The fact is the people in charge of the nation’s money have no idea what they’re doing. We’re facing massive debt, unrestrained borrowing, massive spending, inflation at a 40-year high, a banking crisis, the frozen housing market, de-dollarization abroad, massive corruption, massive government activity that’s blatantly criminal, international political and social instability, and cryptocurrency. Things aren’t wonderful, and there’s not one logical reason to be happy about it.
This our Seldon Crisis. And it’s not fiction!
SAM BANKMAN-FRIED HAD DIRECT ACCESS TO THE WHITE HOUSE AND RANKS SECOND TO GEORGE SOROS IN DEM PARTY BRIBES
The Sam Bankman-Fried trial clearly exposes just how corrupt that system can become, and he’s not alone out there.
California Senator's Group Pledged to Return FTX Cash. It Funneled Millions to Pro-Abortion Group Instead
The donations seemingly helped Bankman-Fried secure meetings with Biden White House officials last year. He attended a House Democratic retreat in Philadelphia last year after a series of donations to the caucus’s campaign arm.
While Bankman-Fried made donations to mainstream Democrats in his own name, he tapped other FTX executives to make "straw donor" contributions to Republicans and progressive groups, seemingly in order to maximize his political influence. Singh was picked to make contributions to left-wing political groups. In one instance, a political adviser to Bankman-Fried told Singh that he would have to donate "to a lot of woke shit for transactional purposes," according to court filings in the Bankman-Fried case.
The Fake Genius: a $30 BILLION Fraud.
https://www.youtube.com/watch?v=w3EYKuFGJ5c
How Involved Were SBF's Parents?
https://www.youtube.com/watch?v=gLvOT2AldwM
Our economy is facing a 'Seldon Crisis'
What’s a Seldon Crisis? For old science fiction readers, like me, that’s an understood term. One of the truly great science fiction writers of all time was Issac Asimov and his greatest contribution to that genre was the Foundation Series, which featured a character named Hari Seldon.
The character Hari Seldon was a mathematician who created what he called “psychohistory.” Psychohistory was “an algorithmic science that allowed him to predict the future in probabilistic terms.” He outlined the future going forward for hundreds, and even thousands of years, and even created a programmable hologram that would appear many years in the future, explaining what people needed to know or what needed to be done regarding a “crisis” he predicted, AKA, a Seldon Crisis.
There was only one problem. As quantum physicist Niels Bohr noted: “It is difficult to make predictions, especially about the future.” I don’t care how smart anyone may be, or how well-read, or how much experience in life one has, you can’t predict the future unerringly, especially for long periods of time.
As it turned out, in the books, they were facing a crisis Hari hadn’t predicted and couldn’t have predicted, so when Harri’s scheduled hologram appeared, telling them everything was going along wonderfully, so be happy, that created a real Seldon Crisis. Since he was wrong, that upset the apple cart, and that’s where we are today: Entirely too many economists and political leaders have been wrong, it’s getting worse, and entirely too many people are willing to go along with that.
When it comes to economics, I’ve concluded if you put the top 25 economists in the world in a room and asked them if they thought two and two really were four, and to explain why they believed what they believed, you’d get 25 different answers. That’s clearly an oversimplification, but the concern about what comes out of the minds and mouths of economists is valid.
Image by Andrea Widburg using data (rounded) from the US Debt Clock.
Economics, as a field, is in many ways like statistics. Arcane! Economists can make up anything and make it sound like it’s something, but so often, all they’re doing is justifying preconceived notions that are politically expedient. I’ve often stated in my articles that my grandfather, who made his living as a coal miner and a farmer, was one of the world’s great economists. He said if you spend more than you make, you’ll go broke! That’s foundational! That can’t be overturned! Eventually, that becomes reality!
There is one economist/investor I find more interesting and understandable than so many others: John Mauldin. I receive a weekly economics update from him called Thoughts From the Frontline, which is free, so you may wish to subscribe. On Saturday, he sent out a piece called Supercycle of Debt (pdf here).
In his essay, Mauldin discusses books that explain historical cycles, which I’ve believed in for years. I’ve found the patterns of life repeat over and over again. It seems everyone wants to be a real-life Hari Seldon (I do, too) but, while I see historical patterns repeating and I think it’s important to read these “cycle” books for their historical oversight and insights as to what’s going on, I also think they’re not predictively useful. I’ve defined them as historical tarot card reading. While they need to be read, and they outline concepts that are judgmentally useful, they’re not road maps to the future.
However, there is one cycle that always proves true and it’s central to Mauldin’s essay: The world’s governments, along with many individuals individuals, are producing massive amounts of debt. He notes:
Just as an individual can go bankrupt no matter how rich she starts out, a financial system can collapse under the pressure of greed, politics, and profits no matter how well regulated it seems to be.
[snip]
But highly leveraged economies, particularly those in which continual rollover of short-term debt is sustained only by confidence in relatively illiquid underlying assets, seldom survive forever, particularly if leverage continues to grow unchecked.
[snip]
Last week the Congressional Budget Office estimated the FY 2023 federal budget deficit was $1.7 trillion, about $300 billion more than the prior year. Spending actually fell slightly but tax revenue fell even more. This brought the gross national debt to $33+ trillion, of which debt held by the public was $26 trillion (a distinction without a real difference!). I have been saying for a long time we would have a $50 trillion debt by 2030. That now looks laughable naive.
Mauldin includes a chart showing the dramatic escalation in federal debt. You should check it out. It’s eye-opening.
This mess among Republicans with the Speaker battle and the Israel/Hamas War are going to change things dramatically. Both crises are exposing more and more people for who and what they are, on both sides of the aisle, and that picture is not a pretty one. I’m expecting to see a massive primary shakeup in 2024 for both parties.
Americans are seeing that we’re going broke, and unchecked immigration is killing the nation’s homogeneity, which is putting America existentially at risk. That’s just foundational, but someone has to say it, more are recognizing it, and everyone needs to act on it, especially those in powerful positions.
One thing is clear: The forces aligned against acting are powerful and entrenched. To effect change will mean completely upsetting the apple cart. That will require guts, perseverance, the willingness to be disliked and, most importantly, the willingness to fight the good fight and do battle irrespective of the personal consequences.
Everyone’s worried about BRICS but, at some point, the debt load worldwide will be so great it won’t matter whose currency is being used because no currency will be worth the paper it’s printed on. As in Venezuela, the cost of printing the money will become too expensive. That’s why I think cryptocurrency will be forced on humanity. That’s a bad thing because cryptocurrency is a system for corruption beyond imagination. The Sam Bankman-Fried trial clearly exposes just how corrupt that system can become, and he’s not alone out there.
The fact is the people in charge of the nation’s money have no idea what they’re doing. We’re facing massive debt, unrestrained borrowing, massive spending, inflation at a 40-year high, a banking crisis, the frozen housing market, de-dollarization abroad, massive corruption, massive government activity that’s blatantly criminal, international political and social instability, and cryptocurrency. Things aren’t wonderful, and there’s not one logical reason to be happy about it.
This our Seldon Crisis. And it’s not fiction!
AMERICA IS BANKRUPT. BIDEN HAS DOUBLED THE NATIONAL DEFICIT WITH HIS GLOBAL WAR MACHINE AND TAX CUTS FOR THE RICH
PAY ATTENTION TO THIS NUMBER
Expense On Debt To Surpass Defense, Medicare, Medicaid Spending
NYT’s Stephens: Many People Will Say They’re Worse Off than They Were Four Years Ago Due to Inflation
On Friday’s broadcast of HBO’s “Real Time,” New York Times columnist Bret Stephens stated that many people would say they were better off in 2019 than they are today because of inflation and that while inflation has tapered, it’s doing so after prices spiked and host Bill Maher said that prices for things people buy every week aren’t going down.
Stephens said, “Here is a reality I think a lot of Democrats, including those who really admire Biden, have to confront, which is, if you asked many Americans, were you better off in 2019 — the last full year of the Trump presidency before COVID — or today? They’re going to say 2019. Because their groceries didn’t cost as much money, their gas didn’t cost as much money, their mortgage wasn’t — mortgage rates weren’t as high. That’s just a political fact that Democrats are not getting their arms around. And I hear them say, well, inflation is coming down, for example. Yes, but it went way up, and now it’s tapering. It’s not actually falling. That’s a real problem.”
Maher then said, “Well, and also…it’s chicken, gas, meat, something else that — eggs, the things that people actually buy every week. Those didn’t come down. Not to mention rent.”
Follow Ian Hanchett on Twitter @IanHanchett
Bidenomics: U.S. Budget Deficit Explodes 23% Higher to $1.7 Trillion
The U.S. budget deficit increased 23 percent to $1.7 trillion, an increase of $320 billion, in the year after the Biden administration pushed through the Inflation Reduction Act which it claimed would close the government’s funding gap.
The explosive growth in the deficit came as revenue fell $457 billion from a year ago and expenses decreased by just $137 billion. Total spending for the year came in at $6.134 trillion.
Spending would have been higher if the Supreme Court had not declared Biden’s student loan forgiveness program illegal.
The deficit adds to the U.S. debt total, which the government said earlier this week had reached $33.6 trillion. That is more than $250,000 per household and more than $99,000 per person in the U.S. The Pete G. Peterson Foundation has calculated that if every household in the U.S. contributed $1,000 a month to debt reduction, it would take 21 years to pay down the debt.
Bidenflation Busted the Budget
Much of the increase in the deficit can be chalked up to the runaway inflation sparked by super-sized spending programs—including the Inflation Reduction Act’s $500 billion in new expenditures and tax breaks, the $1.9 trillion American Rescue Plan, and $1 trillion of infrastructure outlays—pushed for by Biden administration.
As a result of inflation, Social Security’s cost-of-living adjustments drove up the program’s cost of $134 billion, for example.
The Federal Reserve was forced to raise interest rates at a record pace and downsize its mammoth balance sheet in an effort to bring down inflation, raising the cost of government borrowing. Outlays for interest on the public debt increased $162 billion, going from $475 billion to $659 billion.
Interest expense as a percentage of GDP rose to 3.3 percent, the highest level since 2001. According to the Pete Peterson Foundation, the U.S. government is spending $2 billion a day on interest payments.
Higher interest rates also lowered the amount of revenue the government receives from the Federal Reserve, adding to the deficit.
The banking failures triggered by higher interest rates resulted in a $101 billion increase in Federal Deposit Insurance Corporation outlays.
On Friday, President Joe Biden asked Congress to authorize aid to Ukraine and Israel, requesting a massive $106 billion in spending the administration claims will go to bolster “national security.” Around $61 billion of that total is for additional spending on aid to Ukraine.
Government revenues in 2023 fell to 16.5 percent of gross domestic product.
The Buck Stops…With The Other Guys
The Biden administration quickly blamed its predecessor for the budget shortfall, attempting to deny responsibility for the fiscal situation of the government.
“This year, the effect of the Trump tax cuts on revenues and deficits is clear,” said a White House official.
The administration continues to claim the economy is doing extremely well despite polls showing widespread rejection of Biden’s leadership on the economy.
“The U.S. economy remains resilient despite global headwinds,” Treasury Secretary Janet Yellen said.
While the consensus among economists no longer calls for a recession in the near term, a recent Wall Street Journal poll showed that the economy is expected to grow slightly less than one percent next year. The Conference Board said this week that it still expects the economy to fall into a “shallow recession” next year.
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