How the Fed Just Endorsed Democrats

Oh, not overtly; no, of course not. But if you read the Federal Reserve’s latest H.6 Money Stocks Report, down toward the bottom of the page is this marvelous disclosure.

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What this is saying is that the Fed is sloshing out cash and equivalents (M1) at a rate approaching 12% per year.

Now, let’s put on our thinking caps for a second.

Suppose you were like me and wanted like hell to make a bunch of money in the stock market. You have a pretty good idea where the “equilibrium point” is in terms of money supplies. You would look at the growth rate of the population (let’s call it 1%, and if that’s low, just tee-up another memo to Border Patrol to ramp up catch and release. And, if you need more, simply bring in unvetted people from the Middle East and pack them into every small town in ‘Merican. Step one complete.

Step 2? Well, the money supply should go by the inflation rate. Let’s call that 2.2%.

Step 3 is to print enough money to counterbalance the rampant deflation and make it seem to have disappeared. So how about 3% for that?

Last Step: Add them all up. And we may come out around 6.2% (plus or minus a cheeseburger).

Now one of those filthy, dirty secrets that we normally share with Peoplenomics.com subscribers, but in a moment of delusional optimism that the sheep will wake up, I’ll tell you that when the cash is going up 11.6% annualized, and the equilibrium point is around 6 something…well, write this down where you won’t forget it:

“The Money has to go somewhere – and some will go into stocks.

Since we already know that ‘Everything is a business model” we can assume (with some degree of comfort) that this is the Fed putting its thumb on the election scales.

This weekend, again, on the subscriber side, we were talking about “long time-domain conspiracies.”

The idea is simple: But just to make sure you’re on the same page, let’s go through it out here in public, shall we?

Let’s say you and I hold a meeting over a beer today and tomorrow you go out and wreck a car in front of a bank, causing a distraction. While everyone is trying to rescue you, I slip into the bank and pull off a clever heist.

Point: An investigator for such a crime (that we would never commit) would have a simple time tying you and me and the cold beer at the joint next to the bank the day before, with events on the following day.

But now, let’s fiddle and diddle with events on the time domain.

We have that beer a year ago. Then pull of the same bank job.

As you might expect, the bartender has moved on. In fact, the tavern is now a thriving LBGT club, thanks to the sexual-industrialization program. No one there would give a rip about a couple of straights from a year back, would they?

And so this is how things work in real-life: Conspiracies likely happen, but when the time domain is long enough, conspiracy gets tougher to prove in a legalistic way.

Which is why this weekend’s Peoplenomics report linked events over a 20+ year period with some of the nation’s top rock-stars and topics: HAARP, Owning the Weather 2025, a former vice president, a former Illinois lawmaker who now sets fedgov climate tone, the founding of a carbon exchange, and the drive to implement a global carbon tax, which will then set the stage for (wait for it…)

World Government.

But, you see, it’s all about the time domain.

Same thing with the Fed.

Obama, Biden, Yellen, et alia meet recently and a brief flurry of speculation..which quickly blows over. The charlatans who have been forecasting financial collapse scream here it comes.

Then nothing happens.

Well, except it did…and since none of the corporate media talks about how the future works, the whole thing is missed.

Unless you read the Fed H.6 report for last week.

And even then, only if you understand the systemic delays in slamming the pedal to the metal when comes to blowing up the Money Supply.

Yes. Some of that money will find its way into stocks. And yes, we blew out of our unlevered short position Friday and we’re sniping for a good place to go long.

Sell in May and go away is an old adage because it happens to work that way.

Summer rallies don’t get their due, but I smell a big ‘un coming.

And that’s because when the Fed steps on the cash…er…gas…the tired old engine that is the economy suffers from a little bit more than turbo lag. It’ll take a month, or longer, to spool up.

If you want to know what Ure’s truly doesn’t worry about much of anything anymore, it’s because crap like this comes into view with almost crystal clarity. And when it does, it’s not hard to put a few shekels in play and scrape a little side money off the table.

Could we go down a bit more to finish the trend channel? Oh, sure…next Monday or Tuesday – once we get through options – might be interesting.

But this Monday? Sit back and relax.

Janet’s got the longer play covered.

Besides, it is good economic policy to jump on the gas a bit. It potentially help the un employment rates that will roll out in November.

Again, think in the time domain.

Money begins to slosh freely now.

Business confidence improves in a month or three.

By July-August a new all-time high is almost a slam-dunk.

Which means a glorious September jobs report. But that won’t be released under October…and that will be just in time for the incumbent party to claim “We saved the economy!”

And, they will be nominally right, of course. Things will be looking peachy by this summer.

But I thought “You know, George, you really ought to mention this stuff when it’s happening so when the numbers are great this fall, you can look back and point to Janet’s thumb on the scales.”

Naw…why bother? We need the kick and besides, we have bigger problems..but again, living in the time domain is indispensable for clear-headed thinking. So let’s move on to Example #3…

China Buys America

And the absolute beauty of this is we are at another one of those time domain deals.

Here, take a headline:

Chinese pour $110bn into US real estate, says study.

Oh, my, who would have thought (except us, of course?)

And, if you read further, you will see that Chinese investment is set to double in the next five years.

What the hell gives?

Well, it’s simple: The Chinese are toning down the role of the Standing Committee of the Politburo. This will de-emphasize civilian leadership in China, and the .mils of the PLA will rotate more into the fore.

China is pulling off one of the greatest switcheroos in history: Take money from all of those Geithner bond trips, bundle and repackage, then use the dough from that to buy America out from under her. Oh, and with a growing military to help “guard” their North American assets.

You gotta be loving this, because it fits in so closely with the recent SecState babble about living in a “borderless world.”

But around here, we know what that really means it that while Ted Turner and Jane Fonda continue to amass American property, so too China is beginning to buy us out from under US.

Is it time for the TPA and TPP types (thinking Paul Ryan et al) to do anything about it?

Why hell no. He’s still trying to figure out what a Republican is.

So yes, we are hopelessly screwed. Unless, that is, you take the time now to teach your kids Madarin and Spanish – because that’s the future. And we’re passing out money to everyone to take down the American Dream.

Just so’s you know.

Why a Security Council Veto Matters

RSS notes: SOUTH CHINA SEA WATCH: US angers China as UN ruling looms.

Until the US denies foreigners the right to buy property in the US, it’s a kind of game, you see.

Here, Have a Data Point

NY Fed’s Empire State Manufacturing data is just out: Read ‘Em & Sleep…

The May 2016 Empire State Manufacturing Survey indicates that business activity declined for New York manufacturers. The headline general business conditions index turned negative, falling nineteen points to -9.0. The new orders and shipments indexes also fell below zero, pointing to a decline in both orders and shipments. Survey results indicated that inventory levels were lower and delivery times shorter. The prices paid index edged down to 16.7—a sign that moderate input price increases were continuing—and the prices received index fell below zero, suggesting a small drop in selling prices.

The market – when I looked – was trading sideways ahead of the open. Not that we care too much, yet.

Tomorrow is a much more worthy morning to look forward to. That’s because we get some housing numbers and Consumer Prices. Then a market reaction, options close out, and we get to move along with our next trades if nothing changes.

No, there is nothing wrong with playing stocks if you’re “taking from the man” instead of “being the man…”

Useless Politics

I absolutely loved this Google news snip this morning:

“From United Kingdom: Donald Trump might kill the ‘special relationship’. That’s no laughing matter for Britain,”

Well, actually, it IS a laughing matter.

That’s because us dumb colonials remember that Hill and Obama are screaming at every chance how bad a BREXIT (Brits sober up and leave EU before it implodes) would be.

So, while the democorp in chief goes over and munchies crumpets with the royals, the working man in ‘Merica can safely blow out any fears of our “special” relationship with the UK being in trouble.

We did, near as I can recall, save their sorry asses not once (WW I) but twice (WW II) and maybe a third time if we count the backroom financial stuff we’ve done. So yeah, more usless bs for the sheep, but for thinking people? Naw…we’s too smart for that, I’m afraid.

But then again, Obama got two terms…wait, maybe we aren’t so smart after all…

Comments

How the Fed Just Endorsed Democrats — 17 Comments

  1. The Chinese are using their USA treasuries as collateral for these real estate deals, and are leveraging that investment by at least 10-1, so one could say that number should be closer to $1 trillion. To USA banks those treasuries are as good as……..wait for it…….GOLD.

    You folks don’t know how to think bigger. Your little ideas of plans and gathering with friends and family is like a rat on the tenth floor thinking he is pretty smart for not eating the poison when in 5 minutes the entire building is going to be “pulled.”

    The economic future of America is working for a Chinese company for Chinese wages, or prison labor for less than Chinese wages. Have your kids learn mandarin, then at least they can converse with the owners.

    • “Your little ideas of plans and gathering with friends and family is like a rat on the tenth floor thinking he is pretty smart for not eating the poison when in 5 minutes the entire building is going to be ‘pulled.'”

      Your anti-american rhetoric is tiresome and vastly overstated. Even when TSHTF friends and family will gather – probably moreso, actually.. which isn’t entirely bad. Crisis brings folks together.

      You can run from your home, and make one in some far away place. You’re certainly welcome to share your opinions on why that choice makes so much sense to you. However, I take issue when you compare me – AND my friends and family – to rats.
      What is it they say rats do when a ship is sinking?
      If we’re in the sinking ship over here in the U.S. and you abandoned it – which of us is the rat?

      Enjoy living near the equator – I know that you do, since you go on and on about it. Still, I’d appreciate if you’d take it easy on those of us who are hunkering down to weather the storm. For most of us expatriating isn’t even an option.

    • And You, Mr. Ecuador- You that have apparently deciphered The Secret Code of World Order, please pray for those of us ‘Rats’ who lack your Extreme knowledge and insight as to Our Future in Chinese Labor Camps- please let us know how the Ecuadorians will react to your ‘Crazy Gringo’ Ass asking to see your American Consular from your (and your 10 getting more friendly everday cell mates), jail cell after rounding up All Americans following (as a possible like minded scenario) “revolution”!
      I don’ know your ‘Expat’ background, but I can tell you from mine of 23 years (Saudi to Russia), you are Only 1 wrong word, turn, or missed payment away from wishing for the ‘Rat Community” to bail your Sorry Ass back to the land of Just biding time for learning to use Chopsticks!

  2. “Donald Trump might kill the ‘special relationship’.”

    Seriously!??

    Who was it, removed the bust of Churchill, as nearly his first official act; and who, shortly thereafter, gave QE-II a dime-store optical disc of himself as an official gift? Who has pandered to Cameron and dissed the remaining whole of the UK for 7+ years? Who wedged himself into the forefront of British politics just last month to offer unwanted advise and unappreciated veiled threats?

    The “special relationship” the Brits currently have with the U.S. is akin to the relationship a dog-sitter has with someone else’s, possibly rabid puppy — can’t kill it, can’t let it get close, just keep it at arm’s length and wait for it to either recover or choke on its own venom. I’m gonna say the British really don’t need (and shouldn’t want) this kind of relationship with us.

    I don’t know a damn’ thing about The Donald, personally, but would be willing to bet that the bust of Mr. Churchill goes back on its proper pedestal within the first few weeks of a Trump term, should he win the General Election. Hell, I wouldn’t bet that it wouldn’t, should Hillary be elected. Now just what kind of special relationship is that idiot John McTernan bloviating about, or more-importantly, why…?

  3. Let’s sell our buildings to China and our farmland to the Saudis! We’ll just live in low income apartments listening to the Muslims wailing out the call to prayer 5x a day.

  4. Sell the farm and buy stocks. By November we all will be rich. It’s a plan.
    Can I reserve my cruse around the world right now, or do I need to wait until then??

  5. George, can you explain the difference between now and May 2008 when the market got beat up badly going in to November election and Republicans lost the presidency? I enjoy your work both Urban Survival and Peoplenomics.

  6. Several days before 911 it was said the Pentagon was missing between 1-3 trillion dollars. Supposedly the missle that hit the Pentagon wiped out the area containing the records relating to the missing fund (no offsite backup,LOL). With all of the money the Fed keeps printing, and I haven’t seen any of it, do you think this money could be going into indiscrete accounts for subjects above top secret?

    • Building 7 held a lot of records, too! Brought down in a controlled demolition, otherwise called “Pull It”, by the owner, Mr. Larry Silverstein. A little different than the song, “Beat It”, by M. Jackson.

  7. If this wasn’t the most depressing essay I’ve ever read I’ll be darned ;-((. One has to think this thru–and who has the time for that? Most people are NOT inclined to think and therefore I may not read any longer, because we are helpless against the tide. I will turn to other subjects of interest. Btw., what George writes is right on, but (personally!) it would make me ill to continue reading this any longer, because it really gets me (and I can’t do anything about it). Sorry!

    • Yes, you can do something. You can take care of yourself, your immediate family. Then, you can gather close friends and other family members and tell them what you know so as to give them a heads up. See if anyone else is interested in making a PLAN. MOST people are just busy in their lives and do not have the time to keep up with the massive amounts of changes going on which are taking place ON top of the surface AND underneath the surface. Then take some steps to be self sufficient in case things change fast. That’s it. Just do that and you will be a whole lot further ahead than a lot of other people who are partying like it is 2016.

    • I always take this as a bitch session for like-minded people. Occasionally George will stray from the path, but never too far to find his way back, and he does talk about the most interesting things sometimes. If you’re looking for comfort you may have opened the wrong door, er, window. lol

      Can’t do anything about it ? Sure you can, we all make decisions every day about how we choose to live our lives. It may not be popular, and it may even be painful, but you have the power to shape your own world (okay, to some extent).

    • Head … meet sand…

      ………………….don’t forget to close the eyes.

  8. But then again, Obama got two terms…wait, maybe we aren’t so smart after all…

    Remember George- ‘W the II’ got two terms ALSO!!! And remember what happened Then??? Try Nine Eleven and those nice Financial Times of 2008! Oh, well I guess you Republicons can blame that on Clinton and probably directly to Hillary?

    • Clinton got the II terms, too, and gave us NAFTA and 3 STRIKES you are out to fill all those upcoming ‘for private run’ prison coffers.