“We believe monetary policy is in a good place.” – Federal Reserve Chairman Jerome Powell, October 30, 2019.
The Sky is Falling
Ptolemy I Soter, in his chronicling of Alexander the Great’s campaigns, recounted a striking exchange from Alexander’s 334 BC agreement with the Celts residing by the Ionian Gulf. Reported by Arrian of Nicomedia some 450 years later, the story goes that when Alexander inquired about their greatest fears, the Celtic envoys replied:
“We fear no man: there is but one thing that we fear, namely, that the sky should fall on us.”
In this modern age, we echo a similar sentiment: the sky is indeed falling. While the repercussions of this ominous statement are yet to be fully understood, it is worth noting the gravity of the situation.
The “sky,” in our context, refers to the debt-driven dollar reserve standard that has dominated the financial landscape for the last 48 years. Recall that on August 15, 1971, President Nixon “temporarily” severed the dollar’s link to gold, rendering it entirely fiat and a creation of the Treasury. Continue reading
The hills of California turn a crisp brown by autumn, the sun having baked the sage and chaparral dry over the summer. Yet, before circumstances show signs of improvement, they must initially worsen.
Each fall, high-pressure systems develop over the Great Basin – nestled between the Sierra Nevada and Rocky Mountains. These systems push air to the south and west, giving rise to the warm, dry Santa Ana winds that blister Southern California.
These fierce winds howl from the east, sliding through desert passes and raging across the LA Basin toward the Pacific Ocean. As they descend from elevated terrain, they compress and heat up, rising almost 30 degrees in temperature per mile. This uptick in temperature coincides with a dramatic drop in relative humidity, sinking below 10 percent. Continue reading
Beware! At this very moment, economists across the spectrum are concocting elaborate plans concerning your finances. They’re envisioning innovative ways to expend your money before you’ve even had the chance to earn it.
While you toil away to serve your clients, unseen claims are being staked on your future earnings, diverting them to extravagant government projects. These financial obligations stack on top of what the government has already assigned you to bear.
Currently, each American citizen bears a burden of almost $70,000 in national debt. When factoring in U.S. Unfunded Liabilities—which encompass Social Security, various Medicare parts, and federal employee and veteran benefits—the individual debt rises to nearly $383,000. Disturbingly, these numbers are expected to double in the near future with alarming speed.
These economists, enamored with their charts and projections, believe they can foresee impending recessions and know how to thwart them. Their proactive approach to economic downturns centers on pre-emptive stimulus efforts. Continue reading
“This feels very sustainable.” – Federal Reserve Chairman Jerome Powell, October 8, 2019
Under the Influence
Conflict and contradiction emerged as prevalent themes in the world of centralized monetary policy this week.
For instance, on Tuesday, Fed Chair Jay Powell introduced a new phrase, “reserve management purposes,” which encapsulates the inherent contradictions in current monetary strategies. To fully grasp this contradiction, it is essential to first identify the accompanying conflict.
In a scenario devoid of government interference, the economy and financial markets would likely operate with minimal volatility. While extreme fluctuations may occasionally occur, they would soon be corrected, restoring balance within the normal distribution.
Without government meddling, a generally stable economic environment would prevail. Continue reading
