Caracas on the Potomac: MUM’s the Word

Free money for all!  Call Dial-a-Pork in D.C. and get yours today!  

“From a Foreign country, you say?  Screw these Americans – sure we got money for you, too!  ‘Mericans don’t matter!”

Year End Number Flashes

As we’re about to put another year in the can, some truly astounding reality-check numbers to roll with. 

Which we will dig into after the breaking news (and in a few minutes, a second report with the Case-Shiller Housing report – so be sure to click back for that…)

  • A year ago, on the equivalent Monday-after-Christmas week (*30th), the Dow closed at 28,462.14.
  • Yesterday the Dow closed at 30,403.97.

That’s a gain of 6.82%.  Which sounds OK, given the low interest rates and all.

While the S&P 500 was up for the year, as well (15.96%), the real Miracle on Wall Street was the run in the tech sector:

  • Equivalent Monday last year: 8,945.99.
  • Nose bleed country Monday closing at 12,899.42.

If you do it in your head, ball park 40%.  Or, with a calculator, 44.19%.

History Screams a Warning

Since we use a multiple-market Aggregate Index over on the Peoplenomics side of the house, it’s easy to do a comparison of how equal bags of money in the Dow, S&P 500, and NASDAQ Composite fared in 2020.

Our Aggregate yesterday closed at 34,079.02.  On the equivalent Monday a year ago, we were down at 27,316.76.

So, three equal bags of paper in the Dow, S&P, and NASDAQ would have produced a gain of roughly how much?  24.75%

Tech Wreck II in 2021?

We should note in passing, however: The week of January 25, 1998 (a year and three months before the Tech Wreck began, our Aggregate index stood at 8,077.74.

The following year’s equivalent week was 11,950.21.

So that’s a gain of 47.94%.

As a result, in our view, we could continue on this wild and crazy blow-off rally a bit longer (we toss around a target date over on Peoplenomics).  But I think you get the point.

In the Tech Wreck, the Nasdaq peaked the week of March 10, 2000 at 5,048.62.  A year prior it was 2337.11.  So the “hot Internet sector” screamed up more than doubling  (2.16 times) in it’s final blow-off top.

In my work, comparing this morning’s future’s prices, it looks like we have a ways to go.

“Why Caracas Then?”

Well, just getting to that.

We need to talk about “Making Up Money” – MUM for short.

You see, unlike the run-up bubble of Tech, the Fed has been making up money at an astounding rate.

For example, in November of last year, M2 (the broadest measure the Fed admits to measuring, having hidden M3 as too useful) the (Not Seasonally Adjusted) M2 was  $15,422.8 billion.

For the most recent full-month data we have (Nov 2020) the same measure now reads $19,099.3 billion.

Revelations galore!  The Money Supply gained 23.83% (plus or minus a cheeseburger).

As a double-check, we can look at and see the price of gold last year in November (month’s high) which was?

I took the easy route with the January 2, 2020 high fix in London at 1527.10 and we see the Monday London high was $1,872 on Christmas morning.  Not a perfect date-match, but it goes to Ure’s point:  Gold was up 22.6%, call it.

When we look at the Fed Money Stock growth (23.82%) lest the “honesty check offered by Gold” (22.6%) and we subtract the latter from the former, we’re getting real/honest U.S. GDP for the year will be about 1.22%.

That has the “ring of truth to it” – especially if we look at unit volumes, not prices as the metric since they’re hosed-up six was to Sunday.

It also suggests that in order to hold its own on a PPP (purchasing power parity) basis, Our Aggregate Index approach would have offered a (24.75% return less the Gold honesty check (22.6%) for a “loaves of bread and six-packs of Bud” gain of  2.15%.

Except, well, Bud hasn’t gone up that much.  But be patient.  Summer is coming and we’re betting beer may be a good investment this year.

The inflation is still out there and will be along in 2021 in the grocery stores.  And that’s when America enters “The Vise of Caracas.”

Details of the Vise

We will be surrounded on most sides by rising prices – much of it for necessities – and that will fuel two things:  First, there will be waves (by late 2021) of housing refi’s as people try to hold on to an otherwise declining lifestyle.

Then secondly, the cost of servicing the National Debt will begin to edge upward such that government will have to figure new tax angles to make their (cooked) books balance.

Which means (and this is our topic on Peoplenomics tomorrow):  New Federal taxes and fees.  If your hair isn’t white, yet?  Wait until you read this week’s first Peoplenomics report.

Now, let’s leave the shores of Lake Maracaibo the Chesapeake where we will await the Potomac flood as too many paper fiat dollars repatriate to ‘Merican shores.

A Note About Cryptos

Meanwhile, between Ure’s ears:

There’s a fascinating dialog between my play-driven brain (the judge) and the “other George” (the maniacal voice) about whether it would be constructive to devise an Aggregation Master Indicator incorporating non-fiat indicators.

Obviously, Bitcon, which was around $8,000 as 2020 began, should have gone up AT LEAST what the “hot tech sector” did.  Which argues for a $12,000 zone.

Since it’s MUCH higher than that, we have to look at the behavior of “fringe hot money” (deeply greed possessed) and wonder about this:

Bitcon is up let’s say 340 percent.  Tech is up 44.2%.

Since we know that the Internet Bubble burst when the Aggregate went up call it 48% in a year, what is the equivalent Aggregate where 44.2% up for Tech and 340% up for Bitcon equals 48%?  We would have to do a lot of work on the weighting schema but you can see the gist of what the (screaming) voices in my head are getting at:

The STOCK market ebullience is diluted to the degree that crypto madness spreads.  Lower peak than spring 2000 is possible – Bitcon and crypto madness is a steam relief valve of sorts.

A corollary:  If – as a way of corralling all Americans into a necessary Made-Up-Money Fiat (or government backed digital hoax equivalent), as we have stated before, there is absolutely no economic reason that the government would have to offer ANY CONVERTIBILITY from a (fiat competing crypto) into an “Officially Allowed” coin.

Pre-shock?  Ripple Plunges After Coinbase Announces It Will Suspend XRP Trading.

100% gov’t-only crypto.  Which will be required because at its core, the outcome of Modern Monetary Theory (MMT) lays the groundwork for a disastrous two-tiered (domestic and external) valuation scheme.   (You can think of this as like a “digital gold analog” consisting wholly of made-up, specious numbers, but with enough rancor and bullshit as to turn sheep into users.)  Or, a 1930’s style asset seizure except instead of gold and silver being “called”?  Bitcons! Lightcons and all those…

Stephanie Kelton’s book is a socialist con-person’s dream road map.  Remember Our advice?  When the term “the People’s” is used around policy, a radical (or socialist) is usually nearby.  Usually with half-baked selling points that appeal to have-nots and do-nothings in particular.

Or, as her (admittedly slick) book The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy.

Which  maps the current radical attack on hard money and genuine stores of value.  I mean, if money is only transactional, then…er….maybe…

BUT it’s not only transactional!  Never forget this. 

Historically, money has been a store of value.

Ure learned from watching Zimbabwe – and you should too:  Get property.  Get sustainable. Get out of debt. Government is in the printing business.  Making up lies as they see fit and printing financial paper as necessary.

(I mean, give socialism its due:  Used the Courts to take down the Laws of the country.  Now all that’s left if the money…and if Bitcons are outlawed…well, don’t say you weren’t warned. This is quickly becoming Caracas on the Potomac, right?)

Where Were We?

Park the Gulfstream, we’re staying home:  Croatia Rocked By Powerful 6.4 Earthquake.

Passings:  French Fashion Designer Pierre Cardin Dies Aged 98: Family.  Remember when fashion was an industry, not a housecoat and slippers?

And the Hype:  House passes the $2,000 bonus check.  Will die in the Senate.  Never miss an opportunity to hype, though:  Dow futures up 133.

Hopium sells well to dopes.

Write when you get rich,

24 thoughts on “Caracas on the Potomac: MUM’s the Word”

  1. Stop It,Please Mr Ure – killing me with laughter!

    ooohhh noo ….the fits are making it hard breath.

    ..”I cant breath” – next Ure prolly going to be telling engineer jokes.
    – an engineer walks into a bar with a zeus under his arm..

    Ure attempt at fear porn is humorous when talking about economic malfeasance and financial fraud (control mechanism).

    Reaching for it – Ure gonna 10k ft. extendo grabbers to even get near the truth.

    Big Business, Big Banks (special interests) are already pressuring govt. to change laws, add new laws&regs regarding Bitcoin. Too late.. U were warned.

    Keep telling yuse that blockchain is the future of,voting, internetz,ownership anything of value.

    In case U have not noticed – but Contract Law is kaput, as we learned (someofus)during Mortgage debacle..rules 4 thee(slaves), not me (house/head slave)..

    Have the new M2 figures been calculated into the current Price of SPY/DOW/BTC?

    – the LCN sayz NO! buybuybuybuybuybuybuybuybuybuy!

    Thats right – U would ALL be writing when U GOT rich from buying Bitcoin –

    – now hold on tightly..till 20121 then take Ure Profits – long term gain like, or not, just as LCN recommends the HODL model.

    Or trade like a “nazi” – and Short PLUG Power, up only 1000% since the plandemic started. Yes Shorting stox in a bull market is borderline stuuupid, ask me how I know..

    U know – the THEFT of URE Civil Rights, under a fake health crisis, laying grounwerx 4 THEFT of Presidential Election – O Joy, O RUPTURE!

    Dont Fear The Bitcoin – as Ure/Alien masters wish. yes Ure eating meat (farming) is Ure Compliance 4 “them” to Farm US.

    Prove Me Wrong! – Bwahahahahaha..”I’ve come to suck Ure blood bwahahahah”

  2. Alaska Airlines is using their bailout money to buy Boeing aeroplanes, the Planet Smackers no less.

    “Alaska Airlines is upsizing its order for 737 Max planes by 23 and is leasing 13 more.”

    We should all get a bailout check equal to the median Boeing salary.

  3. Park the Gulfstream, you say? Perhaps the rv crowd would, but surely not the jetsetters.

    Speaking of going dual currency, it sounds like Cuba will be dumping its longstanding dual peso system for a single convertible currency next month. For holders of the present dual pesos and particularly the convertible CUC pegged at roughly 1 to 1 USD, good luck, because the exchange rate on the new and improved floating peso is something around 24 to 1 USD.

    CrookedCoin? More than half of bitcoin output is controlled by China, and it’s dirty in more ways than one. A chunk of the power required to fuel bitcoin is coming out of coal-fired generating plants simply to produce no physical product other than pollution. It’s difficult to think this would Kerry favor with the global warming peeps. Here’s hopiuming they can smoke out a different cash crop like method.

  4. $605billion in “small business” funds is about 4 times the amount going to unemployment+checks. The Republicans think they can control the small business fund to pay off politically connected, just look at what happened to the last small business loan program. Take that away from them them and they will get more reasonable. Or get ready for more tinkle down economics.
    Maybe Bernie can throw a hail mary filibuster and shut the whole mess down.

  5. 5500 pages don’t have desire to read just pass it bs. Remind me why we pay these self serving -hits to do They don’t care about us people So please send one a truck load to be dumped on there lawn

  6. I’ve never gotten a straight answer for why we’re sending millions and billions of dollars abroad as “foreign aid”! We can’t even visit without a passport and visas – requiring permission on both ends. What is this buying for us? Is it just extortion to prevent them attacking us or otherwise flouting our doctrines? Most don’t like us, yet are expecting our money.

    Who owns congress? Obviously someone does, and it ain’t us! Compared to the pork in the just passed bill, $2k per individual is relatively trivial, though it’s still inflationary. 2021 will definitely be “interesting times”.

    There’s no safe place for wealth. The big advantage of bitcons is that they can be transferred anywhere in the world virtually instantly and not all governments will interfere with their convertability. They’ve always been overpriced IMHO, and never were easy to acquire and exit from quietly. They ARE a paper trail, albeit an electronic one. Land and visible wealth can always be stolen or seized on any pretext. Jewels and antiques have a thin, elastic market demand. PM’s can’t easily cross borders in this age of sensors and detectors. Paper is just that. Knowledge is good for as long as you can retain it and have materials and equipment to use it.

    Sadly, everything is subject to entropy. Enjoy it while you have it.

    Perhaps love is forever, but only the love that you choose to give, not always that shared with you.

    • I think you have a point on jewelry to which I might add;

      Rubies and diamonds can be manufactured in a factory. I wonder about emeralds? Basically, in this age of 3D printing and rapidly changing technology how can you trust the authenticity of a piece of jewelry?

      For example I can recognize very few pieces of jewelry: a broach Queen Victoria wore with a white dress and a royal blue sash on her trip to Scotland (simply sublime), Alexander the Great’s solid gold oak leaf and acorn crown (awe inspiring) and Van Cleef and Arpels rope diamond necklace (a magnificent piece)

      Authenticating a less famous piece of jewelry might become as difficult as authenticating a Rembrandt. So what does that do for people who are investing in jewelry in the future? I don’t know?

      • Hi, Football,

        You are correct in that some gemstones have been synthesized. Synthetic rubies were first created in 1837. The late Carroll Chatham created emeralds many decades ago, and he most likely died from beryllium poisoning doing that. His son, Tom and Tom’s daughter offer luxury synthetic emeralds with their Chatham created emeralds. Back in the 1960’s, GE created small diamonds in a lab, and that technology was quickly purchased by DeBeers. Sapphires can also be created, but not all gems have a synthetic counterpart. Tanzanite has a simulant in cubic zirconia. However, because tanzanite is trichroic (exhibits different colors on three axis, cubic zirconia does not, which differentiates the two. There are two methods to manufacture diamonds, by HPHT, high pressure and high heat and by CVD, chemical vapor deposition. Even quartz can be synthesized. Nearly most amethyst and ametrine are available as natural, while most citrine is heat treated. Remember that most, but not all, blue topaz is both heat treated and irradiated. The Colorado topaz is natural, as is the imperial precious topaz from Brazil.

        Inclusions in gemstones can be used as diagnostic tools to ascertain whether a gem is natural or is a synthetic. Nothing wrong with synthetics, but they absolutely must be disclosed by law in the US.

        Treatments must also be disclosed, like glass filled rubies, diffused sapphires, glass filled diamonds, and epoxy impregnated emeralds.

        The natural alexandrites, catseye chrysoberyl, fine Burmese rubies, Kashmir sapphires, fine sapphires from Ceylon, Colombian emeralds, these comprise some of the best gemstones in the world. In addition, fine tourmalines of every color, usually the best are from Africa but from other locals too, Burmese and Pakistani peridot, African garnets, Yogo sapphires from Montana, African and Pakistani aquamarine also rank as some of the best gemstones you can buy.

        Diamonds and colored gemstones are graded by clarity and color. Good even color and the absence of inclusions are desirable. However, some inclusions are important, like horsetail inclusions in alexandrite to verify its authenticity. There is a boatload of information regarding diamonds and colored gemstones on the web if you so choose to search.

        One more thing about diamonds. The semi-conductor industry has dreams of having a diamond that is a foot in diameter. Diamonds have been manufactured up to a few a few carats currently. Maybe one day……..

        Stores and stone suppliers in the US are able to sell natural and synthetic stones but must comply with laws of disclosure. Be careful buying on the web. Diamonds and colored stones all have a low, a mid, a high, and a unicorn rating in quality.

      • Hi, Football,

        The Queen of England has most certainly many extraordinary suites of jewelry that incorporate diamonds with emeralds, aquamarines, rubies, pearls, and sapphires. Many of the diamonds in her jewelry inventory are old cut diamonds, like old mine cuts and rose cuts, which I happen to like very much. Some may be old European cuts. The metal used was silver and high Karat gold. There is a detailed inventory kept for all the Crown Jewels of England.

        In the US, it is mandatory by law for jewelry to be stamped what metal was used. Most of our jewelry is 14Kt. white and/or yellow gold, some rose gold and other colors like blue and green gold, sterling or fine silver, but there are jewelry artisans in the US who work in 18Kt. and 22Kt. gold. The European community favors 18Kt. gold over 14Kt. The Japanese like their white gold to be as white as possible, so they usually rhodium plate over the gold. The stamp 750 denotes 18Kt. meaning that it is 75 percent pure gold. The stamp 585 denotes 14Kt. meaning that it is 58.5 percent pure gold. The stamp .725 on silver means sterling. The stamp .999 on silver means fine silver; same as for fine gold. New alloys have been mixed in white gold, silver, and platinum.

        Always buy silver or gold from reputable coin dealers. I know a few in Albuquerque who I trust.

    • Foreign aid is given so they will use that money to
      buy are stuff. OR, kickbacks.
      Easy way to steal from tax payers.

    • Diamonds, diamonds are forever. Rare earth minerals are forever, too.

      But the most precious of preciousness is to dissolve the veil between the subconscious and conscious, then you have it all.

    • “why we’re sending millions and billions of dollars abroad as “foreign aid””

      To purchase influence with their leadership.

      Unfortunately, when people accept bribes as an income supplement, over time they tend to want more, or do less, for the person or entity that’s bribing them.

      We may get to make 1-2 “policy-shifts” per year in Pakistan (or Columbia, or Estonia, or…) which seems to me to be a damn’ poor ROI, to subsidize socialist proclivities and meddle in other people’s domestic affairs.

  7. Between Covid, Obamacare, and the !RS, small business in the US should be going extinct, to the delight of the corporate brown shirts. Next targets for the brown shirts will be small closely held corporates. Fascism requires opposition victims to subsidize. Corporate fascism is pretty much the same. The D’s are state business executioners acting on behalf of the brown shirt corporates.

      • Maybe instead of showering foreign warlords with payola, the D’s should concentrate on dealing with domestic homelessness and hunger. Oh wait, psychopaths only deal with other psychopaths as equals. That must be why our “leaders” feel the compulsion to try and buy the admiration of people like them abroad. The relief bill constitutes the wholesale baring of congressional @sses in constituent’s faces.

      • Most of the money for Central Am I figure is dem payoffs back to a.h.’s who organized those caravans as part of the take-down America drive… you know – like money laundering?

  8. Pakistan has a dismal record wrt women’s rights. In the ‘70s and ‘80s, General Zia-ul-Haq forced enacting of Islamization laws. By virtue of a constitutional amendment imposed by Zia-ul-Haq, these laws were protected both from ordinary legislative modification and from judicial review. The amendment suspended all fundamental rights guaranteed in the 1973 constitution, including the right to be free of discrimination on the basis of sex. The covid relief attempt to funnel U.S. taxpayer funds toward gender education in a nation that embedded misogynistic aspects of Islamic law into its constitution and later blatantly assassinated its first and only female prime minister, Benazir Bhutto, is akin to one young child pissing on a raging forest fire.

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