on: January 06, 2022, 06:15:51 AM »
Hat tip to Doug, who accidentally posted this on the Iran forum  :-D

https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htmc


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Re: The broken supply chain
« Reply #2075 on: January 08, 2022, 10:57:16 AM »
https://www.zerohedge.com/geopolitical/rickards-exposes-globalisms-achilles-heel

From the article:
"The supply chain is the global economy."
------------------------------------------------

"Supply side economics" is the study of easing the the barriers that work against supply and production, and a whole lot of those apply to understanding this crisis.  We don't need a new set of government programs to address the problems the existing government programs caused.  We need to let markets work to the extent that is possible.

But here is a new government programs, the container dwell fee:
https://gcaptain.com/port-of-los-angeles-announces-dwell-fees-for-empty-export-containers/
Port of Los Angeles Announces Dwell Fees for Empty Export Containers

Charge the shipping companies for the empty containers in port so they will have an incentive to send them back (empty) to China sooner for refilling and shipping back to us.

WHAT'S WRONG WITH THIS PICTURE?

Why are shipping containers crossing the Pacific full one way and empty the other way?  They are building belts and roads all over the world to address their supply chain, and we don't build anything they want, not even coal, liquified natural gas or grain from the Midwest, and they build everything we want.  Trump tried to address this and the country yawned. 

I know what might solve the "supply chain" crisis.  A free or freer market.  China isn't a free market supplier selling goods the United States.  China is a bullshit supplier stealing our technology and selling it back to us.  When they aren't stealing it, we are giving it to them. 

Right at the start of covid, funny coincidence, we had their testicles in a wringer.  There was doubt they could survive their own 'political' problems if they didn't come to the table, soon, and make a free and fair agreement with this tough, willing to risk it all, American President.  With covid, we went down a different course and ended up with a different President, Congress and so on.  Now it's year three of the covid diversion/  Why doesn't the other political party continue where Trump left off??

In the DEM debates, the question was asked, who would end the Trump tariffs on the first day in office and none of the candidates raised their little hand, meaning none of even the Democrat electorate wanted the pressure taken off of China.

So what did we do?  Take the pressure off of China.  Worsen the work rules making us unable to produce here.  Pile up the containers and bottleneck the ports.  Watch stores close and watch workers leave the workforce in record f*cking numbers, and wonder, duh, why are prices going up and shelves going empty?

Oh, it's just toilet paper.  Oh, it's just hand sanitizer.  Oh it's just N95 masks.  Oh, it's just plastic toys kids don't need for Christmas.  Wait, it's pipelines and gas for our cars, and cars themselves screwing up the affordable used car market for everyone who needs affordable transportation to f'ing work, and it's HEAT FOR OUR HOMES, and it's FOOD.  And they just passed us up militarily while we left our gear in Afghanistan and they are already there taking ownership of it, and they host the Olympics while imprisoning a million Muslims and no one on the Left cares...

As Larry Elder is known to say, tapping his microphone, IS THIS THINK ON?
« Last Edit: January 08, 2022, 11:08:19 AM by DougMacG »

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Re: The broken supply chain
« Reply #2076 on: January 08, 2022, 01:07:58 PM »
https://www.zerohedge.com/geopolitical/rickards-exposes-globalisms-achilles-heel

From the article:
"The supply chain is the global economy."
------------------------------------------------

"Supply side economics" is the study of easing the the barriers that work against supply and production, and a whole lot of those apply to understanding this crisis.  We don't need a new set of government programs to address the problems the existing government programs caused.  We need to let markets work to the extent that is possible.

But here is a new government programs, the container dwell fee:
https://gcaptain.com/port-of-los-angeles-announces-dwell-fees-for-empty-export-containers/
Port of Los Angeles Announces Dwell Fees for Empty Export Containers

Charge the shipping companies for the empty containers in port so they will have an incentive to send them back (empty) to China sooner for refilling and shipping back to us.

WHAT'S WRONG WITH THIS PICTURE?

Why are shipping containers crossing the Pacific full one way and empty the other way?  They are building belts and roads all over the world to address their supply chain, and we don't build anything they want, not even coal, liquified natural gas or grain from the Midwest, and they build everything we want.  Trump tried to address this and the country yawned. 

I know what might solve the "supply chain" crisis.  A free or freer market.  China isn't a free market supplier selling goods the United States.  China is a bullshit supplier stealing our technology and selling it back to us.  When they aren't stealing it, we are giving it to them. 

Right at the start of covid, funny coincidence, we had their testicles in a wringer.  There was doubt they could survive their own 'political' problems if they didn't come to the table, soon, and make a free and fair agreement with this tough, willing to risk it all, American President.  With covid, we went down a different course and ended up with a different President, Congress and so on.  Now it's year three of the covid diversion/  Why doesn't the other political party continue where Trump left off??

In the DEM debates, the question was asked, who would end the Trump tariffs on the first day in office and none of the candidates raised their little hand, meaning none of even the Democrat electorate wanted the pressure taken off of China.

So what did we do?  Take the pressure off of China.  Worsen the work rules making us unable to produce here.  Pile up the containers and bottleneck the ports.  Watch stores close and watch workers leave the workforce in record f*cking numbers, and wonder, duh, why are prices going up and shelves going empty?

Oh, it's just toilet paper.  Oh, it's just hand sanitizer.  Oh it's just N95 masks.  Oh, it's just plastic toys kids don't need for Christmas.  Wait, it's pipelines and gas for our cars, and cars themselves screwing up the affordable used car market for everyone who needs affordable transportation to f'ing work, and it's HEAT FOR OUR HOMES, and it's FOOD.  And they just passed us up militarily while we left our gear in Afghanistan and they are already there taking ownership of it, and they host the Olympics while imprisoning a million Muslims and no one on the Left cares...

As Larry Elder is known to say, tapping his microphone, IS THIS THINK ON?

https://theconservativetreehouse.com/blog/2022/01/07/minnesota-trucking-company-ceo-warns-about-what-vaccine-mandate-will-do-to-economy/

DougMacG

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Re: The broken supply chain
« Reply #2077 on: January 08, 2022, 01:41:55 PM »
The more they screw things up, the sooner they lose power.  I'm kind of neutral on it.

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Re: The broken supply chain
« Reply #2078 on: January 08, 2022, 01:48:04 PM »
The more they screw things up, the sooner they lose power.  I'm kind of neutral on it.

The trucks carrying the mail in ballots will somehow arrive.

https://www.ncsl.org/research/elections-and-campaigns/vopp-table-18-states-with-all-mail-elections.aspx

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Re: Political Economics, Harris sees the Malaise
« Reply #2079 on: January 09, 2022, 06:59:16 AM »
http://www.realclearpolitics.com/video/2022/01/07/vp_kamala_harris_there_is_a_level_of_malaise_after_two_years_of_covid-19.html

Reminds me that Jimmy Carter won 6 states (?) in 1980 after being fairly even in the campaign.

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Re: Political Economics
« Reply #2081 on: January 09, 2022, 05:02:49 PM »
In which case BTC/ETH/GBTC are fuct , , ,

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Re: Political Economics
« Reply #2082 on: January 09, 2022, 05:06:41 PM »
In which case BTC/ETH/GBTC are fuct , , ,

Ironic. The first Bitcoin purchase was for a pizza, at some point soon, my Bitcoin investment will maybe buy me a pizza…

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Re: Political Economics, Real wages plummeting
« Reply #2083 on: January 10, 2022, 02:54:25 PM »
Wages soared under Trump and plummet under Biden.  Excuse me but which side REALLY cares about working people - and it's not Democrats.

https://www.nationandstate.com/2022/01/10/real-wages-plummet-as-inflation-hits-the-us-recovery/
-------------------------------------------------------------

Funny thing about Hispanics switching to Republican, Hispanics work.
-------------------------------------------------------------

Nothing really new here.  Look at the Clinton administration that was divided into 2 years of pure Dem rule with tax and regulatory increases followed by 6 years of governing with Newt that included bold, capital gains tax rate cuts and "ending welfare as we know it".  Wage growth was 8 times faster in the latter.  Who knew?
https://firehydrantoffreedom.com/index.php?topic=1467.msg98177#msg98177
http://www.heritage.org/research/reports/2008/03/tax-cuts-not-the-clinton-tax-hike-produced-the-1990s-boom


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Political Economics, Veronique de Rugy, Biden should change course!
« Reply #2084 on: January 10, 2022, 03:13:30 PM »
https://www.realclearpolitics.com/articles/2022/01/07/a_resolution_for_the_biden_administration_146998.html

The new year often feels like an opportunity to correct past mistakes -- for example, improving one's diet or quitting smoking. This explains why 25% of Americans, and 40% of those under 30, make New Year's resolutions. Based on the latest poll from The Economist and YouGov, the Biden administration should adopt a New Year's resolution too. In particular, it should reconsider its domestic policy agenda. Americans aren't buying it.

YouGov is an influential international research data and analytics group headquartered in London. Pollsters asked 1,500 American adults about the state of the economy, the COVID-19 pandemic, inflation and more. Their findings show that people aren't particularly happy right now.

When asked whether the country is headed in the right direction, only 23% of respondents said yes, while 62% think we're on the wrong track. Black Americans seem more content than most, with 38% answering yes, as opposed to only 22% of Hispanics. There is also a small gender disparity in these opinions: 33% of white male college grads believe the country is heading in the right direction, while only 22% of white female college grads have the same optimistic view. Meanwhile, only 17% of white, non-college grads of all genders are happy with the country's current direction.

Not surprisingly, 91% of Trump voters believe the country is now heading in the wrong direction. Biden voters are more divided; 40% believe the country is heading in the right direction, 39% believe we are heading in the wrong direction and 22% aren't sure what they think.

Either way, this isn't great news for the administration heading into this year's midterm election, especially because only 22% of Americans believe that the current state of the economy is "good" or "excellent." Forty percent believe it to be "poor."

This is a big deal, as 96% of Biden voters think the economy and jobs are "very important" and "somewhat important" issues. They also rate this issue third in terms of importance after climate change and health care. The poll shows that inflation is another concern, including among many Biden voters, which is understandable with rates reaching levels unseen since 1982.

This anxiety is bound to continue. The administration prefers blaming the surge in prices on corporations, especially in the oil industry, rather than on its own policies -- like the unnecessarily extravagant $2 trillion COVID-19 relief bill that passed in January 2021 and flooded the economy with fresh cash. More spending and taxes will inevitably follow such a large government expansion, and like most other Americans, 88% of Biden voters think these are both important issues.

During a recent address to the country, Biden noted that there is no federal solution to this pandemic, yet he declared his administration's commitment to a legally dubious vaccine mandate for private employers. This could be explained by the fact that while Americans are equally divided on requirements by private employers to ask for proof of vaccination, 83% of his voters approve.

The poll could also help explain Biden's seemingly contradictory support for in-person schooling. More people are against requiring proof of vaccination to attend in-person classes than are for it (though women are more supportive than men are of such measures). Fifty-seven percent of Americans are against asking for proof of a booster to attend in-person classes.

Based on these numbers, there are some obvious resolutions Biden's team could adopt. With a strong majority of Americans believing 2021 was one of the worst years of this nation's history, the president and his party can't afford to continue down their current path.

Of course, most Americans don't follow through on their New Year's resolutions and quickly return to their old habits. If the administration follows this pattern, it will be at its own risk.

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December prices rise 7 percent, compared to a year ago, as 2021 inflation
« Reply #2085 on: January 12, 2022, 11:14:04 AM »
https://www.washingtonpost.com/business/2022/01/12/december-cpi-inflation/
December prices rise 7 percent, compared to a year ago, as 2021 inflation reaches highest in 40 years.

Hey Brandon, any idea what's causing it??

The man knows more about what's up Tara Reade's skirt than he knows about economics.

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Re: December prices rise 7 percent, compared to a year ago, as 2021 inflation
« Reply #2086 on: January 12, 2022, 11:16:20 AM »
https://www.washingtonpost.com/business/2022/01/12/december-cpi-inflation/
December prices rise 7 percent, compared to a year ago, as 2021 inflation reaches highest in 40 years.

Hey Brandon, any idea what's causing it??

The man knows more about what's up Tara Reade's skirt than he knows about economics.

The Dems are really insisting that “Build back Bolshevik” will fix inflation. I wish I was joking.



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« Last Edit: January 13, 2022, 08:38:47 AM by DougMacG »

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Political Economics, How bad is the Biden Harris economy?
« Reply #2089 on: January 18, 2022, 06:18:20 AM »
How bad is the Biden Harris economy?

My neighbor got a pre-declined credit card in the mail.

CEO's are now playing miniature golf.

Exxon-Mobil laid off 25 Congressmen.

I saw a Mormon with only one wife.

McDonald's is selling the 1/4 ouncer.

Angelina Jolie adopted a child from America.

Parents in Beverly Hills fired their nannies and learned their children's names.

A truckload of Americans was caught sneaking into Mexico.

A picture is now only worth 200 words.

When Bill and Hillary travel together, they now have to share a room.

The Treasure Island casino in Las Vegas is now managed by Somali pirates.

I was so depressed last night thinking about the economy, wars, jobs, my savings, Social Security, retirement funds, etc., I called the Suicide Hotline. I got a call center in Afghanistan, and when I told them I was suicidal, they got all excited, and asked if I could drive a truck.

Music on hold at the Suicide Hotline was "Jump" by Van Halen.
Lyrics: Ah, might as well jump (jump)
Might as well jump
Go ahead and jump (jump)
Go ahead and jump
« Last Edit: January 18, 2022, 06:21:13 AM by DougMacG »

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Forward Observer on Hyperinflation
« Reply #2090 on: January 18, 2022, 10:37:55 AM »
Good morning. Mike Shelby here with a hot take on hyperinflation.

One sentiment I see on social media and in opinion/news is that hyperinflation is an outlandish scenario, it's not a concern, the likelihood is very low, etc.

I think that's dead wrong.

In a previous email, I mentioned that war is the most common trigger of hyperinflation.

Foreign bombardment and civil wars are destructive to economies and erode the tax base, forcing governments to expand the money supply, which in numerous cases has resulted in hyperinflation. (I got into more detail on why/how in the previous email.)

A high end conventional war with China or a disruptive domestic conflict/national emergency is not unrealistic over the next several years. It's also not unrealistic to image a scenario where cyber and physical attacks cripple critical infrastructure, the financial sector, and other strategic or symbolic targets.

So if the effects of war are the most common trigger of hyperinflation, the U.S. is facing the potential for two highly destructive conflicts this decade, and we're already seeing the erosion of global dollar dominance, I ask: why is hyperinflation such an "outlandish" scenario.

The answer is that it's NOT an outlandish scenario.

It’s important to reiterate that a hyperinflationary event is not merely extreme inflation, but a loss of faith in the dollar.

In last week's Economic Early Warning, which is available to Forward Observer subscribers, I outlined six scenarios that could trigger hyperinflation in the United States.

I want to share them with you today. If you want access to our weekly Economic Early Warning report, subscribe here.

Here are the six scenarios, along with an abbreviated analysis:

The Fed’s 10x10 scenario gone awry. While high inflation is politically unpalatable, the Fed may pursue something like a 10% annualized rate of inflation over 10 years so the US Government can reduce its debt to sustainable levels. Fed chairman Jerome Powell last week called the US national debt situation “unsustainable,” adding that “it is best to address it soon.” Although Fed officials maintain that this option is not being considered, in this scenario, the US Treasury would be able to pay down debt faster with inflated dollars. The risk here is that the Fed loses control of inflation, causing a catastrophic loss of confidence in the dollar as a safe haven asset, which could accelerate into a hyperinflationary scenario.

A domestic conflict. A high intensity civil war that brings economic devastation would likely shake the world’s confidence in the US Dollar as a safe haven asset, which could lead to foreign investors and central banks dumping the dollar in favor of a more stable currency. Even a low intensity conflict, such as an American version of the Irish Troubles, would likely bring attacks against strategic and symbolic targets, and a protracted conflict would likely diminish foreign investment and use of the dollar. Hyperinflation could occur if a global sell-off of the dollar accelerates, causing bank runs and sensitivity to holding money (i.e., spending it quickly), which is highly inflationary.

An American Suez Crisis. In 1956, Egypt nationalized the Suez Canal. In response, Britain, France, and Israel launched an invasion to take it back by force, but the operation was short-lived. US President Dwight Eisenhower threatened to sell US reserves of the Great British Pound, which forced the British to cease military operations after 10 days. The event was so humiliating for Britain that it caused a monetary and financial crisis, forcing the British to accept financial support from the International Monetary Fund. It also officially ended Great Britain’s reign as a world power. An American Suez Crisis could occur over Taiwan if the US lost face against China. If the US backed down, then the world would lose faith in the US as a protectorate, and we’d see a run on the dollar and U.S. Treasuries, similar to Great Britain’s 1956 financial and monetary crisis.

Economic destruction from war with China. First, in a conventional war, Chinese imports stop. Second, in a high intensity conflict, we should absolutely expect a degraded information and communication environment. This could mean severe disruption to the internet, satellite communications, global positioning satellites (GPS), and cellular communication. Third, in a high end conflict, we’re likely to face severe domestic disruption from Chinese attacks. In December 2020, the US Army warned of the use of hybrid war tactics from peer competitors like China. This would include cyber attacks, the fomenting of civil unrest and riots by foreign information operations, the use of transnational criminal organizations, and other conventional or unconventional means, according to the document. The 2018 National Security Strategy infamously warned that “the homeland is no longer a sanctuary” due to the ability of peer and near-peer competitors to attack the United States. Even a pyrrhic victory against China would be economically and financially devastating, which could lead to hyperinflation.

Forced sale of foreign-owned property. One reason for high property prices is foreign investment. According to the US Department of Agriculture, foreign ownership of American farmland doubled over the past 10 years. Foreign investors own around 3% of agricultural land, or an area roughly the size of Iowa. Could we see the forced sale of foreign-owned land and critical infrastructure due to national security concerns? In a conflict with China, for instance, the forced sale or expropriation of Chinese-owned property could scare off other foreign investment and cause foreign central banks to dump U.S. investments and the dollar, risking hyperinflation.

The financial “nuclear” option. As Bridgewater’s Ray Dalio has described, the US and China are locked in a capital war, where the two countries are attempting to deplete the other of foreign investment. These are “gray zone” tactics intended to cause harm but remain well below the risk of conventional conflict. China does not want a high intensity conflict with the United States and its global allies, so the exploitation of the gray zone remains its preferred course of action. If a financial “nuclear” option becomes necessary, the United States could threaten to cancel its own Chinese-held debt in lieu of war reparations or to punish China, below the threshold of conventional war, over a military campaign against Taiwan. Similarly, China retains the option to threaten or actually dump US Treasuries, which would not only tank US markets but likely cause a global economic, financial and monetary crisis. Both options would cause catastrophic effects for each country, making this a less likely, but not impossible, course of action.

I don’t believe hyperinflation is an imminent threat or a foregone conclusion. One observation from the Obama era is that Americans who tend to catastrophize the news also tend to overestimate threats and underestimate the strength of the US, the value of the country’s natural resources, and the ability of the Fed and US Government to change the rules as they go along to ensure some level of stability.

Pundits like Gerald Celente and Jim Rickards, Jim Rogers and David Stockman, among others, have created so much fear and at points warned their readers and listeners to dump stocks and move to hard assets due to a Greater Depression, hyperinflation, or some other imminent calamity. They’ve been doing this for over 10 years and in hindsight, that’s been horrible advice as the Fed has continued to pump up equity prices while silver and gold have underperformed the S&P over the same time period. Even being in cash has been a horrendous return on investment.

But the Fed won’t always be able to change the rules as they go along.

My belief is firm that we will at some point experience an economic, financial, and monetary catastrophe. But the national debt could conceivably expand to $40-50 trillion without triggering hyperinflation. In context, Celente and others were warning of imminent hyperinflation back when we eclipsed $10 trillion in national debt, which has nearly tripled since his warnings. I look at Japan, for instance, which has run sub-1% interest rates for the past 20 years and has a debt-to-GDP ratio of 257%, and yet has not experienced hyperinflation there. There are many differences between the US and Japan, but national debt for a superpower doesn’t alone lead to hyperinflation.

There may be black swans or other events not included in my list, but these are the six plausible scenarios that concern me regarding hyperinflation.

This is something you should be thinking about.


Until next time, be well.


Always Out Front,
Mike Shelby

« Last Edit: January 18, 2022, 11:03:18 AM by Crafty_Dog »

Crafty_Dog

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Re: Political Economics
« Reply #2091 on: January 18, 2022, 11:04:39 AM »
I like the balanced, centered tone.

G M

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Re: Political Economics
« Reply #2092 on: January 18, 2022, 11:06:07 AM »
I like the balanced, centered tone.

Mike Shelby is former US Army Intel. He strives to be balanced and reasoned.

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DougMacG

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Re: Economy recovers (low wage) jobs, real wages still plummeting
« Reply #2095 on: February 07, 2022, 06:04:09 AM »
https://www.cnbc.com/2022/02/04/heres-where-the-jobs-are-for-january-2022-in-one-chart.html

Interesting observation, jobs surged as the Biden Big Blowout Build Back Broker Bill failed, and while lockdowns and mask and vaccine mandates are failing, not because of his policies.

Still, real wages and wealth are shrinking because of the very real BidenFlation.

https://www.manhattancontrarian.com/blog/2022-2-6-biden-blowout-spending-bill-fails-employment-surges
« Last Edit: February 07, 2022, 06:07:09 AM by DougMacG »

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Re: Political Economics
« Reply #2096 on: February 12, 2022, 07:06:20 PM »
"No tax increase for anyone making less than US$400,000."

(1) Who pays the inflation tax? 

Only people making 400k or less.  Everyone else can arrange their affairs to either benefit or not get hurt by it.

Pass through taxes: (2). Who pays the increases in the corporate income tax?  EVERYONE knows it's the consumers and the workers.

(3). Who pays the 'deficit tax'?  Does President Genius think 23/30 Trillion (going on 100T), at say 10% future interest rate, has no cost?

(4). SALT rewards:. Tax cuts for the rich but 9nly if they live in blue states.  Almost no one making under 100k benefits, they just get stuck with the tab.
Link not pasting, free beacon
Hakeem Jeffries Wanted a Massive Tax Cut for the Rich. Now, He Says They Aren’t ‘Paying Their Fair Share’

What if every dollar of income,, no matter how earned by whom, paid its fair share of the public spending burden, (skin in the game)?
« Last Edit: February 13, 2022, 08:05:12 AM by DougMacG »


DougMacG

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Re: Political Economics, Bernie gets it wrong, again
« Reply #2098 on: February 22, 2022, 01:52:52 PM »
"It's not that our friends on the Left are ignorant; it's just that so much of what they know isn't so."

   - If not AOC, we can always count on Sen Bernie Sanders for his 'knowledge' that just isn't so:

https://www.based-politics.com/2022/02/17/bernie-sanders-pushes-anti-capitalist-conspiracy-theory-about-gas-prices/

Bernie Sanders
@SenSanders
Shock. Shock. Shock. Gas prices are at the highest level in 7 years while Exxon Mobil, Chevron, Shell & BP made nearly $25 billion in profits last quarter – the highest level in over 7 years. The problem is not inflation. The problem is corporate greed, collusion & profiteering.
5:36 PM · Feb 15, 2022
--------------------------

What a moron.  Where do you start with this?  As supply and demand change and prices shift to balance out all those forces, corporate 'greed' [desire to make a return on investment in a free-ish society] is the only thing that stays constant. 

Let's review what happened to supply.
1. Biden and the Dems promised so much killing off of American oil and gas supply that, as price is determined in futures markets, oil and gas prices began their rise the minute the 2020 election was called for Biden - in November.
2.  In his first minute in office in January, he canceled the Keystone XL pipeline, breaking contracts and supply commitments, without any action from Congress, signaling this administration would use powers beyond constitutionality if needed to stop American consumers from filling their tanks and heating their homes.  By f'ing with supply, he invokes the price mechanism to ration out the scarcity.
3.  What else?  He killed ANWR, drilling offshore and on federal lands, the Feds own more than half the American west, and signaled that fracking that reduced CO2 emissions more than any other energy supply would be halted under his administration.

Do I have that about right?

Now, Bernie, you math and science genius, what happens if you kill off 10 or 20% of supply?  Prices go up 10 or 20%?  Right, only if you're (a moron) unable to read a demand curve and don't know elastic from inelastic demand.  When supply is reduced, the price at the pump goes up and up and up until 10 or 20% of the volume is no longer affordable or useful to consumers.  In this case double and still rising.

These policies aimed at ["greedy"] oil companies hurt whom?  Not the rich who own oil company stocks.  Those just go up and up and up.  Not the rich who buy gas.  They just pay more and it still amounts to roughly 0% of their monthly budget.  Not the rich who bought a Tesla [with taxpayer subsidy] and don't need to fill up.  It hurts the poor.  The price increases squeeze them until they finally cut back their purchases by the supply shortfall, leaving the remaining supply to be bought and used by people who are relatively richer, paying ever-increasing amounts to the oil companies to produce less and less oil.

Your class warfare policies declare war on no uncertain terms against the people you PRETEND to want to help.

If you don't believe me, look at any recent opinion poll.

Guess what else happens, as if that wasn't bad enough.  The higher energy prices drive up the cost producing and transporting everything else, let's start with food.  Not just at the grocery store, everywhere.  The cost of a Big Mac (big deal?) went up 40% and the cost of idling in the drive thru went up 100% and the dining room is closed, no bathrooms.  The cost of a Subway sandwich is up 40%.  The cost of EVERYTHING at Dollar Tree, now $1.25 Tree, is up 25%.  It drives up the cost of manufacturing.  Whose jobs get cut there?

YOU THINK THAT HURTS THE RICH?  Sorry, it's not the top 1% or top 10% idling at the drive thrus, hurt by inflation and real wages declining.  It's not the rich working the assembly line or filling their plumbing or electrical service vans.  It may give the rich something to talk about but it's the poor and the working class that are hurt most, for those of you who divide people into classes.  Math science, economic science, and history tell us what you pretend to deny with your wrong-headed policies and your projection of greed on others while you jet between your luxury homes with no visible income but a government check.

Bernie, AOC and President B, it is your political greed that is hurting real people and making solvable problems worse every day.  You win your elections and we get these results.  This is not the mere failure of liberals and Leftists to use second level thinking.  This is complete brain dead denial of their own culpability in the destruction of our country and the lives of the working people who make it go.
« Last Edit: February 22, 2022, 02:13:33 PM by DougMacG »

DougMacG

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