Tag Archives: Fed

Current Events

The Woke of July

1 Comment

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!

Originally posted 2021-07-01 09:35:13.

Recent Posts

Grab Your Socks!

2 Comments

Oh well, here we go again. Ask five Economists a question , and it’s a guarantee you will get at a minimum of six answers, possible more. Why? Because it is a “social” science. Give someone a $1,000 stimulus check, what will he do with it? Well, that’s where the “social” comes in. What’s the state of the economy at the time, who is getting this check, married or single, children, how many, where does he live, how much debt does he have, working, retired or unemployed? These and many more questions come into play before any one can predict what he does with it. And even then, it’s merely a prediction! I  cannot believe some of the garbage this former Fed chairman is spewing, but then I looked at her bio and saw where she was educated and who she worked for, and it all came to light. 

For what it is worth I am in the “No Fed Camp,” that is I do not believe in the Federal Reserve. I believe they do more harm than good and sometimes their actions are disastrous e.g., late 70’s when mortgage rates climbed well over 12% So, based on what this lady is saying, I believe we are on the road to disaster. Stupid comments by someone who should know better.

I could reprint the article for Bunkerville, but I’d like you to go see it for yourself and decide where you fit into the inflation world that is heading our way. Just click the link below

Yellen Concedes Inflation Is About To Surge, Says It Will Be A “Plus For Society”

Originally posted 2021-06-07 10:26:51.

Current Events

Making America 1979 Again

4 Comments

Good Morning Gang, it’s Saturday, the day before the traditional Memorial Day, initially referred to as Decorations Day by MajGen Logan after the Civil War. Personally, I celebrate on the traditional Day, 30 May. So, I will lower my flag tomorrow morning and raise it back up at noon. Changing the day so federal workers could get another day off with pay didn’t impress me since my experience with those snakes in the grass (in the Corps, we called them “Sand Crabs”) has been  most don’t earn a day’s pay anyway. But then that’s my personal opinion and preference.

So what are the swamp creatures up to as they begin their long weekend cook out? Well, the big talking point this week has been inflation. What is that? Well simply, it is the rising cost of goods and services.  There is cost-push inflation where the cost of goods is caused by a rise in the cost of production e.g., gas. Then there is demand-pull inflation where the rise in prices is caused by an increasing demand and firms push up prices due to the shortage of goods e.g., toilet paper. LOL.

The swamp doesn’t fear inflation, just like Peanut Jimmy didn’t in the 70s, but beware folks, the signs are there, they are just being ignored.

By: G. Maresca

You do not have to be a scholar with a dollar to notice how prices are increasing. The Consumer Price Index that measures costs for goods and services increased 4.2% in April. Gas jumped 9%, while housing prices rose 17%.

The Powerball Lottery jackpot is now a tank of gas, a bag of groceries and a sheet of plywood.

A late seventies ambiance has returned with the cyber-attack on the Colonial pipeline cyber-attack and its resulting gas lines. Add to it emboldened Iranian Ayatollahs in a cooking Middle East; an increasing U.S. crime rate; a refugee crisis at the southern border, and a simmering Cold War II. The recent visit Joe and Jill Biden had with Jimmy and Roslyn Carter makes it official that the torch has been finally passed. Their photo op, if you have not seen it, is one for Ripley’s Believe it or Not.

The Carter’s even gifted to Hunter Biden their home-brewing recipe to Billy Beer.

It is time travel Democrat style and for those 41 and younger, welcome to 1979.

At least back then the music was better, and you didn’t need a second mortgage to attend a major league baseball game. Kids went to school and actually played outside, and mask wearing was strictly for Halloween.

It was also in the summer of ‘79 that Carter gave his infamous “malaise speech” about “the erosion of our confidence.” Today, Biden successfully dismantles the myth of white privilege and primacy every time he comes in contact with a microphone.

The Labor Department’s latest jobs report had employers adding only one-quarter of an anticipated one million jobs, while unemployment claims actually increased. Many are choosing not to work since being paid to stay home is now an option. Such a major disincentive to work is unprecedented and brings with it the predictable consequence of labor’s availability. With jobs plentiful combined with escalating unemployment benefits only serves to grease the rails for socialism.

Former Treasury Secretary under Bill Clinton and former head of the National Economic Council for Barack Obama, Larry Summers spoke truth to power when he warned against too much stimulus.

There is no true stimulus, only irrational leftist reasoning that justifies increased deficit spending that is endorsed by bogus good intentions that leads down a path to fiscal ruin.

No one on either side of the aisle gave Summer’s reasoning a second thought.

Biden and his Treasury Secretary Janet Yellen actually claimed, “there is no significant inflation.” Record-low interest rates coupled with a rise in prices is what happens when central banks have a surplus of money that outstrips demand. As we stifle the supply side with handouts, while printing dollars by the trillions the result is Inflation. Prudent advice to any weather forecaster is to look out the window first. Perhaps this dynamic economic duo needs to go grocery shopping and fill the gas tank before making their next inflation forecast.

In a recent press conference, Vice President Kamala Harris ignored a question about inflation with her infamous laughing crackle as she quickly walked away. Perhaps she was on her way to the southern border?

The fear of inflation is why the 10-year U.S. Treasury yield is up 80%, and the 5-year U.S. Treasury yield is up 123%.  Spending and printing comes with consequences as you cannot print your way to prosperity.

Perhaps Biden should consider surrounding the White House with an orchard since he and his economic team believe money grows on trees. The only problem would be when Biden ends up chopping down all the trees for the paper to print even more money.

When the Federal Reserve finally admits that there is too much inflation, interest rates will rise and polarize the economy followed by a toxic bout of stagflation. Such economic malaise hurts the same people that the spend and tax Biden Democrats say they want to help.

Moreover, any stock market gains will be deceiving thanks to inflation where any capital gains taxes will be a direct result of the dollar’s decline.

In 1979, the Carter coast-to-coast malaise paved the way for Ronald Reagan’s conservative reform.

History would do well to not only rhyme but repeat itself.

 

Happy Memorial Day everyone. While cooking steaks, burgers, dogs, and drinking your favorite libation, please remember the nearly 1.1 million Americans who gave their lives  so we could celebrate this day! And remember to lower you flag to half mast on which ever day you traditionally celebrate and raise it back to full staff at noon.. Semper Fi, Jim

 

 

Originally posted 2021-05-29 11:23:49.

Recent Posts

Punishment

LOL, this is so funny. Some may have trouble understanding what Mr. Lindsey is saying in this article. Heck I had to read it again slowly to get the full drift. The bottom line is simple, raise the tax and get less revenue. LOL Makes sense to me, What an idiot this president is. That is unless he is doing it as Mr. Lindsey thinks, to punish the rich and the hell with revenue. OMG.

 

And if anyone is qualified to talk on this subject it is certainly Dr. Lawrence Lindsey, former Governor of the Federal Reserve System for six years.

The Biden administration last week proposed to increase the capital-gains tax rate—currently 20% for most assets held for at least a year—to 39.6% for people making more than $1 million. Since capital gains are also subject to the 3.8% Medicare tax, the new capital-gains rate would be 43.4%.

What makes this unusual is that 43.4% is well above the rate that would generate the most revenue for the government. Congress’s Joint Committee on Taxation, which does the official scoring and is no den of supply siders, puts the revenue-maximizing rate at 28%. My work several decades ago puts it about 10 points lower than that. That means President Biden is willing to accept lower revenue as the price of higher tax rates. The implications for his administration’s economic thinking are mind-boggling.

Even the revenue-maximizing rate is higher than would be optimal. As tax rates rise, the activity being taxed declines. The loss to the private side of society increases at a geometric rate (proportional to the square of the tax rate) as rates rise. The government collects more revenue, but its gains slow as the taxed activity declines. The revenue-maximizing rate is the point at which the government starts losing from higher taxes. Tax rates above the revenue-maximizing rate are punitive: The government is giving up revenue simply to punish the rich.

Punishing the rich is distinct from redistribution. Higher taxes on the rich to finance spending, or to transfer money to lower-income people, may be good for society’s welfare. Economists express this idea in a “social-welfare function,” which weights additional income received by different people, usually based on income. The same sum is considered less valuable if it goes to a high-income person than a lower-income one. The weights are subjective and different analysts will choose different weights.

Still, economists can agree that the ideal is to make someone better off without making someone else worse off. The simplest case is a voluntary exchange of goods for money, in which the buyer values the purchase at least as much as the price, while the seller values the money at least as much as the item being sold. Economists call such an exchange Pareto-optimal after Vilfredo Pareto, the Italian economist who formally framed the concept.

There is no choice in paying taxes, and usually the government is better off and the taxpayer is worse off. But above the revenue-maximizing rate, even the government is worse off. This is called Pareto-pessimal.

Generally, the government can raise tax rates and transfer the money to lower-income people, thereby improving social welfare. The government can do this even after incurring the economic burdens caused by higher rates and the costs of transferring money (known as the “leaky bucket”). The trade-off depends on how much tax rates distort the economy, how big the leaky-bucket effect is, and how one evaluates the difference in value of money going to people in different income groups.

As indicated by other proposals, the current administration rates money going to lower-income people extremely highly relative to higher-income people—higher than has traditionally been the case in U.S. economic policy. It also seems to put little weight on excess economic burdens and leaky-bucket costs. The wisdom of those choices will be tested at the ballot box.

But to an economist, a Pareto-pessimal choice is unwise by definition. There is no set of “weights” one can devise to justify this proposal, because there are no highly prized winners to offset the losses to the low-weighted losers.

The concept of social-welfare maximization has been a cornerstone of economic thinking across the political spectrum for the past century. It dates back at least to Adam Smith in the 18th century, and arguably to the 17th, when Jean-Baptiste Colbert, King Louis XIV’s finance minister, declared “the perfection of taxation consists in so plucking the goose as to procure the greatest amount of feathers with the least possible amount of squawking.”

That’s why it is shocking that this policy got past the economists in the administration, many of whom have had long and distinguished careers. The Biden administration is blowing up one of the key concepts that has united the economics profession: maximizing social welfare. It now believes in taxation purely as a form of punishment and is even willing to sacrifice revenue to carry it out.

Mr. Lindsey is president and CEO of the Lindsey Group. He served as a Federal Reserve governor (1991-97) and assistant to the president for economic policy (2001-02).

Originally posted 2021-04-26 15:14:18.

Current Events

All Dollars and Little Sense

3 Comments

Good day fellow patriots and conservatives. Haven’t posted in a few days as I have been overwhelmed with tales from the swamp creatures and their devious ways. The trial is over, and as we expected he was was found guilty, albeit with Joe and the b**ch from california ( I refuse to capitalize the name of that foreign land) spouting off at the mouth there is lots of ammo for an appeal. Let’s keep praying for it to happen..

And of course the House voted to make DC a state. Oh isn’t that great two more leftist senators and one congressman for the swamp. I don’t hold out much hope from the senate to strike it down; too many leftist republicans in there. So, how will we arrange the stars in the flag?  That will be fun to watch.

From my tone you may wonder what is going on. Well at my ripe age, I refuse to get excited about what happens. Oh, don’t get me wrong. When the war comes, I shall man the lines as I have done before, and if anyone offers me a billet such as a battalion commander, I shall rise to the occasion, as I am sure you will as well.

Had lunch today with two old fellow retired colonels with whom I have served several times, but not seen them in a while — I really don’t know why since we are all retired.  Joining us was another local retired colonel and a retired captain. Of course the items of discussion was a few war stories and lots about the swamp. It’s always a good time when Marine brothers can get together — I miss that.

Okay, what’s the post? Well , as many of you know, I am an Economist by education and full time hobby. I enjoy playing in the market. Today’s post came from my old friend and contributor , Eric Maresca. As a market player I found the article interesting and a dire warning to those who do as I do. Read and learn

By Eric Maresca

The stock market bull rally that got underway after a giant fall last February and ushered in the COVID era has been relentless. Who would believe record highs were even possible after such a swift drop during a pandemic, followed by political turmoil and civil chaos.

After the Federal Reserve cut interest rates again and went on a printing spree pumping trillions into the economy through three stimulus packages, the benchmark S&P 500 and the Dow Jones Industrial Average were catapulted to virgin territory. Likewise, we are in the midst of a cryptocurrency revolution where their hourly values run like an amusement park roller coaster.

With the M1 Money supply – the amount of liquidity available for spending – also at an all-time high at $18.4 trillion, the potential for one of the biggest economic booms in U.S. history is primed.

This optimism has predicted a strong 2021 second half.

The larger concern is 2022 and beyond.

Historically, long periods of low interest rates combined with a growing federal debt is no yellow brick road to Oz. You cannot ignore the laws of physics, gravity, or economics, as the government is spending itself into oblivion. From 2010 to 2019, the aggregate GDP growth was nearly the same Uncle Sam spent in COVID stimulus.

With so much stimulus finding their way to Wall Street, stock prices have been inflated. To underscore how pricey stocks are all you have to do is to juxtapose the price-to-earnings multiple at 31.5 and the price-to-sales at 2.9. At the peak of the dot-com bubble in March 2000, the price-to-earnings ratio was 29 and the price-to-sales ratio at 2.3. In addition, the stock market capitalization-to-GDP ratio that measures markets relative to the economy that peaked in 2000 at 140%, stands today at 190%.

Can you whisper bubble? Such a pop would result in a fiscal 9/11 and catch many nascent investors napping. Many were too young to recall the dot-com bubble burst over a generation ago and will pay dearly.

As the stock market rolls along, so does the national deficit. In fact, it seems to be about the only thing that is mushrooming faster. This should concern plenty, but along the D.C. Beltway such matters are dismissed.

 Stock trading has drawn plenty of new players armed with their “stimmy.” Rather, than paying bills, buying necessities, or paying down their debts, these emerging investors have turned day trading into gamification. With success they gain confidence and buy more shares, but the market’s present trajectory won’t last. When it drops many will see it as a fire-sale opportunity.

The stock app at center stage is aptly named Robinhood having taken its namesake from the English Democrat who robbed from the rich and redistributed their wealth. In this stimulus era of Robinhood fever and GameStop, why waste time researching good companies at reasonable prices, and then waiting years for returns to compound?

Apps like Robinhood, SoFi, Webull, and Public.com can be fun, but addictive, and a bookkeeping nightmare.

Such internet trading platforms make basic tax-abating strategies difficult to implement. Buying and selling stocks by the lot can lower your tax bill by choosing which shares to sell. However, selling specific lots are difficult or impossible to do online as sales are based on a first-in-first-out (FIFO) basis, where the oldest shares are sold first.

These time-honored tactics may be the least of their concerns when the market turns because it will. Once the public buys in, time is short and the potential for disaster gains momentum. When the melt down commences, nearly everyone will lose more on the way down than they made on the way up. Melt Downs do not end quickly, but over time. If the market is one thing – it is unforgiving.

Market peaks are clear in retrospection, but not in the moment, but the warning signs are there.

Do not confuse a bull market for brains.

As the timeworn adage rings: “Markets can remain irrational longer than you can remain solvent.” That applies for booms, too.

Mot people do not have an exit plan like trailing stops that protects your gains and prevents you from losing more money. A diversified portfolio and fixed selling points is always your friend.

In my ECON 101 class the professor told a story that I have found over the years to an absolute. “Put five Economists in a room and ask them a simple question and you will always get at least six answers.” I have been trimming my portfolios for the last two months. I have more cash than I have ever had, upwards of 30% cash, and I keep building it. I have good stocks e.g., DOW down over 300 points today and my portfolio was up 1.9%. But I keep taking some profits and paring down. I believe it is coming folks; somone has to pay the bills the swamp is piling up.  Greg is talking common sense.

Originally posted 2021-04-22 17:16:31.