Saturday, February 27, 2021
Full screen recommended.
Peder B. Helland,
"Beautiful Piano Music 24/7 • Relax, Study, Sleep"
"Eviction Moratorium Ruled Unconstitutional,
Largest Tsunami Of Evictions In U.S. History Incoming"
by Michael Snyder
Ever since last summer, a federal moratorium on evictions has prevented landlords from evicting millions of tenants that are behind on their rent payments. This moratorium has caused extreme financial distress for many landlords, but it has also kept us from witnessing millions upon millions of Americans being thrown out into the cold streets. Of course this moratorium on evictions was never actually legal, and it was just a matter of time before it was challenged in front of a federal judge that still had respect for the U.S. Constitution. On Thursday, a federal judge in the Eastern District of Texas named John Campbell Barker ruled that the federal moratorium is completely unconstitutional:
"J. Campbell Barker, a Trump-nominated judge in the Eastern District of Texas, issued the 21-page ruling Thursday in response to a lawsuit from a group of landlords and property managers. “The federal government cannot say that it has ever before invoked its power over interstate commerce to impose a residential eviction moratorium,” Barker wrote, noting that it did not do so during the Spanish Flu pandemic or during the Great Depression. “The federal government has not claimed such a power at any point during our nation’s history until last year.” But Barker did not issue any sort of an injunction, and so the moratorium is still in effect for the moment. In his ruling, Barker expressed his belief that the defendants will “respect the declaratory judgment” and will willingly withdraw the moratorium on their own… The scope of the order is unclear. Barker wrote that given “defendants’ representations to the court, it is ‘anticipated that [defendants] would respect the declaratory judgment.’”
Federal officials could attempt to drag their feet, but the current moratorium is set to expire on March 31st anyway. So whether it happens immediately or in a few weeks, the federal moratorium on evictions is ending. Of course some states have their own moratoriums in place, and Barker noted that those are constitutional. So renters in those states will still have at least some protection moving forward. But for most of the country, things are about to change in a major way.
According to one recent study, a whopping 10 million U.S. households are currently behind on their rent payments: "An analysis released last month by Moody’s Analytics and the Urban Institute said that some 10 million renters are behind on paying rent and risk being evicted. Moreover, the typical delinquent renter is almost four months and $5,600 behind on monthly rent and utility payments as of January, according to the analysis. To put that into some perspective, approximately seven million households lost their homes in foreclosure during the five darkest years of the global financial crisis,” the researchers wrote. “Here we have 10 million families facing a similar fate over a matter of months.”
Even if rent moratoriums remain in place in some states for the foreseeable future, we are still going to see millions upon millions of households evicted here in 2021. It will be the largest tsunami of evictions in U.S. history, and homelessness is going to rise dramatically. Needless to say, it isn’t going to be a happy time.
Meanwhile, we have already been witnessing a tsunami of bankruptcies. In fact, the number of Chapter 11 bankruptcy filings in 2020 was “at least 30 percent higher than any of the previous four years”: "Bankruptcies filed by entertainment companies in 2020 nearly quadrupled, and filings nearly tripled for oil and gas companies, doubled for computer and software companies and were up 50 percent or more for restaurant owners, real estate companies and retailers, compared with 2019, data from the research firm show. There were 5,236 Chapter 11 filings in 2019, but 6,917 last year, a tally at least 30 percent higher than any of the previous four years."
This isn’t what an “economic recovery” looks like. Sadly, the truth of the matter is that the U.S. economy is in the process of melting down all around us, and a whole lot more pain is ahead.
Up until just recently, the stock market had been one of the very few bright spots, but now chaos has returned to Wall Street. On Friday, the Dow was down another 469 points: "The Dow Jones Industrial Average swung wildly Friday to close near its session low as Wall Street struggled to shake off fears of rapidly rising rates.
The blue-chip benchmark ended the volatile session 469.64 points, or 1.5%, to 30,932.37 after trading in the green earlier. The S&P 500 fell 0.5% to 3,811.15 as energy and financial stocks pulled back. The Nasdaq Composite ended the day 0.6% higher at 13,192.34 as Big Tech names rebounded after a large sell-off in the previous session amid surging bond yields. Facebook, Microsoft and Amazon each rose more than 1%. The tech-heavy benchmark gyrated in Friday’s session where it jumped 1.9% at its high and fell as much as 0.7%."
As I discussed yesterday, I do not believe that a massive stock market crash is imminent. But the early warning signs that we are witnessing now should definitely not be ignored. Many are expecting economic conditions in the U.S. to improve as the COVID pandemic fades, but it is inevitable that many more “trigger events” will hit us in 2021 and beyond. Considering how vulnerable we are right now, it certainly isn’t going to take much to send us into a death spiral from which we will never recover.
Unfortunately, it is always those at the very bottom of the economic food chain that get hit the hardest when challenging times arrive. I feel very badly for the landlords that haven’t been able to collect rent for months and months, but I also feel very badly for the millions of Americans that will soon be thrown out into the streets. The economic pain and suffering that we will soon see will be off the charts, and those that are expecting Joe Biden and his minions to save them will be bitterly, bitterly disappointed."
Full screen recommended.
"Has The Great Shaking Of The Financial Markets Finally Begun?"
by Epic Economist
"Volatility and chaos are sweeping across Wall Street this week, as the Nasdaq has experienced a flash crash, falling more than 5 percent and being on the path to a second consecutive weekly loss, while the bond market has registered an upsurge at levels last seen in November, with the yield on 10-year U.S. Treasuries exceeding 1.6% and set to move even higher in the coming days. Investors have been completely terrified about the idea of a sudden inflation spike since our economy is scheduled to fully reopen this year. A major sell-off has started, and market watchers are truly hoping this is only a temporary blip, otherwise, it may represent the beginning of the great shaking of the financial markets. That's what we're going to analyze in this video.
Ever since the health crisis struck in America, stock prices have continuously climbed, reaching unprecedented highs. However, in real terms, everyone already knew that wasn't going to last very long because valuations quickly started to become unsustainable and completely out of touch with our economic reality. Eventually, the market wouldn't be able to handle the pressure and overinflated prices would have to face a correction. On Thursday, we had the single worst day for stocks in 2021, as a significant surge in bond yields spooked investors, who promptly began to massively dump risk assets, causing U.S. stocks to sharply drop, especially amongst high-flying technology names.
According to recent reports, the Dow Jones Industrial Average fell 559.85 points, or 1.8%, to 31,402.01, considerably declining from a record high. While the S&P 500 dropped by 2.5%, to 3,829.34 registering its worst day since January 27. For its part, the tech-heavy Nasdaq Composite slipped 3.5% to 13,119.43, recording its biggest sell-off since October 28. All the main averages rapidly plunged, and this collapse was primarily sparked by a jump in the US government bond yields. The 10-year Treasury yield rocketed as high as 1.6%, resulting in a sudden move that some described as a “flash” crash.
Conversely, the main reason why the 10-year US bond yield went up was because investors are fearing inflation in the U.S. will rise in the coming months. They are anticipating that as more and more Americans get vaccinated and resume their usual spending patterns, the consumer demand will increase, but the supply won't be able to meet the growing demand. As a consequence, more money would be poured into the same set of goods and services, which could potentially lead to a surge in prices in general and higher inflation. It's important to remember that a higher inflation means that interest rates all across the economy will climb just as well.
Meanwhile, as the stock market has just started to keep up with our reality, the U.S. economy continues to fall apart all around us. Some economists were thrilled with the decline in jobless claims, but others have been highlighting that the national unemployment rate is masking how much some groups are still struggling in the current recession.
It's important to highlight that the reinsertion in the labor market has been extremely uneven. For White workers, unemployment is much lower, at 5.7%, while the unemployment rate for Black groups was 9.2% in January, and for the Hispanic, the jobless rate was 8.6%, according to the Bureau of Labor Statistics. In the meantime, economists are alerting that the widespread business shutdowns happening in states severely hit by the ice storms could result in an increase in jobless claims filings over the next weeks.
Just a few days ago, we learned that Fry’s Electronics would abruptly close all of its stores overnight, letting go of all of its staff, and putting an end to nearly four decades in business. With so many iconic businesses disappearing, the American economic landscape definitely won't be the same once the economy reopens.
Our living standards are about to be even more deteriorated while every-day expenses will sharply increase. It is going to get progressively more difficult to afford to live in this country. All evidences point to a societal decay that worsens with each passing day. And, unfortunately, as economic conditions get even darker, that is just going to trigger even more civil agitation, and economic pain. The markets are shaking, the economy is shaking, and if nothing is changed soon enough, everything will implode right before our eyes."
"Barred spiral galaxy NGC 1365 is truly a majestic island universe some 200,000 light-years across. Located a mere 60 million light-years away toward the chemical constellation Fornax, NGC 1365 is a dominant member of the well-studied Fornax Cluster of galaxies. This impressively sharp color image shows the intense, reddish star forming regions near the ends of central bar and along the spiral arms, with details of the obscuring dust lanes cutting across the galaxy's bright core. At the core lies a supermassive black hole.
Astronomers think NGC 1365's prominent bar plays a crucial role in the galaxy's evolution, drawing gas and dust into a star-forming maelstrom and ultimately feeding material into the central black hole."
“All Men Have The Stars”
by Chet Raymo
“At the end of his big-bang book “The First Three Minutes”, PDF, physicist Steven Weinberg famously wrote: “The more the universe seems comprehensible, the more it also seems pointless.” His point is this: We have discovered in this century that the human species is just one of billions of species of life on a typical planet near a star that is just one of a trillion stars in a galaxy among hundreds of billions of galaxies. It is no longer possible, he implies, to think that the universe was made for us or that our existence is in any way important on the cosmic scale.
Subsequently, in a book of interviews, Alan Lightman and Roberta Brawer asked 27 top cosmologists what they thought of Weinberg’s remark. Some agreed with Weinberg. Some emphatically disagreed. Responses ranged from traditional religious faith to total skepticism and indifference. Apparently, 27 of the world’s most brilliant mathematicians and physicists are no better than the rest of us at figuring out the human meaning of the universe. It occurred to me that I might confront some ordinary people, kids even, with Weinberg’s remark and record their reactions.
For my first interview I called Molly Bloom, an old friend in Dublin, Ireland. It was very late at night when I spoke to Molly (I had forgotten the five hour time difference). We talked about nature a bit, and what it all might mean. When I quoted Weinberg’s remark to her she responded with some agitation: “…God in heaven,” said Molly, ” there’s nothing like nature the wild mountains then the sea and the waves rushing then the beautiful country with fields of oats and wheat and all kinds of things and all the fine cattle going about that would do your heart good to see rivers and lakes and flowers all sorts of shapes and smells and colors spring up even out of the ditches primroses and violets nature it is as for them saying theres no God I wouldn’t give a snap of my two fingers for all their learning why don’t they go and create something I often asked him atheists or whatever they call themselves go and wash the cobbles off themselves first then they go howling for the priest and they dying and why why because they’re afraid of hell on account of their bad conscience ah yes I know them well who was the first person in the universe before there was anybody that made it all who ah that they don’t know neither do I so there you are they might as well try to stop the sun from rising tomorrow…”
Excited by Molly’s unpunctuated enthusiasm, I gave a call to Huck Finn, a friend of my youth from Hannibal, Missouri. How did he respond to Weinberg’s impression of pointlessness, I asked. Huck was thoughtful, and then answered by recalling something that happened when he and a pal named Jim were drifting down the Mississippi River on a raft. “It’s lovely to live on a raft,” said Huck, his voice choked with nostalgia. “We had the sky up there, all speckled with stars, and we used to lay on our backs and look up at them, and discuss about whether they was made or only just happened.”
“That question is certainly related to Weinberg’s observation,” I suggested, “especially when you consider the size and complexity of the universe. There’s a heck of a lot of stars out there.” “Jim he allowed they was made,” said Huck, “but I allowed they happened; I judged it would have took too long to make so many.”
“Ah, yes,” I said. “Many modern cosmologists would seem to agree with you. The number of stars is staggering.” “Jim said the moon could a laid them,” Huck said. “Well, that looked kind of reasonable, so I didn’t say nothing against it, cause I’ve seen a frog lay most as many.” I laughed: “I don’t think many contemporary cosmologists would accept the frog-moon theory for the origin of stars.”
My conversation with Huck reminded me of another friend of my youth, a kid from an asteroid called B-612, if I remember rightly. I never knew his real name; we called him the Little Prince. Now it happened that he was in the neighborhood for another visit, so I gave him a buzz. We chatted for a while, recalling our earlier affection for one another. Then I quoted Steven Weinberg: “The more the universe seems comprehensible, the more it also seems pointless.”
He laughed, and said, “Where I live everything is so small that I cannot show you where my star is to be found. It is better, like that. My star will be just one of the stars, for you. And so you will love to watch all of the stars in the heavens.” I wasn’t sure I understood his meaning.
“All men have the stars,” he continued, “but they are not the same things for different people. For some, who are travelers, the stars are guides. For others they are no more than little lights in the sky. For others, who are scholars, they are problems.” “Like for my 27 cosmologists,” I ventured.
“All these stars are silent,” said the Little Prince, his voice so soft and gentle I could barely make it out over the noisy telephone line. “You – you alone – will have the stars as no one else has them -” I was still perplexed. I did not exactly see what this had to do with finding a human meaning in the universe of galaxies. “In one of the stars I shall be living,” he said. “In one of them I shall be laughing. And so it will be as if all the stars were laughing when you look at the sky at night…You – only you – will have stars that can laugh!” And he laughed again.”
“Night and day the river flows. If time is the mind of space, the River is the soul of the desert. Brave boatmen come, they go, they die, the voyage flows on forever. We are all canyoneers. We are all passengers on this little mossy ship, this delicate dory sailing round the sun that humans call the earth. Joy, shipmates, joy.”
- Edward Abbey
"They Can Always Print More Money But We Can't Print More Time"
by Charles Hugh Smith
"Space I can always recover... but time, never."
- Napoleon Bonaparte
"No matter how much money I make, they will always print more. I can't print anymore time." The source of this quote is correspondent T.D., who shared the story of an acquaintance of his who was offered a high-paying and very demanding corporate position that would have left him nominally wealthier in terms of money but much poorer in terms of time and energy remaining after trading away the bulk of his time and energy for the higher pay. The acquaintance turned the position down and cut the number of hours he was working, with this explanation: "No matter how much money I make, they will always print more. I can't print anymore time."
The point here is that central banks and state treasuries can always print more money, a process which reduces the purchasing power of the money they've issued. We can trade more hours for more money, but this extra money buys less. No matter how much more of our time we trade for more of this created-out-of-thin-air currency, we will never be able to overcome their power to create near-infinite currency, which put another way is the power to devalue the money we trade our time for and thus devalue our time.
This is an asymmetry that should inform our decisions going forward: They Can Always Print More Money But We Can't Print More Time. In other words, they can devalue the money we trade our time for at will but we can't create more time. As catalogued in the monumental history, "Global Crisis: War, Climate Change and Catastrophe in the 17th Century," the history of governments' response to crisis is depressingly repetitive: virtually without exception, every government devalues its currency in response to the soaring costs of conflict (and placating elites) and the concurrent plunge in tax revenues.
The common experience seems to be that the government-issued money loses 90% or more of its value. In the era before central banks could create trillions of dollars with a few keystrokes, this was accomplished by recalling silver or gold coins and replacing them with coins with little intrinsic value. In the case of the mighty Ottoman Empire of the 1600s, the empire recalled all copper coins ("small money" used for everyday transactions) and restamped it at a face value triple the old value, in effect wiping out two-thirds of its purchasing power.
Diaries of commoners in every regime not shredded by war record that the 90% devaluation of the money was just as devastating as the floods, droughts, food shortages and soaring taxes that were all part and parcel of the official response to crisis. That money is losing purchasing power faster than we can earn more of it is a fundamental transformation. In the good old days of two generations ago, making 25% more money still added purchasing power to our incomes, even after deducting 5% for inflation (laughingly estimated at 2%) and another 10% in higher taxes paid because the extra income pushed us into a higher tax bracket. We still netted an additional 10% of purchasing power.
But if history is any guide, then we can anticipate 20% inflation (grossly underestimated by authorities to avoid outright revolt) and 20% higher taxes (often hidden in higher "user taxes" and other flim-flam) on our additional earnings, leaving us with less purchasing power even after we traded every available hour for the additional income. Stuck with trading our time for devaluing currency, we will be poorer in what really counts - our time and energy - and poorer in the purchasing power of our income.
This increases the temptation to gamble whatever money one has to outrace the authorities' devaluation, and indeed, 2020's rampant speculative bubbles generated a widespread illusion that the agile gambler could easily outrace the devaluation. For example, take $2,000, gamble it all on the highest-volatility stocks, and turn it into $200,000. Oops, and then run the fortune to zero. That's the problem with relying on a hot hand in the casino to avoid trading time for money: the vast majority of punters lose in the casino, especially when the tide that's been raising all boats ebbs away.
(Governments love gamblers who win, of course; if you live in a high-income tax state, add 9% to the federal tax rate of 32%, and be prepared to "share" 40+% of your casino winnings.)
The other approach is to reduce our need for money to a very low level so we're not forced to trade what we cannot create more of - time - for something that's rapidly losing value.
A second related approach is to trade our time for time-honored forms of money that have intrinsic value. While I have been on record since 2016 as saying positive things about cryptocurrencies, including my own proposal for a labor-backed cryptocurrency ("A Radically Beneficial World"), the historic stalwarts in the intrinsic value camp are gold and silver. But anything with intrinsic value will do: grain, tools, nails, shelter, etc.
Having the skills to generate goods and services of intrinsic value is very much like "printing money with our time" because our skills make our time valuable, not in terms of what government currency is worth but in terms of the value others find in the goods and services we generate with our skills and time.
History informs us that governments inevitably respond to crisis by devaluing their currency and by raising taxes. In the current era, the more money commoners earn, the more taxes they pay, as taxes are progressive. The less we earn, the less taxes we pay. Politically, this cannot change much, for as people become poorer, their ability to pay taxes diminishes. So taxes will rise on high earners, not on those earning relatively little. It may well be that every dollar of nominal gain in income will simply pay higher taxes. Is that really what you want to spend your time doing, paying higher taxes?
So what do we spend our precious time doing? Running the Red Queen's Race with devaluing currencies, or lessening our exposure to the theft of our time by currency devaluation and taxes? It's not an asymmetry we will have to address tomorrow, but the time will come when it presses on us like gravity itself."
"The Far Field"
"I dream of journeys repeatedly:
Of flying like a bat deep into a narrowing tunnel
Of driving alone, without luggage, out a long peninsula,
The road lined with snow-laden second growth,
A fine dry snow ticking the windshield,
Alternate snow and sleet, no on-coming traffic,
And no lights behind, in the blurred side-mirror,
The road changing from glazed tarface to a rubble of stone,
Ending at last in a hopeless sand-rut,
Where the car stalls,
Churning in a snowdrift
Until the headlights darken.
At the field's end, in the corner missed by the mower,
Where the turf drops off into a grass-hidden culvert,
Haunt of the cat-bird, nesting-place of the field-mouse,
Not too far away from the ever-changing flower-dump,
Among the tin cans, tires, rusted pipes, broken machinery,-
One learned of the eternal;
And in the shrunken face of a dead rat, eaten by rain and ground-beetles
(I found it lying among the rubble of an old coal bin)
And the tom-cat, caught near the pheasant-run,
Its entrails strewn over the half-grown flowers,
Blasted to death by the night watchman.
I suffered for young birds, for young rabbits caught in the mower,
My grief was not excessive.
For to come upon warblers in early May
Was to forget time and death:
How they filled the oriole's elm, a twittering restless cloud, all one morning,
And I watched and watched till my eyes blurred from the bird shapes,-
Cape May, Blackburnian, Cerulean,-
Moving, elusive as fish, fearless,
Hanging, bunched like young fruit, bending the end branches,
Still for a moment,
Then pitching away in half-flight,
Lighter than finches,
While the wrens bickered and sang in the half-green hedgerows,
And the flicker drummed from his dead tree in the chicken-yard.
Or to lie naked in sand,
In the silted shallows of a slow river,
Fingering a shell,
Once I was something like this, mindless,
Or perhaps with another mind, less peculiar;
Or to sink down to the hips in a mossy quagmire;
Or, with skinny knees, to sit astride a wet log,
I'll return again,
As a snake or a raucous bird,
Or, with luck, as a lion.
I learned not to fear infinity,
The far field, the windy cliffs of forever,
The dying of time in the white light of tomorrow,
The wheel turning away from itself,
The sprawl of the wave,
The on-coming water.
The river turns on itself,
The tree retreats into its own shadow.
I feel a weightless change, a moving forward
As of water quickening before a narrowing channel
When banks converge, and the wide river whitens;
Or when two rivers combine, the blue glacial torrent
And the yellowish-green from the mountainy upland,-
At first a swift rippling between rocks,
Then a long running over flat stones
Before descending to the alluvial plane,
To the clay banks, and the wild grapes hanging from the elmtrees.
The slightly trembling water
Dropping a fine yellow silt where the sun stays;
And the crabs bask near the edge,
The weedy edge, alive with small snakes and bloodsuckers,-
I have come to a still, but not a deep center,
A point outside the glittering current;
My eyes stare at the bottom of a river,
At the irregular stones, iridescent sandgrains,
My mind moves in more than one place,
In a country half-land, half-water.
I am renewed by death, thought of my death,
The dry scent of a dying garden in September,
The wind fanning the ash of a low fire.
What I love is near at hand,
Always, in earth and air.
The lost self changes,
Turning toward the sea,
A sea-shape turning around,-
An old man with his feet before the fire,
In robes of green, in garments of adieu.
A man faced with his own immensity
Wakes all the waves, all their loose wandering fire.
The murmur of the absolute, the why
Of being born falls on his naked ears.
His spirit moves like monumental wind
That gentles on a sunny blue plateau.
He is the end of things, the final man.
All finite things reveal infinitude:
The mountain with its singular bright shade
Like the blue shine on freshly frozen snow,
The after-light upon ice-burdened pines;
Odor of basswood on a mountain-slope,
A scent beloved of bees;
Silence of water above a sunken tree:
The pure serene of memory in one man,-
A ripple widening from a single stone
Winding around the waters of the world."
- Theodore Roethke
- Theodore Roethke
Jason Lewis - Mind Amend,
"Upbeat Study Music - Deep Focus for Complex Tasks"
"Deep focus for complex tasks, upbeat study music mix with isochronic tones. Uses beta wave tones to help you reach and maintain a high focus mental state. Use when working on advanced and complicated topics like mathematics, scientific formulas, financial analysis or any complex mental activity. Isochronic tones produce a stronger and more powerful brainwave entrainment effect, compared to binaural beats study music tracks or standard music."
"Covid-19 Pandemic Updates 2/27/21"
SATURDAY, FEB 27, 2021 - 10:44:
"These 7 States Are On The Verge Of Herd Immunity"
by Tyler Durden
Feb 27, 2021 12:36 AM ET:
The coronavirus pandemic has sickened more than 113,386,600
people, according to official counts, including 28,509,327 Americans.
Globally at least 2,516,200 have died.
Feb. 27, 2021 12:36 AM ET:Coronavirus in the U.S.: Latest Map and Case Count
"The COVID Tracking Project"
Every day, our volunteers compile the latest numbers on tests, cases,
hospitalizations, and patient outcomes from every US state and territory.
Every day, our volunteers compile the latest numbers on tests, cases,
hospitalizations, and patient outcomes from every US state and territory.
February 27, 2021 8:40 AM ET○
Where I Live:
2/27/2021: "Cases are very high but have decreased over the past two weeks. The numbers of hospitalized Covid patients and deaths in the Pinal County area have also fallen. The test positivity rate in Pinal County is very high, suggesting that cases are being significantly undercounted. We’ve recommended additional precautions below."
"The Beatings Will Continue"
by Brian Maher
"The beatings will continue until morale improves. The Hon. Jerome H. Mr. Powell, in statements: "There is a long way to go to maximum employment… We live in a time where there is significant disinflationary pressures around the world and where essentially all major advanced economy’s central banks have struggled to get to 2% (inflation). We believe we can do it, we believe we will do it. It may take more than three years…"
Here Mr. Powell’s understrapper - Federal Reserve Governor Lael Brainard - grabs the knout: "The economy remains far from our goals in terms of both employment and inflation, and it will take some time to achieve substantial further progress." That is, you can expect additional years of suppressed interest rates… of monetary delirium… of skyshooting debt. That is, you can expect years of ongoing beatings. Haven’t the brutalities endured long enough - without an appreciable uplift in morale? Set aside the stock market and its jubilations. Take the Federal Reserve on its own terms… and look at inflation...
Years and Years of Futility: For 12 years running, the Federal Reserve has gone at inflation hammer and tong. Its savageries defy all standards of civilized decency. Yet the men remain dispirited… and demoralized… despite the beatings. A sustained 2% (official) inflation rate remains as elusive as the holy grail itself. Why would more bludgeonings yield the prize? There is an excellent reason to believe they will not.
Debt turns deflationary come a certain point… as benign substances turn toxic come a certain point. As Mr. Lance Roberts of Real Investment Advice recently noted in these pages: “Monetary policy is ‘deflationary’ when ‘debt’ is required to fund it.” More: "Beginning in 2000, the “money supply” as a percentage of GDP has exploded higher without a resulting rise in inflation or economic growth... With each monetary policy intervention, the velocity of money has slowed along with the breadth and strength of economic activity. Despite perennial hopes that economic growth and inflation would arise from lower rates, more government spending, and increased “accommodative policies,” each iteration led to weaker outcomes.
In an economy saddled by $82 Trillion in debt, the debt is no longer productive as more debt is issued to cover ongoing spending needs. Decades of (the Fed’s) monetary experiment have succeeded only in reducing economic growth and inflation and increasing economic inequality."
Insanity: Yet the Federal Reserve does not reconsider its enforcement mechanisms. It concludes - rather - that its pummelings have lacked the requisite oomph. The victim requires greater bruising. And so the brass knuckles are out. The battering may run three years yet by Mr. Powell’s own estimate. "Insanity is doing the same thing over and over again,” runs the old saw, “and expecting different results.”
Our esteem for the monetary authority is mighty. We would never in one million years insinuate it is in insanity’s grip. A cheekier fellow might. But we refrain in decency, likely misplaced decency. Yet what is this? The Federal Reserve is acquiring additional muscle?
The Fed Tag-Teams With the Treasury: Monetary policy - quantitative easing and zero interest rates - has failed to lift morale. It has largely inflated assets. But not the consumer price index. The money simply has not oozed over into the broad economy. The beatings must therefore continue. Harsher beatings. And so another goon is ganging in… a roughneck with years of hard experience cracking skulls... and breaking legs.
The name is Janet Yellen. She is the latest Treasury Secretary. And she has a good hard clubbing in mind. She is adding her fiscal muscle to the Federal Reserve’s monetary punch. Each lacks knockout wallop. But together?
The “One-Two” Combination: Crackerjack analyst Lyn Alden Schwartzer, author of Stock Waves: "The Federal Reserve can create base money out of thin air in a process they call "quantitative easing" or QE for short, but has very limited methods to inject it into the broad money supply. They can only buy bonds and certain other assets with it. They have no way to send money to real people and businesses in the economy, outside of financial markets.
The Treasury Department, on behalf of Congress and the President, can send money out to people and businesses, but needs to issue bonds associated with that spending, which just moves money around. The bonds pull capital out from one place (the lenders) and puts it in another place (where it is spent). Therefore, the government also doesn't have many ways to directly increase the broad money supply within the context of the existing legal structure."
But together the Federal Reserve and the Department of Treasury may deliver the one-two combination... A straight cross of monetary policy… succeeded by an upper cut of fiscal policy: "However, the combination of the Treasury Department and the Fed working together, with the Treasury Department sending checks out into the broad money supply and the Fed creating new base money to buy the bonds associated with that spending (rather than extracting that money from real lenders buying the bonds with existing money), outright increases the broad money supply."
Exploding Money Supply: Deficit spending has expanded to dimensions truly extravagant. Treasury debt jumped $5 trillion this past year... from $23 trillion to nearly $28 trillion. Observe the increase in M2 money supply - the broad money supply - then lift your jaw from the floor:
The M2 money supply has swollen some 25% within the space of one year. Yearly M2 expansion had never exceeded 15% prior to 2020. Meantime, a $1.9 trillion bill is on the stocks, awaiting passage. Mr. Biden plans to expend an additional $4 trillion later this year. Will the twin bombardments of the Federal Reserve... and the Treasury... finally yield the grail of 2% inflation, sustained? It is a ferocious assault. What if it meets - or exceeds expectations? What if inflation finds its roar?
Interest Rates and Debt Approaching Collision: Long-term interest rates would jump. 10-year Treasury yields are already bubbling on “reflationary” expectations. At 1.5%, they remain historically low. But note the trend - it is up. Last August 3, yields hovered at 0.56%. This economy and this stock market cannot withstand a substantial interest rate increase. They depend too heavily upon cheap debt… as a corner sot depends on cheap liquor. As the drunk cannot afford pricier drink, these tosspots cannot afford pricier debt.
The question then arises: What interest rate would break them? The aforesaid Lance Roberts: "The limit of that increase in rates is between 1.56% and 2.19%. At these points, rates will collide with the outstanding debt."
No-Win Situation: In this telling, interest rates and outstanding debt are locked on a colliding course. A wreck is not imminent. But opposing masses are in violent motion. Thus the Federal Reserve is hung upon the hooks of a dilemma. Concludes Roberts: "The surge in inflation will limit their ability to continue "unlimited QE" without further exacerbating the inflation problem. However, if they don't "monetize" the deficit through their "QE" program, interest rates will surge, leading to an economic recession."
It's a no-win situation for the Fed. The fellow draws the scene in dark colors. A no-win situation is an all-lose situation. Yet we advise you to keep heart. After all… Our collective fate is in the infinitely capable hands of Jerome Powell and Janet Yellen..."
"We're so freakin' doomed!"
- The Mogambo Guru
Friday, February 26, 2021
“How far do magnetic fields extend up and out of spiral galaxies? For decades astronomers knew only that some spiral galaxies had magnetic fields. However, after NRAO's Very Large Array (VLA) radio telescope (popularized in the movie Contact) was upgraded in 2011, it was unexpectedly discovered that these fields could extend vertically away from the disk by several thousand light-years. The featured image of edge-on spiral galaxy NGC 5775, observed in the CHANG-ES (Continuum Halos in Nearby Galaxies) survey, also reveals spurs of magnetic field lines that may be common in spirals.
Analogous to iron filings around a bar magnet, radiation from electrons trace galactic magnetic field lines by spiraling around these lines at almost the speed of light. The filaments in this image are constructed from those tracks in VLA data. The visible light image, constructed from Hubble Space Telescope data, shows pink gaseous regions where stars are born. It seems that winds from these regions help form the magnificently extended galactic magnetic fields.”
“White Owl Flies Into and Out of the Field”
“Coming down out of the freezing sky
with its depths of light,
like an angel, or a Buddha with wings,
it was beautiful, and accurate,
striking the snow and whatever was there
with a force that left the imprint
of the tips of its wings - five feet apart -
and the grabbing thrust of its feet,
and the indentation of what had been running
through the white valleys of the snow -
and then it rose, gracefully,
and flew back to the frozen marshes
to lurk there, like a little lighthouse,
in the blue shadows -
so I thought:
maybe death isn't darkness, after all,
but so much light wrapping itself around us -
as soft as feathers -
that we are instantly weary of looking, and looking,
and shut our eyes, not without amazement,
and let ourselves be carried,
as through the translucence of mica,
to the river that is without the least dapple or shadow,
that is nothing but light - scalding, aortal light -
in which we are washed and washed
out of our bones.”
- Mary Oliver
“Farewell to you and the youth I have spent with you.
It was but yesterday we met in a dream.
You have sung to me in my aloneness,
and I of your longings have built a tower in the sky.
But now our sleep has fled and our dream is over,
and it is no longer dawn.
The noontide is upon us and our half waking has turned to fuller day,
and we must part.
If in the twilight of memory we should meet once more,
we shall speak again together and you shall sing to me a deeper song.
And if our hands should meet in another dream
we shall build another tower in the sky.”
- Kahlil Gibran, “The Prophet”