Friday, January 28, 2022

"Young Dr. Frankensteins"

"Young Dr. Frankensteins"
by Bill Bonner

Youghal, Ireland - "The tendency of an inconvertible paper money is to create fictitious wealth, bubbles, which by their bursting produce inconvenience." ~ Lord Liverpool

Cool, schmool. Fair, schmair. What really makes the world a better place? A ‘New Deal?’ A Republican? A Democrat? A master race? Stimulus spending? An Inquisition? Fair Trade? The Rights of Man? Vax mandates? Slavery? Prohibition? Low interest rates? A cheap currency? Diversity? Price controls? Defending Ukraine from the Russians? Or Russia from the Ukrainians?

Blah, blah, blah… what really makes the world a better place is a stable currency and an honest profit. This week, we laughed at the super rich who wish to trade their dollars for cool. We mocked Larry Fink for pushing his own anti-carbon agenda. We ridiculed Abigail Disney for wanting to give more money to a corrupt and wasteful government.

A Mischievous Insight: If they were serious about making things better for others, they’d put their talents, energy and money to work… to earn more money! Because, as far as we know, money is the only measure of how much time, energy (human… and carbon-based) and resources go into a product. Profits are the only measure of whether what comes out is worth the effort. Each dollar earned honestly is a sign that someone else’s life has been improved by at least $1.

That was the un-cool, contrarian, and mischievous insight we left you with yesterday – that making honest profits, rather than cool pronunciamientos, moral awakenings, or ‘The Science’, was really the only way for a company to do any good. Thus, completely out-of-step with the do-gooders, we stumble forward.

In the real sciences, new experiments allow us to probe deeper and deeper into the way the world works. Electrons, photons, interplanetary space – we know more each year. But real scientists also know that they never know the whole story. If only politicians and central bankers were as modest. Instead, they think they have the final word on how things work… and run the same experiments, over and over, to prove it.

We know from many painful trial runs, for example, that price controls don’t work. But get ready for more proof! The Fed has been controlling, indirectly, the most important price in capitalism – the price of capital itself – for the last two decades. It’s created a nightmare economy, hooked on zero cost (free!) money. Now, it can’t ‘normalize’ interest rates… or half the country will go broke.

Meanwhile, French president Emmanuel Macron says he’s going to control the price of energy. In Argentina, as we noted, they’ve been controlling the price of energy for decades – with the all-too-predictable result: shortages.

And here’s the New York Times, urging another experiment in the US; what else – price controls! "America’s recent inflation spike has prompted renewed interest in an idea that many economists and policy experts thought they had long ago left behind for good: price controls."

The NYT, voice of the Elite Establishment is desperate to rehabilitate a disgraced idea: Few economists today defend the Nixon price controls. But some argue that it is unfair to consider their failure a definitive rebuttal of all price caps.

Hey, let’s run the experiment again! Argentina is practically a constant lab experiment. Control prices. Currency and capital controls. Protect key industries from foreign competition. Print more and more money, with an inflation rate currently around 50%. Of course, all of these things have been tried before. The results are hardly a surprise to anyone. But, bless their hearts, the gauchos keep heating up their beakers and letting their hair grow, until their concoctions blow up in their faces.

The biggest and most costly experiment in modern history took place in the Soviet Union between 1917 and 1991. For more than 70 years the lab rats kept at it… even though the result was a foregone conclusion. Central planning – with its thorough price, capital, wage, job, rationing and supply chain controls, from top to bottom – was never going to work. And the Soviets proved it.

Modern Monetary Turkeys: But the experiments go on. Now, Turkey is conducting a goofy test to see if it can become an export powerhouse simply by devaluing its currency. The Turks’ lira lost about half of its value last year. Sure enough, the orders are coming in. Too bad Turkish companies are going broke before they can fill them. Their costs rise… they go out of business.

In this jackassery, Turkey is being advised by none other than Warren Mosler himself, one of the mad Mengeles behind ‘Modern Monetary Theory.’ As the Turks’ economy goes down, Mosler advises the central bank to do the exact opposite of what common sense and experience suggests. He told them to cut their policy rate to zero.

Wow. That ought to help. Already at 50% inflation… Mosler wants the central bank to lower rates… not raise them. Another experiment! How will that work out? We suspect it will go the way of all such experiments and end a bit like Wernher von Braun’s 1977 obituary in the Economist: “He aimed for the stars…and hit London.”

"How It Really Should Have Been"

"Old Man, Look at Your Life…"

"Old Man, Look at Your Life…"
by Jim Kunstler

"Rock’n’roller Neil Young’s conniption over having to share the Spotify platform with Joe Rogan affords a glimpse into the glutenous mire that is a mind bethinking itself “progressive” these drear days of American unraveling. For those of you not tuned in: Joe Rogan is a comedian and martial arts maven who runs the most popular podcast in the world, renowned for long-form interviews (three hours sometimes!) often with high-powered intellectuals. A month ago, he interviewed the mRNA developer Dr. Robert Malone, who has become an outspoken opponent of the Covid-19 mRNA “vaccines,” and of the US-led world pandemic policy in general under Dr. Anthony Fauci, going as far as to call for an immediate end to the world-wide vaxxing program because, Dr. Malone says, the vaxxes don’t work and they kill and disable people. Hearing that, Mr. Young called for Joe Rogan to be cancelled for spreading “misinformation.”

It’s worth paying attention to just how disordered Mr. Young’s thinking is because it summarizes everything that has gone awry on the political Left: He is wrong two ways: 1) morally, and 2) on the facts of the matter = which is as wrong as you can be. Like virtually everyone on the Democratic Party/Woke/Progressive axis, he is obviously in favor of suppressing free speech. Since when did that become okay for old hippies?

If I remember correctly (cuz I was there) the youth movement of the 1960s was all about freedom to say pretty much anything, except yell “fire” in a crowded theater - based on the idea that ordinary people were equipped to sort out the truth. During the War in Vietnam, we hippies were especially averse to the official lying that emanated from the Department of Defense, the FBI, the CIA, and the White House under both Lyndon Johnson and Richard Nixon. We founded “alternative” newspapers in defiance of the establishment’s propaganda. We applauded Daniel Ellsberg’s purloined Pentagon Papers, revealing the mendacity of the war effort. Altogether, this activity made it more difficult for the government to prosecute that war, and to defend the strategy behind it.

Today the Left is not only all-in on speech suppression, but also censorship of print and broadcasting, and is especially avid for the diverse punishments of cancellation - ruining careers, reputations, livelihoods, and families of anyone who opposes Woke right-think. Alternate views are not tolerated, labeled “unacceptable” (Mr. Young put it exactly that way), and flagged as “misinformation” (ditto Mr. Young). It’s gotten to the point where the word misinformation has acquired a distinct odor that signals bad faith in everyone who flogs it. These days, the charge of misinformation is deliberate misinformation.

Today, the Left is all-in for FBI home invasions, DOJ malicious prosecutions, CIA manipulations of public opinion, a fake president fronting for an unseen cabal, and a news media that wouldn’t know the actual shape and substance of reality if it jumped up and bit Jim Acosta on the lips. Ideas and principles don’t really matter to the Left; they’re just window-dressing for their sole interest, which is pushing other people around, in a word: coercion. That is the moral quagmire the Left is in and, having captured so many institutional transmitters of our polity, that is the nature of the evil they represent.

On the facts of Dr. Malone’s public statements about Covid-19 public health policy and the “vaccines,” Neil Young doesn’t know what he’s talking about. He’s just dead wrong, uninformed, possibly ignorant. The vaxxes have been a disaster from the start and the damage gets worse every week that the insane policy of coercing more vaxxes goes on. The vaxxes are a false magic talisman for a psychotic cargo cult of disordered minds who cannot face the actual quandaries in this momentous Fourth Turning of our foundering civilization - namely, our dwindling energy resources, the economics based on them, the malfunctioning operations of money, our over-investments in techno-complexity, and the out-of-scale dynamics of just about everything in daily life.

Fortunately, enough Americans now see through this matrix of bad faith and mendacity that the opposition is poised to wipe up the floor with the Left in next November’s election. The Left has screwed things up so completely that the end of Covid will expose every broken thing on the landscape - and now it’s up to others to try to repair it all, if possible. One thing is certain to happen a little less than a year from now, the day a new Congress is sworn in: “Joe Biden,” if he is still alive, and still in office, will be impeached. And unlike his several predecessors - Andrew Johnson, Richard Nixon, Bill Clinton, and Donald Trump - “Joe Biden” will be convicted in the Senate, too, and of serious crimes against his country, not just trivialities because the evidence is there. He’ll be convicted of the very things spelled out in the constitution: treason, bribery, or other high crimes and misdemeanors.

The laptop computer belonging to the Biden family bag-man, Hunter Biden, is not only still in the negligent possession of the FBI, but many faithful copies of its hard-drive were mindfully distributed to safe hands outside the agency. The email, contracts, and memoranda on it contain a clear record of bribery from foreign nations and money laundering to conceal the trail of all that grift. “Joe Biden’s” deliberate open border policy, and the purposeful transport of unvetted illegal aliens from scores of foreign countries to cities all over the USA, certainly represents an arrant and treasonous failure to uphold the law. It remains to be seen what kind of fiasco his misadventures in Ukraine may foment, but we’ll know presently."

Must Watch! "Why America Is HURTLING Toward Economic Collapse"

"Why America Is HURTLING Toward Economic Collapse"
by BlazeTV

"Thanks to FOIA requests, we now know the 2008-2010 bank bailout didn't cost us $5 trillion, as we've been told. The real number is closer to $29 TRILLION (at 27:00), and it didn't just go to American banks. Gee, I wonder why we're talking about inflation.

When Biden was given the keys to the Oval Office in January 2021, gas was $2.50 a gallon and the inflation rate was 1.4%. Today gas is at $3.32 a gallon and the inflation rate is at 7%, and still rising. These are just 12 months of numbers, but we’re clearly in a worrying decline. While the economy has opened up more post-COVID, it’s not just getting worse - we’re going in reverse.

Glenn heads to the chalkboard (and the very top of his studio ceiling) to explain what’s happening to inflation and why it’s so hard for your family to afford basic goods and groceries. It’s not “corporate greed,” as Democrats have been telling you. The Biden administration wants to continue to spend trillions of dollars to “reinvent capitalism,” but that’s in addition to the trillions that are being pumped out in the shadows. Glenn exposes what the Fed has been doing behind closed doors and shows us the tidal wave that’s about to hit. He’s looked at the numbers, and they're frightening. Carol Roth, former Wall Street investment banker and author of “The War on Small Business,” gives advice to Americans who want to protect their checking and savings accounts before it’s too late."
"$29,000,000,000,000: A Detailed Look at the 
Fed’s Bailout by Funding Facility and Recipient"

"There have been a number of estimates of the total amount of funding provided by the Federal Reserve to bail out the financial system. For example, Bloomberg recently claimed that the cumulative commitment by the Fed (this includes asset purchases plus lending) was $7.77 trillion. As part of the Ford Foundation project “A Research and Policy Dialogue Project on Improving Governance of the Government Safety Net in Financial Crisis,” Nicola Matthews and James Felkerson have undertaken an examination of the data on the Fed’s bailout of the financial system - the most comprehensive investigation of the raw data to date. This working paper is the first in a series that will report the results of this investigation.

The purpose of this paper is to provide a descriptive account of the Fed’s extraordinary response to the recent financial crisis. It begins with a brief summary of the methodology, then outlines the unconventional facilities and programs aimed at stabilizing the existing financial structure. The paper concludes with a summary of the scope and magnitude of the Fed’s crisis response. The bottom line: a Federal Reserve bailout commitment in excess of $29 trillion."

Gregory Mannarino, "Inflation Continues To Surge; Economy Cratering; Be Ready For Anything"

Gregory Mannarino, AM 1/28/22:
"Inflation Continues To Surge; Economy Cratering; 
Be Ready For Anything"

Musical Interlude: Kevin Kern, "Another Realm"

Kevin Kern, "Another Realm"

Thursday, January 27, 2022

"Kraft-Heinz Again Raises Prices On Dozens Of Products As Inflation Continues To Bite"

"Kraft-Heinz Again Raises Prices On Dozens
 Of Products As Inflation Continues To Bite"
by Tyler Durden

"As some on Wall Street warn that the Fed remains dangerously behind the inflation curve (a fear that was given voice yesterday when Fed Chairman Jerome Powell's comments on inflation during the post-FOMC press conference appeared to send stocks spiraling lower), one of America's biggest makers of food and consumer goods has warned that more price hikes are coming.

To wit, Kraft-Heinz (in which Warren Buffett's Berkshire Hathaway owns a big stake) said in a letter to customers that it will raise prices in March on dozens of its most popular products. The hikes will affect brands including Oscar Mayer cold cuts, hot dogs, sausages, bacon, Velveeta cheese, Maxwell House coffee, TGIF frozen chicken wings, Kool-Aid and Capri Sun, CNN reported. Increases range from 6.6% on 12oz packs of Velveeta to a whopping 30% hike on a package of Oscar-Mayer turkey bacon. Most cold cuts and beef hot dogs will go up around 10% and coffee around 5%. Some Kool-Aid and Capri Sun drink packs will increase by about 20%.

"As we enter 2022, inflation continues to dramatically impact the economy," Kraft Heinz said in a letter dated January 24 to at least one of its wholesale customers that was viewed by CNN Business. The wholesaler shared the letter on the condition of anonymity to protect the company's relationship with its suppliers.

Kraft Heinz is just the latest consumer manufacturer to announce plans to boost prices early in the year. Last week, P&G said that it would raise prices on Tide and Gain laundry detergents, Downy fabric softener and Bounce dryer sheets by an average of about 8% in February. Conagra, which makes such brands as Slim Jim, Marie Callender's and Birds Eye, has said it plans to raise prices later this year.

The question now is how much of these price hikes will retailers pass on to customers? Given the thin margins that grocery stores operate on, it's likely that most, if not all, of the hike will be incorporated into prices on the shelf. For Kraft-Heinz, this isn't the first time prices have been raised since the start of the latest "transitory" inflation wave. The brand just announced a 9% price hike on its beef, lean beef, hot dogs and some other products back in November.

Headline consumer prices surged 7% in December according to the most recent CPI data release, which was the strongest level in nearly 40 years. Food prices alone rose 0.5% MoM. Beyond the US, global food prices have soared to levels unseen in a decade led by surging demand for wheat and dairy products following a year of severe drought and other environmental factors limiting production.

The question now is how many more times will K-H and its competitors hike prices before inflationary pressures finally ease?"

"Stock Market Crumbles Today; Robinhood Slammed; FED Will Not Rescue Market; Prepare"

Jeremiah Babe, PM 1/27/22:
"Stock Market Crumbles Today; Robinhood Slammed; 
FED Will Not Rescue Market; Prepare"

Gerald Celente, "Canadien Truckers Protest: A Mega Trend For Freedom"

Gerald Celente, PM 1/27/22:
"Canadien Truckers Protest: A Mega Trend For Freedom"
"The Trends Journal is a weekly magazine analyzing global current events forming future trends. Our mission is to present Facts and Truth over fear and propaganda to help subscribers prepare for What’s Next in these increasingly turbulent times."

"Two Shortages That Threaten To Absolutely Eviscerate The Global Economy In 2022"

Full screen recommended.
"Two Shortages That Threaten To Absolutely 
Eviscerate The Global Economy In 2022"
by Epic Economist

"We were promised that things would be getting back to normal at this point. But of course, those promises were empty. And here we are at the end of January 2022, realizing that our problems have only gotten worse. As we move forward into February and beyond, we should keep a close eye on two key global shortages that are threatening to disrupt the American status quo. The first is the rapidly spreading fertilizer shortage. It seems that all over the globe, agricultural fertilizing supplies are getting increasingly tighter. The situation is escalating so quickly that even our biased mainstream media is already reporting alarming updates about this shortage. A couple of days ago, the Wall Street Journal ominously warned that “high fertilizer prices are weighing on farmers all across the world”.

The article highlighted that from South America’s avocado, corn and coffee farms to Southeast Asia’s plantations of coconuts and oil palms, skyrocketing fertilizer prices are impacting farmers in every corner of the planet, making it much more expensive to cultivate and forcing many to cut back on production. As a consequence, that means our grocery bills will go up even more in the coming months, following a year in which global food prices have already risen by over 30 percent. And this relentless rise in the cost of food is going to exacerbate hunger crises and food insecurity. In America, at least 24 million people still need aid to have enough to eat. Even more concerning, in Africa, surging fertilizer prices can cause an acute decline in agricultural output, “equivalent to the food needs of 100 million people”, according to the International Fertilizer Development Center.

That’s a very big deal, and if global leaders don’t act to prevent that from happening, we might witness a tragic humanitarian crisis this year. Unfortunately, if we do get to this point, governments and corporations are likely to prioritize profits over human lives, given that consumer demand for food is at all-time highs. We can only hope that doesn’t happen. At the same time, here in the United States, fertilizer shortages and rising prices are also already affecting millions of farmers in the nation. In a recent opinion piece authored by U.S. Senator Roger Marshall, he argued that by now it is no secret that this crisis is having a major impact on domestic food production.

“Prices for phosphorus-based and potassium-based fertilizers have more than doubled in Kansas while Nitrogen-based fertilizers have more than quadrupled. Fertilizer is vital to feeding not only the country but the world. It contains essential nutrients for plant life, and without it, American agricultural yields will quickly suffer as well as food prices in local grocery stores,” Marshall stressed. “If we want to help people in need the best play is to get inflation under control and to encourage economic growth – not stifle it. The unfortunate reality is this is only the beginning. And the effects felt by fertilizer prices at the farm will also be felt at the fork,” he warned.

Moreover, the other shortage that we all need to pay attention to is the worsening computer chip shortage. A new report released by the Department of Commerce revealed that U.S. chip inventories “have become dangerously thin”. Today, the semiconductors needed to produce automobiles and medical devices to meet our national demand are in such short supply that our industries are losing several billion that could be used to generate more jobs and boost economic growth. According to the Washington Post, industry insiders aren’t very optimistic about the near-term outlook for chip production. They say that although federal funding could help build up the long-term supply of chips, it wouldn’t help in the short term because chip factories cannot be built overnight.

Every single industry requires semiconductors to make their machinery, and in some cases, their products operate properly. The vast majority of chip consumers surveyed by the department estimated that shortages will not go away in this year, and some suggested it could take another year until production is normalized. Over the past decade, we’ve become perilously dependent on chips sourced from Asia, and more specifically, from Taiwan.

That’s why, it is “both an economic and national security imperative to solve this crisis," Raimondo says. If the trade conflict between China and Taiwan escalates to an aggressive confrontation, it means that our computer chip supply chain will be completely cut off. Needless to say, things are looking very scary. We should start thinking about all of these issues and the possible outcomes because what was once “unimaginable” can become very real in 2022."

"The Truth About Today’s Blowout GDP Number"

"The Truth About Today’s Blowout GDP Number"
by Brian Maher

"Today the United States Department of Commerce informs us: Fourth-quarter gross domestic product expanded at an annualized 6.9%. 6.9% is plenty handsome - especially in consideration of Omicron’s omnipresence - and ongoing supply chain delinkages. Third-quarter GDP came in at a far less fulsome 2.3%. And Bloomberg’s survey of economic Wrong Way Charlies had projected a 5.5% Q4 expansion. But numbers can conceal more than they reveal. They can spin wondrous tales and tell fantastic lies. What then can we glean from today’s gaudy numbers?

Eternal Optimism: Today’s gaudy numbers reveal wondrous truths and fantastic facts, argues Reuters: "The U.S. economy notched its strongest growth in nearly four decades in 2021 after the government pumped trillions of dollars in COVID-19 relief, and is seen forging ahead despite headwinds from the pandemic, strained supply chains as well as inflation."

Next is the sun-soaked judgment of Mr. Jim Baird, chief investment officer with Plante Moran Financial Advisors: "The strength of the economy last year stood in stark contrast to the collapse in activity in early 2020, but also speaks to the success of both the public and private sector in quickly adapting to the unprecedented challenges created by the pandemic."

Adds a certain Mike Reynolds, he being vice president of investment strategy at Glenmede:
"The Q4 GDP report was a nice upside surprise in a string of recently underwhelming economic data points."

Just so. Yet we are not entirely persuaded that today’s numbers give a true signal of economic dynamism. As said Matthew Sherwood, global economist with the Economist Intelligence Unit: “The result flatters to deceive.”

The Facts About GDP: Assume the government pays a fellow to shovel out a hole. Assume further it pays him to shovel it back in. In the official telling, you have just witnessed an increase to the gross domestic product. Have you? Or have you merely witnessed a derangement, the fruitless birth and death of a hole? Or if the government adds one cup of inflationary water to one cup of milk… do you have two cups of whole milk? Government statistics may infer that you do. Yet two cups of watered milk do not equal two cups of whole milk.

Now return to today’s 6.9% Q4 GDP expansion… Scratch the paint from the dazzling surface. Lift the lid. Peer within. Seize the numbers by the scruff and haul them in for interrogation.

Today’s Numbers, Explained: What do we find? What accounts for the screaming headline number? Inventories… largely. Government number-manglers heap inventories into the column of business investment. Thus in the official telling, inventory piles add figures to the gross domestic product. Inventory values skyshot a preposterous $240 billion in 2021’s fourth quarter. MarketWatch affirms that: "GDP got a big lift at the end of last year from frantic efforts by businesses to restock barren shelves and warehouses in time for the holiday season. The economy grew a lot more slowly if the inventory buildup is set aside…"

The value of inventories soared by $240 billion - one of the biggest increases in decades - as companies ramped up production to try to meet demand. Spending on inventories is a boost to GDP, and was an especially big boost in the fourth quarter. The Bureau of Economic Analysis informs us piling inventories contributed a bulking 4.9 percentage points to the headline figure.

Less Than Meets the Eye: Rinse out their additions… and what do you find? You find fourth-quarter GDP expanded at a 2% annualized rate - not 6.9%. A 2% expansion is an expansion. Yet it is far from a blossoming. Adds MarketWatch: "Investment in housing declined for the third quarter in a row. Shortages and higher prices made companies more cautious about investment spending."

Meantime, real incomes - inflation-adjusted incomes, that is - declined at a 5.8% annual rate in quarter four. That is largely because quarter four’s annualized inflation rate was an income-devouring 6.5%. In all, 2021 consumer prices galloped along at the fastest gait since 1982. Yet rejoice - Q4 GDP vastly trounced all reasonable expectations. Look away from the flames tearing through your dollars.

Cold Water: But perhaps this quarter’s gross domestic product can get a good push from last quarter’s gross domestic product, you say. Perhaps the momentum will add economic velocity to the first quarter… then to the second quarter… and beyond.

Have another guess, argues Daily Reckoning affiliate Wolf Richter. Here he empties frigid water upon Pollyanna’s lovely head: "Rising inventories, which are considered an investment and add to GDP, are eventually followed by a decline in inventories when companies whittle them down again, and there is a price to pay for it… Companies that sit on that inventory and have trouble selling it will at some point cut their orders to reduce their inventories. When this happens, sales drop all the way up the supply chain… when businesses whittle down their inventories by ordering less, it ripples through the economy, lowers GDP growth…"

MarketWatch gives Pollyanna an additional soaking: "The economy won’t get a similar lift from restocking in the first quarter, however, and inventories might even be a negative. Early data point to the U.S. growing at a less than 2% annual clip in the first three months of the year…"

Concludes Cassandra - Ms. Megan Greene, senior fellow at Harvard’s Kennedy School: "Any growth we have from inventories now is sort of at the price of destocking later. Inventories aren’t a strategy for driving growth forward." We must agree. They are not.

Bad News for Wall Street: We believe only true productivity gains will drive growth forward. The Keynesian “multiplier” - the magic of water into wine, of debt into growth - has taken up division. At today’s grievous debt-to-GDP ratio, the borrowed dollar yields no additional growth. It merely yields ashes, ashes in the mouth. What about the stock market? Today’s “good” news landed upon Wall Street with a thud. Here is the reason, as we see it: The Federal Reserve will consider Q4’s superficially gaudy growth added justification for rate hikes. And tighter money is a tightening noose about Wall Street’s neck. Once again, the three major indexes closed trading in red numbers. Also again, the rate-sensitive Nasdaq absorbed the greatest slating, shedding another 189 points. Rates will rise, support will dwindle. We hazard Mr. Powell will once again yield to Wall Street – but only when it is too late."

Musical Interlude: Deuter, "Sound of Invisible Waters"

 

Deuter, "Sound of Invisible Waters"

"A Look to the Heavens"

“A now famous picture from the Hubble Space Telescope featured Pillars of Creation, star forming columns of cold gas and dust light-years long inside M16, the Eagle Nebula. This false-color composite image views the nearby stellar nursery using data from the Herschel Space Observatory's panoramic exploration of interstellar clouds along the plane of our Milky Way galaxy. Herschel's far infrared detectors record the emission from the region's cold dust directly.
The famous pillars are included near the center of the scene. While the central group of hot young stars is not apparent at these infrared wavelengths, the stars' radiation and winds carve the shapes within the interstellar clouds. Scattered white spots are denser knots of gas and dust, clumps of material collapsing to form new stars. The Eagle Nebula is some 6,500 light-years distant, an easy target for binoculars or small telescopes in a nebula rich part of the sky toward the split constellation Serpens Cauda (the tail of the snake).”

"Complexity Theory: the Avalanche and the Snowflake"

"Complexity Theory: the Avalanche and the Snowflake"
by James Rickards

"One of my favorites is what I call ‘the avalanche and the snowflake’. It’s a metaphor for the way the science actually works, but I should be clear: it’s not just a metaphor. The science, the mathematics and the dynamics are actually the same as those that exist in financial markets.

Imagine you’re on a mountainside. You can see a snowpack building up on the ridgeline while it continues snowing. You can tell just by looking at the scene that there’s danger of an avalanche. It’s windswept… it’s unstable… and if you’re an expert, you know it’s going to collapse and kill skiers and wipe out the village below. You see a snowflake fall from the sky onto the snowpack. It disturbs a few other snowflakes that lie there. Then, the snow starts to spread… then it starts to slide… then it gains momentum until, finally, it comes loose and the whole mountain comes down and buries the village.

Question: What do you blame? Do you blame the snowflake, or do you blame the unstable pack of snow? I say the snowflake’s irrelevant. If it wasn’t the one snowflake that caused the avalanche, it could have been the one before, or the one after, or the one tomorrow. The instability of the system as a whole was the problem. So when I think about the risks in the financial system, I don’t focus on the ‘snowflake’ that will cause problems. The trigger doesn’t matter.

A snowflake that falls harmlessly – the vast majority of all snowflakes - technically fails to start a chain reaction. Once a chain reaction begins, it expands exponentially, can ‘go critical’ (as in an atomic bomb) and release enough energy to destroy a city. However, most neutrons do not start nuclear chain reactions, just as most snowflakes do not start avalanches.

In the end, it’s not about the snowflakes or neutrons. It’s about the initial critical state conditions that allow the possibiity of a chain reaction or an avalanche. These can be hypothesized and observed at large scale, but the exact moment the chain reaction begins cannot be observed. That’s because it happens on a minute scale relative to the system. This is why some people refer to these snowflakes as ‘black swans’, because they are unexpected and come by surprise. But they’re actually not a surprise if you understand the system’s dynamics and can estimate the system scale.

It’s a metaphor, but really the mathematics behind it are the same. Financial markets today are huge, unstable mountains of snow waiting to collapse. You see it in the gross notional value of derivatives. There is $700 trillion worth of swaps. ($2.5 Quadrillion by other reputable estimates. - CP) These are derivatives off balance sheet, hidden liabilities in the banking system of the world. These numbers are not made up. Just go to the IS annual report and it’s right there in the footnote.

Well, how do you put $700 trillion into perspective? It’s ten times global GDP. Take all the goods and services in the entire world for an entire year. That’s about $70 trillion when you add it all up. Well, take ten times that, and that’s how big the snow pile is. And that’s the avalanche that’s waiting to come down."

"Feeling Overwhelmed: Breathing into Order"

"Feeling Overwhelmed: Breathing into Order"
by Madisyn Taylor, The DailyOM

"Always know, the Universe works in perfect order and you are never given more thank you can handle. Sometimes we may feel like there is just too much we need to do. Feeling overwhelmed may make it seem like the universe is picking on us, but the opposite is true: we are only given what we can handle. Difficult situations are opportunities to be our best selves, hone our skills and rise to the occasion.

The best place to start is to take a deep breath. As you do, remind yourself that the universe works in perfect order and therefore you can get everything done that needs to get done. As you exhale, release all the details that you have no control over. The universe with it‘s infinite organizing power will orchestrate the right outcome. Anytime stress begins to creep up, remember to breathe through it with these thoughts. Then, make a list of everything you need to do. Note what needs to be done first, and mark the things others may be able to do for you or with you. Though we often think no one else can do it correctly or well, there are times when it is worth it to exhale, let go of our control, and ask for help from professionals or friends. With the remaining things that feel you must do yourself, take another breath and determine their true importance.

Sometimes they are things we’d like to do, but aren’t really necessary. After taking these quick steps, you will find you have a plan laid out, freeing you from frenzied thoughts circling in your head. With calming deep breaths, you are now free to focus more fully on our priorities. Herbal teas or flower remedies along with wise choices about caffeine and food can help keep us from becoming frantic too. But with nothing further from us than our breath, we can breathe in our best intentions and let the rest go with an exhale. Keeping ourselves centered and breathing into and through life’s challenges helps us learn what we are truly capable of doing, and we will find we have the ability to rise to any occasion. Remember you aren’t being picked on, and you are never alone."

The Poet: Theodore Roethke, “The Return”

“The Return”

“Suddenly the window will open
and Mother will call,
it's time to come in.
The wall will part,
I will enter heaven in muddy shoes.
I will come to the table
and answer questions rudely.
I am all right, leave me
alone. Head in hand I
sit and sit. How can I tell them
about that long
and tangled way?
Here in heaven mothers
knit green scarves;
flies buzz.
Father dozes by the stove
after six days' labor.
No - surely I can't tell them
that people are at each
other's throats.”

- Theodore Roethke

"If I Try.."

- Steve Jobs

"Try? What is try? Do or do not do."
- Yoda

"Major Shortage Alert In 2022: Empty Shelves In Grocery Stores Set To Grow Substantially"

Full screen recommended.
"Major Shortage Alert In 2022: Empty Shelves
 In Grocery Stores Set To Grow Substantially"
by The Atlantis Report

"The number of empty shelves in grocery stores is about to grow substantially. Injection mandates, staff shortages, supply chain issues. Supply shortages, sick staff and shipment delays during the pandemic have stores struggling to keep inventory on shelves. Shortages here, shortages there, shortages everywhere.

The number of empty shelves in grocery stores is about to grow substantially. That happens when you outsource everything for higher profit, and then transport fails, due to sick workers or high oil prices. We know exactly what destroyed the supply chains.

Forced closures, lockdowns, and failing fiat currency. It's the Venezuela playbook 2.0... Hyperinflation is already happening... Theft is the only thing on the menu. It's how the bankers get out paying for those IOU Notes and Fake Assets. When currency becomes worthless, the profit motive diminishes along with it.

I think that there's an element of sabotage going on as well. These congestions in ports, for instance, would never have happened if the government wasn't intentionally throwing wrenches into the works. It’s a smoke screen acting like its port congestion. I honestly think most containers arriving are empty because let's face it, there are shortages of EVERYTHING.  What better way to blame it on something else. 

The breakdown of social order is not far-fetched.  It's already here. It was 13 years of socialism and Weimar Republic money printing that caused shortages. The worst part of this propaganda about supply chains is that US leadership isn't giving up on socialism and Weimar Republic money printing. They will make excuses rather than change course.

During that time the German government printed money to pay the striking workers not to work. That is what set it off. As long as all of the German marks were getting printed and going abroad there was no cost push inflation inside Germany. Once they started to pay people with printed money not to work, that is when inflation really took off.

Just like they are doing today in paying people not to work. And of course cost inflation is really taking off now. Things are really going to start to break down as we head into the hyper-inflationary curve.

Hyperinflation is coming to America: These sudden supply chain interruptions and issues are artificially created, like the container ship stuck in the Suez Canal. But it will get worse due to our increasing inflation of our fiat currencies. I’m guessing The Power That Be are just front running the issue, that the sheeple will not connect it with the coming hyperinflation. Remember it’s all by design. All part of the plan.

It does remind me of the UK after WWII, it carried on with rationing for 5 years after the end of the war. By then nobody could really remember what pre-war life was like, covered up the lost purchasing power after the loss of GRC status nicely. We are due for another reset. CBDC's will fail because it represents absolute control over what you will be allowed to buy. The Bank for International Settlements plans to rule the US from Europe (they believe they already do). They will fail because people will immediately look for a substitute. Silver is that substitute. Gold is the ONLY currency in wartime for more obvious reasons than hyperinflation.

Gregory Mannarino, "Markets: Caution Remains In Effect"

Gregory Mannarino, PM 1/27/22:
"Markets: Caution Remains In Effect"

The Daily "Near You?"

Casper, Wyoming, USA. Thanks for stopping by!

"It Was Pointless..."

"And it was pointless to think how those years could have been put to better use, for he could hardly have put them to worse. There was no recovering them now. You could grieve endlessly for the loss of time and for the damage done therein. For the dead, and for your own lost self. But what the wisdom of the ages says is that we do well not to grieve on and on. And those old ones knew a thing or two and had some truth to tell for you can grieve your heart out and in the end you are still where you were. All your grief hasn't changed a thing. What you have lost will not be returned to you. It will always be lost. You're left with only your scars to mark the void. All you can choose to do is to go on or not. But if you go on, it's knowing you carry your scars with you."
- Charles Frazier
 "Never be ashamed of a scar. 
It simply means you were stronger than whatever tried to hurt you." 
- Unknown

"Cool Fads and Killer Cads"

"Cool Fads and Killer Cads"
by Bill Bonner 

Youghal, Ireland - "Human life is always a struggle. Between good and evil… comedy and tragedy … civilization and barbarism. To and fro… back and forth… between honest, consensual commerce and brute force politics… between those who make it… and those who take it away from them. And between ‘cool’… and the profit motive.

That last item may shock readers. It shocked us. But when you connect the dots; that is what you see: chasing profits improves the world; chasing cool does not.

We begin by declaring that we are not as “fringy” as we may seem. Our major insight is that the post-1971 “fake” dollar (not backed by gold) allowed the feds much more freedom to fudge, fiddle, and fabricate phony wealth than ever before. No one with the power to print money can resist the temptation for long. The Fed’s habitual reticence gave way when Alan Greenspan decided to go for the cool. He wanted his mug on TIME magazine cover; he got what he wanted. Very cool.

Thereafter, the whole economy went wild on EZ credit. At the peak of the US empire’s glory – in about 1999 – the US had about $28 trillion in household, business, and government debt. Now, the feds alone owe $29 trillion. Altogether, the debt pile has grown to over $86 trillion.
(Source: US Board of Governors of the Federal Reserve)

Delirium Tremens: And now, almost every mother’s son in the nation is hooked on it. Mortgages, credit cards, student debt, business debt… and the ‘national’ debt – all depend on artificially low interest rates… which depend on the Fed’s bond buying… which depends on printing more money.

Yes, it’s “inflate or die.” Either the Fed continues to hold down interest rates and print more money… inevitably causing higher rates of inflation… or, it goes cold turkey and the whole economy gets the shakes. And we are not the only ones who think so. The Financial Times: "The more [Greenspan] did to keep markets propped up, the better it was for the business elite, and the less politicians had to do, creating a dysfunctional dance in which the fortunes of asset owners versus everyone else moved further and further apart.

In 2008/2009, one Fed government, former head of the Kansas City Fed branch, Thomas Hoenig tried to stop the music. According to the FT, he “broke out of the traditional Fed consensus and risked public fury (not to mention massive criticism from his peers) to sound the alarm about how a radical experiment in monetary policy, which involved pumping unprecedented amounts of money into the US economy, would increase inequality and encourage ever more risky behavior on Wall Street.”

Mr. Hoenig was un-cool. Almost invisible in 2009, by 2011, he disappeared from the Fed completely. Now, says Hoenig, “we’ve built an entire economic system around a zero rate. “ The Fed went ahead with its ‘experiment.’ It kept its key lending rate below zero (adjusted for inflation) throughout almost the whole of the last decade. Everybody borrowed. And the federal government, the biggest borrower, is now adding to its debt at a record rate.

CNSNews: "When President Joe Biden was sworn in on Jan. 20, 2021, the federal government's debt stood at $27,751,896,236,414.77. When his first year in office ended on Jan. 20, 2022, it stood at $29,867,021,509,573.92. That means that during Biden's first 12 months in office, the federal debt grew by more than $2 trillion — or $2,115,125,273,159.15 to be exact."

How do you put that in perspective? The United States of America had existed for 210 years - and 40 presidents had served as this nation's chief executive - before the debt first topped $2 trillion in 1986. From rich to poor… business to households… the dance has become more and more dysfunctional. More chaotic. More unequal. More like a mosh pit slam than the foxtrot; someone is going to get hurt! This week, we saw that the lion’s share of the new money has gone to the wealthiest people in the country… and that some of them would gladly trade a little of it for more cool.

Killer Cads: Larry Fink is urging corporate CEOs to forsake profits… and pursue zero emissions instead. Mr. Fink seems to think that this will either make the world a better place… improve his status in it… or both. Abigail Disney is calling for the feds to tax away more of the gains. In Mr. Fink’s case, we have no idea whether companies aiming for zero emissions are doing the world a favor or not. Fighting climate change is cool today. As for tomorrow, we don’t know. In Ms. Disney’s case, there is almost no chance that taking money away from rich people and giving it to the government will be a winner. Ms. Disney may gain a few cool points, but any sentient biped – even by accident – can probably invest her money better than the government. At least… if he’s guided by the profit motive.

And here we permit ourselves a little guesswork. For deep down in the heart of man is a very primitive animal. He’s a hunter. A killer. A cad. And he aims for cool… that is, for whatever he wants, when he wants it. “Civilization” restrains him. It dresses him in clothes. It gives him manners. It holds up ‘commandments’ – like stop signs – telling him not to kill, or steal or covet his neighbor’s wife. It also tells him to forget ‘cool’ public policies… and instead follow the path of honest profits.

Would it be cool to rob a bank? Maybe… but he’ll probably make more money if he starts one. Would it be cool to shackle his employees to their desks? Maybe; but, in the modern world, wage slavery is more efficient and less costly that chattel slavery. Would it be cool to watch people starve… to let children run around naked… and see them freeze in the winter? Maybe. But the way to make a buck is to knit sweaters, build houses and plant potatoes! The pursuit of honest profits helped civilize the world. Aiming for cool, on the other hand, is always a step backwards."

"The Wild Ride Continues for this Seesaw Market"

Full screen recommended.
Dan, iAllegedly, AM 1/27/22:
"The Wild Ride Continues for this Seesaw Market"
"The Madness continues. What a wild ride we are living through. There is a selloff due to the Fed's inaction. The economic chaos and volatility is a result of inflation, supply chain nightmare and the employment problems."
Related:

Gregory Mannarino, "Critical Updates: Stock Market, Economy, Crude, Dollar, Gold, Silver, Fed."

Gregory Mannarino, AM 1/27/22:
"Critical Updates: Stock Market, Economy, 
Crude, Dollar, Gold, Silver, Fed."

"Here's Our Historical Analogy Menu: Rome, the USSR or Revolutionary France"

"Here's Our Historical Analogy Menu:
Rome, the USSR or Revolutionary France"
by Charles Hugh Smith


"There's a definite end of days feeling the world. It's as if everyone knows there is no returning to the good old days of a well-oiled Imperial machine chewing through any and all obstacles, and this realization is so frightening that the need to pretend everything is fine, just fine, overwhelms the last remaining ties to reality.

Let's play the historical analogy game: which collapse will America track most closely? Rome circa 475 AD, the USSR circa 1989, or Revolutionary France circa 1789? I'm tempted to include China's Song Dynasty circa 1276 AD, but the analog of the Mongol invasion isn't a likely fit. The Khmer Empire circa 1350-1430 AD and the Mayan Civilization in the 9th century might be excellent analogies but not enough is known about these complex declines to make an analogy more than guesswork.

Rome, the USSR and Revolutionary France are all compelling analogies due to the hubristic cluelessness of their fractured elites as the pretensions of stability collapsed around them. Even though Nero didn't actually fiddle while Rome burned and Marie Antoinette didn't gush "Let them eat brioche" when notified that the peasants had no bread (or more accurately, could no longer afford it), these myths are handy encapsulations of the disconnect from reality that infested the elites in the last years before the deluge of non-linear chaos overwhelmed the regimes.

While historians gather evidence of tipping points such as pandemics, ecological damage, invasions, droughts, inflation, etc., the core dynamic is ultimately the loss of social cohesion within the ruling elites and in the social order at large. As a generality, the permanence of the status quo is taken for granted by elites, who then feel free to squabble amongst themselves over the spoils of wealth and power. Distracted by their own infighting, the elites are blind to the erosion of the foundations of their power. As coherence in the elites unravels, the ties uniting the elites with the masses unravel as well. One camp within the elites recognizes the danger and seeks reforms, but the reforms are too little, too late, and in any event, the elites who cling most ardently to the past stability fight the reform movement to a standstill.

As social cohesion unravels, systems that once seemed immutable (i.e. linear) suddenly display non-linear dynamics in which modest changes that would have made little difference in the past now unleash regime-shattering disorder.

So take your pick, America: what's the closest analogy? A sclerotic Politburo of elders living in the past, an elite fiddling while the nation disintegrates, or an elite so out of touch with reality that it claims inflation is zero while the populace can no longer afford bread? They all lead to the same destination:

"How It Really Is"

 

Gregory Mannarino, "Special Evening Report: The Selloff Continues... Stock Futures Are Cratering"

Gregory Mannarino, Late PM 1/26/22:
"Special Evening Report: The Selloff Continues... 
Stock Futures Are Cratering"

"Why Finding a Bolthole is More Important Than Ever"

"Why Finding a Bolthole is More Important Than Ever"
by International Man

"International Man: Today, political risks around the world are growing rapidly. Aside from acquiring a second passport or residency and diversifying yourself financially, what are the benefits of physically diversifying yourself and where you live?

Doug Casey: Political risks are indeed growing very, very rapidly. The COVID hysteria is international and has greatly amplified political risk everywhere. By far, the most important reason to diversify remains getting a second passport, or at least legal permanent residency. It’s perverse, but only by becoming the de facto property of another government can you insulate yourself to some degree from the depredations of your home government. It’s a sad testimony to the state of liberty on planet Earth.

There are, however, plenty of advantages besides the political and financial ones to diversifying physically and geographically. The weather and the local culture can only be improved by moving physically to another place. Personally, I prefer mild warm weather to nasty cold weather. Culturally, I wouldn’t want to live in a place like North Korea or Saudi Arabia. Or a war zone. Or a police state.

It’s better to locate where not only the weather suits your clothes but the way people think and act also suits you. Foreigners are more likely to allow an expat his eccentricities than his own countrymen. It can be psychologically as well as politically and financially liberating to expatriate. Most people have the mentality of medieval peasants, who felt that if they wandered over the next hill, there might be dragons. The only way you can overcome that psychological attitude is by proving to yourself there really aren’t dragons over the hill.

International Man: For years, you’ve recommended that our readers find a second crib outside of their home country as a form of diversification. In light of the current global hysteria, what other things should people consider?

Doug Casey: Governments are unpredictable, much in the way a demented individual is. You can’t be sure exactly what they’re going to do, simply because national leaders are almost necessarily psychopaths. As a consequence, the situation is constantly changing.

For instance, when I lived in Hong Kong in the 1980s, the place was great; it was a really free, wide-open international city. It was exotic but low cost - before property prices moved up 10-fold. Since the Chinese government forced the British out, however, it’s become much more constrained. Most recently, with political violence and the COVID bugbear, Hong Kong has become a much less desirable place to live. It’s gone from being one of the freest places in the world to one of the more locked-down places in the world. And that can happen absolutely anywhere. A word to the wise.

The colors of the map on the wall are always running; nothing stays the same in terms of international politics. If you don’t want to be roadkill, it’s important to be proactive, as opposed to reactive. Plan ahead rather than trying to play catch up.

It’s possible to read the writing on the wall to some extent, though. I expect quite a few unpleasant things to develop in any number of countries. Unpleasant, at least, if you care about your personal freedom and financial opportunity.

International Man: What do you say to people who say that the US and Europe are still the best places to live?

Doug Casey: In many ways, they are. But look it at this way. In the ancient world, if you were a free man, probably the best place to live was the Roman Empire. That was true for centuries, until the 220s. It offered the highest standard of living, the most opportunity for self-realization, and the least danger of being robbed and murdered on the highway. It was an advanced, orderly society. The barbarians outside the border mostly had to grub for roots and berries while living lives that were solitary, poor, nasty, brutish, and short. But things started going seriously badly in Rome during the 3rd century.

By the time Constantine took over early in the 4th century, Rome was turning feudal, and he started its transformation into a theocracy. Romans were no longer free citizens; they were subjects. Many were already trying to exit the empire to avoid its onerous taxes.

Still, it was a relatively good place to live. They still had the Roman baths and books. Commodities were still traded around the empire. Things basically still worked. In 378 AD, however, the barbarians won the battle of Adrianople; within two generations, the Roman world had transformed totally, absolutely, and irrevocably. It headed rapidly into the Dark Ages, where it stayed for five centuries.

Why do I bring up this bit of ancient history? It’s pretty much the way both the US and Europe are heading. They’ve gone from being free and open societies with high standards of living to following the path of Rome after Adrianople.

Tens of millions of migrants are going to overwhelm North America and Europe, and they’re going to permanently change things. Some immigrants add some spice to the stew, as it were; everybody enjoys some new ethnic cuisines. But past immigration was fairly orderly and almost all from Europe. However, if you transplant 20 million Nigerians to Canada, it’s going to look like and act like Nigeria, not what used to be Canada. That’s what’s happening on many fronts around the world today.

Is that "good" or "bad"? As a fan of Western Civilization, which is responsible for almost all the progress the world has ever made - and, yes, I understand it’s shockingly un-PC to even think that - I’d say it’s bad. But who knows what humans will say 500 years from now when -hopefully - all the action is elsewhere in the solar system, or even elsewhere in the galaxy?

International Man: The truth is, there is no "perfect place." And at various levels, the governments of every country are engaging in destructive behaviors. Does it come down to personal preference and finding a decent place where you can ride out a crisis?

Doug Casey: Personal preferences matter. There are four things that are important to me personally, namely, to maintain my health, maintain my wealth, maintain my personal freedom, and associate largely with people I like.

Based on that, where can you best maintain those values? It’s becoming problematical, in part because the US and China are heading toward something like World War III. This war will be fought with very different weapons and will be much more destructive than what we saw in World War II. That, however, is an entirely different discussion. For the moment, let’s just say I don’t want to be caught up in it.

One thing for sure is that this COVID hysteria is a godsend for the people that like to control other people. The public is as easily terrified as a herd of sheep. Like herd animals, they stupidly self-control by all conforming to the herd. COVID has transformed the US and Western Europe from lands of whipped dogs to lands of snitching rats. Excuse my mixing several metaphors…

Anyway, this hysteria has been so effective that I’m sure we’re going to have a COVID 2.0 and a COVID 3.0. It’s a great setup for what the horrible people at the World Economic Forum have been talking about very overtly - The Great Reset. They recently said that in 10 years, "you’ll own nothing, and you’ll like it." I’d dismiss them as annoying busybodies - except that they’re rich, powerful, and control the world’s governments. Worse, the hoi polloi seem to respect them. So the situation appears fairly hopeless.

Where can you run and hide at this point? Almost nowhere because the whole world is moving in the wrong direction. The old pieces of the puzzle are going to be completely upset, and I don’t know how the new pieces are going to realign. I’m convinced that this decade is going to be one of the scariest in world history, at least on the order of 1929-1945, maybe, the Thirty Years’ War in the 17th century, or, maybe, the collapse of Rome itself. Definitely exciting, but not in a good way. How’s that for a bearish prediction? It’s time to lay out options for yourself now, so you’re not reacting."

Wednesday, January 26, 2022

"Stock Market Stunned Today; Entire System Is Collapsing; Federal Reserve Plays With Fire"

Jeremiah Babe, PM 1/26/22:
"Stock Market Stunned Today; Entire System Is Collapsing; 
Federal Reserve Plays With Fire"