"The 'Helicopter Parent' Fed and the Fatal Crash of Risk"

"The 'Helicopter Parent' Fed and the Fatal Crash of Risk"

by Charles Hugh Smith

"The Federal Reserve is the nation's Helicopter Parent, saving everyone from the consequences of their actions. We all know what happens when over-protective Helicopter Parents save their precious offspring from any opportunity to learn from mistakes and failures: they cripple their child's ability to assess risk and learn from failure, guaranteeing fragility and catastrophically blind-to-risk decisions later in life.

Helicopter Parents generate a perfection of moral hazard, defined as there is no incentive to hedge risk because one is protected from its consequences. Moral hazard perversely increases the incentives to take on more risk because Mommy and Daddy (the Fed) will always save me/bail me out.

For example, when Mommy and Daddy make their reckless teen's DUI charge go away, the teen's already potent sense of godlike liberation from real-world consequences floats even higher. So next time the teen gets into his car drunk and takes his friends on a high-speed spin down Mulholland Drive, he loses control and kills everyone in the car - not just himself but those who trusted his warped sense of risk.

The Fed is the ultimate Helicopter Parent, protecting all the power players in our economy and society from the consequences of their risky actions. By crushing interest rates to near-zero, the Fed has perversely incentivized increasingly risky expansion of credit, and given the green light to there's no limit, spend as much as you want government borrowing.

The Fed's implicit promise to never let the stock market drop for more than a few days - the Fed Put - has incentivized every punter from billionaires to corporations to unemployed people with stimmy checks to max out their credit (or margin accounts) to increase their bets in the market casino.

The Fed has implicitly informed the bigger players that they can bet as big as they want because the Fed will always bail them out, transferring private losses to the public via Fed bailouts, lines of credit, backstops, etc. The Fed has also signaled it will change the rules as needed to save its Players from loss. Mark-to-Market reveals the insolvency of the Players? Well, we'll just get rid of that. All fixed! (heh)

Once the path of moral hazard has been taken, a fatal feedback loop takes hold: as reckless punters take on more risk to boost their gains, the fragility and brittleness of their positions increases geometrically. This soon endangers not just their own bets but the entire financial system, as it's not just one punter who responds to the Fed's Helicopter Parenting promise of no consequences for taking on more risk - every punter gets the green light to take on more risk because the Fed has our back.

Indeed, now that the Fed Put has been established as unbreakable, it would be irrational not to max out margin to increase one's exposure to risky bets. And voila, margin debt has soared as the Fed has signaled its commitment to bail out every risky bet in the market casino.

Now that every punter has maxed out their margin account to increase their bets on markets lofting ever higher, the Fed has no choice but to increase the system's moral hazard: as punters respond to the Fed's incentives to take on more risk, the Fed has to expand its protection of punters from the consequences of their recklessness, which then increases their recklessness.

Nobody's ever had a more generous and godlike Helicopter Parent than the Fed. But alas, just as actions have consequences (first-order effects), those consequences have consequences (second-order effects): in the case of the Fed, credit and markets, the second-order effects are as catastrophic as the drunken teen's there's no risk I can't handle last race down Mulholland: all the risk that the Fed has supposedly dissipated into nothingness has been transferred to the entire financial system.

All the risks generated by gambling with trillions of borrowed and leveraged dollars didn't actually vanish; they were transferred by the Fed to the entire system, which is itself now too fragile and brittle to withstand even the slightest intrusion of consequence. The entire financial system is now careening down a treacherous stretch of curves and blind spots, absolutely confident that being dead-drunk on the Fed's promise of never-ending gains in the market poses no risk whatsoever because the Fed has our back.

Unfortunately for the drunken teen, Mommy and Daddy could make the DUI go away but they can't bring the lifeless bodies of those who reckoned their distorted view of risk was actually accurate back to life. Once the fragile, brittle, disconnected-from-reality system the Fed has created crashes, the Fed will be as powerless as all the other grief-stricken Helicopter Parents to reverse the irreversible consequences of their meddling with moral hazard."

- https://www.oftwominds.com/

"Whimpers, Whines, and Wonders"

"Whimpers, Whines, and Wonders"

by Bill Bonner

“It is the mynd, that maketh good or ill,

That maketh wretch or happie, rich or poore:

For some, that hath abundance at his will,

Hath not enough, but wants in greatest store;

And other, that hath litle, askes no more,

But in that litle is both rich and wise."

– "The Faerie Queene," Edmund Spenser

YOUGHAL, IRELAND – "How does the empire die? With a whimper… and then a bang. Today, we will look at the whimper. It comes from millions of voices… distracted… confused… insipid. Headlines that make no sense. News stories that are almost completely fake. Hysteria. Hallucinations. Bombast and bunkum. We have it on the authority of Yahoo! that model Paulina Porizkova is “rediscovering dating and sex in her 50s.” We’re so relieved. And former House Speaker John Boehner says Senator Ted Cruz is a “reckless a**hole.”

Whimper and Whine: Meanwhile, people worry about whether they are using the right personal pronoun… or committing a micro-aggression by telling the truth. We’re not supposed to read Dr. Seuss, either – there’s a stereotype of a “Chinaman” in there… And put down that "Gone With the Wind". Don’t you know that Scarlett O’Hara was a white supremacist?! Oh, and are you still the same gender you were assigned at birth? Boring! And don’t forget to play your part in the war against COVID-19. Remember, no one is safe until we are all safe. Or something like that.

We’re a racist society. We’re killing the planet. See something, say something. The patriarchy is unfair to women and minorities. Smoking is bad; recycling is good… Oil is bad; solar is good… Stimulus is good; austerity is bad… Democracy… Equality… Diversity… Sobriety… Blah, blah, blah.

Two percent inflation… excellent! Zero percent inflation… bummer. (Just yesterday, Federal Reserve chair Jerome Powell said he wasn’t budging from his ultra-low interest rates… no way… no how… until inflation is securely at 2% or more.) NFTs… SPACs… TESLA… GameStop… bitcoin... MicroStrategy… Michael Jackson lactating? Sure… they’re investments, right?

Whimper… whimper… whine… whiffle… waffle… Trivia. Obiter dicta. Claptrap.

Banished Gaucho: And here’s poor Saddleback College… From the LA Times: "After years of turmoil and heated debate, Saddleback College announced this week that it’s getting rid of its mascot, one that many see as a racist caricature. Saddleback President Elliot Stern made the decision to retire the school’s gaucho mascot following a petition signed by hundreds, several community forums and recommendations from the school’s three governing bodies. “It became our college’s Confederate flag,” Stern said over the phone, alluding to the controversial banner seen by many as a symbol of racism and slavery.

The Gaucho mascot, depicting an angry Mexican man riding a horse, has long drawn comparisons with the Frito Bandito, considered one of the more racist brand logos. A gaucho is an Argentinian cowboy.

Blackest Blemish: Gone, too, is the statue of John O’Donnell from Baltimore. O’Donnell was born in Ireland… and emigrated to the U.S. in the 18th century. But he “owned dozens of slaves.” That was enough for the city, now under the enlightened eye of Mayor Brandon Scott. It doesn’t want any reminders of its past… or at least that part of it.

The world’s blackest blemish – America’s slave past – is cast as such a monumental evil that beside it, all else shrinks into good. But when John O’Donnell left Ireland, the country had been through two centuries of conquests, rebellions, famine, and ethnic cleansing. In some places, a quarter to a half the population had been exterminated by English invaders.

Edmund Spenser, an English officer (and later, author of The Faerie Queene), described what he saw... “notwithstanding that [Ireland] was a most rich and plentiful country, full of corn and cattle, that you would have thought they could have been able to stand long, yet eare one year and a half they were brought to such wretchedness, as that any stony heart would have rued the same.

Out of every corner of the wood and glens they came creeping forth upon their hands, for their legs could not bear them; they looked Anatomies [of] death, they spoke like ghosts, crying out of their graves; they did eat of the carrions [corpses], happy where they could find them, yea, and one another soon after, in so much as the very carcasses they spared not to scrape out of their graves; and if they found a plot of water-cresses or shamrocks, their they flocked as to a feast for the time, yet not able long to continue therewithal; that in a short space there were none almost left, and a most populous and plentiful country suddenly left void of man or beast.”

But after so many tears shed for America’s unfortunates, who has any left? Certain groups are approved for whimpers; others are met with a stony heart. Many Irish fled to France… Spain… Argentina… America. In the 19th century, so many Irish immigrants had come to America, that Irish labor was cheaper than slave labor. The Irish were put to work on the most dangerous jobs – such as digging the Pontchartrain Canal in New Orleans. Yellow fever and cholera were endemic in the lowland canal area; slave owners didn’t want to lose their valuable property. Back then, who cared if the Irish died?

All That Matters: And who cares now? John O’Donnell owned slaves; that’s all that matters. John O’Donnell ran away from home – in Limerick, Ireland – at age 10. He rocked up as a young man in India, where he seems to have stolen money from the East India Company. Later, he went into privateering and was charged with murder. And the fortune he brought to Baltimore, at least by some accounts, was made by selling the most lucrative trade item in Asia – opium.

But no one wanted to take down John O’Donnell’s statue because he might have been a thief or a drug dealer. Or a murderer. We no longer ache for any sin committed earlier than the founding of America… and none against anyone outside of its borders. And so keen are we to appear to right the wrongs of the past (we cannot undo the past… we can only be smug and superior about it)…that we can spare no indignation for the crime going on right now… nor any alarm for the catastrophe that follows…to which – the big bang – we return tomorrow."

- www.rogueeconomics.com

"How It Really Is"

Gregory Mannarino, AM 4/13/21: "Banned Again! Alert! Consumer Prices Are Surging With Much More To Come!"

Gregory Mannarino, AM 4/13/21:

"Banned Again! Alert! 

Consumer Prices Are Surging With Much More To Come!"

- https://traderschoice.net/

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"Margin Debt Has Exploded by 49 Percent in One Year to $814 Billion. 

The Actual Figure May Be in the Trillions. Here’s Why"

Then of course there's the $2.4 QUADRILLION in derivatives...

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The Rolling Stones, "Gimme Shelter"

To paraphrase Chief Brody in "Jaws", "You're gonna need a bigger shelter."

"Woke-a-Cola: How To Destroy A World-Leading Brand In 60 Seconds"

"Woke-a-Cola:

How To Destroy A World-Leading Brand In 60 Seconds"

by Tom Luongo

"I’m sure you’ve heard the phrase, “Get Woke, Go Broke.” In the curious case of Coca-Cola, going woke may be the single biggest branding mistake in the history of marketing. In late February a whistleblower came forth with screenshots, posted on YouTube, of slides from Coke’s internal ‘diversity training’ course urging its employees to quote, “Be less white.” And by ‘less white’ they mean subservient. They don’t mean be more sensitive.

When this happened, I immediately said to myself, “Scratch ever buying another Coke product off my list.” Not a moment’s angst or energy went into it. “Be less white?” “Drink no Coke.” Why? Because choosing not to buy a Coke on the rare occasion I buy a soda anymore is an easy one. Sugar (or aspartame) and water in and of itself isn’t anything to get excited about, it’s the association of Coca-Cola with a past positive experience that is. And they just told me I’m a bad person because of the heritage of my birth. Not a positive, relationship-building experience.

Now I know that Critical Race Theory hustlers think they can immunize themselves and their real agenda with rhetoric, justifying their racism and hoping they’ve conditioned enough of us into feeling guilty to allow the inversion of society where blacks are in power and whites are not. While words certainly have power, nothing has more power than action. This incident sparked an enormous controversy which has yet to die down. But it wasn’t one that made headlines for more than one news cycle. And yet, millions of people made the same effortless decision I did.

Immediately Coke went into damage control and pulled the training course, issued statements that it wasn’t true and all the typical backpedaling a cowardly management team does when caught insulting a core customer base. You would think they would have learned from the NFL. But, no, sadly. In their quest to be all things to all people, if I’m being generous, Coke will quickly find themselves hated by everyone. Hated by whites for telling them they’re bad people. Hated by the race baiters for sucking up to their fragile white overlords.

I’ve spoken to dozens of people who work in modern corporate America and Coke isn’t the outlier, but rather the norm. And the backlash against this race hustling isn’t just coming, it’s here. For some companies, they can survive a mistake like this because their business doesn’t depend on brand loyalty.

Take airlines, for example. When planning a trip is the choice of airline at the top of your priorities? Or are flight availability, timing, proximity to home and about a hundred other things far more important than the particular company operating the plane? Of course not. Air travel is one of the most heavily regulated and, by extension, homogenized industries one can think of. Choosing an airline is like choosing a brand of gasoline. Air travel is a commodity and the most convenient one will most likely determine your shopping preference.

But what is Coca-Cola’s business based on if not its brand? It’s the alchemy of Coke’s secret formula and its marketing which imbues Coke with its profit engine. Famously, Warren Buffett owns a big position in Coke precisely because it had a bullet-proof brand, what he calls, in investing terms, a moat around its business.

And with three little words they just torched more than a century of brand nurturing that has been the standard by which such things are measured. Business schools use Coke’s brand maintenance as a primary case study in how to do it right. Soon, it will be the primary case study on how to do the exact opposite. That is, when we’re allowed to teach such things again.

So, what possessed them to think they could turn on 70+% of Americans already sick to the gills of the anti-white rhetoric coming at them from every angle and not drain that moat?Arrogance? Maybe. Incompetence mixed with mandated virtue signaling is a better bet. Like I said at the outset I didn’t give this much thought when it first happened more than a month ago. But something happened the other day that got my attention.

My private boycott of Coke wasn’t something I thought much of until I went to my local CVS to buy a Diet Pepsi… and found that I couldn’t because there were none in the cooler.

Right next to it was the coke cooler… stocked to the gills. I live in North Florida, practically Georgia, which is literally Coke Country. Remember, Atlanta is Coke’s headquarters. And in my small town there wasn’t a Pepsi to be bought? Needless to say, I chuckled knowing that Donald Trump – 2021’s version of Lord Voldemort – may not be allowed in the public communications space but his words still have tremendous power. He said boycott Coke and my conservative North Florida town said, “Yes, sir.”

Companies like Coke don’t get it. Their management, just like our politicians, live in bubbles too far removed from their customers to have any sense for what they’re feeling. And Trump voters feel marginalized. The free market is a brutal thing. It’s unforgiving and uncompromising. Every seller on Ebay lives in fear of the dreaded negative feedback. So does every Uber driver. Marketing people know that for every hundred positive comments one negative one will depress sales.

It’s why a restaurant that gives you great service a dozen times in a row is forever on your ‘avoid list’ after one bad meal. Don’t get me started about my personal war with Subaru, Netflix and General Motors.

When the barrier to your choice of one product over another is low, there’s no reason to have brand loyalty if that brand doesn’t 1) satisfy your needs or 2) treat your money with respect. Branding is all about identifying with your customer, telling them that buying this product will not just improve your life but make you the kind of person you want others to see you as. And Coke just told seven out of ten Americans they’re scum.

Brand creation takes a lifetime to create and a minute to destroy. Brand destruction of this type is happening all across America right now. I wrote recently about Patreon’s willingness to join the Big Tech censorship brigade but it’s everywhere.

From Disney’s movies to Major League Baseball all the uniquely American things we could find common ground on despite our political differences are under direct attack. Critical Race hustlers are culture warriors obsessed with destroying anything and everything beautiful. They are Leninists never content with what they’ve achieved and will not stop until they have poisoned everything we’ve ever held dear. Amplifying a race war between whites and blacks by turning every institution of culture into a hotbed of fabricated conflict built on false dichotomies has been their modus operandi for generations.

Companies like Coke think they can bargain with these folks, that there is a limit to their behavior. But there isn’t. Coke has committed the critical sin. The race hustlers won this round. If Pepsi is smart they’ll fire their entire Diversity Division tomorrow, and put on a third production shift at the market rate for labor. If they don’t then they too simply want to go broke."

- https://www.zerohedge.com/

"Guns Of April And Global War"

"Guns Of April And Global War"

by J.B. Shurk

"War between Russia and Ukraine looks imminent. Israel and Iran are engaging in tit for tat maritime altercations. And China is ratcheting up provocative incursions into the airspaces and waters of Taiwan, Japan, and the Philippines.

Any one of these regional conflicts is incendiary enough to ignite World War III (or, more accurately, each one is capable of transforming the cold, hybrid warfare of cyberhacks, technology thefts, financial markets manipulation, and perhaps even biological attacks that has been underway for many years into total and unrelenting global bloodshed), yet trading markets and news media are largely ignoring what's unfolding. It's as if the Cuban Missile Crisis, the 1999 Kargil War between nuclear-equipped India and Pakistan, and the Soviet and Nazi Invasion of Poland were all happening concurrently, and the world decided it was too busy enforcing face mask mandates upon religious congregants and following the turmoil of Khloe Kardashian to care.

Barbara Tuchman's "The Guns of August" paints a vivid picture of European elites so mentally imprisoned by the mores and cultural etiquette of the nineteenth century that they failed to grasp the reality of the geopolitical chessboard before them or the likelihood of the monumental carnage of WWI. Something eerily reminiscent of those miscalculations is going on today. 

In the thirty years since the fall of the Soviet Union, the United States has squandered much of its time as the world's sole superpower. Rather than winding down NATO's mission in a post-Soviet world, the West redirected and revitalized the alliance after 9/11 into a global military engagement against "extremism," with the U.S. fortifying its role as the world's policeman. And rather than using the end of the Cold War to balance budgets and fix America's unstable financial footing, the U.S. aggressively burdened itself with new and unsustainable levels of debt. In effect, the U.S. rejected the possibility of multipolar peace, assumed the role of global hegemon, and never saved up for a rainy day.

Instead of broadly integrating a shaky post-communist Russia into European and trans-Atlantic institutions, the U.S. has wobbled between treating Russia as an ally in the "war on terror" and as a Cold War adversary that must be contained by driving the expansion of NATO-allied member countries all the way to Russia's borders. One moment Hillary Clinton is promoting a "Russia reset," and the next moment Barack Obama and Victoria Nuland are orchestrating a Ukrainian coup d'état to swap a Russia-friendly government with a fiercely anti-Russian replacement. In order to prevent Russia from becoming a thorn in the side of New World Order types utilizing the IMF, WTO, and World Bank as engines for maintaining American-led global governance, U.S.-controlled NATO and E.U. technocrats intent on building a European superstate have kept Russia relegated to the sidelines. And in recent years, Democrats in the U.S., "Remain" Brits opposed to Brexit, and European integrationists who have taken umbrage at Central European countries such as Poland and Hungary defending their own sovereignty have tried to scapegoat lost referendums on illusory "Russian disinformation" campaigns. The effect of this intentional ostracism has been to push Russia closer to communist China and into adversarial brinkmanship with U.S.-E.U. interests.

Likewise, by largely ignoring China's decades of human rights abuses and normalizing trade relations at the turn of the millennium in an effort to tame a large but poor communist country through globalization and cultural assimilation, the United States has instead elevated China to an economic powerhouse increasingly capable of bending the West to its will. After hollowing out America's manufacturing and industrial capabilities and orchestrating the largest intercontinental transfer of wealth in history from America's post-WWII middle class to China's emerging middle class, the U.S. now finds itself in a defensive geopolitical posture with a combination of national debt, crumbling infrastructure, and dependence on Chinese raw materials and imports endangering America's rules-based international order. In what should be seen as a shot across the bow of the U.S. financial system, the recent (and almost certainly intentional) self-destruction of the Chinese-controlled family firm Archegos that destabilized Western credit markets and threatened the solvency of numerous Western investment banks was a pointed reminder from China to the U.S. that the latter's days of unilateral control of the global economy are over.

Both China and Russia are deleveraging from American dollars, increasing their gold stores, and preparing for a future when the dollar is no longer the world's reserve currency. Without that ace in the hole, the U.S. loses not only its ability to continue printing and spending money without enduring the normal consequences of monetary devaluation and collapse but also its ability to inflict financial sanctions as a way to "club" other nations into obedience.  A Sino-Russian alliance that utilizes Russia's oil, coal, and natural gas leverage over Europe and its outsized military capabilities; China's manufacturing dominance and Belt and Road Initiative extending across and linking Asia, Europe, Africa, and South America; and both nations' wealth of natural resources puts them in a strategic position to forge a stable gold-backed digital currency that will instantly interconnect most of the world's population.

It is in this volatile reshuffling of global power that an often addled and confused Joe Biden attempts to confront the military chess moves of Russia and China while somehow transforming Iran from a destabilizing regional belligerent (almost certainly already in possession of nuclear weapons) into some kind of U.S. and European partner capable of playing nice with Israel, Saudi Arabia, and the rest of the Middle East.

U.S. Secretary of State Antony Blinken and NATO's Secretary-General Jens Stoltenberg have laid out a military strategy in NATO 2030 that explicitly calls for the alliance to combat "Russian threats and hostile actions," to "expand and strengthen partnerships with Ukraine and Georgia," and to defend against Chinese "security challenges." Ol' Joe has reportedly given personal assurances to President Zelensky that the U.S. stands with Ukraine, and he's publicly committed to defending Taiwan's freedom. But "red lines" coming from America are not the same after Barack Obama's presidency.

U.S. warships have entered the Black Sea and are sailing through the Taiwan Strait. Meanwhile, even though the Biden administration has capitulated to Iran by unilaterally dropping sanctions, Iran has promised to "respond" against the U.S. and Israel for the recent Red Sea mine attack against a vessel purportedly used as a covert Islamic Revolutionary Guard Corps forward base.

Russia has been very clear. It will not allow Kiev to reacquire Crimea or the Russian-aligned breakaway proto-states of Luhansk and Donetsk. It has responded to Ukrainian President Zelensky's signing of Decree No. 117/2021 directing the Ukraine Army to recapture and reunify these areas by flooding the Ukraine-Russia border with weapons, troops, tanks, and elite paratroopers.  Russia is ready for war.

China has been very clear. It considers Taiwan a renegade province and the Senkaku Islands in the East China Sea and the Spratly Islands in the South China Sea as territorial possessions. It has promised to use military force to safeguard these claims and has built artificial islands in disputed territorial waters and sent fleets of "fishing vessels" to surround disputed island chains. China is ready for war. And Taiwan is ready, too.

Israel has been very clear. It will not allow a nuclear-empowered Iran to become a Damocles sword threatening Israel's very existence. Israel is ready for war.

How will Joe Biden respond to these three powder kegs? The more important question is this: Is his mind so trapped in last century's geopolitics that he's now overestimating American strengths, miscalculating other nations' resolve, and stumbling headfirst into global conflagration?"

- https://www.zerohedge.com/

Short answers: yes, yes and yes...

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The Alan Parsons Project, "Lucifer"

"And there was war in Heaven..."

A curiosity... Why did God need an army?

And what if His army lost? Ahh, what then?

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"It is well that war is so terrible, 

otherwise we should grow too fond of it." 

- Robert E. Lee

Oh, the human race has always been far too fond of it...

Bloodthirsty monsters that we are by nature...

"You Are Not Alone..."

"Many people need desperately to receive this message:

I feel and think much as you do, care about many of the things

 you care about, although most people do not care about them. 

You are not alone."

- Kurt Vonnegut

Must Watch! "Prepare To Lose Your Job; Total Collapse; Millions Borrow Money To Survive; Financial Hopelessness"

Jeremiah Babe,

"Prepare To Lose Your Job; Total Collapse; 

Millions Borrow Money To Survive; Financial Hopelessness"

"Final Nail in the Coffin"

"Final Nail in the Coffin"

by Jim Rickards

"The stock market was down today, but it’s still trading at record highs. The mainstream financial media will tell you it’s because the market is anticipating a robust recovery as the economy continues to reopen and vaccination numbers grow. But don't buy into the happy talk that all is well with the U.S. economy.

The unemployment rate has indeed dropped. But initial unemployment claims are on the rise again. That's a trend that will show up as weaker job creation in the months ahead. The declining headline unemployment rate ignores over 10 million able-bodied Americans between the ages of 25 and 54 who don’t have jobs but are not counted as unemployed because they haven't looked for a job recently. If you're a waitress, why would you look for a job if half the restaurants in town are closed or out of business?

You can judge the health of the economy based on a few key metrics: the labor force participation rate, real wage increases, and initial unemployment claims. Right now, all three point to slower growth and a recovery that is running out of steam. Of course, some claim the cure is more government spending.

No sooner had Biden signed the $1.9 trillion COVID relief bailout bill, than his administration proposed another $4 trillion of deficit spending for "infrastructure." In round numbers, today’s view is that Biden will have $4 trillion of new “infrastructure” spending combined with $2.1 trillion of tax increases, making the net new deficit spending on infrastructure $1.9 trillion.

Phony Talking Points on Taxes: But the tax increases are the subject of even more phony talking points. Biden proclaimed that he would not raise taxes on anyone making less than $400,000. But now, "anyone" is being redefined to include a married couple filing a joint return with $400,000 combined income. This means that if one spouse makes $220,000 and the other spouse makes $180,000, then the combined income of $400,000 would be subject to the new top bracket of 39.6% that Biden wants.

A spouse making $220,000 may sound like a lot of money, unless you happen to live in New York, San Francisco, Los Angeles or Miami and have two or more children. In this case, it's barely enough to get by after income taxes, property taxes, sales taxes, gasoline taxes and a generally high cost of living. Additionally, much of the tax increase burden will fall on U.S. corporations, which will hurt our international competitiveness and force corporations to move businesses and jobs offshore to avoid the higher taxes in the U.S. So, Biden's tax plans will drive U.S. jobs offshore and punish the middle-class, not just the "rich." It will be just one more headwind for economic growth in the years ahead.

Modern Monetary Theory Is Here Now: The real takeaway from the avalanche of new spending is that the last vestiges of fiscal constraint are vanishing. I’m sure you’ve heard about Modern Monetary Theory (MMT) by now. Biden may or may not understand what MMT is, but it doesn't matter. The point is, it's here. MMT is now the law of the land in the form of extreme deficit spending. There's a complete disregard for the size of the deficit or whether spending is paid for with taxes. The resulting unprecedented growth in the debt-to-GDP ratio has now put the U.S. in the same super-debtor league as Lebanon, Greece and Italy.

Bernie Sanders is chair of the Senate Budget Committee, and his muse is Professor Stephanie Kelton, the bright light of MMT advocates. Presidents and members of Congress have always been addicted to spending; but now, they have intellectual air cover in the form of the callow analytics of MMT. At this stage of the process, there is no stimulus or real growth, just more debt. The already slow recovery will slow further, and the debt will remain. That's what rising initial claims for unemployment benefits are telling us.

Proponents of the bill claim the spending is for "infrastructure." But most of what they’re saying about this legislation is phony. Most Americans understand infrastructure to mean bridges, tunnels, roads, railroads, airports and other needed additions and improvements to the transportation network. But the bill only provides about $400 billion for those types of projects, under 10% of the proposed total. The rest goes to windmills, solar panels, subsidies to electric vehicles, and school repairs (as a payoff to teachers’ unions). Even more spending goes to items that have nothing to do with infrastructure, such as day care, tuition, unemployment benefits, community organizers and other welfare-style programs.

In other words, it's more of a political project than an economic package to provide good jobs and stimulate the economy. One difference between Biden's $4 trillion infrastructure spending binge and the $1.9 trillion of COVID relief is that the White House is at least going through the motions of trying to pay for the new spending with massive tax increases.

Biden Wants to Be the Next FDR or LBJ: The infrastructure spending bill may be broken into two pieces so that part of it can be passed under a process called "reconciliation" that requires no Republican votes. The tax bill itself may be separated for the same reason. The result is that the entire program may require three separate bills and lots of horse-trading behind the scenes, but the Democrats are determined to get it all done by the end of the summer.

Democrats want at least large parts of this new spending plan out of committee by the end of May and passed by the entire House of Representatives by the Fourth of July. Then they hope the Senate will act quickly and get the entire package done before the August recess. There's a method to the madness.

Biden and Democrat party leaders know that 2022 is an election year for the House and Senate. The Democrats may very well lose the House; they currently have a slim nine-vote margin (222-213), and it would only take five losses to flip the House to a 218-217 Republican majority. New administrations typically lose 20 or more House seats in their first mid-term election, so the Democratic majority is definitely in danger.

The Republicans could eke out a slim majority in the Senate as well. Either result (or both) would put an end to the Democrats' ability to ram through their agenda. The window for Democrats’ plans such as the New Green Deal, free tuition, free healthcare, free child care, increased unemployment benefits, student loan forgiveness, and so-called infrastructure is brief.

By August, we'll know if the country has held the line on reckless spending and more welfare or if Biden will get to make history by permanently pushing America to the left in the manner of FDR's original New Deal and Lyndon Johnson's Great Society. We won't have long to wait."

- dailyreckoning.com

Musical Interlude: Liquid Mind, "Dream Ten"

Full screen recommended.

Liquid Mind, "Dream Ten" (Black Holes and Quasars)

"A Look to the Heavens"

“Point your telescope toward the high flying constellation Pegasus and you can find this expanse of Milky Way stars and distant galaxies. Centered on NGC 7814, the pretty field of view would almost be covered by a full moon. NGC 7814 is sometimes called the Little Sombrero for its resemblance to the brighter more famous M104, the Sombrero Galaxy.  

Both Sombrero and Little Sombrero are spiral galaxies seen edge-on, and both have extensive central bulges cut by a thinner disk with dust lanes in silhouette. In fact, NGC 7814 is some 40 million light-years away and an estimated 60,000 light-years across. That actually makes the Little Sombrero about the same physical size as its better known namesake, appearing to be smaller and fainter only because it is farther away. A very faint dwarf galaxy, potentially a satellite of NGC 7814, is revealed in the deep exposure just below the Little Sombrero.”

- http://apod.nasa.gov/

"Listen..."

 

“I Know How to Live… I Don’t Know How to Die”

“I Know How to Live… I Don’t Know How to Die”

by Bill Bonner

“I’ve never done this before…” The woman on the bed was almost a skeleton. The flesh had already gone from her. What was left was an 86-year-old empty tube – shriveled, bent, used up. “I know how to live,” she said. “I don’t know how to die. I don’t know what I’m supposed to think or what I’m supposed to do.”

“Don’t worry about it,” we advised. “It’ll come naturally. Do you need anything?” “Need anything? I need nothing at all. Absolutely nothing. I’m dying. And I have everything I need to do it.” “How about some more pain medication?” “No. I don’t want any. I am only going to do this once. I don’t want to get doped up. I don’t want to miss anything.”

Heaven with Tobacco Fields: People who are dying have a status somewhere between Nobel Prize winners and mobsters. We are reluctant to contradict them. We remember a scene from childhood: We had gone to visit a dying uncle, Edward. Like all our relatives, he was a tobacco farmer. But now the plant he had cared for all his life was killing him: he had lung cancer. Other relatives had gathered at the house to say goodbye. The mood was gloomy, dark… quiet. But the conversation, in early spring, ran in a familiar direction – toward the weather and soil conditions. “They won’t be planting tobacco where I’m going,” said Uncle Edward.

The group fell silent. Some looked down at the floor. Some shuffled toward the kitchen. But Agnes, a cousin, challenged him. “How do you know where you’re going or what they’re doing there?” This enlivened and emboldened the confrérie of tobacco growers. “Yeah, for all we know they’re pulling the plants already,” said one, glancing out the window to see if the rain had stopped. (The plants were “pulled” from the nursery beds for transplanting in the fields. We particularly disliked pulling them because black snakes enjoyed the warm of the gauze-like covering and slithered among the plants.)

The 12-year-old in the group – your editor – forever admired his cousin Agnes. She could see the truth and had the courage to speak it. None of us knew what happened after death. Why not tobacco farming? We tried to imagine Heaven with tobacco fields. It was so implausible that we had a hard time with it. But we persisted. Rows of the green plants, tended by generations of deceased farmers. The sun must not be so hot in Heaven, we concluded, for there was nothing heavenly about the scorching summer sun when you were cutting tobacco. The ghost farmers must hoe each row… and “top” the plants to remove the flower and force the growth to the leaves, just as we did in the Maryland fields. At the end of the day, sweat-stained and tired, they must gather around their pickup trucks – one foot up on the running board, an elbow on the raised knee, with a cigarette in the right hand.

An Unexplored Mystery: The other professions must have their quarters, too… Wheat farmers need broader fields. Cobblers could enjoy their trade, too. Why not? Heaven – immeasurably large – could have a place for everybody. Even bankers and lawyers might find a spot. For a moment, we imagined what it must be like, with mechanics tightening their bolts and dairymen milking their cows. But if everybody did in Heaven what he did on Earth, what was the point of it? The juvenile mind, like its adult successor, stalled.

Half a century later, it is still stopped where it was left – like a tractor abandoned on the edge of a field, with trees grown up between the wheels. Rust has covered the hood. The tires, cracked from the sun, have flattened and disintegrated. It has moved not an inch forward… leaving the mystery of Heaven completely unexplored. “Well, you’re not dead yet,” we replied. “How about a little apple juice?”

The death rattle began two days later. The goodbyes have all been said. Prayers have been offered. Undertakers contacted. A church put on alert. Remembrances shared. Toward the end there was no one there to share the remembrances with. The spirit seemed to have packed up and moved out before the body got the message. Life, like bull markets and credit expansions, always come to an end, sooner or later. New technology and newfangled monetary policies offer delays, unfounded hope, and stays of execution – but never a full pardon.”

- http://www.thedailyreckoning.com

○

Bread, "Everything I Own"

"If you were going to die soon and had only one phone call 

you could make, who would you call and what would you say? 

And why are you waiting?"

- Stephen Levine

Free Download: Richard Bach, "Illusions, The Adventures Of A Reluctant Messiah”

"We Are All. Free. To Do. Whatever. We Want. To Do.”

by Richard Bach 

“We are all free to do whatever we want to do,” he said that night. “Isn’t that simple and clean and clear? Isn’t that a great way to run a universe?” “Almost. You forgot a pretty important part,” I said. “Oh?” “We are all free to do what we want to do, as long as we don’t hurt somebody else,” I chided. “I know you meant that, but you ought to say what you mean.”

There was a sudden shambling sound in the dark, and I looked at him quickly. “Did you hear that?” “Yeah. Sounds like there’s somebody…” He got up, walked into the dark. He laughed suddenly, said a name I couldn’t catch. “It’s OK,” I heard him say. “No, we’d be glad to have you… no need you standing around… come on, you’re welcome, really…”

The voice was heavily accented, not quite Russian, nor Czech, more Transylvanian. “Thank you. I do not wish to impose myself upon your evening…” The man he brought with him to the firelight was, well, he was unusual to find in a midwest night. A small lean wolflike fellow, frightening to the eye, dressed in evening clothes, a black cape lined in red satin, he was uncomfortable in the light.

“I was passing by,” he said. “The field is a shortcut to my house…” “Is it?” Shimoda did not believe the man, knew he was lying, and at the same time did all he could to keep from laughing out loud. I hoped to understand before long.

“Make yourself comfortable,” I said. “Can we help you at all?” I really didn’t feel that helpful, but he was so shrinking, I did want him to be at ease, if he could. He looked on me with a desperate smile that turned me to ice. “Yes, you can help me. I need this very much or I would not ask. May I drink your blood? Just some? It is my food, I need human blood…”

Maybe it was the accent, he didn’t know English that well or I didn’t understand his words, but I was on my feet quicker than I had been in many a month, hay flying into the fire from my quickness. The man stepped back. I am generally harmless, but I am not a small person and I could have looked threatening. He turned his head away. “Sir, I am sorry! I am sorry! Please forget that I said anything about blood! But you see…”

“What are you saying?” I was the more fierce because I was scared. “What in the hell are you saying, mister? I don’t know what you are, are you some kind of VAM-?” Shimoda cut me off before I could say the word. “Richard, our guest was talking, and you interrupted. Please go ahead, sir; my friend is a little hasty.” “Donald,” I said, “this guy…” “Be quiet!” That surprised me so much that I was quiet, and looked a sort of terrified question at the man, caught from his native darkness into our firelight.

“Please to understand. I did not choose to be born vampire. Is unfortunate. I do not have many friends. But I must have a certain small amount of fresh blood every night or I writhe in terrible pain, longer than that without it and I cannot live! Please, I will be deeply hurt – I will die – if you do not allow me to suck your blood… just a small amount, more than a pint I do not need.” He advanced a step toward me, licking his lips, thinking that Shimoda somehow controlled me and would make me submit.

“One more step and there will be blood, all right. Mister, you touch me and you die…” I wouldn’t have killed him, but I did want to tie him up, at least, before we talked much more. He must have believed me, for he stopped and sighed. He turned to Shimoda. “You have made your point?” “I think so. Thank you.”

The vampire looked up at me and smiled, completely at ease, enjoying himself hugely, an actor on stage when the show is over. “I won’t drink your blood, Richard,” he said in perfect friendly English, no accent at all. As I watched he faded as though he was turning out his own light… in five seconds he had disappeared.

Shimoda sat down again by the fire. “Am I ever glad you don’t mean what you say!” I was still trembling with adrenalin, ready for my fight with a monster. “Don, I’m not sure I’m built for this. Maybe you’d better tell me what’s going on. Like, for instance, what… was that?”

“Dot was a wompire from Tronsylwania,” he said in words thicker than the creature’s own. “Or to be more precise, dot was a thought-form of a wompire from Tronsylwania. If you ever want to make a point, you think somebody isn’t listening, whip ‘em up a little thought-form to demonstrate what you mean. Do you think I overdid him, with the cape and the fangs and the accent like that? Was he too scary for you?”

“The cape was first class, Don. But that was the most stereotyped, outlandish… I wasn’t scared at all.” He sighed. “Oh well. But you got the point, at least, and that’s what matters.”

“What point?” “Richard, in being so fierce toward my vampire, you were doing what you wanted to do, even though you thought it was going to hurt somebody else. He even told you he’d be hurt if…”

“He was going to suck my blood!” “Which is what we do to anyone when we say we’ll be hurt if they don’t live our way.”

I was quiet for a long time, thinking about that. I had always believed that we are free to do as we please only if we don’t hurt another, and this didn’t fit. There was something missing.

“The thing that puzzles you,” he said, “is an accepted saying that happens to be impossible. The phrase is hurt somebody else. We choose, ourselves, to be hurt or not to be hurt, no matter what. Us who decides. Nobody else. My vampire told you he’d be hurt if you didn’t let him? That’s his decision to be hurt, that’s his choice. What you do about it is your decision, your choice: give him blood; ignore him; tie him up; drive a stake of holly through his heart. If he doesn’t want the holly stake, he’s free to resist, in whatever way he wants. It goes on and on, choices, choices.”

“When you look at it that way…”

“Listen,” he said, “it’s important. We are all. Free. To do. Whatever. We want. To do.“

○

“Illusions: The Adventures of a Reluctant Messiah”

by Richard Bach

“Born in 1936, Richard Bach is an American author who has written many excellent books. His quotes are inspirational and motivational. “Jonathan Livingston Seagull;” “Illusions;” “The Bridge Across Forever;” to name only a few of his books.

Notice: This electronic version of the book has been released for educational purposes only. You may not sell or make any profit from this book. And if you like this book, buy a paper copy and give it to someone who does not have a computer, if that is possible for you.

FREELY download “Illusions”, in PDF format, is here:

- http://img1.liveinternet.ru/images/

The Poet: John O’Donohue, “In These Times”

“Do not lose heart. We were made for these times.”

– Clarissa Pinkola Estes

○

“In These Times”

“In these times when anger

Is turned into anxiety,

And someone has stolen

The horizons and mountains,

Our small emperors on parade

Never expect our indifference

To disturb their nakedness.

They keep their heads down,

And their eyes gleam with reflection

From aluminum economic ground,

The media wraps everything

In a cellophane of sound,

And the ghost surface of the virtual

Overlays the breathing earth.

The industry of distraction

Makes us forget

That we live in a universe.

We have become converts

To the religion of stress

And its deity of progress;

That we may have courage

To turn aside from it all

And come to kneel down before the poor,

To discover what we must do,

How to turn anxiety

Back into anger,

How to find our way home.”

~ John O’Donohue,

from “To Bless the Space Between Us”

Gregory Mannarino, PM 4/12/21: "Expect A MASSIVE Spike In Inflation To Hit At The Worst Possible Time"

Gregory Mannarino, PM 4/12/21:

"Expect A MASSIVE Spike In Inflation To Hit At The Worst Possible Time"

- https://traderschoice.net/

The Daily "Near You?"

Machias, Maine, USA. Thanks for stopping by!

"Ah, You Miserable Creatures!"

"Ah, you miserable creatures! You who think that you are so great!

You who judge humanity to be so small! You who wish to reform everything!

Why don't you reform yourselves? That task would be sufficient enough. "

- Frederic Bastiat

Any questions?

"Inflation Sightings!"

"Inflation Sightings!"

By Bill Bonner

YOUGHAL, IRELAND – "Like pilgrims crossing the Atlantic, we keep our eyes on the horizon, watching for land. Consumer price inflation… it must be out there somewhere. We’ve been headed in that direction for many years. And lately, huge gusts of big spending/big printing… from Donald Trump and Joe Biden… have been driving us forward.

Headed to InflationLand: In 2020, the feds spent $3.7 trillion they didn’t have. In 2021, the Biden Bunch is still adding to the total deficit… U.S. debt topped $28 trillion last week. It’s not as if there were any mystery to what happens next. There’s a huge, sad continent out there – InflationLand. And it requires no navigational skill to get there. Just keep going in this direction… We’ll hit landfall soon enough.

And what’s this? A seagull! We must be getting close. CNBC: "U.S. producer prices increased more than expected in March, resulting in the largest annual gain in 9-1/2 years, fitting in with expectations for higher inflation as the economy reopens amid an improved public health environment and massive government funding. The producer price index [PPI] for final demand jumped 1.0% last month after increasing 0.5% in February, the Labor Department said on Friday. In the 12 months through March, the PPI surged 4.2%. That was the biggest year-on-year rise since September 2011 and followed a 2.8% advance in February."

March’s rate, if it were to continue, would put the PPI well into double digits for the year. Then, the wholesale prices would work their way down the chain to the retail shelves… where people would begin to notice. So far, the numbers are relatively small. But with enough careful management by Treasury Secretary Janet Yellen and President Joe Biden, it shouldn’t be too long before we run onto the rocks.

Full Speed Ahead: You get to InflationLand, grosso modo, by discouraging production and encouraging consumption. Then, when the quantity of money increases faster than the goods and services you buy with them, prices rise. The feds (with the collusion of federal, state, and health officials) “turned off” whole industries last year. Even today, many shops are still closed.

Note that they didn’t shut down demand; they closed off the supply of goods and services. Meanwhile, they gave out money. Here’s The Seattle Times: "The Treasury Department said Wednesday it has issued more than 156 million payments as part of President Joe Biden’s coronavirus relief plan, including 25 million payments that were primarily to Social Security beneficiaries who hadn’t filed 2019 or 2020 tax returns.

The direct payments of as much as $1,400 per person were the cornerstone promise of Biden’s $1.9 trillion package to contain the pandemic and revive the U.S. economy. Roughly $372 billion has been paid out since March 12, a sum that likely boosted hiring last month as Americans had more money to spend."

But with so much stimmy money headed in their direction, a lot of people are apparently deciding not to go to work. Businesses report that it is hard to hire people for entry- and low-level jobs.

No Turning Back: Economists predict a big “surge” in GDP this year. But it is mostly a surge in spending fake money, not in creating new goods and services. In other words, it’s not the gentle wind of an honest, productive economy that we have to look forward to… it’s the gale of out-of-control inflation. MarketWatch:

A sudden surge in demand following a supply shock is a “classic recipe” for a pickup in inflation, wrote Christopher Wood, global head of equity strategy at Jefferies, in an April 4 note. “The result is that investors should be prepared for the biggest inflation scare in America on the reopening of the economy since the early 1980s when former Fed Chairman Paul Volcker crushed double digit inflation in the late 1970s by imposing high real interest rates on the American economy,” Wood said.

But there will be no high real interest rates imposed this time. The monetary system won’t be rescued. InflationLand is where we’re going. There’s no turning back. Stay tuned."

- www.rogueeconomics.com

"The Healing Power of Simplicity"

"The Healing Power of Simplicity"

by Sofo Archon

“Greed is a bottomless pit which exhausts the person in an 

endless effort to satisfy the need without ever reaching satisfaction.”

- Erich Fromm

"Gandhi said that the Earth has enough for everyone’s need, but not enough for everyone’s greed. Indeed, we can all have enough to live happily. But when we become greedy, we can never have enough - even if we have everything. And on our way to quench our thirst for more, we ruin both our personal and public health, as well as the health of the wonderful planet that sustains us and every other being alive. So, how can we stop hurting ourselves, society and the Earth? By learning to live simply."

- https://theunboundedspirit.com/