Our monetary system faces a paradox. Today, the system relies on more debt being issued continually to keep markets functioning. And yet, the more debt created the more growth slows AND deflation prevails. The dollar shortage is a feature of the debt too.
1/9
Is everyone apologizing to
@SantiagoAuFund
for dunking on his dollar milkshake?
Cause guys.....in the midst of all this carnage over the past 30 days....the dollar trade has been the ONLY safe haven....
Listening to some Lacy Hunt this morning and something finally clicked in for me. Its the below graph. Private individual savings have gone up during the pandemic, but the government spending has far outpaced the increase in savings
1/3
The top 1% now officially have more wealth than the entire middle class of America…
“There has been no greater engine of inequality than the Federal Reserve Bank of the United States.”
- Stanley Druckenmiller
America is a currency creator so there’s no reason for people to live like this. Government and the banks have made a deal to keep the people in debt. They always say if you print money it will cause inflation. They just printed 3 trillion. Little or no inflation.
We are in the clam before the storm here in the US.
The world has begun to break. The US hasn't yet.
Get yourselves ready people.
A little less debt. A little more savings.
Hold your loved one close. Be available for those who aren't ready.
Don't lose your moral compass.
US dollar is king. It will remain king for my lifetime.
The naysayers are:
1) Selling something
2) Dogmatic about their hatred toward the US/West
3) A combination of 1 & 2
When Taylor Lorenz was at the NYT and pulled this same melodramatic manipulation -- destroying people's reputations with lives, then whining that she's the real victim --
@esaagar
and
@krystalball
said everything there is to say about that tactic and her:
@Jkylebass
@Hedgeye
The calamity won't affect everywhere evenly.
Central America will get crushed first in the West. Leads to an even bigger Mexico/US border crisis.
I want to give a huge shout-out to
@DiMartinoBooth
regarding her recent
@RealVision
interview with Lacy Hunt.
I wanted to highlight a few new ideas that hadn't gotten into my head before this conversation.
1/13
MORE IS NOT MORE, its less. The more debt financed government money enters the system, the worse long term growth gets.
The ponzi is on. Deficit spending today is a GDP growth tax.
If GDP is flat, earning will be flat. Keep an eye on those P/E scores.
3/fin
Very cool paper by Ozge Akinci, Gianluca Benigno, Serra Pelin, and
@jturek18
regarding the US Dollar.
cc
@NewYorkFed
@NYFedResearch
Punches hard and in your face right out of the gates:
1/7
The reason Treasury/Wall Street are discussing future bank mergers is the current banking problems are far from done. They tell you everything is fine while prepping for a lot more to come. It's in the data. All of it.
The End Game episode 6 is live, featuring a true gentleman and a scholar in Lacy Hunt. The perfect counterpoint to our conversation with Russell Napier, Lacy makes the case for continued deflation as forcefully and as eloquently as always.
@fleckcap
@BeschlossDC
Milk and pineapple?
Citric acid + lactic acid and milk fat = the worst puke you could ever imagine.
Mix that in a separate bowl and see what happens.
"declining prosperity" is a big claim
Here is the World Bank data on per capita GDP.
Included is the US, Brazil, Russia, China, India, South Africa.
Guess which country is the blue line?
All the shouting and warmongering by US establishment are due to the declining prosperity of the nation and the average American.
The only solution they know is to bring down not only economic and geopolitical rivals but also allies - like Europe - to keep America
#1
.
I had a great time listening to
@GeorgeGammon
and
@SantiagoAuFund
most recent conversation regarding the Dollar, Dollar Milkshake, and inflation/deflation.
A few quick thoughts and comments on my part.
1/18
So what? Well, two consequences there. 1) investment into the real economy will continue to lag and growth faces fierce headwinds, and 2) banks aren't going to be loaning out money anytime soon.
2/3
We had to talk about how doing the right thing, being the hero, often means you never "go back" to the shire.
But that its still worth it.
"Greater love hath no man than this, that a man lay down his life for his friends."
John 15:13 KJV
3/fin
"I'd grown up fearing the...mobs of the KKK; as an adult, I was starting to wonder if I'd been afraid of the wrong white people...My worst fears had come to pass... in D.C., where I was being pursued not by bigots...but by left-wing zealots draped in...sanctimony."
- Thomas '91
Fiscal and Monetary policy HAS NOT lead to more economic activity. The Spike in M2 has lead to a DECREASE in velocity of money - indicating that the Debt IS NOT productive. There isn't an increase in gross national income to cover principle and interest on the existing debt.
Unproductive debt erodes economic growth. Further, the debt has left the banks in a state of "disrepair."
The falling Loan to Deposit ratio indicates extreme uncertainty by both lenders and consumers. More people holding money and banks not lending.
This is the craziest conversation regarding sexuality I have ever heard. (Also the best).
Professor Hooven
@hoovlet
talks with a young woman who began to transition to a man and has de-transitioned back to being a woman.
@BenjaminABoyce
thank you.
I recently watched Lord of the Rings with my 8 year old son.
Something interesting happened.
As we get to the end, Frodo is sad. Everyone else is more or less happy, but not Frodo. He has to leave his friends and go to "paradise" because of how broken he is.
1/3
Until there is a deleverage OR there is a new system that bypasses debt and goes to direct money printing, this chart below is all that matters in the long haul.
/fin
@zei_squirrel
The Palestinians will need friends now more than ever. As the US exits the region, the geopolitical forces will push the Arab states to ignore the Palestinians even more. Israel will have license to do as they wish.
Dark times.
@Govt_for_all
@leedsgarcia
@MichaelSkolnik
@TheDemocrats
I understand. This is a totally reasonable position. The problem is that the RAISE act will fundamentally redefine America as an anti immigrant society. If the Dems have a chance to stop that, now is not the time to abandon them.
...on the inability to refinance, the collateral in the system falls and the Fed is forced to intervene yet again."
These two are brilliant. Thank you
@vol_christopher
and
@profplum99
.
I am equal parts terrified and motivated to dive into this even more.
12/12
#HappyEaster
@cacouteau
@DiMartinoBooth
On this point we are in total agreement!
The best way forward, I think, is to decentralize the banking system and go towards community banking.
@scientificecon
@ProfessorWerner
has been telling the world how to get out of this mess for decades.
The Moscow bank run: a queue for a Tinkoff ATM in the Liga shopping center in Khimki. There are about 70 people in line. Eyewitnesses say the money in the ATM runs out within 40 minutes.
@bazabazon
$DXY continues to go up.
Just unreal.
@amlivemon
warned us for years and years that suck a strong dollar would wreak havoc in international markets.
How are people not talking about this?
French President Emmanuel Macron in a recent State Visit to Beijing reportedly discussed the “Deepening” of Military Cooperation between France and China in the Indo-Pacific and French Polynesia with President Xi Jinping.
Just making sure I track the logic here.
We can't have a gun registry or licensing because of tyranny.
But the government should have more armed personnel walking around our communities.
Am I doing this right?
@IlyaSomin
Why didn't the CO Supreme Court use the federal crime of insurrection as the test instead of consulting some dictionaries and making up their own?
M2 money growth did happen due to the combination of Fiscal and Monetary policy, however, that increase in M2 money stock HAS NOT created persistent inflation.
Fed Reserves aren't money and don't leave the financial markets. Fed moves old debt onto its balance sheet.
@biancoresearch
All I see is a slowdown dead ahead... and its not just based on Covid but higher prices, lower stimulus, slowing China, slowing Japan, etc
Dr. Hunt looks to
@AtlantaFed
and its GDP projections. Although inventories are up, actual sales are flat AND if you believe CPI numbers, then producers are sliding. The services sector can't be the whole recovery. Manufacturing tells us that growth is flat or slightly negative.
$DXY down
@amlivemon
go take a look at Fed swaps overnight....
Trying to weaken dollar demand before they do a rate hike.
I think.
Likely to tear higher again after rate announcement.
The Fed is playing a DANGEROUS game. So so dangerous.
@frankoz95967943
8. Female householder families had the highest poverty rate among primary families, at 23 percent, while married-couple families had the lowest, at 4.8 percent.
Tucker Carlson, when asked about Alexei Navalny, opposition leaders and journalists in Russia: “Every leader kills people. Some kill more than others. Leadership requires killing people.”
A quick trip back in time for a Sunday thread.
MMT basics inbound.
Sometime in early 2020, I decided to get serious about understanding US monetary policy. There was one interview in particular that, well, BLEW ME AWAY.
1/12
This is the heart of the matter.
@coloradotravis
@MetreSteven
@amlivemon
@SantiagoAuFund
Anyone else have thoughts on this?
Dollar spikes abroad and foreign markets begin to sell USD assets. Dollar shortage beings a selloff abroad.
Makes sense to me.
The Dollar to zero zealots have to reckon with the above data and analysis. This is the NY Fed full on embracing my guy
@SantiagoAuFund
. Look at the last few sentences:
"As we discuss, at the core of it, there is a fundamental asymmetry between the shrinking exposure...
6/7
Okay everyone. Lets talk about this for a minute.
1) war has no rules. The United States and the evil "west" made up rules. Those rules were enforced by...the West. Mostly the US.
Guess what, the US isn't enforcing that anymore.
Was this city block all Hamas?
I in no way support Hamas and have absolutely no horse in this race at all but this is indiscriminate. Hamas hides weapons and bases in these areas using human shields but Jfc this is destruction for revenge sake.
As GDP goes down, the intelligentsia on the Left and Right are confused as to why the labor market has YAWNED.
The theory seems to be...THERE MUST NOT BE A RECESSION.
Lets dive into this, because it matters. A lot.
1/21
The old world is over.
Demographics - not coming back
Globalization - peace between major powers from 1945-February 2022 was a good run. Over.
Debt - the boomers used cheap deb to keep their assets AND lifestyles afloat. That's over.
Stop looking to dinosaurs for answers.
Dr. Hunt then recounts that the "consensus" has been telling him that rates were going to go up STARTING IN 1990.
"Trying to understand the consensus or to get agreement from the consensus in my opinion is an absolute waste of time."
@SantiagoAuFund