There’s a lot of news flying around about the changes happening in global currency trading. From “Gas for Rubles” to “What the Hell is Going on With the Yen?” there are a lot of questions and very few answers as to what it all means and whose on which side of the divide. The Fed just hiked 50 basis points for the first time since 2000 and will be running off its balance sheet forcing the Treasury to stop issuing new debt at stupid rates. The European Union unveiled a sixth sanctions package against Russia which calls for a complete embargo of all Russian oil. Further to this the EU is now...
deficit
Abolish Society Security
Social Security is the compulsory government retirement program Americans are required to pay into for as long as they are employed. All revenue which is used to pay for Social Security is acquired through payroll taxes. More specifically, it is acquired through Federal Insurance Contributions Act (FICA) taxes, which also fund Medicare and Social Security disability benefits. A specific portion of these taxes then pay for the benefits received by retired Social Security beneficiaries, currently a pension averaging $1,657 per month which is eligible to individuals over the age of 62. In...
The ‘Threat’ of the Big Bad Bear
At the height of the late Cold War period, Andrew Cockburn wrote The Threat, a book that explored the bear cave of assumed Soviet military dominance. Challenging the narrative of Soviet supremacy—the belief that the Red Bear not only had greater numbers in their favor but also technological marvels that were capable of ensuring swift victory in time of war—Cockburn exposed myths that had been invented: a perceived supremacy that helped justify NATO, the Pentagon’s spending sprees, and a military-industrial complicated nation state that continues to grow long after the Berlin Wall fell and...
Our Monetary System Is Between a Rock and a Hard Place
Last November, the Federal Reserve System announced tapering (a gradual reduction of the central bank’s monthly asset purchases to the point of ending the asset purchase program, which means that the Fed would stop increasing its balance sheet). In December, it announced another decrease in monthly asset purchases. And in the last Federal Open Market Committee meeting, held on December 14–15 and published in January, the committee participants spoke not only of finishing the tapering, but also of a faster rate hiking. In addition, participants spoke of reducing the Fed's balance sheet...
The Pharma Revolution Is Being Televised
Marketing is essentially the art of persuading people to buy what they would not have bought, left to their own devices. This is achieved through manipulating either desires or perceptions of need. People who do not watch television are exposed to much less advertising of consumer products than are people who do. Similarly, the less time one spends surfing the internet, expressing either explicit or implicit interest in buying possible products, the fewer items there will likely be in one’s various shopping carts, not only because marketers now target people with ads catering to their...
Inflation Is Robbing Your Pocket, Whether You Realize Or Not
All across the economic dashboard, inflation indicators are blinking red. Most recently, the Personal Consumption Expenditures (PCE) index, calculated by the Bureau of Economic Analysis, rose 5.7% from November 2020 to November 2021. That’s the biggest year-over-year surge since September 1983. Many mistakenly attribute today’s rising prices solely to supply chain woes, and government officials are happy to fertilize that mythology—as Kamala Harris reflexively did last week in her rambling, didn’t-do-the-reading response to a question from Margaret Brennan: The truth is, in the words of...
Lunatic With a Plan: Erdogan and Turkey’s Economic Woes
Since the first assault on Turkey’s finances in 2018, which I wrote about multiple times (here, here, and here), I’ve been the lone voice telling everyone that President Recep Tayyip Erdogan is a lunatic but he’s a lunatic with a plan. That plan is to de-dollarize the economy of a valuable member of NATO geostrategically. Since the first shots across the bow by the Trump administration at Erdogan’s toying with those powers east of the Bosporus (Russia, China and Iran) the Turkish lira has been the primary mode of attack against Erdogan. Erdogan has pursued what has been deemed unorthodox...
The Blowback of 75 Years of Dollar Hegemony
There is no question. The United States dollar dominates world commerce. In 2019, it made up 88% of global trade, and no other currencies came close. This dominance gave the United States power over any other country that exports anything from anywhere. For example, due to the mechanics of the petrodollar, oil is settled in dollars regardless of where it comes from. Consequently, not only does this frustrate U.S. rivals by making them vulnerable to trade sanctions, but ultimately causes them to craft savvier innovations to conduct commerce. This is what the Central Intelligence Agency...
Biden’s Keynesian Course: Riding the ‘Multiplier’
White House Chief of Staff Ronald Klain tweeted on Wednesday: “Stronger COVID measures produce STRONGER ECONOMIC outcomes. That’s why jobs, growth, and economic activity are UP this year, significantly over last year.” Actually, jobs and economic activity have rebounded because governors are no longer locking down businesses, schools, and daily life. But Biden’s team is painting its latest COVID decrees as the key to renewed prosperity. Biden’s team is tacitly invoking a long history of multipliers to justify government interventions. In the 1930s, John Maynard Keynes popularized the...
The Fed’s Big Flub Up
What do the Federal Reserve and neoconservatives have in common? They both refuse to admit that their policies—the neocons’ promotion of perpetual war and the Fed's manipulation of the money supply—are complete failures, having produced the opposite of the promised results. The latest example of the Federal Reserve engaging in Bill Kristol-like levels of denial is the Fed’s continued insistence that the return of 70s-style inflation is a “transitory” phenomenon resulting from the end of the lockdowns. The Fed has acknowledged the “transitory” inflation will last until at least 2022, yet...