Making Up Money (MUM): Bad Endings?

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The next couple of months should go in economics history books.  Because, near as we can figure it, the US Fed (which didn’t change rates Wednesday, and barely even changed their press release) does  not have an infinite capacity to Make Up Money.

Although the official Fed Balance Sheet won’t be out until after the market closes, we have to wonder – with reports saying the Fed has piled $4-trillion into the economy) largely to buy U.S. bonds we assume – we sense the country is now like the ancient mystery school drawings; a snake swallowing its own tail.

There is some reason for hope – at least over the holidays – that the end is not yet here.  However, as a thought experiment, think about what it’s like in a near-zero interest rate environment, if you were to “borrow money from yourself.”

Let’s say you have $20 in your pocket that you need that you need to pay someone.

What do you do?

You make up another $20-bucks out of thin air.  How?  Why simply borrow it from yourself.  Now, with $40 (half of it made up) you can pay off the 20 owed and still have money left over.  Whee!!!  Mugabe Economics, here we is…

Why, just this morning, the Fed’s Repo Depot announced $68-billion:  Golly, that’s only 681-thousand times what we made last year (*reportable).  And that’s before lunch!

Only one glitch.  Pretty soon, you’re up to your ass in paper, and since you’re looking like a financial nut-case (oh, and your president is being impeached and you’re in a trade war) no one with half a brain will borrow money from you.

Well, except maybe for a few folks in the EU who have negative interest rates.  A whole other delusional scam:  They start with $20 to lend out, offering to pay back $19…and are then surprised when no one jumps at the prospect.  .

Which is why, in the meantime, the rich and powerful world-wide are using Bitcoins to skirt money laundering.  Which keeps that bubble at $7,117 as of earlier this morning.  Notwithstanding scams of the rich and famous, we are holding to our prediction of sub-$4,000 BTCs are ahead for 2020 because at some point, the US will have to devalue the dollar.

You see (and this is not something many people talk about) one reason for the dramatic rise in stock prices may indicate a kind of in your face inflation that no one wants to admit to.

Inflation hits everything differently, of course…which is why this morning’s Producer Price Index is so interesting.  It adds some context to the odd CPI report Wedneday.

Wait!  Did the man say Odd?  Well, yes.  You see, food at home was up only 1%, but food away from home was up something like 3.2%.  The difference?  Labor.  The economy – overheating from too much Fed making up money – is, IMHO evidencing the possible start of wage-driven inflation.

The way I figure it, you can’t have socialist outposts upping the min-wage without impacts.  The SF min-wage is $13, though San Jose is $10.30. Seattle is $9.47, while the national-federal is rate $7.25.  Laughably, D.C. has a min-wage of $13.25…which is still too much for congresspersons! NYC is $15…Chicago is $10.50…

Point is, food away from home is likely impacted more recently by the evolving higher minimum wages in big cities.

All of which is a lead in to the Producer Prices just out:

“The Producer Price Index for final demand was unchanged in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices increased 0.4 percent in October and fell 0.3 percent in September. (See table A.) On an unadjusted basis, the final demand index advanced 1.1 percent for the 12 months ended in November.

After the data, Dow futures down 35.

Tomorrow, Retail Sales figures will begin to hint at future developments.  Our sense is that since most people are up to their eyeballs in televisions and phones, there’s little (except replacements and upgrades of technology) left to drive the economy ahead…but that’s the kind of thing that will make 2020 a horse race.

Google Year in Search

Since you, too, seem to be one of those “data-driven people” here’s the top news search results from Google’s “Year in Search” report just out:

We’re amused that Time’s “person of the year” (the robo-climate kid) didn’t make the list. (WTG!)  [Sometimes I’m just perverse, like that. ] (Like you haven’t noticed!)

Anyway,. Details of the report are over here…and we just wonder how a closing days of the Roman Empire would have looked from this level…  Looks to us like a country half-full of fat,.self-important, Hollywood-centric, crazy people. Your take may differ.

Trendly

Attention Earth!  We pointed out earlier this week famine’s on the horizon due to global cooling implied in the latest Solar Cycle Progression out from NOAA.  To show you have screwed up the planet is, consider back-to-back these two stories:  “Why The Famine In South Sudan Keeps Getting Worse” and then “From Famine To Feast: Angelenos Save Animals Facing Food Shortage .”  Is it just me, or are we all somehow  effing crazy, anymore?

Meanwhile, as we await The Big Chill Putin Adviser Vows to Highlight Climate Activists’ Demands.

Reality Doesn’t Search well:  Global cooling: 1.5-million hits.  Global warming 102-million hits.

Headline du jour New Zealand volcano still seismically active.  They need help figuring that out?

Playing house: CoreLogic Reports 78,000 Single-Family Properties Regained Equity in the Third Quarter of 2019.

Look for anti-mask-wearing laws as Airport and Payment Facial Recognition Systems Fooled By Masks and Photos, Raising Security Concerns.  Side issue:  If a mask can hide your IRL identity, what not ban made-up web names and other identity hacks?

(While we’re at it, let’s make use of fake caller ID a felony too…damn tele-scammers…)

Bad Government:  Again, the Brits go to the poll UK election 2019 underway as voters head to the polls.  Government didn’t like the leave the EU vote, so they’re making the vic’s vote again.  Sheesh.

No, it’s Not a Joke

Someone asked if the Peoplenomics reports on “building a time machine” were a joke…seems inquiring minds want to know.

The answer is no, it most definitely is not.  Already this morning, one more necessary piece to the puzzle (which we’re not sure is solvable, BTW) was added:  A Wavetek 273 programmable sweep generator.  Which will make sense to subscribers who are following along.  Problem is most sweep generators (simple, analog) tend to be low to high affairs and for reasons outlined in the report yesterday, we need high to low for the research….

Tech DNA trivia:  Wavetek begat Acterna which became part of JDSU which became….(was it VIAV and LITE?  The brain-freezes…)

Subscribers can tinker with the ideas in the report using an online sweep generator like the one over here:  Starting frequency 160, ending 132, time 13, exponential, hold tone at end, and sine or triangle waveform. Start volume 100, end 40.  Turns out we’re short of cantors in Texas.

OK, back to the lab…the laser scatterometer sub-problem next…not as good as the John Titor IBM parts…but odd parts do seem to be needed in these kinds of adventures.

Write when you get rich,

george@ure.net

38 thoughts on “Making Up Money (MUM): Bad Endings?”

  1. George

    “Whee!!! Mugabe Economics, here we is…”

    “Our sense is that since most people are up to their eyeballs in televisions and phones”

    Let me know when they come out with a phone with an Emergency Beam Up button! I want off this planet!!

    Any UFO flying by will be OK with me.

    Coffee! I need lots more coffee!!!!

      • Nah, I think aliens are marinating us in blue light from our dumb-phones. Once we have soaked long enough, they slurp whats left of the the mushy brains our through a set of earbuds.

      • “Nah, I think aliens are marinating us ”

        Personally Gene I think a race from another world would want to help us.. technology they would share would be shared for the purpose of benefitting our world.
        I believe it’s the stupidity of the human race to take these gifts and pervert their use to destroy rather than build.
        Theres so many instances where their presence has been reported during times where violence could escalate to the point where we would destroy everything.
        Some of the hopi legends basically say this .
        It all depends on what you wish to believe.
        If…
        There are beings from another planet I would be interested in having coffee and listening to them
        https://en.m.wikipedia.org/wiki/Hopi_mythology

  2. Hey George,

    Yes, as always you are correct that most everyone is effing crazy anymore excepting myself and I’ll also give you the benefit of the doubt. Revel in the knowledge that those who I do not consider effing crazy are in a very small elite group.

    Just kidding.

    73

  3. Bottom shelf whole milk jumped fifty cents per gallon in value.

    Old price, $1.39, new $1.89. Just like that.

    Something is fishy because the largest milk supplier, Dean Foods filed BK about a month ago.

  4. “the US will have to devalue the dollar”

    The $ isn’t anchored to anything, it floats. All other currencies with exception to NK, Iran and Syria (others?) are measured in $ (anchored).

    Inflation is the expansion of the money supply. A result of inflation is an increase in the general price level. The GPL increase means value in the currency has been removed, or devalued.

    I don’t know what it means when people use the term “devalue the the $”. Can someone explain how the U.S. Fed can devalue the dollar.

    • The US DOES NOT have to devalue the dollar as long as USD is a “reserve currency.” It is the “benchmark” other currencies are measured against. As long as this exists,the idea that “the US will have to devalue the dollar” is a pipe dream! US can print as many dollars as it wants, and being a reserve currency it can export inflation world wide through its reserve status.

      “The times are a changing” though, many countries are breaking away from the USD and starting to settle trade in their own national currency. Russia accepts international trade settlement in Rubles, China with Renminbi, Saudis with Riel, etc. As soon as enough countries start settling trade in their own currency, then we can talk about “devaluating” USD against other “benchmark” currencies.

      We had an example how this worked in 1968 when France’s DeGaul, had the “gaul” (pun intended) to DEMAND from US trade settlement in GOLD and NOT in printed dollars! As other countries started to think the same way, President Nixon in 1971 “slammed the gold window shut!” (Put the rest of the world on notice, no GOLD settlements only with USD)

      This was a “shock” to international trade, resulting in sudden “rebalancing” of trade accounts through massive inflation in the seventies. That was lesson No.1, Lesson No. 2 was the 2008 meltdown, I guess we are about to learn Lesson No. 3.

  5. The telling thing is all the money is obviously going into what “the rich” would put money into which is high dollar real estate, collectibles and “art”. Bananas duct taped to the wall shows just how far down the hole they’ve gone to waste six figures on a depreciating asset and, frankly, yes, I think BTC fits neatly into that category even better. Thou$and$ spent on literally n-o-t-h-i-n-g. But since the US$ is also “nothing” but computer entries I guess it all evens out, right?

    What my head-scratcher question is is where do they think they’re going to unload this after TSHTF? I mean, at least Hitler had a grand museum planned for his stolen artwork but where will all this go after it all falls apart? Their bunkers? “I’ll trade you a Van Gogh for a hamburger today”. Perhaps they’re in the know about the new currency to come while us peons can all just line up for whatever comes. Makes me embarrassed to have any money at all but having a conscience may be a luxury that will become unaffordable in the not too distant future.

    George, you’ve mentioned some stock markets of the past that went to the Moon even during the inflationary blow-out they occurred in didn’t you? Was that Weimar’s market or some other? If that’s what’s happening now, and it certainly looks like it, you could be tracing Elliot Waves to said Moon while Mad Max makes his debut. I’d trade an original Remington for an old clunker Remington with plenty of ammo to go with it any day. Oh well, make hay while the Sun shines, right?

  6. Washington State minimum wage is $12/hour increasing to $13.50/hour next month.
    As a one man small business owner I wish someone would pay me that for all the hours I put in. I don’t have any employees because I would have to pay them more than I make. The amount of paperwork involved is tedious and additional taxes is ridiculous!

    • When I started my business in NY, I used a Temp Agency to hire employees. Although more expensive, if your employee can make you $50 an hour & you pay $30 an hour to the temp agency, you are $20 an hour ahead. Plus with the temp agency I avoided all the governments red tape.

    • Mammy tell’d me t’aint no fault us po’ foke settln fur crumms frum da Massa’s tabel.

    • I got terrified.. a week ago.. a guy in a govt.. feduciary dept.. was talking about a facility.. ( My wife works there) and what they get per person… and he had this thought that they were asking to much… I chocked on my coffee and said you do realize that that isn’t even minimum wage for one person per month.. to make minimum wage you need one and one half persons heavein help it but there are people there making way more than minimum wage because they have to have them there to meet federal regulations.. to make that minimum wage figure.. times that by how many employees there are and the basic building costs the owner can’t make it..
      it looks like a lot of money coming in and I am sure it is like delivering newspapers looks like a lot but in reality there isn’t that much and I am pretty sure he hasn’t noticed the real reason yet other wise he would be making changes…. Right now he is juggling real hard I am sure it baffles him and I am not going to go out and point it out to him.. I only hope he can keep the doors open for three more years.. one major bump in the road would cause him to go into the death spriral.I don’t even have to look at the books to see that..scared me.. because we depend on the income from there…
      I don’t know how small businesses can do it.. then I see just because the cost of necessities has risen to the point where theres no extra cash.. at all.. necessary expenditures are now more than what is taken in on an average day.. pretty soon we all will be like the kids making a quarter mil in San Fran and shizting on the sidewalks and sleeping in cardboard boxes and old junk cars….. LOL…

  8. “The next couple of months should go in economics history books.”

    For a few years I would wake up right at 3:15…every day.. a few times since I have dreams that seem to happen and there were a lot of them around that time .. I had wondered..was there a sign8 reason other than just waking up to that..
    Global cooling with global warming .. I was freezing water by using the heat of the sun concentrated on the evaporator..

    The self consuming snake symbol .. since it’s been around since before written language i have read many reasons for prosperity of mankind with the head a phallus and the tail a womb it was used by celts ancient Egyptians in religious symbols for renewal and even a symbol for cannibal. So who really knows what its original meaning was.

    My take on the hunter Biden and the president’s wanting to investigate wrong doing… my question is why is everyone so upset.. why dont they want anyone to know what he was doing..granted no one wants to be investigated.. so what if they discovered that the Ukraine officials brought in Ukraine women to see him..hell you would have to get rid of almost every person in congress and since the area around govt. Facilities is well known as the mecca for the ladies of the night.. everyone er lse.he looked up porn on the internet..
    Or are they worried because theres something more devious that went on..
    If they investigate and nothing happened then joe has his ticket to the wwe white house..he is exonerated.. and c as n say see I told you so. The same thing with congress..why are they so irritated.. does the situation go deeper?
    Just some random thoughts.. oh hey . I wonder if cinnamon rolls will be cheaper than a hundred grand a piece after the fall

      • exactly my thought.. if there isn’t anything to worry about then why fret and fuss so much.. that just makes you look guilty of something.. and if there was anything and it was just the kid.. well your kid does his own thing.. you didn’t have anything to worry about.. so why is everyone so irritable about the situation..
        if there isn’t anything there then no one should be caring at all.. if it is just the kid being greedy.. there again.. dam kids.. I didn’t know what they were doing..
        so what is it that is so terrible that they are going through so much effort to cover up and do the billy did it shift of blame..
        then to find out there has been papers that were signed into law saying it was ok for a president to investigate .. seems like a lot of mirror swapping to me.. but then I may be wrong.. who knows.. history will not ever give us the true story..and I won’t be around to care..

  9. The Great Trumpeeny, Caveman President and greatest negotiator the world has ever seen caves in and by-the-way still has no agreement from the Chinese nor will he other than a gratuitous we’ll buy some of your stuff and probably not until he removes all tariffs and with a very weak pledge – meaning they will do what they were doing before the Tariff War started – and all for what?

    • A major fraud has been perpetrated against the citizenry of this country on this trade deal that will not be signed or made available to the public.

    • Clawsy….
      I think the chinese at this point are waiting.. they know we are in trouble economically.. and the deep state has been really good about undercutting the president from day one..
      now the line is in the water.. the bobber is bobbing.. they are just waiting for a bite..

      • In 2017 China bought 20B in AG products, in 2013 The Chinese had their largest year of purchases at 29B which included fish and poultry. The President is absolutely dreaming (lying) to think the Chinese will buy 50B in one year and from the US first – they may buy 50B in 2.5 to 3 years. Back to where we started with how many farmers in bankruptcy? Nothing will be fulfilled but the President will say it has been – no accountability at all.

  10. George, I too am confused by this new economic model. My conservative friends now no longer even pretext justify the tax cuts as paying for themselves via increased revenues. They now argue that the US national debt is NOT dangerously high, and point the Japan’s Debt/GDP ratio as an example. And they are quite happy as long as the deficit stimulus is running up the market — albeit dropping PEs. I even had one quite sensible pal refi his home to put more $$ into the stock market. Best, Mike.

  11. “let’s make use of fake caller ID a felony too…damn tele-scammers”

    Funny you said that… I got a call on the home phone… heck it was my cell phone calling.. I thought dam butt calls.. pulled out the cell phone and nope.. it was a telemarketer..

    I actually enjoy it if it is a person calling.. I love to change the subject with them and get them talking about the weather or where they are.. I use to get daily updates on singapore the weather what was the hot spot in town etc.. when I was using quicken I called them daily knew all of them in the tech department by name…. LOL..Now they keep all your banking data there by the way.. when the program quit having the availability to do equations accurately.. Oh yes.. a penny here or a penny there.. it was driving me nuts.. but..how many millions of customers do they have. a nickle here and there..I am not saying there was anything wrong with the program or that there was anything devious about it but a penny add’s up pretty quick.. I never could get it to add or subtract correctly and since it was driving me insane…I decided when they started just using the cloud.. I quit using it.. the one I use now.. not one problem on its calculations..

    • Just for laughs a few years back, I constructed a model ‘Flux Capacitor’ and installed it on a panel in our television control room where I worked. Then the operating staff complained that it didn’t work, because they wanted a ‘do-over’ when they made a mistake!

  13. Hello George about your time machine.every great advancement in history took someone to make it happen, however I would prefer you worked out a way to preserve your brain after you die. Put it on your bench with wires connected to your computer so that subscribers and non subscribers can benefit from a continuance of your fertile mind.

  14. Facial recognition? From what I Heard, using IR Wheat(LED) bulbs around a baseball cap blanks the face out of an IR camera. Would the same thing work on car plates to minimize traffic light cameras from grabbing numbers to issue tickets?

    • Hahahahaha.. I doubt that.. heard a flat black car will not show up on a traffic radar to..LOL..

      I seen a picture once of snipers.. all in full cammo.. and was asked how many I could spot.. I got twenty.. I posted the picture on FB page and used the FB scanner…( the govt scanner is slightly better than the one we can use..) it picked out 34 and gave me their names and fb pages… LOL LOL… so I doubt that is true..the same thing with satalite imagry.. on google earth we can get 900 scuare ft space.. the govt one that was gong to be released to the population will get a six foot radius.. slightly better..
      on google earth.. ( just seen the truck yesterday drive by) they do street view.. now on top of that.. realators are using virtual tour.. a friend was selling his home in a major city.. (DC suburb) and showed me the ad to his home.. I was able to using google maps take a tour of his whole neighborhood and four of the houses for sale around his… scary stuff there…
      big news item yesterday was someone hacked into the cloud for the ring security camera;s..( oops told you so) and was monitoring what people were doing in their homes…
      Give the cloud to AI and you now have a serious issue..
      then I seen that coming a few years ago when it was reported that china turned on all the monitors and cameras on phones etc.. web cams just to show what they can do.. amazing show of might.. think there is corporate espionage only to realize its your own cell phone..or computer camera.. microphones etc..

      • just to clarify.. the photo was put in a see only file and then I used the fb scanner to check it for facial recognition.. I didn’t post it for everyone to look at..

  15. Sir,

    A report published yesterday in the CBC’s “Kids’ News” section, offers some last minute Christmas – oops, holiday season – gift ideas for young folk looking to break with uncool gender binary traditions.

    Yes! New this year, “Ms. Monopoly” permits females to start the game with more money, and collect more money when passing ‘go’, than their male equals.

    Barbie collectors may be taking note of the doll maker unveiling a gender neutral line. These its will permit their users to dress and mould appearance to either gender or slight degrees thereof.

    In spite of Woodstock 50 fizzling, full steam ahead with a chant of “hippie, hippie, hooray” re-tread.

  16. People – especially Americans, underestimate political engineering! It’s not taught as a college course.

    McCain was convinced to betray his party after asserting that he would vote to repeal obamascare. He used the power of the ambush as a final means to shut down the repeal.

    The Federal Reserve Act was passed in the dead of night on Christmas Eve, 1913. It was a pure power play and we’re dealing with the consequences to this day. In a similar manner, my very limited spidey sense is indicating that there’s a possible power play in the cards this holiday season. The impeachment nonsense is being pushed like crazy with no stated impeachable offense.

    If the House can actually impeach, then the action in the senate could presumably happen a 3am Christmas morning. All it would require would be to turn McConnell and Roberts(both of whom are deep state types) and have a few colluding senators present.

    How? This could possibly happen due to the stupid rules for a quorum in the senate.

    Quorum – The number of senators that must be present for the Senate to do business. The Constitution requires a majority of senators (51) for a quorum. Often, fewer senators are actually present on the floor, but the Senate PRESUMES that a quorum is present unless the contrary is shown by a roll call vote or quorum call.

    Reference: http://www.cop.senate.gov/reference/glossary_term/quorum.htm

    Bottom line: If only a few senators are present including Mitch McConnell, then they can pass anything at all by voice vote without a roll call! The only safety is if there are lots of honest senators(LOL), one of whom would demand a roll call vote.

    If Roberts is present, they can have a “trial” and declare the president guilty of anything by a voice vote in only 15 minutes! Would they do such a thing? Would McConnell and Roberts flip to allow such an action? It certainly would not be the first time!

    There really should be times where the legislature absolutely cannot act, such as at night, weekends, and holidays! The only exceptions might be where there’s a presidential declaration of emergency that needs action.

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