Market futures are down a bit today. Not a lot. But, give it time. There are many “moving pieces” that could fall well for America. Or, very, very badly.
We will start by noting that Fed Boss J. Powell is talking-down the chances of a Fed Rate Hike for the remainder of the year, and beyond. One reason is Covid virus, which we will treat separately in a sec.
Corp Tax Warfare
Second point is the Biden administration – via Treasury Secretary Janet Yellen, is already calling for an increase in U.S. corporate tax rates.
You may not remember Dec. 20, 2017 well, but that’s when the onshoring of a lot of corporate money began. Claims to the contrary, the corporate tax reductions were one reason the Trump administration had a reasonable economy. Were there not a pandemic, Trump might have made two terms – tweets and all.
Biden to Kill Golden Goose?
Here’s how our Aggregate Index shows the change of trend channel from the pre-Corporate tax change through last week:
As I look at it, the 5 (ii) wave should have come down to the bottom of the long-term trend in place all the way from the left-hand side of the chart.
It didn’t. Instead, spurred by corporate dough, the decline was truncated and we were off to the races.
The problem is? We are running out of “Accounting Magic” to throw at the problem. Here’s how the present period compares with the 1920-1929 blow-off and subsequent decline:
The Fed’s quandary is simple: If they don’t keep inflating – and at a sufficiently fast clip to “paper over normalcy” people will figure we’re going a kind of Venezuela or Zimbabwe Lite inflation.
We rather suspect that won’t happen – and the Fed may have figured out how to “grab some cover” from criticism while at the same time making the Rich Richer and selling a bill of goods to We the People. Some of whom are correctly-pissed that Congress abdicated and sold “sound money” to the banksters over the holidays in 1913.
How can such a feat be accomplished?
Cue the War!
Our work on the economic side, and collateral such as G.A. Stewarts essays on how all this lines up to fit Nostradamus predictions, begin to have a certain interconnectedness about them.
Scoff at Nosty all you want. But, even Google Trends might be showing a recent uptick that could grow into something:
Some of the headlines today are, in fact, concerning:
- “Donetsk: Violent clashes – An ambulance and a gas station – Movement of Polish forces – They are afraid of movement from Kaliningrad and Transnistria! (video)“
- “Ukraine says Putin won’t talk to Zelenskiy about Russian troop build-up despite request”
- And “Ukraine says 1 soldier killed in east as tensions rise.“
Of course, there are other hot spots to keep an eye on, as well. Like Taiwan and China. And say, what’s this? “Iran Blames Israel For Attack On Natanz Nuclear Site, Vows Revenge. Everyone’s gotta have a scapegoat, huh? Iran plans a get-even: “Iran vows revenge for ‘Israeli’ attack on Natanz nuclear site.”
Whee! War and inflation are still our best long-term investments. Which is sick…
Did you see where “India overtakes Brazil to become the second-worst hit country as Covid cases soar“? We expect the conspiracy sites will light up on this as South America and the Indian subcontinent would make prime population reduction targets, goes the “where’s my meds” thinking.
On the other hand, the fact of 142 people in the Houston area – fully vaccinated – getting Covid anyway – is disappointing.
But, then, so is the report that “Covid variant from South Africa was able to ‘break through’ Pfizer vaccine in Israeli study.”
We Told You This Was Coming!
Huge story out of China that few are likely to grasp the significance of. “China’s Digital Yuan Comes With An Expiration Date.”
As for the claim of telling you this was coming? In a 2002 Peoplenomics report, not all of which survived, we discussed depreciating money. More recently, in Peoplenomics in 2016 (pre-dating Bitcoin) subscribers were told:
“It occurred to me this week, in a blinding flash that we are now at a unique point in world history. We can put computer chips in coins, to track their ownership and their spending patterns, so that we could really trace money (like we do ducks and whales) and maybe (like them) we could learn more about its habits. But no, what do we do? We print crap on printers and then put little strips of magnetic stuff in them that won’t tell us much of anything.
Picture, if you will, the perfect coin. It has a history of where it was spent, the registration of its present owner (so you couldn’t be robbed of it) and it would be impossible to clone at home or at the Kinko’s down the street. You’d need a forge, a chip manufacturing plant, and in what I call the “George Coin”, the coin itself would periodically have to be recalled by the government to be recharged.
Sure. It’s how you prevent counterfeiting. Just like paper money wears out, the “rechargeable coin” concept would allow the government to put into the coin whatever value it wanted, and smart dispensers would read and accept them.
Now, if we had “George’s Rechargeable Money” back when Elaine was buying nickel stamps (ooops, she’s not that old, I mean dime stamps) then she would still be able to buy a stamp for a single coin, instead of fumbling through her purse for the right combination of “dumb money”.
OK, so much for this week’s rant (with a copy to my Patent Attorney as notice of first use of the concept and phrase “Rechargeable Money” (Larry Graham’s, phone number on request).
What if it cost you: a “Rechargeable [and perpetually inflation indexed] Dime” and was part of my new “Integrated monetary system”? (It promises to be way more efficient and not prone to the excesses of debt that accompany credit cards and other less honorable means of exchange.
Somehow, the idea of going to work in order to recharge your saved coins, or asking Congress to authorize the Fed to recharge money, sounds way far fetched. However, in light of second and third order derivatives in the debt markets, this idea seems incredibly simple – if not elegant. Of course, no banker in his right mind would support the idea, because if money was always inflation indexed, what would a bank provide? For this reason, or actually the lobbying power of banks to look out for their own, this is bound to be one of those great ideas that doesn’t go anywhere.
But remember where you read it first when in 20 years someone says “Hey. Let’s try rechargeable money!” Drug dealers would hate it. How would you periodically recharge illegally gotten funds? A limited history of ownership is included in the money…and so instead of prosecuting the innocent dealer, who is after all only making a buck, government could go after the buyers, who put the drug lords in business in the first place. So-called victimless crime, such as prostitution and drugs, would go back to where they came from, merely intimate social contract, without the opportunity for “big business”. Undercover and covert ops? History. Any tin-horn dictator with an I.Q. over 50 wouldn’t accept “traceable tender” [tm]
Any currency over $100 ought to be rechargeable, and certainly anything under $10 ought to be printed on paper.”
In the Peoplenomics subscriber archives: Peoplenomics Report for this week 2016.
Why It Matters?
There are several reasons we didn’t (and won’t) invest in cryptos.
- They are a challenge to government and a form of self-labeling.
- Governments don’t have ANY reason to recognize “private money” since it has absolutely zero value except as a unique, made-up number and we can make up numbers all day!
- The Yuan with an expiration date means the problem of M2 Velocity of Money disappears. If you hoard money that will be worth NOTHING at some point in the future, the faster you spend, the faster you lock value of some tangible.
- Last, but not least, it becomes an economic caste system. You bet! With only the government able to “recharge” money, the social conveyor belt of inflation (buy with nothing down and wait 20-years and be filthy rich) goes bye-bye.
It’s the logical furtherance of Chinese-style central control and we’ve told you of it coming for almost 20-years. Money – at the government’s convenience – not YOURS is arriving.
White House has gone to the dogs: Major Biden to get training after biting incidents.
Peanuts kill – and nearly so: “Model left brain-damaged after allergic reaction to pretzel awarded $29.5 Million.”
Chip Shortages Hit IT Depts: “Sixty-Week Delay on Router Orders Shows Scale of Chip Crisis.”
What we could be seeing is a SLO-MO-WAR.
- Slow motion as a low speed bioweapon makes the rounds.
- Slow motion as chips run out.
- Slow motion in Ukraine.
Something to think about. Monday is normally a “slow motion day” huh?
NFIB Optimism and those glorious fairytales of consumer prices due tomorrow. My, what a fun week ahead, huh?
Write when you get rich,