School’s in session! This has been a most remarkable year for the stock market.
Or has it?
Most people, understand, are woefully ignorant of the role of the Money Supply in determining the prevailing prices paid in markets. This is true whether you’re talking House, stocks, digital/cryptos, or the price of lumber.
To wind up the year (since markets are closed tomorrow at 2PM), let’s do a final Reality Check before we launch into a war-ready, collapse-pending, lockdown power-tripping 2022 beginning this weekend.
The so-called “financial press” does an absolute shit-job of covering the relationship between money and goods.
Take this week, for example.
Your hair should be singed based on a preliminary trade-deficit report from the Census Bureau: Our “monthly hole dug” (spending more than we actually produce in the remnants of America) was a smoking 97.8 billion in one month.
A Biden Apologist View
“Ure is being totally unfair,” a Biden apologist might rebut. “Ure fails to mention that the previous month was down around $67 billion – lower than the previous month – so on average Ure would mention the growth rate of our debt to other nations is really more on the order of $82.5 billion…”
Ure doesn’t buy it…not even for a New York second. Because America’s now at the front-edge of collapse due to lockdowns and the die-off of small business. (The merger of Communism/socialism with big-box store Corporatism is not well-described but corporate feudalism is close.)
Even at $82.5 we still dig a (roughly) Trillion Dollar Hole. And given that America’s GDP is (measured in highly diluted “dollars”) $23 trillion, it means each year that goes by sees America’s international indentures increase by about 4% per year.
Were it a one-time event, no harm – no foul. But it’s not. This has been going on for over a decade.
Our Foreign Masters take our phony money, mix it in with some of their own (and boatloads of drug cartel money which is laundered in) and use those funds to buy America out from under us.
In a way, it’s graceful. In another, it’s a slaughterhouse to come. Because – as leftists are prone to do – this will put them in a position to collapse our economy, call loans on a mass basis – and leave Americans destitute and homeless.
It’s war without bullets.
The Bankers Are Behind It
I don’t use terms like “Lying Turds” loosely. But, in my considered opinion, to call the Fed a bowl of lying turds would really be a slur – on turds.
You see, they HIDE AMERICA’S MONETARY DATA.
The Fix was in when Alan Greenspan axed reporting of the M3 Money Stocks figure in the H.6 Money Stocks report. Essentially, by doing so, he placed a “starting line” for the non-linear decline of America.
Jerome Powell went him one worse.
Because what Powell and the coconspirators at the FOMC did was delay timely reporting of monetary data. Used to be weekly, then it was delayed. But Powell said – if you read between the lines – that there was too much risk of people figuring out the collapse (and being able to plan around it), so he turned America’s money report – not just into a monthly report – but a Monthly report on a delayed basis.
The Truth Still Leaks
The half-assed financial press (which is a left-wing franchise backing this financial revolution) barely reported (only if you looked for it) the report out Tuesday of this week – the unconscionably-delayed H.6 report.
The Monetary Base (at the end of November) was $6.3948 Trillion.
A year ago, it was $5.093 Trillion.
Divide this last number into the first and is screams the Money Supply was jacked-up 25.5% in the past year.
This Impacts EVERYTHING
But above all, it impacts your clear-thinking about prices.
Tuesday, the Case-Shiller housing report proudly announced that Prices were up nationally 19.1% for the year to date.
How could they not be?
To understand the process, set up a Monopoly game and play two or three times around the board. Now, give everyone 25% more money based on their real estate holdings. Come on, people, it ain’t that hard!
Vindicating the Aggregate Index
As you know, the foundation of our Peoplenomics.com work is something I developed called the Aggregate Index.
Developed when the financial industry lied its way through the post Internet Bubble Collapse, the Aggregate is a most useful tool for understanding how markets (and institutions (like the Fed) and Government (like the free-spending make-up artists in D.C.) play “Hide the Sausage” on the Little People.
Did you know – and maybe I shouldn’t reveal this, but our Aggregate Index hit an all-time high on November 8th – the exact same day when Bitcoin hit its high of $67,582.60?
Waves of stupidity – is bitcoin calling the market turn we’re due for?
Well, here we are – almost two months on – and BTC is hanging at $47,536. Is that 30% lower?
School’s out for now: If you can’t sort out that a 25% increase in the monetary base only moved houses up 19.1%, and therefore deflation is still having its way at a systemic level, you’re past hope.
It’s all terribly more complicated – because inflation propagates at different speeds. For example, as my consigliere points out: “Petroleum prices in my work are not fully diffused into pricing until about the 60-month mark…”
These dynamics of diffusion are the meat & potatoes of smart generalists. Because hysteresis is a non-dimensioned (unitless) measurement. The student generalist learns that human scientific thought can with be “dimensioned” (like dollars, inches, pounds, or feet per second) but that these “lock” into domains (like finance, measurement, weights, or velocities). Dimensionless (unitless) concepts include conceptual items like “Hysteresis is the dependence of the state of a system on its history.”
The homework becomes obvious: Monetary Base is an instantaneous measure. The resulting collapse (or wild nonlinearities of a Massively Correlated Hyper-Volatility Event (MCHVE) is dimensionless.
Except for the parts where you lose your ass, and comfortable lifestyle in the process.
Our dart for actual experienced inflation in 2022 is 13.8% plus or minus a crooked banker, bailout, and war.
Note to My Consigliere
“As we discussed in our telcon Wed. the Velocity of Money at M2 reveals the stark reality (truth of inflation) as follows:
Translation for the Masses:
The basic calculation for Velocity of Money (essentially, how many times does it turn over in a year) is Gross Domestic Product divided by the Money Supply.
This is a hysteresis example: Since the Fed is locked into a soft hyperinflation, the money supply will (until they go for the pain of a recession or depression) always rise faster than the GDP. This is why government is pursuing otherwise insane policies (like underwriting child-raising) on the theory that it will increase GDP. Unfortunately, it cannot (because of delays between receipt of funds and new spending, (e.g. money is used first to pay down cards and such) so the divisor *(money supply) is locked in semi-permanent outrunning of actual growth.
As in, yes, George is telling you we’re still in deflation. Papering it over may or may not work. Government is betting our country on it.
For past chicanery workouts, see Zimbabwe, the fall of the Soviet Union, and Venezuela for likely outcomes.
Axiom for future economists to test: “The Money Supply IS the GDP at the end.”
Stalin’s Weekly Report
“The illusion is healthy, Comrade. Why, just look at these dandy job numbers! The number of new filers is very low!”
Whee! (Don’t mention that no one is left working, and that most people have burned through all their benefits, and this is a widely sold & told misleading statistic.
Chicago purchasing numbers early in the session. But later on (3 PM) farm prices come out and that could start moving toward our 13% inflation range, but maybe too early.
The Fed Balance sheet will be out later, after the market’s closed for the holiday weekend and you can’t trade your way ahead.
Sloe Joe and Bad Putin will be back on the blower shortly: Biden, Putin emphasize diplomacy ahead of call over Ukraine crisis.
The problem is that Slo and his neocon handlers keep doing little things to piss the Russians off. Like US orders warships to stay in Mediterranean amid tensions with Russia.
Here in Texas, when you’re negotiating with someone, laying your six-shooter (or boot gun) on the table is considered bad form. Tip-off you’re a murder waiting for you to cave. Which is why there are few neocons here.
Point is, one of these days, Putin’s going to lay down and it will be a “F**k you, Brandon” moment. Which then has a 30% chance of going NSNW* before the year is out. (*Non-strategic nuclear weapons – e.g. battlefield nukes.
With a full jug of Braveheart and a large prime rib for tomorrow night, we certainly don’t have enough to worry about.
“George, I forgot to mention…are you tracking Xi’an?” (My consigliere’s shortest-ever phone call.)
But maybe you’re not. If so, then a read of the WaPo’s Locked down in China’s Xi’an amid covid outbreak, residents subsist on deliveries of vegetables.
Let’s see here: 13-million in a super-hard lockdown. Does China have a problem they’re not telling us about? Some hid for now?
Oh, you mean like the annual fall into winter hantavirus season (generally in Sha’anxi province) and maybe one of the local rodents mixed with some CV-19 and that’s why 13-million are “in the house?”
We’ll see. Mobile smokestack watch begins about here.
Write when you get rich,