"America’s Worst Drug Crisis Ever Is Causing The Streets Of Many U.S. Cities To Look Like A “Zombie Apocalypse” Has Arrived"

"America’s Worst Drug Crisis Ever Is Causing The Streets Of

Many U.S. Cities To Look Like A “Zombie Apocalypse” Has Arrived"

by Michael Snyder

"America has been battling illegal street drugs for decades, but we have never seen anything like this. When the COVID pandemic hit the U.S., illegal drug use dramatically surged, and that has carried over into 2021. As I discussed a few days ago, the amount of meth that CBP agents have seized is up 9 percent so far in fiscal year 2021 and the amount of cocaine that CBP agents have seized is up 64 percent so far in fiscal year 2021. But the largest increase has been in fentanyl traffic. At this point, CBP agents have seized “more than 4,900 lbs of fentanyl during the first five months of FY21, already surpassing the total for all of FY20”.

The big drug cartels absolutely love fentanyl for a couple of reasons. First of all, it is extremely inexpensive to make, and it is very easy to move it long distances. Secondly, it is exceedingly addictive, and so customers constantly come back for more. But the only problem is that many of those customers don’t last too long. Tens of thousands of Americans are dropping dead from fentanyl overdoses, and this has become a major national crisis.

Once again tonight, vast hordes of addicts will congregate in urban areas where they know they will be able to score some fentanyl. One of those areas is Kensington Avenue in northeast Philadelphia…

"The video looks like a scene from an apocalyptic movie – dozens of disheveled people shivering in the middle of a winter night as they camp out around a trash bin on fire among a street strewn with litter. But the footage isn’t a Hollywood production but a candid snapshot of Kensington Avenue in northeast Philadelphia – an area that has been likened to the infamous Skid Row section of Los Angeles. The neighborhood has previously been dubbed the ‘East Coast’s largest open-air drug market’ by DEA officials, according to the New York Times." If you didn’t know better, you would probably be tempted to think that it was pulled right out of a post-apocalyptic horror film.

On Kensington Avenue, addicts can purchase a bag of fentanyl-laced heroin for as little as five dollars…The Kensington section of Philadelphia, where anyone can buy a lethal dose of fentanyl-laced heroin for $5 a bag, has been known locally as the ‘ground zero’ of America’s opioid epidemic, Philadelphia Magazine reported. It is not uncommon for locals who pass by the area to notice men lying motionless on the sidewalk. Syringes and needles are also frequently seen out and used in plain sight. Sometimes the men that are lying motionless on the sidewalk never get up, and that is because they have dropped dead from an overdose.

Of course scenes like this play out on a nightly basis all over America. At this point, synthetic opioids such as fentanyl have become the leading cause of overdose deaths in the United States… "In 2016, synthetic opioids, primarily illegal fentanyl, passed prescription opioids as the most common drugs involved in overdose deaths in the United States, according to the National Institute on Drug Abuse.

It is incredibly easy to overdose on fentanyl. In fact, an amount of fentanyl equivalent to “two grains of salt” is apparently enough to put you in the grave… "Some families are facing a fentanyl crisis and law enforcement is sounding the alarm. The tasteless, odorless drug is driving up the number of fatal overdoses. People who are battling a substance use disorder are being fooled by fentanyl. Lisa Smittcamp, the District Attorney in Fresno County, California, says the amount it takes to overdose is about the size of two grains of salt."

For a number of years, this was primarily a problem in the eastern half of the nation, but that has all changed. Fentanyl use is now spreading like wildfire in the western half of the country, and that spike is pushing the overall death toll dramatically higher. The following comes from NPR… "The spike in fentanyl deaths in the West contributed to a record number of fatal overdoses last year, with roughly 72,000 Americans dead. “It’s just getting worse, and it’s killing too many people,” said Matthew Donahue, deputy chief of operations for the Drug Enforcement Administration." Sadly, the final number for 2021 is expected to be even higher.

These are deaths that do not need to happen, but Americans don’t seem to be getting the message that fentanyl use is extremely dangerous. In fact, since the beginning of the pandemic the number of Americans testing positive for fentanyl use has absolutely skyrocketed… "Use of methamphetamine and fentanyl shot up after the pandemic hit the U.S. in March 2020, with a particularly sharp spike for the latter, according to a new report by drug testing company Millennium Health.

The adjusted positivity rate of urine drug screens was up 78% for fentanyl and 29% for methamphetamine during the first 9 months of the pandemic compared with the same period in 2019, according to the report. While cocaine and heroin saw small increases initially, both fell below pre-pandemic levels by the end of 2020." This is yet another example of how the fabric of our society is unraveling all around us, and it is only going to get worse.

For years, much of the fentanyl being used in the U.S. was coming in from China, but then international pressure forced the Chinese to ban the sale of fentanyl. Unfortunately, since that time vendors in China have found ways around that ban… "Under international pressure, China’s government banned the production and sale of fentanyl and many of its variants in May 2019, resulting in a significant reduction in the country’s illicit fentanyl trade.

But more than a year later, Chinese vendors have tapped into online networks to brazenly market fentanyl analogs and the precursor chemicals used to make fentanyl, and ship them directly to customers in the U.S. and Europe as well as to Mexican cartels, according to an NPR investigation and research from the Center for Advanced Defense Studies, or C4ADS, a nonprofit data analysis group."

This is one of the reasons why we need strong security on our southern border. Right now the Mexican cartels are flooding our streets with fentanyl, and the new administration does not seem too concerned about doing anything to stop this from happening."

- https://www.investmentwatchblog.com/

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Being from Philadelphia this song came to mind...

Full screen recommended.

"Housing Hysteria Cooling; Average American Is Going Broke; Economic Casino; FED Will Buy It All"

Jeremiah Babe,

"Housing Hysteria Cooling; Average American Is Going Broke;

 Economic Casino; FED Will Buy It All"

"Rising Food Prices Are Triggering A Dangerous Hunger Crisis In America: Be Ready For Starvation!"

Full screen recommended.

"Rising Food Prices Are Triggering A Dangerous

 Hunger Crisis In America: Be Ready For Starvation!"

by Epic Economist

"While the U.S. tries to bounce back from the health crisis, a ravaging hunger crisis is still sweeping across the nation. Recent data suggest that over 40 million Americans are still at serious risk of facing food insecurity this year, and although the health crisis may seem close to an end, its consequences will linger for a long time. Long-term unemployment and sharp wage cuts are here to stay, as countless jobs were permanently lost and many industries are still struggling to make it through the recession.

The UN is warning that now - one year after widespread business shutdowns severely impacted economic activity, and governments' extraordinary monetary response aggravated inflation - the situation is bound to get a whole lot worse, as food prices are going through the roof and neither wages nor employment rates are keeping up with the pace of such increases. That's what we're going to analyze in this video.

Even before the current recession, 35 million Americans were already food insecure, meaning they lacked access and means to afford enough nutritious food for themselves and their families. While millions of others were one or two paychecks away from needing help. Then, after the sanitary outbreak exploded, those vulnerable workers and households have fallen into a poverty spiral incredibly hard to recover from.

In 2020, more than 54 million Americans suffered from food insecurity, and now at least 42 million, or one in six, remain at risk of experiencing acute hunger in 2021, according to Feeding America, the nation’s largest anti-hunger organization. According to a report published by the Institute for Policy Research, "food insecurity has doubled overall, and tripled among households with children".

As of January 18, nearly 24 million households - including 12.5 million households with children - reported to already be facing severe food insecurity. The fallout of the health crisis has inflamed the problem, but also shed a light on the fact that, in the world's wealthiest country, a large chunk of the population doesn't have the means to afford their most basic needs. A Federal Reserve survey found that 40% of Americans can not afford to pay an unexpected $400 bill. So in face of long-term unemployment or other financial strains, this lack of financial cushion created an economic shock and exacerbated an already existing hunger crisis.

During the early months of the sanitary outbreak, lockdown announcements triggered a massive panic-buying frenzy that lead to dramatic food shortages all over the country. Even though shortages of some essentials linger until this day, the reason why we still have massive lines at food bank distributions is not because we have a shortage of food supplies.

Yes, supply chain disruptions repeatedly occurred and caused short-term shortages when people started to run to stockpile non-perishable goods and cleaning supplies. However, the main determinant that is driving millions of Americans to face starvation is the growth of social inequality. Throughout the years, the American living standards were continuously deteriorated by reckless monetary policies that have put us on a hyperinflationary path and ended up expanding the wealth disparities while progressively rising food prices. Needless to say, in face of such a multi-layered crisis as the one we're into, the government's extraordinary monetary response has made the problem worse.

Food staples such as meat and grains have seen the highest spikes of about 40%. But the truth is, even with a leaner output, the amount of food produced in the world is enough to feed the entire global population. Food shortages mostly happen due to poor management issues and people continue to suffer from hunger as economies collapse and workers lose their ability to provide for themselves.

Another major issue no one seems to be talking about is the fact that, even though vaccines are starting to be distributed and that could put the health crisis behind us, after the last shots are given and politicians declare it's the end, the hunger crisis will likely be - once again - swept under the rug, and all of those food-insecure people will remain in the same situation, as the reopening of the economy also means higher inflation, and therefore, higher food prices.

That is to say, as many of the problems that experts predicted last year have been deferred, and not solved, and our economy has significantly shrunk, more and more Americans are likely to be pushed to the brink of starvation. Even more tragically, their struggles might be made invisible as our leaders turn their eyes away from our real problems, and leave our great people fighting for crumbs while our economy dies. We should prepare for the worst since the good old days may never come back."

 - https://www.epiceconomist.com

Musical Interlude: Neil H, "Candlelight Dreams"

Neil H, "Candlelight Dreams"

"A Look to the Heavens"

"A gorgeous spiral galaxy some 100 million light-years distant, NGC 1309 lies on the banks of the constellation of the River (Eridanus). NGC 1309 spans about 30,000 light-years, making it about one third the size of our larger Milky Way galaxy. Bluish clusters of young stars and dust lanes are seen to trace out NGC 1309's spiral arms as they wind around an older yellowish star population at its core.

Click image for larger size.

Not just another pretty face-on spiral galaxy, observations of NGC 1309's recent supernova and Cepheid variable stars contribute to the calibration of the expansion of the Universe. Still, after you get over this beautiful galaxy's grand design, check out the array of more distant background galaxies also recorded in this sharp, reprocessed, Hubble Space Telescope view.”

-  http://apod.nasa.gov/apod/ap130116.

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Full screen recommended.

Vangelis, "A Tour of the Universe"

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"In this galaxy, there's a mathematical probability of 3 billion Earth-type planets. And in all of the universe, 20 trillion galaxies like this. And in all of that... and perhaps more, only one of each of us."

"Dr. Leonard McCoy"

Chet Raymo, “Free As A Bird”

“Free As A Bird”

by Chet Raymo

“All afternoon I have been watching a pair of hummingbirds play about our porch. They live somewhere nearby, though I haven’t found their nest. They are attracted to our hummingbird feeder, which we keep full of sugar water. What perfect little machines they are! No other bird can perform their tricks of flight – flying backwards, hovering in place. Zip. Zip. From perch to perch in a blur of iridescence. If you want a symbol of freedom, the hummingbird is it. Exuberant. Unpredictable. A streak of pure fun. It is the speed, of course, that gives the impression of perfect spontaneity. The bird can perform a dozen intricate maneuvers more quickly than I can turn my head.

Is the hummingbird’s apparent freedom illusory, a biochemically determined response to stimuli from the environment? Or is the hummingbird’s flight what it seems to be, willful and unpredictable? If I can answer that question, I will be learning as much about myself as about the hummingbird. So I watch. And I consider what I know of biochemistry. The hummingbird is awash in signals from its environment – visual, olfactory, auditory and tactile cues that it processes and responds to with lightning speed.

How does it do it? Proteins, mostly. Every cell of the hummingbird’s body is a buzzing conversation of proteins, each protein a chain of hundreds of amino acids folded into a complex shape like a piece of a three-dimensional jigsaw puzzle. Shapes as various as the words of a human vocabulary. An odor molecule from a blossom, for example, binds to a protein receptor on a cell membrane of the hummingbird’s olfactory organ – like a jigsaw-puzzle piece with its neighbor. This causes the receptor molecule to change that part of its shape that extends inside the cell. Another protein now binds with the new configuration of the receptor, and changes its own shape. And so on, in a sequence of shapeshifting and binding – called a signal-transduction cascade – until the hummingbird’s brain “experiences” the odor.

Now appropriate signals must be sent from the brain to the body – ion flows established along neural axons, synapses activated. Wing muscles must respond to direct the hummingbird to the source of nourishment. Tens of thousands of proteins in a myriad of cells talk to each other, each protein genetically prefigured by the hummingbird’s DNA to carry on its conversation in a particular part of the body. All of this happens continuously, and so quickly that to my eye the bird’s movements are a blur.

There is much left to learn, but this much is clear: There is no ghost in the machine, no hummingbird pilot making moment by moment decisions out of the whiffy stuff of spirit. Every detail of the hummingbird’s apparently willful flight is biochemistry. Between the hummingbird and myself there is a difference of complexity, but not of kind. If humans are the lords of terrestrial creation, it is because of the huge tangle of nerves that sits atop our spines.

So what does this mean about human freedom? If we are biochemical machines in interaction with our environments, in what sense can we be said to be free? What happens to “free will”? Perhaps the most satisfying place to look for free will is in what is sometimes called chaos theory. In sufficiently complex systems with many feedback loops – the global economy, the weather, the human nervous system – small perturbations can lead to unpredictable large-scale consequences, though every part of the system is individually deterministic. This has sometimes been called – somewhat facetiously – the butterfly effect: a butterfly flaps its wings in China and triggers a cascade of events that results in a snowstorm in Chicago. Chaos theory has taught us that determinism does not imply predictability. Of course, this is not what philosophers traditionally meant by free will, but it is indistinguishable from what philosophers traditionally meant by free will. If it walks like a duck, and quacks like a duck, it’s a duck.

I watch the hummingbirds at the feeder. Their hearts beat ten times faster than a human’s. They have the highest metabolic rate of any animal, a dozen times higher than a pigeon, a hundred times higher than an elephant. Hummingbirds live at the edge of what is biologically possible, and it’s that, the fierce intenseness of their aliveness, that makes them appear so exuberantly free. But there are no metaphysical pilots in these little flying machines. The machines are the pilots. You give me carbon, oxygen, hydrogen, nitrogen and a few billion years of evolution, and I’ll give you a bird that burns like a luminous flame. The hummingbird’s freedom was built into the universe from the first moment of creation.”

- http://www.sciencemusings.com/

"Butterflies..."

“I think humans might be like butterflies; people die every day without many other people knowing about them, seeing their colors, hearing their stories… and when humans are broken, they’re like broken butterfly wings; suddenly there are so many beauties that are seen in different ways, so many thoughts and visions and possibilities that form, which couldn’t form when the person wasn’t broken! So it is not a very sad thing to be broken, after all! It’s during the times of being broken, that you have all the opportunities to become things unforgettable! Just like the broken butterfly wing that I found, which has given me so many thoughts, in so many ways, has shown me so many words, and imaginations! But butterflies need to know that it doesn’t matter at all if the whole world saw their colors or not! What matters is that they flew, they glided, they hovered, they saw, they felt, and they knew! And they loved the ones whom they flew with! And that is an existence worthwhile!”

- C. JoyBell C.

The Poet: Charles Dickens, “Things That Never Die”

“Things That Never Die”

“The pure, the bright, the beautiful

that stirred our hearts in youth,

The impulses to wordless prayer,

The streams of love and truth,

The longing after something lost,

The spirit’s longing cry,

The striving after better hopes -

These things can never die.

The timid hand stretched forth to aid

A brother in his need;

A kindly word in grief’s dark hour

That proves a friend indeed;

The plea for mercy softly breathed,

When justice threatens high,

The sorrow of a contrite heart -

These things shall never die.

Let nothing pass, for every hand

Must find some work to do,

Lose not a chance to waken love -

Be firm and just and true.

So shall a light that cannot fade

Beam on thee from on high,

And angel voices say to thee -

‘These things shall never die.’”

- Charles Dickens (1812-1870)

The Daily "Near You?"

Rapid City, South Dakota, USA. Thanks for stopping by!

"Fed Lets Circus Roll On"

"Fed Lets Circus Roll On"

by Brian Maher

"The Federal Reserve sat idle on its hands today. And so the federal funds rate stays nailed to the floorboards. Monthly asset purchases will roll on at $120 billion the month. Markets feared that Mr. Powell and mates might telegraph hawkish hints today as growth - and inflation - bubble and percolate. But the reign of doves is extended yet again. Mr. Powell, today: "Following a moderation in the pace of the recovery, indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak. Inflation continues to run below 2 percent."

The majority of FOMC members divine no rate hikes until 2023. Stocks were up and away on today’s news...

Music to the Market’s Ears: The Dow Jones closed trading above 30,000 for the first occasion today - at 30,015 in fact. The S&P added 11 points; the Nasdaq 53. And why wouldn’t the stock market take a leap today? Mr. Michael Arone, chief investment strategist with State Street Global Advisors: "It sounds like the perfect scenario for investors and the outlook and you’re seeing market response to this very optimistic view. Monetary policy is going to remain largely accommodative almost regardless of what happens with interest rates, inflation and asset prices." And so the circus runs yet… until the tent crashes down. Gold - meantime - gained $12 and change on Mr. Powell’s dovish mumblings.

The gyrations, transiences and effervescences of the daily scenery offer us grand amusement. But they do not seize our interest. It is the eagle’s view, the overall view, the view sub specie aeternitatis that fascinates us. That is the view we take today…

The Lowest Rates in 5,000 Years The chart below gives 5,000 years of interest rate history. Please direct your attention to anno Domini 1895.

Rates had never been lower - not in all of recorded history: Rates would sink lower only on two subsequent occasions - the dark, depressed days of the early 1930s - and the present day, dark and depressed in its own way.

The Arc of the Universe Bends Toward Low Interest Rates: Paul Schmelzing professes economics at Harvard University. He is also a visiting scholar at the Bank of England. He has conducted a strict inquiry into interest rates throughout history. From which: "The discussion of longer-term trends in real rates is often confined to the second half of the 20th century, identifying the high inflation period of the 1970s and early 1980s as an inflection point triggering a multi-decade fall in real rates. And indeed, in most economists’ eyes, considering interest rate dynamics over the 20th century horizon - or even over the last 150 years - the reversal during the last quarter of the 1900s at first appears decisive…"

Here the good professor refers to “real rates.” The real interest rate is the nominal rate minus inflation. Thus it penetrates the monetary illusion. It exposes inflation’s false tricks - and the frauds who hold them up their shortsleeves. In one word… it clarifies. And the chart above reveals another capital fact…

The Long View: Revisit the chart. Now take an eraser in hand. Run it across the violent lurch of the mid-to-late 20th century. You will come upon this arresting discovery: Long-term interest rates have trended downward five centuries running. It is this, the long view, that Schmelzing takes: "Despite temporary stabilizations such as the period between 1550–1640, 1820–1850 or in fact 1950–1980 - global real rates have shown a persistent downward trend over the past five centuries…"

This downward trend has persisted throughout the historical gold, silver, mixed bullion and fiat monetary regimes… and long preceded the emergence of modern central banks. What is more, today’s low rates represent a mere “catch-up period” to historical trends: "This suggests that deeply entrenched trends are at work - the recent years are a mere “catch-up period”… In this sense, the decline of real returns across a variety of different asset classes since the 1980s in fact represents merely a return to long-term historical trends. All of this suggests that the “secular stagnation” narrative, to the extent that it posits an aberration of longer-term dynamics over recent decades, appears fully misleading."

Is it true? Is the nearly vertical interest rate regime of the later 20th century a historical one-off… a chance peak rising sheer from an endless downslope? What explains it?

Interest Rate Spikes, Explained: Galloping economic growth explains it, says Lance Roberts of Real Inves‌tment Advice. He argues that periods of sharply rising interest rates are history’s lovely exceptions. Why lovely? Higher interest rates are a function of strong, organic, economic growth that leads to a rising demand for capital over time. In this view, rates went spiking at the dawn of the 20th century. It was, after all, a time of lightning industrialization and dizzying technological advance.

Likewise: The massive post-World War II rate spike owes directly to the economic expansion then taking wing. Roberts: "There have been two previous periods in history that have had the necessary ingredients to support rising interest rates. The first was during the turn of the previous century as the country became more accessible via railroads and automobiles, production ramped up for World War I and America began the shift from an agricultural to industrial economy.

The second period occurred post-World War II as America became the “last man standing”… It was here that America found its strongest run of economic growth in its history as the “boys of war” returned home to start rebuilding the countries that they had just destroyed."

Let the record show that rates peaked in 1981. Let it further show that rates have declined steadily ever since. And so we wonder: Was the post-World War II period of dramatic and exceptional growth… itself the exception?

The Return to Normal: Let us widen our investigation by summoning an additional detective. For example, New York Times senior economic correspondent Neil Irwin: "Investors have often talked about the global economy since the crisis as reflecting a “new normal” of slow growth and low inflation. But just maybe, we have really returned to the old normal."

More: "Very low rates have often persisted for decades upon decades, pretty much whenever inflation is quiescent, as it is now… The real aberration looks like the 7.3 percent average experienced in the United States from 1970–2007."

That is precisely the case Schmelzing argues before the jury. But at this point, we must hoist a red warning flag…

A Pursuit of the Wind: Drawing factual connections between historical eras can be a snare, a chasing after wild geese, a pursuit of the wind. Success requires a sharpshooter’s eye… a surgeon’s hand… and an owl’s wisdom.

The aforesaid Schmelzing knew the pitfalls awaiting him before setting out. But he believes he has emerged from the maze, clutching the elusive grail of truth. Today’s low rates are not the exceptions, he concludes in reminder. They represent a course correction, a return to the long, proper path. How long will this downward trend continue, professor Schmelzing?

The Look Ahead: "Whatever the precise dominant driver - simply extrapolating such long-term historical trends suggests that negative real rates will not just soon constitute a “new normal” - they will continue to fall constantly. By the late 2020s, global short-term real rates will have reached permanently negative territory. By the second half of this century, global long-term real rates will have followed…"

But can the Federal Reserve throw its false weights upon the scales… and send rates tipping the other way? With regards to policy, very low real rates can be expected to become a permanent and protracted monetary policy problem… The long-term historical data suggests that, whatever the ultimate driver, or combination of drivers, the forces responsible have been indifferent to monetary or political regimes; they have kept exercising their pull on interest rate levels irrespective of the existence of central banks… or permanently higher public expenditures. They persisted in what amounted to early modern patrician plutocracies, as well as in modern democratic environments…

We have argued previously that central banks wield far less influence than commonly supposed. Here we find validation. But we are unconvinced rates are headed inexorably and unerringly down. Tomorrow, another possible lesson - a warning - from the book of interest rates."

- dailyreckoning.com

Gregory Mannarino, PM 3/17/21: "Fed. Promises UNLIMITED ASSET PURCHASES Thru 2023. Stocks Hit New Record Highs"

Gregory Mannarino, PM 3/17/21:

"Fed. Promises UNLIMITED ASSET PURCHASES Thru 2023.

 Stocks Hit New Record Highs"

- https://traderschoice.net/

"Our Dead Money Economy"

"Our Dead Money Economy"

by Charles Hugh Smith

"Take a quick glance at these depictions of Dead Money: while the broad measure of the money supply in the U.S., M2, has gone up 12-fold since the start of 1981, the velocity of money - how many times it changes hands over a period of time - as collapsed. What does this tell us about the U.S. economy and what lies ahead? The Federal Reserve's FRED database provides a definition of M2 that's a good starting place.

Note that the Fed refers to money stock, where the word stock refers to the sum total of money in the system, as in "the store is fully stocked with merchandise". They're not referring to the stock market, but to all the money that's in the "store" of our financial system: cash, money in checking accounts and money market funds, etc. Here's the definition of M2:

"Beginning May 2020, M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000) less IRA and Keogh balances at depository institutions; and (2) balances in retail MMFs (money market funds) less IRA and Keogh balances at MMFs."

Put somewhat more directly, M2 is all the money in the financial system which people can spend. It doesn't include the money in individual retirement accounts because that has been set aside for the long-term and is not available (except in cases of early withdrawal) to spend.

Here's the definition of the velocity of money:

"The velocity of money is the frequency at which one unit of currency is used to purchase domestically produced goods and services within a given time period. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy. A decreasing velocity might indicate fewer consumption transactions are taking place."

You might have seen one of the illustrative tales circulating around the web about the one $10 bill that ends up paying a half-dozen debts as it circulates through the town: the grocer pays a debt owed the baker who uses the $10 to pay a debt to the florist and so on. This is an example of a high velocity of money: the $10 bill changes hands many times in the space of a few hours, funding transactions that all lead back to the exchange of a good or service.

There's one part of the definition that is often overlooked: the velocity of money only tracks domestically produced goods and services, so all the transactions that end up in a container of goods from China being unloaded in Long Beach aren't counted.

I've annotated the charts of M2 money stock and the velocity of M2 money to provide historical context for the unprecedented expansion of the stock of money and the equally unprecedented collapse of money velocity. In short, while America's GDP (gross domestic product) has gone up 6.5-fold since the start of the financialization-globalization boom in 1981, the stock of money has risen 12-fold.

This is striking: money stock basically doubled from 2009 (the brief Global Financial Crisis recession) to last February, before the pandemic had any impact on the economy. In other words, setting aside the extraordinary vertical expansion of money stock in the past year, the U.S. economy's stock of money doubled in a bit over a decade, just to keep GDP ("growth") at an anemic, barely-above-flatline rate of expansion. Put another way, there wasn't much bang for doubling the supply of bucks.

Meanwhile, the velocity of money has absolutely tanked. In the era of widespread prosperity in the 1960s and 1970s, the velocity of money ratio remained in a band between 1.7 and 1.8, moving up toward 2 in the inflationary late 70s as it made sense to trade cash that was losing value for goods and services before it lost even more purchasing power.

Velocity returned to this range in the 1980s boom, and then rocketed to postwar highs at 2.2 in the Internet boom of the 1990s. Since that top in 1997, money velocity has been in a secular decline. As every Fed-inflated financial bubble pops, money velocity takes another leg down. Even before the pandemic, it was in a steady free-fall even as the supply of money steadily rocketed higher.

So what do we make of this stunning expansion of money and equally stunning collapse of money velocity? Ours is a Dead Money Economy. New money is created in the trillions of dollars, but it is either shipped overseas to exporters selling goods to Americans or it's being stashed somewhere rather than being exchanged for domestically produced goods and services. In other words, our financial system is pushing on a string: it keeps creating trillions in new money which is either stashed away or sent overseas, having been spent on imported goods. This is the acme of a Dead Money Economy.

Lastly, let's look at the Fed's broadest measure of money, MZM which is inexplicably being discontinued, just as the measure it replaced, M3, was discontinued. (Do we need to keep moving the goalposts on money stock to mask the abject trajectory of our Dead Money Economy?)

Here's the Fed's definition of MZM money stock: "MZM (money with zero maturity) is the broadest component and consists of the supply of financial assets redeemable at par on demand: notes and coins in circulation, traveler's checks (non-bank issuers), demand deposits, other checkable deposits, savings deposits, and all money market funds. The velocity of MZM helps determine how often financial assets are switching hands within the economy."

In other words, if we want a summary of America's financial system, we look at the velocity of MZM money. MZM money stock has skyrocketed right along with M2 money stock - no surprise there. The surprise is that the velocity of MZM money topped out in the inflationary peak of 1981 and has been in a free-fall since the start of the financialization-globalization era began.

Not to put too fine a point on it, but this aligns with the secular stagnation of earnings/wages which began in earnest at the same time (1981), and the rising dependence on central bank intervention/stimulus which has reached the extreme absurdity where the U.S. stock and bond markets and its entire financial system now teeter on the edge of collapse if there is even a slight hint that 1) the Fed won't give more free candy to Wall Street or 2) the Fed has lost control of the Dead Money Economy it has created.

If you think a Dead Money Economy is a healthy economy, you might want to cut your intake of Delusionol."

- https://www.oftwominds.com/

"People Of Privilege..."

"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason. But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right."

- John Kenneth Galbraith

 “You know, I've been around the ruling class all my life, 

and I've been quite aware of their total contempt for the people."

- Gore Vidal

"A Big Con"

"A Big Con"

By Bill Bonner

YOUGHAL, IRELAND – "Last Thursday must go down in history as one of America’s most important WTF days. That’s when the American Rescue Plan became law. It is so remarkable… so flat-out preposterous… so clearly a big step towards America’s rendezvous with disaster…And yet… the president and all his minions are fanning out… explaining… justifying… excusing… taking credit… and claiming paternity…of a monster.

Bloomberg: "The White House wants to underscore to Americans that the legislation Biden championed – and was only supported by Democrats – is central to jump-starting an economy battered by a year of lockdowns and job losses set off by the coronavirus…

“What the president recognizes from his own experience is that when it’s a package of this size, you know, people don’t always know how they benefit and what it means for them,” White House Press Secretary Jen Psaki told reporters Monday. “He believes the American people deserve every high-level person from our administration out there explaining, discussing, taking input.”

We sympathize with anyone trying to explain it. We couldn’t do it. It makes no sense… well, not in any other terms but old-fashioned political payola and economic folderol. But even in those sordid terms, it is a brain buster. The election is over. This is not the time to buy votes. This is the time to stab naïve voters in the back by not keeping your campaign promises. After all, politicians make absurd promises to get elected; few are fool enough to follow through on them.

But here is Joe Biden going coast-to-coast to remind voters that he actually did the dumbest thing he said he was going to do – passing one of the most ruinous laws in U.S. history… wasting 10% of U.S. GDP… one half of annual tax collections… in one reckless giveaway.He should shut up and let the money do the talking. Because the more you try to make sense of it, the more senseless it becomes.

Conversation With the Government: Just try to imagine an earnest White House aide gamely trying to explain it to an alert citizen.

“Look, our $1.9 trillion American Rescue Plan… it gives you dollars,” the admin guy might say. “You can use them to buy stuff. Then, the economy will boom. It will give you a fighting chance.”

“A ‘fighting chance’ of what? You sure you’re not just pulling a fast one…? You know, advertising that you’re the party that hands out free money?”

“No… no… of course not.”

“You talk about the money you’re giving ordinary people like me, but doesn’t most of the money go to special interests with lobbyists in Washington?”

“Well, we tried to address many of the problems in our country… so, we’ve designated certain sums for the organizations and groups that need it.”

“You mean, like bailing out union pension systems… and Amtrak? Isn’t that what you call a ‘boondoggle’?”

“That would be a very cynical way to look at it… Let’s focus on what’s really going on here. We’re giving every eligible America $1,400.”

“Yeah… and I hear there are tax credits, too… Together, they’re gonna be more than some families earn by working. You’re gonna change lives. But not necessarily for the better. I read in the paper that this is supposed to reduce child poverty by a third. But I don’t see how buying a bigger screen TV, more liquor, or a new car helps the kids. They need stable, honest families… not families that win the lottery.”

Stimulate the Economy: “Well, it stimulates the economy… so there are more jobs… and more goods and services available.”

“So people go out and spend this money, right? And that gets the economy all excited, right? But what happens when the free money stops? Doesn’t that get them un-excited? Won’t you have to keep giving people free money… or all that excitement will come to an end, and the economy will be depressed again?”

“No, no. Once we have stimulated the economy, it will grow on its own.”

“But didn’t you stimulate it last year? And from what I heard, your stimulus was five times as much as the actual loss from the COVID-19 shutdowns.”

“We are helping families through this difficult period.”

“That sounds good. But I see people earning more than $100,000 a year. And they didn’t lose their jobs… they didn’t suffer at all from the COVID-19 crisis. They don’t need the money. What sense does it make to send them checks? If they’ve got a few kids, between last year’s giveaways and this one, they could get something like $20,000. Doesn’t seem fair. Doesn’t seem very smart, either. Besides, $1.9 trillion is a lot of money. Isn’t that about half of your tax receipts… your income?”

“Well, yes…”

“You’re giving it away in one fell swoop? If I took half my income and blew it on a wild weekend in Las Vegas, I wouldn’t be doing my family much good.”

“You don’t understand. This will allow you to increase spending… it will be good for the economy.”

Better Off… Broke? “Everybody is already spending like crazy, thanks to all that money you gave us last year. They say consumer spending is rising faster than any time in the last 10 years. Is that a good thing? Maybe I’ve got it backwards, but I thought it was saving and investing that made people better off. I know in my own case, if I save and invest money, I’ll have more money… but if I spend it, I end up with less. This ain’t exactly rocket surgery. And by the way… Where did you get all that money? I thought you fellows were broke. Some guy on the news said your deficit is going to be around $3.3 trillion. That would be like me earning $60,000 and spending $100,000, wouldn’t it? I couldn’t do that for long. I’d lose my house, my car, my business…”

“Yes, but the government can never go broke.”

“Why’s that?”

“Because we can always create more money.”

“How do you do that?”

“Well, dollars represent real wealth – because you can use them to buy things. We have the power to create all the dollars we want. And they’re just like the dollars in your wallet.”

“But I earned those dollars in my wallet. I put in septic systems for a living. What did you do for your dollars?”

“You don’t understand. We are the government. We don’t have to do anything.”

“I know what my dollars are worth. I do the work myself. Now people can flush their toilets without worrying about them backing up or overflowing. That’s worth something. But if you don’t do anything to get your dollars… what are they worth? I mean, what have you got to show for them? Where’s the beef?”

Trust the Government: “I’m afraid we’re getting a little lost in the details of a complex, modern monetary system. Trust me, I’m from the government and I’m here to tell you that these new dollars are every bit as valuable as the old ones in your wallet.”

“Hmmm… and you can create as many as you want?”

“Yes…”

“Well, why stop with a measly $1,400? Why not $2,000… or $20,000? And if you were right – that you can make people better off just by printing up more money – why didn’t someone think of this sooner? The printing press was invented by Johannes Gutenberg in 1440. That’s almost 600 years ago. Since then, a lot of governments have tried printing up money to get themselves out of a jamb. I’ve never heard of any of them that made a success of it. I’m gonna level with you. This whole thing smells like a con job to me.”

- www.rogueeconomics.com

Happy Saint Patrick's Day! 2021

Happy Saint Patrick's Day! 2021

"How It Really Is"

"What You Are Pursuing..."

“If the sun is shining, stand in it – yes, yes, yes. Happy times are great, but happy times pass – they have to – because time passes. The pursuit of happiness is more elusive; it is life-long, and it is not goal-centered. What you are pursuing is meaning – a meaningful life… There are times when it will go so wrong that you will be barely alive, and times when you realize that being barely alive, on your own terms, is better than living a bloated half-life on someone else’s terms.”

- Jeanette Winterson

Greg Hunter, “'The Dimming': A Must Watch New Documentary by Dane Wigington"

“'The Dimming':

 A Must Watch New Documentary by Dane Wigington"

By Greg Hunter’s USAWatchdog.com

"A few weeks ago, I interviewed Dane Wigington, geoengineering researcher and founder of GeoEngineeringWatch.org, about what he calls “Weather Warfare.” One of the topics was the heavy snow in Texas last month and freezing temperatures during that time that were 30 degrees colder than the North Pole. Wigington says it looks like more Weather Warfare took place recently around Denver, Colorado. It’s all part of man-made climate control called geoengineering.

Wigington is out with a new documentary that cost $100,000 to put together called “The Dimming.” Please take time to watch it. I am embedding it below from Wigington’s YouTube channel. Part of Wigington’s write up is below:

“Global climate engineering operations are a reality. Atmospheric particle testing conducted by GeoengineeringWatch.org has now proven that the lingering, spreading jet aircraft trails, so commonly visible in our skies, are not just condensation as we have officially been told. Over 75 years ago global powers committed the planet and populations to a climate engineering experiment from which there is no return. The intentional dimming of direct sunlight by aircraft dispersed particles, a form of global warming mitigation known as “Solar Radiation Management”, has and is causing catastrophic damage to the planet’s life support systems. The highly toxic fallout from the ongoing geoengineering operations is also inflicting unquantifiable damage to human health. Why aren’t scientists or official sources disclosing the ongoing climate engineering operations? Who is responsible for carrying out these programs? What will the consequences be if geoengineering/solar radiation management operations are allowed to continue? "The Dimming" documentary will provide answers to these questions and many more. Thank you for viewing and for notifying others of "The Dimming"film release.”

Greg Hunter of USAWatchdog.com is proud to promote and 

share the new documentary by Dane Wigington called “The Dimming.” Enjoy.

There is vast and totally free information on GeoEngineeringWatch.org.

Gregory Mannarino, AM 3/17/21: “Today, All Eyes On The FED; Must Know Updates”

Gregory Mannarino, AM 3/17/21:

“Today, All Eyes On The FED; Must Know Updates”

- https://traderschoice.net/

Musical Interlude: Josh Groban, "You Are Loved (Don't Give Up)"

Full screen!

Josh Groban,

 "You Are Loved (Don't Give Up)"

"A Look to the Heavens"

“Will our Sun look like this one day? The Helix Nebula is one of brightest and closest examples of a planetary nebula, a gas cloud created at the end of the life of a Sun-like star. The outer gasses of the star expelled into space appear from our vantage point as if we are looking down a helix. The remnant central stellar core, destined to become a white dwarf star, glows in light so energetic it causes the previously expelled gas to fluoresce.

The Helix Nebula, given a technical designation of NGC 7293, lies about 700 light-years away towards the constellation of the Water Bearer (Aquarius) and spans about 2.5 light-years. The above picture was taken three colors on infrared light by the 4.1-meter Visible and Infrared Survey Telescope for Astronomy (VISTA) at the European Southern Observatory’s Paranal Observatory in Chile. A close-up of the inner edge of the Helix Nebula shows complex gas knots of unknown origin.”

- http://apod.nasa.gov/apod/ap120131.html

Chet Raymo, “We Are Such Stuff…”

“We Are Such Stuff…”

by Chet Raymo

“Be not afeard; the isle is full of noises,

Sounds and sweet airs, that give delight, and hurt not.

Sometimes a thousand twangling instruments

Will hum about mine ears, and sometimes voices,

That, if I then had wak’d after long sleep,

Will make me sleep again.”

“Caliban is talking to Stephano and Trinculo in Shakespeare’s “Tempest”, telling them not to be “afeard” of the mysterious place they find themselves, an island seemingly beset with magic, strangeness, ineffable presences. And you and I, and, yes, all of us, find ourselves inexplicably thrown up on this island that is the world, and we too, if we are attentive, hear the strange music, the sounds and sweet airs, that seems to come from nowhere and everywhere

No, I’m not talking about the usual ubiquitous clamor, the roar of internal combustion, the blare of the television, the beeping of mobile phones. I’m not talking about the Limbaughs and the Becks, the televangelists, the blathering politicians, the twitterers and bloggers (including this one). I’m not even talking about the exquisite music of Mozart, the poetry of Wordsworth, the theories of Einstein.

I’m talking about the sounds we hear in utter silence, in moments of repose, in the heart of darkness, when we are a little bit afraid, disoriented, off kilter. A strange music that comes from beyond our knowing, a felt meaning. You’ve heard it. I’ve heard it. You’d have to be deaf not to have heard it.

Where we differ is how we describe it. Mostly, we give its source a name. Angels. Fairies. Gods or demons. Yahweh. Allah. Father, Son and Holy Spirit. Nixies, E.T.s, shades and shadows. Naiads, dryads, Ariel and Puck. A host of invisible creatures who are, in one way or another, images of ourselves. And, in naming, we are a little less afraid.

And some of us are just content to listen, to take delight. Having woken to the inexplicable mystery of the world - the sounds and sweet airs that give delight and hurt not - we let the music lull us back into a sweet slumber, a kind of dreamless dream, a reverie. Does reverie share a deep root with reverence? I don’t know.”

- http://blog.sciencemusings.com/

"Tell Me..."

“Life passes like a flash of lightning, whose blaze barely lasts long enough to see. While the earth and sky stand still forever, how swiftly changing time flies across man’s face. O you who sit over your full cup and do not drink, tell me – for whom are you still waiting?”

- Hermann Hesse

Must Watch! "Reality Will Hit The Masses In The Mouth; Zombie Economy; Debt Addict"

Jeremiah Babe,

"Reality Will Hit The Masses In The Mouth; 

Zombie Economy; Debt Addict"

○

Related:

"Stimulus Addiction Disorder: 

The Debt-Disposable Earnings Pyramid"

"One glance at this chart explains why the status quo is

locked on "run to fail" and will implode in a spectacular 

collapse of the unsustainable debt super-nova..."

○

We do not...

"Alas!"

"Alas! regardless of their doom,

The little victims play;

No sense have they of ills to come,

Nor care beyond to-day..."

- Thomas Gray,

"Ode on a Distant Prospect of Eton College"

○

“We are in the process of creating what deserves to be called the idiot culture. Not an idiot sub-culture, which every society has bubbling beneath the surface and which can provide harmless fun; but the culture itself. For the first time, the weird and the stupid and the coarse are becoming our cultural norm, even our cultural ideal.”

- Carl Bernstein

○

Oh, they will care, very much, and very soon...

Gerald Celente, "Trends Journal": "COVID-19 WAR, Our Freedom or Power, Money, and Control"

Gerald Celente, "Trends Journal": 

"COVID-19 WAR, Our Freedom or Power, Money, and Control"

"The Trends Journal is a weekly magazine analyzing global current events forming future trends. Our mission is to present Facts and Truth over hype and propaganda to help subscribers prepare for What’s Next in the increasingly turbulent times ahead."

- https://trendsresearch.com/

"The Everything Bubble Burst! Stocks, Housing And Bond Markets Will Collapse Simultaneously"

Full screen recommended.

"The Everything Bubble Burst! Stocks, 

Housing And Bond Markets Will Collapse Simultaneously"

by Epic Economist

"The Everything Bubble never seemed so close to explode. The stock market crash, the housing bubble burst, and the bond price collapse are likely to happen simultaneously, causing an astronomical blowup that will certainly trigger the next financial crisis. Throughout the past year, the Federal Reserve's monetary policies managed to expand multiple bubbles at the same time. Stocks, real estate, bonds, and all sorts of speculative investments have all experienced historic inflations. Now, all of these bubbles are at the brink of deflation, and several experts are sounding the alarm for the monetary disaster the United States is about to face - one, they say, that will lead us to the Great Depression that was kicked off after the deep recession of 2008. That's what we're going to expose in this video.

Over the past year, the flood of liquidity and ultra-accommodative monetary policies has simultaneously inflated several bubbles across the stock, real estate and bond markets. Consequently, the result of cheap debt and an enormous amount of liquidity is the boom of household net worth as a percentage of disposable personal income.

On the other hand, while it may seem that Americans are getting more wealthy, the truth is that only a small portion of the population has benefited from these policies. That is to say, by trying to forge a wealth expansion, the Fed ended up exacerbating the wealth inequality gap, making the top 10% even richer while the majority of the population remained financially vulnerable. And this unbalanced framework is the very foundation that will lead to the deflation of the Everything Bubble.

Once again America has entered into a housing bubble territory as the persistent suppression of borrowing costs, liberal lending policies, and the constant liquidity injections have all contributed to a historical increase in home prices. A lean inventory and a mass migration trend have also made home price appreciation eclipse long-term price trends. But, of course, the current housing rally has been primarily driven by record-low mortgage rates. Therefore, all of that monetary support is about to be reversed by rising interest rates. Considering prices are remarkably up and the demand remains high, very soon there will be a rush to sell to a diminishing group of buyers. The logic of the housing bubble burst is pretty simple: given the unsustainable rise in prices, the market will be forced to a correction, and the resulting price decline will likely be equally as sharp.

When it comes to the bond market, higher interest rates pose an even bigger threat. Since yields represent a function of price, there is an inverse correlation between prices and interest rates. Thus, higher rates are translated into lower bond prices. In this case, bond price deflation will occur as a rapid increase in both rates and defaults is very likely to happen at a greater extent and at a much faster pace than the Federal Reserve can absorb.

Furthermore, it's in the stock market that things get a lot trickier. During a “market frenzy,” as the one we're currently witnessing, investors have to continuously overpay for assets to keep prices climbing higher. Just as in the real estate and the bond market, the problem starts when interest rates start to rise. In view of the fact that the frantic rally in corporate leverage is being supported by weak economic growth, higher rates will severely impact corporate profitability and financing activities.

Countless warnings of an imminent stock market crash are being echoed by veteran investors and financial strategists. Economist and financial analyst Harry Dent has recently alerted that stock prices could face an 80% crash. It could be “the biggest crash ever,” and it will be “the initiation of the next big economic downturn. A huge collapse is coming. This thing will be hell,” Dent predicts.

When asked why this downturn will be so harsh, the analyst stressed that "the only reason the 2008 downturn didn’t turn into a depression was that they turned on the monetary spigots so hard and blew us out of it, which kept the bubble going. They kept printing money and put it off. Now we’ve got a bigger bubble. This downturn is going to be the Great Depression that the deep recession of 2008 was falling into."

The failure to address the collateral effects of ongoing monetary policies, given a decade of experience of mounting debt and deficits obstructing organic growth, is extremely troublesome. The U.S. economy is literally on eternal life support. And the latest events clearly show the whole system is addicted to fiscal and monetary stimulus. And as the economy is facing a relentless collapse, by extension, the stock market is approaching the end-game."

- https://www.epiceconomist.com

“An Incredibly Important Turning Point”

“An Incredibly Important Turning Point”

by Brian Maher

"Fact #1: Reams of stocks have been trading at 52-week highs.

Fact #2: Reams of stocks have been trading at 52-week lows.

Not since 1984 - the year not the book - has the stock market manifested such violent schizophrenia. Sentiment Trader: "[We recently saw] the biggest split in almost 40 years. There were so many stocks hitting 52-week highs AND 52-week lows on both the NYSE and Nasdaq that it registered the 2nd most extreme reading since 1984."

Thus we find the stock market a riot of warring signals…A traffic light flashing red and green both. A road sign arrowing in opposing directions. A compass giving north and south indications. In brief, a market convulsed by schizophrenic fevers.

Mr. Larry McDonald, he of "The Bear Traps Report", gulps, "we are sitting on an incredibly important turning point." Which way will its mood swing next? To despair… or rapture?History’s answer, anon. First, a look in on the psychiatric ward…

Anxious Markets: The Dow Jones gave back 127 points today. And so a winning, seven-day run ends… as must all things good. The S&P lost six points while the Nasdaq managed to wring an 11-point gain. Why were markets in heavier spirits today?

The Federal Reserve is currently huddled in conference. Investors fear it might wire the wrong message tomorrow. CNBC: "There’s growing concern among investors that interest rates may continue to climb, snuffing out the comeback for equities. The market fell to its session lows when the benchmark 10-year Treasury yield briefly rose above 1.62% in afternoon trading."

Again, which way will the market mood swing next — to despair — or rapture?

Spiking Interest Rates: Here is the argument for despair, as CNBC suggests: Interest rates are on the jump. The bellwether 10-year Treasury note presently yields 1.62%. A slender offering by history’s standard, it is true. But the same 10-year Treasury note yielded 0.91% to open the year. Thus we have witnessed an increase of 71 basis points in 2.5 months.

As Mr. Louis Gave, CEO of Gavekal Research, reminds us...A 50-basis point increase in interest rates approximates the annual budget of the United States Navy. At $160 billion, the annual budget of the United States Navy is not… insignificant. The added debt service costs from a 71-basis point rise are even less so. Mr. Gave: "They will have to decide whether to let bond yields rise or not. If they let them normalize to pre-Covid levels, 10-year Treasury yields would have to rise to about 2.5%. But if they do that, the funding of the government becomes problematic… The U.S. is already borrowing money to pay its interest today. If rates go up, they’re getting into the cycle where they have to borrow more just to be able to pay interest, which is not a good position."

An Earthquake: Jim Rickards labels the alarming rate spike an “earthquake:” “If you think that the move from 0.91% to 1.6% is small, it’s not. In the bond market, that’s an earthquake.” Yet the true earthquake — the “big one” — remains a future catastrophe.

The stock market and the economy have risen upon a San Andreas Fault of artificially low interest rates. Tectonic energies, potential energies and kinetic energies presently meet in savage collision… tremendous masses... pushing… shifting... groaning. Markets sense that inflationary forces, long dormant, are mounting. They have the dynamism of $1.9 trillion in “stimulus” in back of them. Further spending later this year will load additional inflation pressures. These forces are shouldering interest rates higher.

The Trigger: If rates rise much above 2%, some believe the plates will slip… and fantastic seismic energies will unleash the “big one.” The market would go rolling into the ocean. And the economy likely with it. Others believe rates must rise to 3% or higher before the plates give way. No one knows the precise figure, of course. But beyond all questioning: Artificially low rates keep the $85 trillion edifice of public and private debt standing.

No Foundation:This architectural atrocity stretches thousands of feet into the sky — but only inches into the earth. That is, it is all high-rise and no foundation. It is all height and no depth. The thing would come heaping down if rates rise markedly... as the earth shakes ferociously beneath it. Thus is the peril of building upon a deeply unstable fault line. But the Federal Reserve keeps piling one story upon the other… Chief architect Jerome Powell insists the foundations are secure. Inflation is no menace because unemployment remains elevated, and the economy runs at diminished capacity.

Inflation Can Run “Hot”: Only when unemployment returns to pre-pandemic depths... and inflation runs persistently at 2%... will he turn his attentions to the ground beneath him. After all, the fellow reasons, inflation has been dormant for decades. Interest rates have dropped across the same space. The trendlines remain fixed in a solid position.

What if he does attain his 2% inflation? He believes he can allow inflation to run “hot” for a stretch. He can dial down the temperature again if sweat begins to drip. But can he? Have another guess, argues Michael Hartnett — Bank of America's chief investment strategist.

Is the 40-Year Cycle Ending? The cycle is reversing, he claims. Both inflation and interest rates are heading the other way: "The lower inflation of the last 40 years that sent interest rates down and stock market valuations higher has reached a turning point. We believe we are at a secular turning point for both inflation and interest rates."

But why? "We believe 2020 likely marked a secular low point for inflation and interest rates due to a reversal of deflationary secular factors, fiscal excess, and an explosive cyclical reopening of the global economy creating excess demand for goods, services and labor."

Market history has witnessed eight major cycles dating to 1871. Investors grabbed the greatest gains — nearly all of them — in four cycles of the eight.Investors handed over their gains in the others, robbed by the silent thief of inflation.

Importantly: The bulking majority of market gains across these cycles were harvested during disinflationary cycles — not inflationary cycles.

A Decade of Losses: What if Mr. Hartnett is correct? What if the 40-year cycle of declining inflation and declining interest rates is ending? What if both are streaking higher? It would suggest rough going for stocks during the coming years... as the cycle swings from disinflation… to inflation. At present valuations, stocks could shed 50% or more of last decade’s gains. By some estimates, your odds of losing money in the stock market approach 100% — odds that make the bravest fellow quail.

This time is different, say Wall Street’s drummers. Of course. It always is. But if a hangover exists in direct proportion to the binge that produced it… investors may be down for the next decade..."

- dailyreckoning.com

The Daily "Near You?"

Savannah, Georgia, USA. Thanks for stopping by!