So, we rise from the rubble...
Friday, November 20, 2020
"Market Fantasy Updates 11/20/20"
"Market Fantasy Updates 11/20/20"
Down the rabbit hole of psychopathic greed and insanity...
Only the consequences are real - to you!
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"The more I see of the monied classes,
the better I understand the guillotine."
- George Bernard Shaw
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Gregory Mannarino, PM 11/20/20:
"The Market, And Some People, Are A Total Freak Show"
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Updated live.
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Daily Update (Nov. 19h to 23rd)
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Insanity...
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And now... The End Game...
"The Greatest Swindle in American History... And How They'll Try It Again Soon"
"The Greatest Swindle in American History...
And How They'll Try It Again Soon"
by Jeff Thomas
"International Man: Before 1913 there was no income tax, and the United States was a much freer country. Initially, the government sold the federal income tax to the American people as something only the rich would have to pay.
Jeff Thomas: Yes, exactly. It always begins this way. The average person is always happy to see the rich taken down a peg, so this makes the introduction of the concept of theft by the government more palatable. Once people have gotten used to the concept and accept it as being perfectly reasonable, then it’s time to begin to drop the bar as to who "the rich" are. Ultimately, the middle class are always the real target.
International Man: The top bracket in 1913 kicked in at $500,000 (equivalent to around $12 million today), and the tax rate for it was only 7%. The government taxed those making up to $20,000 (equivalent to around $475,000 today) at only 1% – that’s one percent.
Jeff Thomas: Any good politician understands that you begin with the thin end of the wedge, then expand upon that as soon as you feel you can get away with it. The speed at which the tax rises is commensurate with the level of tolerance of the people. And in different eras, the same nation may have a different mindset. The more domination a people have come to accept from their government, the faster the pillaging can be expanded.
As an example, the Stamp Tax that King George III placed upon the American colonies in the eighteenth century was very small indeed – less than two percent – but the colonists were very independent people, asking little from the king in the way of assistance, and instead, relying upon themselves for their well-being. Such self-reliant people tend to be very touchy as regards confiscations by governments, and even two percent was more than they would tolerate.
By comparison, if today, say, Texas were to eliminate all state taxation and allow only two percent in federal taxation, Washington would come down on them like a ton of bricks, saying they were attempting to become a "tax haven." They’d be accused of money laundering and aiding terrorism and might well be cut out of the SWIFT system. The federal government would shut down the state government if necessary, but diminished tax would not be tolerated.
International Man: Of course, once the American people conceded the principle of an income tax in 1913, the politicians naturally couldn’t resist ramping it up. Just look at the monstrosity that exists today in the US tax code, which most Americans passively accept as "normal." It’s a typical example of giving an inch and taking a mile.
Jeff Thomas: Yes – the key to it is twofold: First, you have to be sensitive as to how quickly you can ramp up taxation, and second, that rate is directly proportional to the level that the public receive largesse from the government. They have to have become highly dependent upon a nanny state and thereby willing to take their whipping from nanny. The greater the dependency, the greater the whipping.
International Man: Homeowners in the US – and most countries – must regularly pay property taxes, which are taxes on property that you supposedly own. Depending on where you live, they can be quite high and never seem to go down. What are your thoughts on the concept of property taxes?
Jeff Thomas: Well, my view would be biased, as my country of citizenship has never, in its 500-year history, had any direct taxation of any kind. The entire concept of direct taxation is therefore anathema to me. It’s easy for me to see, simply by looking around me, that a society operates best when it’s free of taxation and regulation and people have the opportunity to thrive within a free market.
Years ago, I built my first home from my savings alone, which had been sufficient, because my earnings were not purloined by my government. I never paid a penny on a mortgage and I never paid a penny on property tax. So, following the construction of my home, I was able to advance economically very quickly. And of course, I additionally had the knowledge that, unlike most people in the world, I actually owned my own home – I wasn’t in the process of buying it from my bank and/or government. So, not surprisingly, I regard property tax as being as immoral and as insidious as any other form of direct taxation.
International Man: Not all countries have a property tax. How do they manage?
Jeff Thomas: I think it’s safe to say that political leaders don’t really have any particular concern over whether a tax is applied to income, property, capital gains, inheritance, or any other trumped-up excuse. Their sole concern is to tax.
Taxation is the lifeblood of any government. Once that’s understood, it becomes easier to understand that government is merely a parasite. It takes from the population but doesn’t give back anything that the population couldn’t have provided for itself, generally more efficiently and cheaply.
So, as to how a government can manage without a property tax, we can go back to your comment that the US actually had no permanent income tax until 1913. That means that they accomplished the entire western expansion and the creation of the industrial revolution without such taxation.
So, how was this possible? Well, the government was much smaller. Without major taxes, it could become only so large and dominant. The rest was left to private enterprise. And private enterprise is always more productive than any government can be. Smaller government is inherently better for any nation. Governments must be kept anemic.
International Man: The Cayman Islands doesn’t have any form of direct taxation. What does that mean exactly?
Jeff Thomas: It means that the driving force behind the country is the private sector. We tend to be very involved in government decisions and, in fact, generate many of the decisions. Laws that I’ve written privately for the Cayman Islands have been adopted by the legislature with no change whatsoever to benefit government. As regards property tax, there are only three countries in the western hemisphere that have no property tax, and not surprisingly, all of them are island nations: The Turks and Caicos Islands, Dominica and the Cayman Islands.
I should mention that the very concept of property ownership without taxation goes beyond the concern for paying an annual fee to a government. Additionally, in times of economic crisis, governments have been known to dramatically increase property taxes. Further, they sometimes announce that your tax was not paid for the year (even if it was) and they confiscate your property as a penalty. This has been done in several countries.
What’s important here is that, with no tax obligation, the government in question is unable to simply raise an existing tax. If you have no reporting obligation, you truly own your property. And you can’t be the victim of a "legal" land-grab. Instituting a new tax is more difficult than raising an existing one, and instituting any tax in a country where direct taxation has never existed is next to impossible.
International Man: How do Cayman’s tax policies relate to its position as a business-friendly jurisdiction?
Jeff Thomas: Well there are two answers to that. The first is that the Cayman Islands operates under English Common Law, as opposed to Civil Law. That means that as a non-Caymanian, you’re virtually my equal under the law. Your rights of property ownership are equal to mine. Therefore, an overseas investor, even if he never sets foot on Cayman, cannot have his property there taken from him by government, squatters, or any other entity such as can legally do so in many other countries.
The second answer is that, since we’re a small island group, the great majority of business revenue comes from overseas investors. Therefore, our politicians, even if they’re of no better character than politicians in other countries, understand that, if they change a law or create a tax that’s detrimental to foreign investors and depositors, wealth can be removed from Cayman in a keystroke of the computer. Before the ink is dried on the new legislation, billions of dollars can exit, on the knowledge that the legislation is taking place.
Now, our political leaders may not be any more compassionate than those of any other country. Thier one concern is that their own bread gets buttered. But should they pass any legislation that’s significantly detrimental to overseas investors, their careers are over. They understand that and recognize that their future depends upon making sure that they understand and cater to investors’ needs.
International Man: Governments everywhere are squeezing their citizens through higher taxes and new taxes. And don’t forget that printing money, which debases the currency, is also a real, but somewhat hidden, tax too. What do you suggest people do to protect themselves?
Jeff Thomas: Well, the first thing to understand is that many nations of the world grabbed onto the post-war coattails of the United States. The US was going to lead the world, and Europe, the UK, Canada, Australia, Japan, etc., all got on board for the big ride to prosperity. They followed all the moves the US made over the decades.
Unfortunately, once they were on board the train, they couldn’t get off. When the US went from being the largest creditor nation to the largest debtor nation, those same countries also got onto the debt heroin. That big party is coming to an end, and when it does, all countries that are on the train will go over the cliff. So, what that means is that you, as an individual, do not want to be on that train. If you’re a resident of an at-risk country, you want to, first and foremost, liquidate your assets in that country and get the proceeds out. You may leave behind some spending money in a bank account – so that you have the convenience of checking, ATMs, etc. – and that money should be regarded as sacrificial.
You then would want to move the proceeds to a jurisdiction that’s likely to not only survive the train wreck but prosper as a result of it. Once it’s there, you want to keep it outside of banks and in forms that are difficult to take from you – cash, real estate and precious metals. After that, if you’re able to do so, it would be wise to also get yourself out before a crash, as the day will come when migration controls will be imposed and it will no longer be legal to exit.
It does take some doing, but if faced with a dramatic change in life, I’d want to be proactive in selecting what was best for me and my family, before the changing socio-economic landscape made that choice for me.
Governments everywhere are squeezing their citizens through increased taxation and money printing–which is a hidden tax. This trend will only gain momentum as governments go broke and need more cash. It’s an established trend in motion that is accelerating, and now approaching a breaking point. At the same time, the world is facing a severe crisis on multiple fronts. The good news is it will likely cause a panic into gold and gold mining stocks. Gold tends to do well during periods of turmoil."
"Trade-Offs"
"Trade-Offs"
by The Zman
"Back in the Cold War, one of the unanswered questions that came up from time to time was why did the people in the Soviet Union put up with it? American propaganda said that the living conditions were terrible. They had to stand in line for essentials like toilet paper and meat. The secret police regularly hauled people away, sending them into exile in Siberia or worse. Despite it all, the people, including those in the captive nations never revolted against the state or the communist party.
It is a useful question to ponder now as America and the West slip into the abyss of soft totalitarianism. We don’t have cops busting down doors and hauling away dissidents, at least not yet. We do have ideologues armed with the power of the state pushing people around because they can. The Covid hassles are the result of petty pipsqueaks in government offices dreaming up new ways to torment us. Curfews and bans on alcohol are punitive measures, not palliative ones.
It brings up that old question. Why are people tolerating this? There were some flickers of resistance during the early stages of the lock downs, but governments sent out the cops to harass dissenters and the media revved up the fear campaign. Here we are in a second wave of pointless lock downs, more petty and stupid than the first, but no one is raising hell about it. Back in the Cold War, stories like this elicited oaths about how the tree of liberty needed to be fertilized with the blood of tyrants.
A popular answer, for why people willingly allow themselves to be stripped of their liberty and dignity, is our material prosperity. The Boomers care more about their stock portfolios and their kids care more about the game consoles. The reason everyone goes along with this stuff, according to popular thinking, is everyone feels like they have too much to lose. That material prosperity has made everyone lazy and cautious, so they are easily pushed around by the petty tyrants.
While there is some truth to it, that can’t be the answer for why the people living under communism never revolted. The stories about people waiting in line for bread were no doubt exaggerated by Western media, but there is no doubting that the people in the Soviet Union lived well below Western standards. The Soviets may have had great military gear, but their consumer goods were terrible. Only party members had access to the small luxuries taken for granted in the West at the time.
In retrospect, we now know that life for most people in the Soviet Empire was not the dystopian nightmare portrayed in the West. Once Stalin died, there was a brief period of reform and then communism fell into a long period of conservatism. That is, it was more about maintaining a set of rules and enforcing them. Ideological experimentation came to an end and the focus was on the basics of life. For most people this meant a predictable life, where they had the necessities.
There’s no doubt that material standards of living for people in communism were far below that of the West, but this was not something they saw everyday. They just knew that life was better under communism than in the past. They were also free of crime, disorder and the great uncertainty of the first half of the 20th century. In other words, lacking a plausible alternative that was clearly better, most people were willing to knuckle under to the ideologues in order to get on with life.
We see that in America now. An under appreciated subplot to the Trump phenomenon is that Trump represented disorder and uncertainty, while his establishment opponents became stability and order. They selected the Pretender Biden because no one could possibly see him as a revolutionary. To use the old movie concept, the election was about the blue bill of Biden or the red pill of Trump. Note that the old alt-right greedily gobbled down the blue pill of Biden.
Another historical parallel is important. The captive people of the Soviet Empire were not all willing to go along to get along. The Hungarians revolted in October of 1956 against the party and the Soviet occupation. In November the Soviets sent in the Red Army to crush the revolt. The Politburo was initially open to dealing with the leaders of the rebellion, but changed their mind and crushed the revolt. The reason was they did not want to encourage more rebellions.
In January 1968, the reformer, Alexander Dubček, was elected First Secretary of the Communist Party of Czechoslovakia. This set off what is known as the Prague Spring, which was an effort to liberalize Czech politics and economics. This reform effort did not go over well with the Soviets who sent in half a million Warsaw Pact troops to suppress the reform movement and restore the old order. The scenes from Freedom Plaza last Saturday had a Prague Spring vibe to them.
What the Hungarian Revolt and the Prague Spring showed is that raw power has an appeal that can never be underestimated. There is no question that the people of the captive nations were in support of their independence, but the raw power of the Soviet Empire was more than enough to counter popular support. When the rebels had no answer for the Soviet tanks, the people did what Osama bin Laden observed many years ago. They chose the strong horse.
This is a lesson the Poles learned and put to good use in the 1980’s. The Solidarity Movement was as much about making the Polish communist party look weak as it was about organizing the people. Instead of hoping the party would yield to popular will, they played a game of chess with the party, putting them in positions where they looked weak and indecisive. This allowed the people to trust that the cure for communism was not worse than the disease of communism.
This brings us back to the current time. One obvious failing of the populist movement that put Trump in the White House is it was never able to create a plausible alternative in the mind of the people. Was the goal a return to the past or was the goal the present with specific modifications? Was it some undefined future? Trump was not skilled enough to grasp this and lacked the imagination to articulate a plausible alternative, even if he recognized the historical moment.
This is something that the reformers and rebels in the late Soviet Empire did not fail to grasp when their time came. When the party tried to oust Yeltsin, for example, the public rallied to his side because he represented a clear alternative. The Solidarity movement in Poland had a clear set of goals, rather than a list of complaints. When the party tried to muscle them, they were opposing more than just a rebellious rabble, but a set of specific reforms popular with the people.
Getting back to the central question as to why people throughout the ages have been wiling to submit to the most terrible crimes against their liberty and dignity, the answer is that life is about trade-offs. Instinctively, people make their choices based on the options put before them. They do not rebel against the present arrangements because they fall short of some ideal. They rebel, either because the alternative is misery and death or they see some better option on the table.
This has been the magic of the two-party democracy, which is explicit in America and implicit in Europe. The options before the people are always the two faces of the establishment, Republican and Democrat, Liberal and Conservative. Unless and until that dynamic is broken, either with a third option or the discrediting of the two option system, the status quo remains the strong horse. Nothing will change until the trade-offs presented to the people change."
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The corrupt establishment will do anything to suppress sites like the Burning Platform from revealing the truth. The corporate media does this by demonetizing sites like mine by blackballing the site from advertising revenue. If you get value from this site, please keep it running with a donation. [Jim Quinn - PO Box 1520 Kulpsville, PA 19443] or Paypal at the website.
Thursday, November 19, 2020
Musical Interlude: Justin Hayward, "I Dreamed Last Night"; "Celtic Heart"
Full screen recommended.
Justin Hayward, "I Dreamed Last Night"
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Justin Hayward, "Celtic Heart"
Greg Hunter, "Weekly News Wrap-Up 11/20/2020"
"Weekly News Wrap-Up 11/20/2020"
By Greg Hunter’s USAWatchdog.com
"The President’s election legal team put on a 90 minute press conference on Thursday that laid out their plan to overturn the election by exposing “massive voter fraud.” The President’s point man on the effort, Rudy Giuliani, says he can “overturn the election in Georgia, Michigan, Pennsylvania, Wisconsin, Nevada and Arizona with more than double the votes needed.”
Sidney Powell, another top former federal prosecutor on the President’s team, says Dominion voter machines were also used in electronic voter fraud on a nationwide scale. Powell said the Dominion voting system was used, and it was imported from Venezuela and owned by people who are friends of the communist government. Powell also charged, “There was massive money influence of communist Venezuela and China” in effort to get a Biden win.
Meanwhile, the lying propaganda media is continuing its psyop and disinformation campaign. It claims, without proof, that President Trump’s “voter fraud claims are baseless” and “voter fraud claims are thoroughly discredited” when, in fact, they are nowhere near discredited."
Join Greg Hunter of USAWatchdog.com as he talks about this
hugely important story that will guide the future of America and liberty.
Must Watch! "Job Massacre Continues; 12 Million To Lose Unemployment; Businesses Close Forever; Reset Has Begun"
Jeremiah Babe,
"Job Massacre Continues; 12 Million To Lose Unemployment;
Businesses Close Forever; Reset Has Begun"
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Full screen mode recommended,
"25,000 LINED UP FOR FOOD - GREAT DEPRESSION 2.0 -
Are You Ready For It?"
"Panic And Desperation Sweep Across America As Fears Of A 'Dark Winter' Continue To Rise"
"Panic And Desperation Sweep Across America
As Fears Of A 'Dark Winter' Continue To Rise"
by Epic Economist
"A very dark winter is approaching, and considering that even the next administration is admitting that things are about to get really ugly, there's no wonder why Americans are being moved by panic and desperation.
Those who can still afford to get supplies at the stores are emptying shelves at a fast speed, fearing shortages and the coming strict lockdowns. Meanwhile, those who were left without any other choice are being jammed in endless food bank lines to receive enough for maybe a week or two. In this video, we address how panic shopping behavior is about to prompt another wave of shortages very soon.
Back in March, consumers rushed to the stores to stock up on cleaning products, non-perishables, and canned goods. However, the least fortunate ones that had to rely on external assistance to put food on their tables, often waiting in colossal lines at food banks, which, back then, were already stressed by the unprecedented rise in demand.
Now the new wave of confirmed has once again become the primary focus of the mainstream media, leading the public to react in fear and making all of this happen again. Additionally, the prospects of a new round of strict lockdowns is making Americans worry that they might soon found themselves stuck at home without enough toilet paper and hand sanitizer.
In many cities, these products are nowhere to be found, with companies outlining that supply chain disruptions are already occurring and the tendency is that the situation will only get more aggravating from now on.
Furthermore, Biden has repeatedly warned that “we’re still facing a very dark winter”, while his health advisor disclosed to have plans to shut down the entire economy for weeks to bend the curb. Although winter doesn't start until a month from now, consumers hoarding behavior has already begun to be registered across the country.
In California, shoppers are racing to local markets to stockpile essentials one more time. The so-called "panic shopping" has already drained some stores of their toilet paper and cleaning supplies. It's understandable why Californians are so panicked to stockpile enough cleaning supplies. After the burst of the crisis, it became impossible to find any store that had even one bottle of hand sanitizer left on the shelves. Gloves, Clorox wipes, paper towels, cleaning supplies, hand soap, frozen food, and food staples such as rice or any type of meat were completely sold out all across the state.
In some cities, a widespread shortage of toilet paper lingered for months, and the product became a coveted item and a scarce commodity. "Some became so desperate that they resorted to theft", officers informed, describing that they busted three individuals in a "heinous toilet paper caper. As preposterous as it sounds, similar occurrences were recorded across the country and are expected to continue since many can't find the means to buy such products, and attack other's stockpiles to get what they need.
Giants such as Walmart stated months ago to be stockpiling in advance to prevent shortages, but on Tuesday revealed that supply chains haven't kept up with the skyrocketing demand, and several goods have been harder to stock especially in locations with acute spikes in new virus cases. According to market research firm IRI's data, approximately, 21% of paper products and 16% of household cleaning products were out of stock during the week ending November 15. Before the crisis, less than 5% of such products were out of stock.
The panic-buying issue has become so extreme that it is being studied as a social phenomenon triggered as a consequence of the sanitary crisis. Right after the outbreak struck, supply chains were promptly disrupted as retailers struggled to adjust to meet the sudden demand. A recent study pointed out that this response is largely triggered by fear.
Having to cope with mounting uncertainty, those shopping behaviors provide a way to deal with fear and to "relieve anxiety and regain control over the crisis". In some states, the threat of sending law enforcement to private homes to enforce government mandates, as well as mandatory and arbitrary orders about who people can, and cannot, have over for the Thanksgiving and Christmas holidays, have made people rush into the stores, leaving shelves bare.
Despite several grocery chains had created "pandemic pallets" not to get caught flat-footed again when hoarding tendencies remerged amid another round of lockdowns, many of those never have completely recovered from round one. For that reason, it's inevitable not to anticipate further shortages and possibly another break on supply chains by the end of the year."
"Monetary and Fiscal Policy Won’t Work"
"The 'Sugar Rush' Economy"
by Dan Amoss
January is still a ways off, yet many economists have already forecast the types of stimulus plans that might arrive from the federal government and how these plans might impact the economy. So, will the size of the expected 2021 stimulus package surprise on the upside or the downside? I’ll first explore this question. Then I’ll explain its impact on the dollar.
Barring a successful Trump legal challenge to the election results, Joe Biden will take office in January. A Biden administration would likely have to negotiate with a Senate led by Mitch McConnell (though that’s not certain, depending on the outcome of the two runoff elections in Georgia on January 5).
The two men have a long history of negotiating. Each has shown a willingness to let the other side claim a “win” in a compromise, while also getting something they want. Infrastructure and government-supported jobs seem to be Biden’s priorities. A federal judiciary that doesn’t “legislate from the bench” seems important to McConnell. I could imagine a compromise in which McConnell trades Biden a hefty stimulus package for tangible commitments to protect the independence of the judiciary.
Throughout their careers, neither of them has been very concerned about deficits. So we can be fairly confident that federal deficits will remain very high and that the Fed will ultimately fund a large percentage of the deficit in order to suppress yields on Treasury bonds. So the national debt will likely continue to balloon despite predictions of “gridlock” in the federal government. And rapid growth in the debt is a strong source of support for gold. High deficits with heavy spending foster the conditions for rising inflation in the years ahead.
As my colleague Jim Rickards often notes, a jump in inflation is not likely in the near term because money velocity is so low (see below for more). But one thing that could make money velocity jump higher would be broader recognition that federal deficits are out of control and will keep growing at a rate that far exceeds GDP growth.
Why should we expect government deficits and debt to grow at a faster pace than the underlying economy? We’re long past the point when central bank rate cuts can stimulate economies because consumers would simply react by saving more than they already are saving. It’s like raising a kid on a diet with frequent sugar rushes. The economy has become addicted to easy monetary policy and a massive government budget. Tighten conditions for either of these factors, and the economy quickly goes into withdrawal.
Too much stimulus, like too much sugar, has damaging long-term consequences. When an economy’s debt grows, it transfers what would have been future economic activity into the present. So it’s logical to assume that as the stock of global debt soared over the past decade, a large amount of production and consumption activity was pulled from the future to the present. The borrowed-against future eventually arrives and brings with it a collapse in demand for the already-bought items.
So when you see or hear the word “stimulus plan” in the months ahead, imagine a sugar rush. It might yield a satisfying short burst of energy. But there is always a hangover, and there are long-run consequences for the economy. The endgame of this cycle is a radical debasement of the U.S. dollar (and most other paper currencies), which will make precious store metals like gold an excellent store of value.
Below, Jim Rickards shows you why we’re actually in a depression and why neither monetary policy nor fiscal policy can lift us out of it. He also shows you when you can expect to see inflation. Read on.
"Monetary and Fiscal Policy Won’t Work"
by Jim Rickards
"As I’ve argued before, we’re in a new depression. You won’t hear that from mainstream economists. They’ll say we had a recession because of the COVID lockdowns, but they’ll never mention a depression. But, most of them don’t understand what a depression really is. The starting place for understanding a depression is to get the definition right.
Most think a depression must mean an extra-long period of decline. But that's not the definition of depression. The best definition ever offered came from John Maynard Keynes in his 1936 classic "The General Theory of Employment, Interest and Money." Keynes said a depression is "a chronic condition of subnormal activity for a considerable period without any marked tendency either towards recovery or towards complete collapse."
Notice that Keynes didn’t refer to declining GDP; he talked about "subnormal" activity. In other words, it's entirely possible to have growth in a depression. The problem is that the growth is below trend. It’s weak growth that doesn’t do the job of providing enough jobs or staying ahead of the national debt. That is exactly what the U.S. has been experiencing for years and is experiencing today.
Monetary and fiscal policy won’t lift us out of the new depression. Let’s first take a look at monetary policy.
It’s the Velocity, Stupid: Fed money printing is an exhibition of monetarism, an economic theory most closely associated with Milton Friedman. Its basic idea is that changes in money supply are the most important cause of changes in GDP. A monetarist attempting to fine-tune monetary policy says that if real growth is capped at 4%, the ideal policy is one in which money supply grows at 4%, velocity is constant and the price level is constant. This produces maximum real growth and zero inflation. It’s all fairly simple, as long as the velocity of money is constant.
But, it turns out that money velocity is not constant, contrary to Friedman’s thesis. Velocity is like a joker in the deck. It’s the factor the Fed cannot control. Inflation is caused by the velocity, or the turnover, of money. Velocity is a psychological phenomenon. It depends on how an individual feels about his economic prospects. The Fed can “print” all the money in the world. But if people don’t actually spend it but save it instead, it won’t create inflation because there’s no velocity. Think of when you tip a waiter. That waiter might use that tip to pay for an Uber. And that Uber driver might pay for fuel with that money. This velocity of money stimulates the economy.
Velocity has been crashing for the past 20 years. From its peak of 2.2 in 1997 (each dollar supported $2.20 of nominal GDP), it fell to 2.0 in 2006, just before the global financial crisis, and then crashed to 1.7 in mid-2009 as the crisis hit bottom. Velocity continued to fall to 1.43 by late 2017, despite the Fed’s money printing and zero rate policy (2008–15).
Even before the new pandemic-related crash, it fell to 1.37 in early 2020. As velocity approaches zero, the economy approaches zero. There is no economy without velocity. The bottom line is, monetary policy can do very little to stimulate the economy unless the velocity of money increases. And the prospects of that happening aren’t great right now, especially as new lockdowns loom. But what about fiscal policy? Can that help get the economy out of depression?
The Broken Keynesian Multiplier: The government will add more to the national debt this year than all presidents combined from George Washington to Bill Clinton. That added debt could increase the U.S. debt-to-GDP ratio to 130%. That’s the highest in U.S. history and puts the U.S. in the same super-debtor’s league as Japan, Greece, Italy and Lebanon.
The idea that deficit spending can stimulate an otherwise stalled economy dates to John Maynard Keynes, who I mentioned earlier. Keynes’ idea was straightforward. When the government spent money (or gave it away), the recipient would spend it on goods or services. Those providers of goods and services would, in turn, pay their wholesalers and suppliers. This would increase the velocity of money. Depending on the exact economic conditions, it might be possible to generate $1.30 of nominal GDP for each $1.00 of deficit spending. This was the famous Keynesian multiplier. To some extent, the deficit would pay for itself in increased output and increased tax revenues. Here’s the problem:
There is strong evidence that the Keynesian multiplier does not exist when debt levels are already too high. In fact, America and the world are inching closer to what economists Carmen Reinhart and Kenneth Rogoff describe as an indeterminate yet real point where an ever-increasing debt burden forces a debtor nation into austerity, outright default or sky-high interest rates.
Here’s how it happens: When the Keynesian multiplier falls below 1, a dollar of debt and spending produces less than a dollar of growth. Creditors grow anxious while continuing to buy more debt in a vain hope that policymakers reverse course or growth spontaneously emerges to lower the ratio. This doesn’t happen. The economy is addicted to debt, and the addiction consumes the addict.
The endpoint is a rapid collapse of confidence in U.S. debt and the dollar. This means higher interest rates to attract investor dollars to continue financing the deficits. Of course, higher interest rates mean larger deficits, which makes the debt situation worse. The result is another 20 years of slow growth, austerity, financial repression (where interest rates are held below the rate of inflation to gradually extinguish the real value of debt) and an expanding wealth gap.
The next two decades of U.S. growth would look like the last two decades in Japan. Not a collapse, just a slow, prolonged stagnation. This is the economic reality we are facing. And neither monetary policy nor fiscal policy will change that.
So, we’re looking at disinflation and deflation for now, despite all the money creation we’ve been seeing. But that doesn’t mean inflation is dead. Not at all. The inflation will arrive, just not yet…
When You’ll See Inflation: Between 2008 and 2014, the Fed created trillions of dollars through quantitative easing. Many analysts sounded the alarm about “inflation” as the inevitable consequence of all that excessive money printing. But, despite all the fears, nothing bad happened.
Inflation actually fell; there was no serious inflation threat. Interest rates fell. There was no “bond bubble” or rout in the bond market. As a result, it seemed that debt didn’t matter after all. That’s why there’s so little resistance to all the money printing we’ve seen since the pandemic started. It’s like the boy who cried wolf. Analysts cried wolf about inflation during the last crisis, but the wolf never materialized. Why should we listen to them now?
But inflation will come when people lose confidence in the dollar and suddenly dump dollars for any hard assets they can find. Money velocity will accelerate, but it won’t be into consumer goods. It’ll be into hard assets that hold their value over time, gold in particular. In other words, the best leading indicator of inflation won’t be found in the grocery store or at the gas pump.
It’ll be found in the dollar price of gold. Of course, higher gold prices mean higher consumer prices since higher gold prices mean a weaker dollar. More dollars will be required to buy the same amount of goods. When gold pushes past $2,000 per ounce toward $3,000, that’s your signal that inflation in the price of everything else is not far behind. Don’t wait until that happens. Buy your gold now while it’s still affordable (about $1,860)."
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Freely download
"The General Theory of Employment, Interest and Money",
by John Maynard Keynes, here:
"Covid-19 Pandemic Updates 11/19/20"
18 November 2020: "Danish Study Finds No Clear Evidence
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NOV 19, 2020 2:14 PM: "CDC Asks Americans Not To Travel For Thanksgiving; Rhode Island Imposes '2 Week' Pause: Live Updates"
Thu, 11/19/2020 - 12:30: "The COVID Feedback Loop"
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Nov. 19, 2020 2:01 PM ET:
The coronavirus pandemic has sickened more than 56,661,800
people, according to official counts, including 11,695,579 Americans.
Updated 11/19/20, 2:25 PM ET
Click image for larger size.
Gregory Mannarino, "UPDATES Plus! Stocks Reverse On New Stimulus Talk"
Gregory Mannarino,
"UPDATES Plus! Stocks Reverse On New Stimulus Talk"
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Related:
"Senate Majority Leader Mitch McConnell, R-Ky., has agreed to resume negotiations with Democrats over a potential new Covid-19 bill as cases continue to surge around the country, Sen. Chuck Schumer, D-N.Y., said on Thursday. “Last night, they’ve agreed to sit down and the staffs are going to sit down today or tomorrow to try to begin to see if we can get a real good Covid relief bill,” the minority leader said during a press conference in New York. “So there’s been a little bit of a breakthrough in that McConnell’s folks are finally sitting down and talking to us.” However, Politico's Sherman highlights: "Republicans are describing the meeting this afternoon as being about government spending ahead of the Dec. 11 deadline while "Democrats are describing the meeting as being about Covid relief/government spending."
Musical Interlude: Jason Mraz, "I Won't Give Up"
Jason Mraz, "I Won't Give Up"
Full screen recommended.
"A Look to the Heavens"
“To some, the outline of the open cluster of stars M6 resembles a butterfly. M6, also known as NGC 6405, spans about 20 light-years and lies about 2,000 light years distant. M6 can best be seen in a dark sky with binoculars towards the constellation of Scorpius, coving about as much of the sky as the full moon.
Like other open clusters, M6 is composed predominantly of young blue stars, although the brightest star is nearly orange. M6 is estimated to be about 100 million years old. Determining the distance to clusters like M6 helps astronomers calibrate the distance scale of the universe.”
- http://apod.nasa.gov/apod/ap110906.html
"Perhaps They Never Will..."
"One summer night, out on a flat headland, all but surrounded by the waters of the bay, the horizons were remote and distant rims on the edge of space. Millions of stars blazed in darkness, and on the far shore a few lights burned in cottages. Otherwise there was no reminder of human life. My companion and I were alone with the stars: the misty river of the Milky Way flowing across the sky, the patterns of the constellations standing out bright and clear, a blazing planet low on the horizon. It occurred to me that if this were a sight that could be seen only once in a century, this little headland would be thronged with spectators. But it can be seen many scores of nights in any year, and so the lights burned in the cottages and the inhabitants probably gave not a thought to the beauty overhead; and because they could see it almost any night, perhaps they never will."
- Rachel Carson
The Poet: Robinson Jeffers, "Love That, Not Man Apart From That"
"Love That, Not Man Apart From That"
"Then what is the answer? Not to be deluded by dreams.
To know that great civilizations have broken down into violence,
and their tyrants come, many times before.
When open violence appears, to avoid it with honor or choose
the least ugly faction; these evils are essential.
To keep one’s own integrity, be merciful and uncorrupted
and not wish for evil; and not be duped
By dreams of universal justice or happiness.
These dreams will not be fulfilled.
To know this, and know that however ugly the parts appear
the whole remains beautiful. A severed hand
Is an ugly thing and man dissevered from the earth and stars
and his history... for contemplation or in fact...
Often appears atrociously ugly.
Integrity is wholeness, the greatest beauty is
Organic wholeness, the wholeness of life and things,
the divine beauty of the universe.
Love that, not man apart from that,
or else you will share man’s pitiful confusions,
or drown in despair when his days darken."
- Robinson Jeffers
"If You Live On This Land..."
"If you live on this land, and you have ancestors sleeping in this land,
I believe that makes you a native to this land.
It has nothing to do with the color of your skin.
I was not raised to look at people racially.
What I was taught is that we're flowers in the Great Spirit's garden.
We share a common root, and the root is Mother Earth."
- Oh Shinnah Fastwolf, Shishindi Nation (Apache)
"The Chief Obstacle..."
"The chief obstacle to the progress of the human race is the human race."
- Don Marquis
"In the mass of mankind, I fear, there is too great a majority of fools and knaves,
who, singly from their number, must to a certain degree be respected,
though they are by no means respectable."
- Philip Stanhope
"Back to the Usual Grift"
"Back to the Usual Grift"
by Bill Bonner
"Permit me to issue and control the money of a nation,
and I care not who makes its laws!"
– Mayer Amschel Rothschild,
founder of the Rothschild banking dynasty
SALTA, ARGENTINA – "We are on our way back to the U.S. Our first stop is the local capital city, Salta. After nine months in the Calchaquí Valley, it seems odd to walk on pavement… to hear so much noise… and to see so many people, all with their faces covered. Masks are obligatory here.
But do they make any difference? Apparently not. Here’s The New York Times: "A New Study Questions Whether Masks Protect Wearers. You Need to Wear Them Anyway." "Researchers in Denmark reported on Wednesday that surgical masks did not protect the wearers against infection with the coronavirus in a large randomized clinical trial. But the findings conflict with those from a number of other studies, experts said, and is not likely to alter public health recommendations in the United States."
You need to wear them anyway,” says the NYT. But why? Because Christians wear crosses. Jews wear yarmulkes. Sikhs wear turbans. And in the feds’ new religion, the faithful must wear the holy rag. They must give the fist bump and believe in the infallibility of Dr. Fauci and the other high priests. Only they can save us from the wrath of the Great Plague.
Praying for Deliverance: And of course, we’re all on the edge of our pews – waiting for Pfizer or Moderna to come through with the talisman we need to ward off the evil spirits. In Pfizer’s test – this is “science,” remember – they lined up 43,538 people to prove that their latest juju works. Trouble was, they couldn’t get the damned guinea pigs to get sick. As we read the numbers, the mammalian immune system… refined over approximately 285 million years… was the real winner. It was 99.97% effective at preventing serious illness in the whole group. Only nine of the placebo group developed any serious illness, and only one of those who got the vaccine.
That hardly seems very scientific to us, but it was enough for Pfizer to declare their elixir 95% effective! No matter that it is all hocus pocus. As Dr. Fauci said, this is not the time to think independently, or to think at all. This is the “time to do what you are told.” So we bow before the new gods… and pray for deliverance.
Fake Everything: But let us now turn from the gods to Mammon. Here at the Diary, we focus on the money. Or, more precisely, on the fake money that the U.S. tricked up in 1971. We focus on the money, not because we especially care about money itself, but because so much of life depends on it. Money is what we use to keep track of time… effort… luck… forbearance… self-discipline… energy… raw materials… sweat… innovation… and all the other things that go into creating real wealth.
Fake the money, and you also fake up the whole archipelago of rigors, relationships, and realities that rule our lives. We don’t use money simply to measure the value of a ton of grain or a new Mercedes. We use it to measure ourselves and others. We have a “two-bit” (25 cent) lawyer… and we recognize the fool by how fast he and his money part ways. In England, someone is as “nice as nine-pence” or as “queer as a nine-bob note.”
As for the two political parties in America, as former four-term governor of Alabama George Wallace once remarked, there is “not a dime’s worth of difference between them.”
Fake money fakes up everything… and brings the two parties even closer together. It makes it easier for them to collude – to increase their own power and wealth at the expense of the public. Rather than have to beg for money from the taxpayers… or borrow it from the future… the feds can “print” it. Without this printing-press money, for example, this year’s $7 trillion spending lalapalooza would have been impossible. As would this year’s presidential contest…
Cruel Fate: Poor Donald Trump was outspent, on TV ads alone, by two to one – about a billion dollars more was spent by the Biden team. Where did the money come from? And why did it flow to a hacky has-been? Well, the hack is promising to return things “back to normal.”
Donald Trump actually did more for the insider elite than any president since Franklin Roosevelt. He filled The Swamp with more fake money than any of them. The biggest donors to Joe Biden came from Wall Street. Donald Sussman. Jim Simons. Seth Klarman. Michael Moritz. The hedge fund managers “gave back” some of the fake profits Donald Trump had given them… but to his opponent!
Yes, the ingrates considered Trump unreliable, unpredictable, and embarrassingly uncouth. They laughed at him… they undermined him… and, in the end, they drowned him in The Swamp he had helped create.
Cruel, cruel fate. And now… with the whirling dervish Trump finally becalmed… the hack packing his bags for the move into the White House… and false prophets preaching salvation… we are all ready to get back to the usual grift. Stay tuned…"
"I Wish..."
"I wish it need not have happened in my time," said Frodo.
"So do I," said Gandalf "and so do all who live to see such times.
But that is not for them to decide.
All we have to decide is what to do with the time that is given us."
- J.R.R. Tolkien, "Lord of the Rings"
"Top Pathologist Claims COVID-19 Is 'The Greatest Hoax Ever Perpetrated On An Unsuspecting Public'"
"Top Pathologist Claims COVID-19 Is
'The Greatest Hoax Ever Perpetrated On An Unsuspecting Public'"
by Paul Joseph Watson
"Top pathologist Dr. Roger Hodkinson told government officials in Alberta during a zoom conference call that the current coronavirus crisis is “the greatest hoax ever perpetrated on an unsuspecting public.” Hodkinson’s comments were made during a discussion involving the Community and Public Services Committee and the clip was subsequently uploaded to YouTube.
Noting that he was also an expert in virology, Hodkinson pointed out that his role as CEO of a biotech company that manufactures COVID tests means, “I might know a little bit about all this.” “There is utterly unfounded public hysteria driven by the media and politicians, it’s outrageous, this is the greatest hoax ever perpetrated on an unsuspecting public,” said Hodkinson.
The doctor said that nothing could be done to stop the spread of the virus besides protecting older more vulnerable people and that the whole situation represented “politics playing medicine, and that’s a very dangerous game.” Hodkinson remarked that “social distancing is useless because COVID is spread by aerosols which travel 30 meters or so before landing,” as he called for society to be re-opened immediately to prevent the debilitating damage being caused by lockdowns.
Hodkinson also slammed mandatory mask mandates as completely pointless. “Masks are utterly useless. There is no evidence base for their effectiveness whatsoever,” he said. “Paper masks and fabric masks are simply virtue signalling. They’re not even worn effectively most of the time. It’s utterly ridiculous. Seeing these unfortunate, uneducated people – I’m not saying that in a pejorative sense – seeing these people walking around like lemmings obeying without any knowledge base to put the mask on their face.”
The doctor also slammed the unreliability of PCR tests, noting that “positive test results do not, underlined in neon, mean a clinical infection,” and that all testing should stop because the false numbers are “driving public hysteria.”
Hodkinson said that the risk of death in the province of Alberta for people under the age of 65 was “one in three hundred thousand,” and that it was simply “outrageous” to shut down society for what the doctor said “was just another bad flu.” “I’m absolutely outraged that this has reached this level, it should all stop tomorrow,” concluded Dr. Hodkinson.
Hodkinson’s credentials are beyond question, with the MedMalDoctors website affirming his credibility. “He received his general medical degrees from Cambridge University in the UK (M.A., M.B., B. Chir.) where he was a scholar at Corpus Christi College. Following a residency at the University of British Columbia he became a Royal College certified general pathologist (FRCPC) and also a Fellow of the College of American Pathologists (FCAP).” “He is in good Standing with the College of Physicians and Surgeons of Alberta, and has been recognized by the Court of Queen’s Bench in Alberta as an expert in pathology.”
In case the above video gets deleted by YouTube, a backup via Bitchute is available here."
"Market Fantasy Updates 11/19/20"
"Market Fantasy Updates 11/19/20"
Down the rabbit hole of psychopathic greed and insanity...
Only the consequences are real - to you!
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"The more I see of the monied classes,
the better I understand the guillotine."
- George Bernard Shaw
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"12 Million Americans Could Lose Unemployment Aid After
Christmas Without Stimulus; 14 Million Pending Evictions"
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Gregory Mannarino, AM 11/19/20:
"This ENGINEERED By Design Economic
Collapse IS Getting Rapidly Worse"
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Updated live.
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Daily Update (Nov. 18h to 20th)
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Insanity...
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And now... The End Game...
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