Typical or modest supply scarcities are generally inflationary: Per textbook economics they drive up the costs of goods. Service providers in-turn pass that extra cost through to their customers via a markup in their fees. However the supply chain breakdown we are experiencing now is a more severe perturbation with both inflationary and deflationary effects that established economics does not address. A brick layer who is now unable to get the material his customers expect will lower his fees in order to get whatever work he can using the most suitable material he can manage. He thus experiences the unpleasant combination of deflation in his wage with inflation in material costs
Although the ‘creation-to-default’ lifetime for government is centuries rather than years for corporations, government default rates are 100% and corporate defaults historically around 7%. When corporations default, the bondholders get some recovery disbursement once all the assets are liquidated. When government defaults, treasury holders get nothing back. But during sovereign debt crises, government never looks in the mirror when seeking the culprit – its always the taxpayer not surrendering enough of the earnings from his labors. The hunt for taxes is clearly going to sharply intensify. Keynesian economics has failed, but government’s answer has been to embrace MMT, or the endless printing of new money whenever it feels like it. In light of that fact, it is somewhat curious that the US government is also deploying an army of 80,000 new IRS agents to hunt for all the taxes that it is sure you have not all been properly paying.
Numerous governments have defaulted and that generally does not lead to social chaos. But revolutions arise when government moves to aggressively seize the savings that ordinary honest-living people have saved all their lives through their hard work – go figure. If Biden goes after IRAs and 401ks outright, that would also likely result in him facing a violent uprising. So he (of course his hidden directors, in-actuality) probably wont do that unless he has an armed military readied to take over the country by force and wants to generate a reason like a revolution to deploy them. But his administration is out to pick your pocket. Smart money has moved out of treasuries into real estate, commodities, and other tangible assets, stocks, as well as into mortgage and corporate debt. Governments has only itself as the remaining substantial buyer of its own debt now.
ESG (woke) investing, and institutions like college endowments that are its big participants, have had a handsome boost from the totalitarian green policies of the administration, as well as more inflows. But since the results of those enforced policies driving much of it has been things like crushingly high energy prices and the breakdown of key supply chain links like trucking, those tempted to bray about 2021 ESG performance might do well to remain just a bit modest about it. Not only has Biden now turned-around to beg OPEC to open up more oil production, but also for domestic producers to drill more. However, in light of his prior pledge to put them permanently out of business, they have been reluctant to respond.
It has been easy for him to swiftly dismantle existing policies and public needs like fiscal rectitude as well as border and energy security, but it will be more difficult for him to reinstate them if and when he realizes his initial actions were too destructive. He has said that regular and special military force members who refuse vaccination will simply be discharged. Hopefully he wont wait until China is invading Taiwan to pull back on that foolishness. These days one has to wonder if his puppet masters may in-fact seek a more-thoroughly degraded US military force as part of their plan.
It is good to see that people, like the employees of Southwest Airlines and others, are finally pushing back on government’s bullying. The people running government are the most incompetent anywhere; Biden’s first move was to drive US energy consumption more in the green direction by cancelling the Keystone pipeline before viable green alternatives were even in-place. Among other brilliant military moves, he withdrew troops before civilians from Afghanistan. These people couldn’t run a lemonade stand sustainably. If enough of us ‘ordinary’ people will stand up to the administration’s edicts, it may soon come to realize that is we: all the surgeons, airplane pilots, software and bio engineers, food producers, first-responders, etc. who are actually the skilled irreplaceable specialists in the economy – not the bureaucrats. The people can bring down the entire system if they refuse to go along – so resistance is effective. But there’s no longer much time for delay.
Those old enough to remember the 70’s and it’s ‘stagflation’ ought to be able to recognize that we are sinking deeper into it now. It is the combination of stagnant or declining economic activity combined with inflation. At some point the rate of inflation will surpass the rate of economic growth – what a difference Biden & Co. made in 10 months. A principal economic lesson from the 70s is that once secular inflation sets-in, it is a very stubborn phenomenon to stop. Yellen and Powell know that when they tell us that it is ‘transitory’ this time. The sophistry and lies are endless and everywhere now. Volker’s aggressive approach of pumping up interest rates is not an option this time – the costs of serving the national debt would be crushing.
Communists and the communist party has existed in America for some time but only on the fringe – neither party would ever consider openly instantiating communists as policy leaders in government. Appointing a communist who wants government to take over control of everyone’s personal savings would be an outrageously hostile and completely unacceptable move in America. But that just changed when Biden nominated Saule Omarova to head the Office of the Comptroller of the Currency (OCC). She is a monetary Marxist revolutionary, with ambitions to “end banking as we know it” and to completely centralize the creation of money and allocation of capital and credit in the economy. She wants to reassign all retail banking accounts to the Federal Reserve. Then, using that money as a deposit base, she wants to radically expand on the government’s ability to borrow even more money, the sum of which will then be invested by a National Infrastructure Authority. It’s a complete centralization of the nation’s financial resources that puts private wealth in service of financing “investing” decisions made by “deciders” in Washington, D.C.. Their investment goals are things like “equity,” “inclusivity,” and “sustainability.” In short, its communism: government takes everyone’s money and then uses it to ‘reshape’ society according to its own dogmatic, naive, stupid, and destructive idealistic dream-fantasies. How’s that for federal deposit insurance ?
And just like the elites at the WEF who are spearheading the green-utopian ‘build back better’ global economic remake, Omarova is an academic with no real world economic experience like trading or running any private enterprise. Via her, Washington wants to replace the existing banking system centered on Wall Street with a new centralized electronic one run by D.C. swamp-insiders. As I mentioned earlier, it plans to not bail-out existing banks in the next financial crisis, and when they fail, it intends to activate its private sector lieutenants in big tech to administer the new electronic economy and banking complex with its own perfectly transparent and traceable blockchain-based CBDC as the only remaining legal currency in America. Total financial surveillance of everyone’s lives. She
The Biden administration is also gunning for full socialist control of the federal reserve (as well as the supreme court). The leaking of Jerome Powell’s trading is a first-step in an effort to destroy his chances for renomination. Biden (actually whoever is running him) wants the socialist Lael Brainard to replace Powell. She would utilize her newfound influence to push the climate change agenda, the new CBDC, and to get banks to raise capital during prosperous times. Under her, we would see the Fed pump even more endless money into circulation.
The Wuhan virology lab has been toying with a new Nipah virus that reportedly has a 50-80% lethality rate, and which Covid vaccination gives no protection from. Wonderful. Why hasn’t anyone taken a few vials of the covid vaccines into a lab and independently analyzed what’s in them ?
As I just wrote, ‘the mask is off’ with government’s drive for tyranny and so it is speeding it up. We are moving from late to hear-end of the 3rd quarter of a communist takeover of the USA. More and more, familiar strategies for shielding one’s assets, freedoms, and personal sovereignty no longer pertain. Those in government and other positions of power, who live on sinecure are on the warpath against the common honest private sector worker. What can such an ordinary person do as they tighten their shackles on everyone except to resist, en-masse, in peaceful civil disobedience ? That would bring their wicked show to a quick end, and we have to do it. The only other option is this:
“…I’m hovering like a fly, waiting for the windshield on the freeway…”
From ‘Fly on A Windshield’ by Genesis