Tag Archives: Fed

Current Events

Here’s Greg

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In case you haven’t noticed, I have been absent, UA, AWOL, or simply MIA. LOL. Sorry gang, but am still on vacation traveling in the RV visiting relatives. Am currently in MD to celebrate my daughter’s 60th this Saturday. For the first time on the trip, I have a solid Wifi connection so I thought I would peak at what is in my laptop. WOW. For those of you who do not know what minimize means, let me say again. NO EMAIL TRAFFIC. There are a few exceptions and Greg is one of them and he has sent me a good one. With that, here’s Greg.

Clearing the ledger

By: G. Maresca

There is plenty to say about brevity, but that would defeat the purpose.  Neither time nor space affords me the opportunity to opine on the many headlines, stories, and political twists that comprise an average news day – let alone an entire week.  With that in mind, let’s clear the ledger.

The Federal Reserve has yet to learn the hard lessons of the 1970s inflation that when growth of the money supply slows, so does the increase in prices.

Considering the rapid increase in inflation, it should lead to a major reform in the capital gains tax but it won’t considering Congress is home to so many fiscal illiterates.

Ohio Gov. Mike DeWine signed a bill into law that allows all teachers to conceal carry a handgun – with librarians allowed to use silencers.

German leaders of the anti-immigration party called Angela Merkel the worst Chancellor in Germany’s history – now that is saying something.

Why can’t the left comprehend that Title IX was never meant to allow male athletes to compete against female athletes?

How fortunate the nation is that Merrick Garland is not on the Supreme Court.

With unstable financial markets, and increasing crime, Democrats want you to turn in your weapons.

 The tithe at the Church of Green Energy is well over 10% and it is anything but voluntary.

Leftist fanatics find their way to university faculties, journalists, and district attorneys, while those on the right are ostracized, threatened, and fired.

The issue of Nazism was settled in 1945 when the notion of white supremacy was soundly defeated by the forces of white privilege.

Every school board in the country needs to make the U.S. Citizenship Test, administered to naturalizing immigrants, a high-school graduation requirement.

At this point, any abduction by aliens, is not an abduction, but a rescue.

The ability of children to read has become secondary to what they are allowed to read – for fear they may learn to read between the lines.

At the rate U.S. drug laws are being repealed, Hunter Biden could get indicted for not bringing enough drugs for everyone.

Perhaps the U.S. needs to expand the census to South America so that they can register in advance of arriving.

Many Democrat policy proposals are not only radical, but scientifically, economically, and numerically illiterate: Medicare for All and the Green New Deal violate the laws of economics, physics, and mathematics.

Socialism is contrary to human nature, while capitalism is the only proven economic system.

Wise decisions about how to utilize deficits start with understanding the factors that actually play into it and sadly many of our politicians don’t have a clue. Congress does not want the responsibility of governing, just the perks.

Sen. Joe Manchin, a Democrat no less, has doomed humankind by not supporting Biden’s green agenda.  And here I thought Donald Trump was humanity’s greatest villain. You need a scorecard to keep track of who the Democrats blame as the greatest nemesis of humanity each week.

Arguably, the nation’s two most existential threats are China and our national debt and Republicans need to start selling it that way.

Arizona executed its first prisoner in nearly eight years and for his last meal he requested some Kentucky Fried Chicken before kicking the bucket.

Dr. Seuss’s latest: There is Disorder at the Border by Executive Order.

A cargo plane arrived in Philadelphia from Australia with three million cans of baby formula on board.  Apparently, each can is labeled: Foster’s. Relax, it is a joke albeit a weak one. But any mother reading this can at some level certainly relate.

Have you noticed that when any leftist threaten to leave the U.S., they only mention white enclaves like Canada, Australia, and New Zealand?

Heinz Field was renamed by the Pittsburgh Steelers to Acrisure Stadium as the insurance and real-estate company acquired the naming rights for next 15 years. Granted, a good number of Steeler fans may not be able to spell or even pronounce the new name; but they will certainly ketchup sooner than later.

A recession is when your neighbor loses their job, a depression is when you lose your job and a recovery when Joe Biden and Congressional Democrats lose their jobs.

Current Events, Recent Posts

Train Wreck in Slow Motion.

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I know some of you are probably tired of my posting these sort of comments as they are somewhat hard to understand and follow without some education in that confusing world of Economics; however, I love it. Read carefully and try to get a grasp of what he is saying and showing you in the charts. Chart #7 is an eye opener of me. As he says, we are about to watch a train wreck in slow motion. I agree with his advice, keeping that money in your bank or under your mattress is not the way to get through this perfect storm we are about to experience. Hard assets will always win out.

Good luck Brothers and Sisters.

Calafia Beach Pundit
Monetary policy is a slow-motion train wreck

Posted: 13 Oct 2021 06:32 PM PDT

There is no shortage of things to worry about. 

That’s a phrase I have used several times over the past decade. I used it as a foil to argue that since the market was quite cautious (and nervous), then a surprise downturn or selloff wasn’t a serious risk. Recessions usually happen when nearly everyone is feeling optimistic. Today there again is no shortage of things to worry about, and the market is within inches of its all-time high. Most disturbing, however, is that neither the Fed nor the administration nor Congress nor the bond market are very worried about inflation. Inflation and all its nasty consequences are, arguably, big things to worry about today.

Fed policy, as laid out in today’s FOMC minutes, is amazingly blasé about the risks of higher inflation. The Fed currently plans to begin “tapering” its purchases of Treasuries and mortgages sometime next month, and to finish tapering by mid-2022. That’s not a tightening of monetary policy; it’s only making policy less accommodative over a prolonged period. Actual tightening—which would consist of draining reserves (i.e., selling bonds) and/or raising the interest rate it pays on reserves (i.e., higher short-term interest rates)—won’t begin until sometime late next year.

The market has apparently agreed that this is a sensible course of action. Inflation expectations embedded in bond prices are somewhat high, but still a relatively tame 2.75% per year (average) over the next 5 years. The bond market is currently pricing in one or two 25 bps “tightenings” by the end of next year (i.e., short-term interest rates of roughly 0.4% to 0.5%), and a 1.5% fed funds rate 3 years from now. By any standard, that would be a supremely gradual pace of monetary tightening. But at a time when inflation is at levels not seen in over 30 years?

This is almost certainly an unsustainable situation. The Fed and the bond market are almost certainly underestimating the risks of higher-than-expected inflation.

How do I know this? It’s all about incentives. Today, the incentives to borrow are huge. Short-term interest rates are below the current level of inflation and will likely remain so for at least the next year. (Even 30-yr fixed rate mortgages are lower than the rate of inflation.) Smart investors and consumers won’t find it hard to arbitrage these variables. In fact, the process is already underway. You simply borrow money and buy anything that is a productive asset and which also has roots in the nominal economy (e.g., commodities, equities, farms, factories, cars). Leverage is your friend and ally in a high-inflation, low-interest-rate world.

How does one place a bet on an asset (in this case the dollar) that is expected to decline in value (because of inflation eroding its purchasing power)? You sell it if you own it, or you sell it short (you borrow it and then sell it). You buy it back when inflation settles back down and/or interest rates rise to a level that is greater than inflation. One way to “short” the dollar is to simply borrow dollars. And a common way to do that is to get a loan from a bank. And when the bank lends you money, the bank can actually create the money it lends you, which in turn expands the money supply. Banks are uniquely able to create money, provided they have sufficient reserves on hand to collateralize their deposits. Since the banking system currently has upwards of $3 trillion in “excess” reserves, thanks to the Fed’s gargantuan purchases of notes and bonds, banks have an almost unlimited ability to increase their lending.

So it’s not surprising that the M2 money supply has expanded at an unprecedented rate over the past 18 months, a time in which the Fed has bought almost $3 trillion of notes and bonds and bank deposits have swelled by some $5 trillion. And it’s also not surprising that in the past six months consumer price inflation has posted a 6-7% annualized rate of growth—a rate last seen in late 1990.

As for Biden, his approval rating is now down to an abysmal 38%. His administration has committed a series of blunders, most notably with the Afghanistan withdrawal. His top priority now is to pass two bills chock full of new social spending and new taxes which he preposterously claims will cost the economy “zero.” Meanwhile, inflation has risen to multi-decade highs, yet both the administration and the Fed keep insisting it’s just transitory. Things will almost certainly get worse if trillions of new taxes and spending, additional layers of bureaucracy, and hundreds of billions of dollars of new handouts and subsidies get lavished on the middle class. My good friend and talented artist Nuni Cademartori sums it up in this cartoon:

As the battle in Congress over Biden’s “Build Back Better” agenda rages, I would urge everyone who thinks this agenda will actually help the economy grow and prosper to read the recently released study by the Texas Public Policy Foundation in collaboration with my good friend, Steve Moore of the Committee to Unleash Prosperity.

The key findings:

• The cost of the Biden Build Back Better plan spread across two bills will reach $6.2 trillion over the next decade.

• The higher tax rates on corporate income, small business income, capital gains, and so on will raise the cost of capital and reduce national investment and the capital stock.

• Compared to baseline growth, the negative impact of these taxes over the next decade will result in 5.3 million fewer jobs, $3.7 trillion less in GDP, $1.2 trillion less in income, and $4.5 trillion in new debt.

While I’m on the subject of Steve Moore, whom I’ve known since the mid-1980s, I will once again recommend you read and subscribe to the Committee to Unleash Prosperity’s free daily newsletter. I read it every day, as do more than 100,000 citizens and Washington policymakers. (One of his recent issues featured Nuni’s cartoon, and another featured some of my recent charts.)

In the study mentioned above you will find details on a plethora of Biden’s tax proposals (e.g., a 12.5% payroll tax on all income over $400K, a reduction in the estate tax exemption of $8 million, and an increase in the top marginal tax rate to 65%) and their likely negative impact on the economy and employment. It’s frightening to think that the people who came up with these proposals apparently believe that the overall impact of BBB will be stimulative. Have they no common sense? Here’s a fundamental supply-side truth: when you tax productive activity and success more, you will get less of it. And when the government borrows trillions only to redistribute the money to favored groups and industries, you get a weaker, less efficient economy. And you also risk boosting already-high inflation.

I’ll wrap things up with some updated charts and commentary:

Chart #1

Nothing illustrates better the supply-chain bottlenecks that currently plague the global economy than Chart #1. Used car prices have literally skyrocketed; in inflation-adjusted terms, used car prices are higher than they have ever been. In nominal terms they are up over 50% since March ’20.

Chart #2

Chart #2 shows how almost half of small businesses in the US report paying higher prices. The last time this occurred was in the 1970s. It’s hard to escape a higher inflation Deja vu conclusion.

Chart #3

 

As Chart #3 shows, bank reserves are very near their all-time high. The vast majority of these reserves are “excess” reserves, meaning they are not required to collateralize bank deposits. Banks thus have enough reserves on hand to collateralize an ungodly increase in deposits via new lending (i.e, money creation). If the Fed doesn’t increase the interest rate it pays on these reserves by enough to make them more attractive, on a risk-adjusted basis, than the interest rate banks can expect to earn on new lending, bank lending will surely continue to expand, and that will fuel a prolonged expansion of the money supply and ever-higher inflation.

Chart #4

 

Chart #4 shows the 6-mo. annualized rate of growth of the CPI (including the ex-energy version). I think this is a fair way to measure what’s happening now, since we are well past all the distortions of last year and the turmoil earlier this year. Inflation by this measure hasn’t been this high since late 1990.

Chart #5

Chart #5 compares the year over year growth in the CPI (I’m being conservative with this) to the level of 5-yr Treasury yields. Yields haven’t been this low relative to inflation since the 1970s. Recall what happened back then: millions of households made a fortune borrowing money at fixed rates and buying houses. Negative real interest rates cannot be sustained for long, mainly because of the incentives they create to borrow and buy.

Chart #6

Chart #6 is an updated version of the one featured in Steve Moore’s newsletter. It’s important to note that the multi-decade trend rate of M2 growth is 6-7% per year. This has been blown away in the past 18 months. If the public tires of holding $3.8 trillion more in bank deposits than they normally would at this time, that’s a tsunami of money that could float higher prices for nearly everything in the next year or so. It’s also worth noting that M2 has been growing at a 10-11% annualized rate so far this year.

What worries me the most right now is how this all sorts out. The Fed seems determined to avoid even the semblance of tightening for the next 12 months. Yet if inflation turns out to not be transitory as they currently expect, how long will it be before policy becomes tight enough to threaten the economy’s health?

Chart #7 

Chart #7 provides some historical context which may help answer that question. Note that every recession on this chart (shaded bars), with the exception of the last, was preceded by 1) a flat or negatively-sloped Treasury yield curve, and 2) a very high real Fed funds rate. Both of those conditions confirm the existence of very tight monetary policy that was intended to keep inflation pressures at bay. Neither condition is in place today, however, which strongly suggests that monetary policy poses no threat to the economy at this time.

Past Fed tightenings, however, were different from what a tightening would look like today. To really tighten policy, the Fed would have to 1) start raising the interest rate it pays on reserves, and 2) start draining reserves by selling bonds. It might take years to get rid of all the excess reserves, however, and no one knows for sure how the economy will respond to higher short-term rates in the presence of abundant reserves—that’s never happened before. In the past, the Fed simply drained reserves until they were in such short supply that the banks were willing to pay ever-higher interest rates in order to acquire enough of them to collateralize their deposits. A scarcity of reserves led to a liquidity shortage, and high real borrowing costs led to bankruptcies and weak investment. Eventually, economic growth ceased, and the inflation cycle was broken.

The dilemma for investors: we might be years away from a return to these conditions, so selling risky assets right now might be premature. And, by the way, holding cash is a guaranteed way to lose money. But how long can you wait, knowing that another economic collapse looms on the horizon?

In the meantime, the prospects for Biden’s Build Back Better lollapaloosa are declining by the day, thankfully, and the spreading disarray in Washington only makes that more likely. I’m willing to bet that if any of his bills survive, it will be in greatly reduced form, and thus much less damaging to the economy. Just letting the economy sort things out on its own would be a great relief to everyone, in my view.

Nobody said investing was easy. There are a lot of things to worry about these days. But I wouldn’t panic just yet. The next year or so might be likened to watching a train wreck in slow motion.

Rik is a great friend and brother Marine with whom I served several times. Thanks Rik, I love this stuff. Give him a call .


 

 

Current Events

$1.00 = $0.95

1 Comment

This post may be too hard for some to swallow without some Economics background, but I consider it important enough for my followers to be prepared. I received the following from a trusted Marine brother who runs an investment business in NC. Rik and I are usually on the same page on everything “Economic” because we are both “supply siders” and also “Monetarists.” Won’t get into any Economics BS to explain what that means in layman’s terms as it would only confuse the issue more than it already is. Having said that I totally agree with the article; we are already seeing the start of it. As of this instant, my total portfolio has lost 3.56% in the last month, and I firmly believe it will continue, while inflation is sits and waits for the right time to make itself known to every American. Keep it up Joey  and we will be a bankrupt country while the FED, most of whom are not supply siders fiddle.

 

 

 

 

Your cash will lose at least 5% of its purchasing power in the next year

Posted: 24 Sep 2021 05:03 PM PDT

Earlier this week, Fed Chair Jerome Powell announced that the real yield on dollar cash and cash equivalents is likely to be -5% or less over the next 12 months. Yes, your cash balances will lose at least 5% of their purchasing power over the next year, and that’s virtually guaranteed. So what are you—and others—going to do about it?

Assumptions: This forecast of mine optimistically assumes that 1) the first Fed rate hike of 25 bps comes, as the market now expects, about a year from now, and 2) the rate of inflation slows over the next 12 months to 5% from its year-to-date rate of 5.9%. Personally, I think inflation next year likely will be higher, if only because of the delayed effect of soaring home prices on Owner’s Equivalent Rent (about one-third of the CPI), the recent end of the eviction moratorium on rents, and the continued, unprecedented expansion of the M2 money supply.

I’m a supply-sider, and that means I believe in the power of incentives. Tax something less and you will get more of it. Tax something more and you will get less of it. Erode the value of the dollar at a 5% annual rate and people will almost certainly want to hold fewer dollars than they do today.

I’m also a monetarist, and that means I believe that if the supply of dollars (e.g., M2) increases by more than the demand for dollars, higher inflation will be the result. We’ve already seen this play out over the past year: the M2 money supply has grown by more than 25% (by far an all-time record) and inflation has accelerated from less than 2% to 6-8%. Massive fiscal deficits have played an important role in this, but so has an accommodative Fed. Between the Fed and the banking system, 3 to 4 trillion dollars of extra cash were created over the past 18 months. At first that was necessary to supply the huge demand for cash the followed in the wake of the Covid shutdowns. But now that things are returning to normal, people don’t need or want that much cash. Yet the Fed continues to expand its balance sheet, and they won’t finish “tapering” their purchases of notes and bonds until the middle of next year. That means that there will be trillions of dollars of cash sitting in retail bank accounts (checking, demand deposits and savings accounts) that people will be trying to unload.

If we’re lucky, the inept and feckless Biden administration will be unable to pass its $1.5 trillion infrastructure and $3.5 trillion reconciliation bills in the next several weeks. This will lessen the pressure on the Fed to remain accommodative, but it’s not clear at all whether it will encourage the Fed to reverse course before we have a huge inflation problem on our hands. Non-supply-siders (like Powell) view an additional $5 trillion of deficit-financed spending as an unalloyed stimulus for the economy. Supply-siders view it as a virtually guaranteed way to increase government control over the economy and thereby destroy growth incentives and productivity.

Amidst all this potential gloom, there are some very encouraging signs, believe it or not. Chief among them: household net worth has soared to a new high in nominal, real, and per capita terms. Also, believe it or not, the soaring federal debt has not outpaced the rise in the wealth of the private sector.

Today’s interest rates are relative to inflation. Terribly low! In normal times, a 4-5% inflation rate would call for 5-yr Treasury yields to be at least 4-5%. yet today they are not even 1%. The incentives this creates are pernicious: holding cash and/or Treasuries implies steep losses in terms of purchasing power. That in turn erodes the demand for cash and that fuels more spending and higher inflation.

The growth of the non-currency portion of M2 (currency today is about 10% of M2). Currency in circulation—currently about $2.1 trillion—is not an inflation threat, because no one holds currency that they don’t want. The rest of M2, just over $18 trillion, is held by the public (not institutions) in banks, in the form of checking, savings, and various types of demand deposits. For many, many years M2 has grown at an annual rate of 6-7%. But beginning in March of last year, M2 growth broke all prior growth records. The non-currency portion of M2 is about 25% higher than it would have been had historical trends persisted. That means there is almost $4 trillion of “extra” money in the nation’s banks. This extra money has been created by the same banks that are holding it: banks, it should be noted, are the only ones that can create cash money. The Fed can only create bank reserves, which banks must hold to collateralize their deposits. Today banks hold far more reserves than they need, so that means they have a virtually unlimited ability to create more deposits. And they have been very busy doing this over the past 18 months.

For most of the past year I have been predicting that this huge expansion of the money supply would result in rising inflation, and so far that looks exactly like what has happened. People don’t need to hold so much of their wealth in the form of cash, so they are trying to spend it. But if the Fed and the banks don’t take steps to reduce the amount of cash, then the public’s attempts to get rid of unwanted cash can only result in higher prices, and perhaps some extra spending-related growth. It’s a classic case of too much money chasing too few goods and services. And Fed Chair Powell has just added some incentives for people to try to reduce their cash balances. He’s fanning the flames of inflation at a time when there is plenty of dry fuel lying around.

Now for some good news. The evolution of household balance sheets in the form of four major categories. The one thing that is not soaring is debt, which has increased by a mere 20% since just prior to the 2008-09 Great Recession.

With private sector debt having grown far less than total assets, households’ leverage has declined by 45% from its all-time peak in mid-2008. The public hasn’t had such a healthy balance sheet since the early 1970s (which was about the time that inflation started accelerating). Hmmm….

In inflation-adjusted terms, household net worth is at another all-time high: $142 trillion.

On a per capita and inflation-adjusted basis, the story is the same. We’ve never been richer as a society.

Total federal debt owed to the public is now about $22 trillion, or about the same as annual GDP. It hasn’t been that high since WWII. So it’s amazing that federal debt has not exploded relative to the net worth of the private sector. As I’ve shown in previous posts, the burden of all that debt is historically quite low, thanks to extraordinarily low interest rates.

Gold prices are weak today because the market is anticipating higher short-term interest rates. Gold peaked when forward interest rate expectations were at an all-time low. Why? Because super-low interest rates pose the risk of higher inflation. With the Fed now talking about raising rates (albeit sometime next year, and very slowly thereafter), gold doesn’t make as much sense because forward-looking investors are judging the risk of future inflation to be somewhat less than it was a few years ago.

 

S/F

Rik
Current Events

Beware of Halloween Spooks

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Hello followers. I hope this missive finds you and yours in the best of health and staying safe. My bride and I returned from our getaway to St. Lucia very early this morning. Truly a relaxing place for the late twenty to late thirty crowd. For the early eighty crowd, not so relaxing; glad I purposely did not bring my Hearing Aids. Not quite my genre of music; in fact, it was unbearable. However, the place is so large and dissected in such a way we found a quiet pool away from all that. Anyway, we both had a great time, lots of fun in the sun.

I arrived home to find an excellent treatise by Greg on the current state of the economy in this once vibrant and glowing country of sane people. And as usual, I totally concur with all he states. It is coming folks. For those living off their 401K’s beware!! I and most who think like me have been selling for the past several weeks, and I shall continue during the ups and downs of Wall Street. I shall also do some selective buying, but inflationary companies, which are many, will not be on my sought-after lists.

The highlights in red within Greg’s treatise are mine.

October Instincts

By: G. Maresca

The Executive Director of JPMorgan Chase admitted that the stock market’s “biggest nightmare periods have tended to be October. You go back to obviously the crash in 1929, but the 1987 crash, and in 1989… was in October. You tend to have these October moments.”

Financially most are feeling pretty good as brokerage accounts never looked healthier and home prices are over-the-top. Over the past year, the S&P 500 has closed at new, all-time highs over 50 times and in so doing has created the illusion that the market only rises.

This results in taking more chances when investing.

The K-shaped economy and booming stock market underscore that Main Street and Wall Street are at a major disconnect. Many dismiss the growing rate of inflation, the unprecedented intervention by the Federal Reserve’s nonstop money-printing and increased debt believing that the dollar today is worth the same as it was last year.

It’s not.

The duality of low interest rates and those stimulus payouts have devalued the dollar. Thanks to inflation and time, savings in fixed investments like CDs, bank accounts and money markets lose purchasing power. With yields registering next to nothing, where are investors expected to put their money?

As a result, savers seek more risk in order to obtain better returns leading to a stock market that is cooking and overvalued. Increasing stock prices coupled with a mushrooming federal debt is a brick road paved over with inflation.  As the Fed continues easy-money policies, the market will continue higher as the infusion of cheap dollars rules the day.

Most bankers, brokers, and politicians understand that these bouts with inflation are what economists call: “The Money Illusion.” It is when one’s wealth is measured in how many dollars they possess, rather than its purchasing power.

Among investors, the Money Illusion breeds risk taking and heightened speculation. It’s like watching a skilled magician work his stagecraft. It looks and appears amazing and impossible, but it is not at all what it seems.

Low interest rates did, in fact, rescue the market. The Fed slashed short-term interest rates to near zero at the onset of the COVID-19 debacle and bought large purchases of Treasury and mortgage bonds making dollars discounted. In so doing, The Fed propped up not only the bond markets, but stocks, too.

Many are in denial about what is truly happening throughout our financial system. To paraphrase writer Upton Sinclair, it’s difficult to get someone to look when their getting paid depends on not looking.

Adding to the illusion is that 40% of all U.S. currency in circulation has been printed since March 2020. Few comprehend the effects of so many trillions in our financial system. The Case-Shiller Index which measures home prices has risen 18.6% for the year, up from a record 16.8% the month before. The index is the proverbial rat in the financial mine that brings with it a healthy dose of inflation.

Financial storm clouds are forming as the economy experiences labor shortages, supply chain disruptions, rising prices, and increasing inflation. With too many dollars chasing too few assets, the good times won’t last forever.

One out of every four companies are on life support because of low interest rates. With rates near zero, and with inflation rising, The Fed cannot afford to keep them low forever.

Bankruptcies are on the horizon.

The federal debt continues to grow as trillions crowd the government’s balance sheet with the debt literally growing by the second. Inflation does to a degree keep the debt somewhat manageable. However, as inflation rises, Social Security, and other assorted fixed incomes like pensions will see their buying power shrink even further.

Eventually, a significant tax increase will hit all Americans hard and below the belt – regardless of income.

Rising stock prices are great, but when easy money begins to create social, political, and economic turmoil, something is seriously amiss. A White House which believes that global warming, systemic racism and COVID are our greatest threats, does not possess the foresight and wisdom to comprehend what is economically occurring.

The laws of economics cannot be repealed, no matter what one’s wishful thinking may be.

As October looms, consider this a heads-up.

Postscript: Beware of the ghouls of October, they are coming, meanwhile many Americans keep chasing those soon to be negligent goods and, to paraphrase Mack the Knife , “Spending like a Sailor.”

Current Events

The Woke of July

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Well here we are the first day of a new month, a summer month, when folks should be planning vacations to the beaches, the lakes, the mountains, or many of the places this once great nation has  to offer. And what’s even more significant about this month is it includes our nation’s birthday. Personally, I am concerned about the future of its birthday. In fact, this just might be the last time any of us get to celebrate the Republic of the “United” States of America. How sad is that, but then I will have celebrated the founding of our nation 80 times this July 4th. How many my children, grandchildren and  great grandchildren  will be able to celebrate I haven’t a clue. Why? The answer is simple, but if you do not know why, you are reason.

By Greg Maresca

As the Constitutional Convention in Philadelphia concluded on September 17, 1787, Benjamin Franklin was asked what kind of government do we have? “A Republic,” he replied, “if you can keep it.”

Stripped to its essence as the nation attempts to celebrate its 245th birthday, Franklin’s challenge needs examination and any newspaper will do.

The nation’s president says: “America is back”— back to the 1970s with increased inflationary spending, high gas and food prices and compounded global threats. Not to be outdone, he also claims the Constitution does not protect our right to own “assault weapons” because “if you wanted, or if you think you need to have weapons to take on the government, you need F-15s and maybe some nuclear weapons.”

Sen. Dick Durbin’s remarks on the Equality Act was equally as telling. “Catholic” Durbin ran counter to the church’s disapproval to the legislation as it discriminates against Christians and the unborn. Durbin quantified, “I do believe that people who want to blatantly discriminate and use religion as their weapon have gone too far. We have to have limits on what they can do. I might remind us in history that the Ku Klux Klan was not burning question marks.”

Equating those who adhere to biblical morality with the KKK, does not bode well for any reasoned debate about religious freedoms in the future and those arguments are forthcoming.

Welcome to July 4, 2021, where courage is a boy declaring himself a girl and athletically competing against them. It is a place where the Internal Revenue Service denied a Christian nonprofit tax-exempt status because the Bible’s “teachings are typically affiliated with the Republican Party.” This disqualifies them from exemption under Section 501(c)(3), according to the Washington Examiner.

Don’t dare joke about Newark, New Jersey that erected a 700-pound bronze statue of George Floyd or utter “all lives matter.” Do not expect to keep your job at Space Force if you criticize the evils of Marxism, or post on Facebook how the COVID vaccine made you sick.

Las Vegas Raiders defensive end Carl Nassib’s pronouncement that he is gay made national headlines. NFL Commissioner Roger Goodell spoke directly to the wokeism cult saying, “The NFL family is proud of Carl for courageously sharing his truth today.” Evidently, the highest leftist virtue is discovering one’s personal truth, and expecting approval for doing so.

A transgender BMX bike rider who qualified as an alternate for the U.S. at the Tokyo summer Olympics said her goal was to win an Olympic medal “so I can burn a U.S. flag on the podium.” In a spirited nation, she would be immediately nixed from the team. Yet, certain folks will lionize her.

Some police departments have stood by as looting and burning goes unabated and where statues of Columbus and Lincoln are toppled, while the law is applied asymmetrically on the basis of ideology and race.

Technology tycoons exploit the cult of woke to attack those who have dissenting views including a former president. In Biden’s America, the Federal Reserve is now telling employees to avoid “biased terms like Founding Fathers.”

Governors and mayors have used a virus to deny constitutional freedoms of assembly, religion and speech. Society can be juxtaposed to the condition of that Miami condominium before its collapse. Cracks in our moral and spiritual foundations threaten our future.

Undoubtedly, you can add to this list – daily.

We have abandoned the concepts of a republic for a democracy.

The Constitution’s framers were adamantly against tyranny of the majority. The Founders framed a representative republic that Franklin’s famous quote underscored with designated checks-and-balances.

Over two centuries ago, English historian Alexander Tytler believed, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury.” The Wall Street Journal reports nearly half the nation is now on the federal dole.

If you believe America is humanity’s noblest construct of nation and spirit, the moment to stand up and be counted is upon us.

Doing nothing will only accelerate the deep-seated conversion from a constitutional republic into a one-party socialist government.

What better time to step-up than the nation’s birthday?

I will attend church on Sunday with my bride, come home, and revel in the fact we are still a Republic that is 245 years old. It may be the last time I will be able to do that, and not because I will have passed, but my Republic did. Sad!