Madness and Mayhem

Totally Bogus

Link

“America is hell-bent on continuing the monetary and fiscal policies eroding its economic and geopolitical hegemony.  The so-called “thinking classes” that shape policy are trapped in ideologies that keep them repeating the same mistakes over and over – spending too much money with no prospect of paying it back, mismanaging our foreign affairs by imagining a world that doesn’t exist, and prioritizing false concepts of equality and liberty.”

The Credit Strategist

A reminder for Jerome Powell:

"It is obvious from the statistics of the past two months that inflation no longer exists in Canada...we won that fight, and I hope you're congratulating us for it."

- Pierre Trudeau, January 1971

Number Go Up[.

“Lowering the fund rate will do absolutely nothing for the trend in unemployment”

Steve Van Metre

“Now that the Labor Revision Hyperventilation has subsided, it’s time to consider whether we’re even that restrictive once you consider the longer span of history that includes periods other than abnormally low/repressed post-GFC interest rate suppression.”

- Michael Kao

Link

“In terms of the Fed, it kind of is madness and mayhem.”

I don’t necessarily agree with everything Greg (or anyone here) says, but he’s a smart straight-shooter.

“A Secular Breakdown in the dollar”

Apparently they got rid of the old “trade-weighted dollar index.”

Here’s the replacement:

The commonly used “dollar index” is basically the dollar/Euro index:

For fun, here’s the Gold/Oil ratio (I cut off the spike to around 150 when the oil price temporarily went insane during the Covid):

Here’s a 10-year Dollar/Gold chart:

Remember, the 2-year leads the Fed Funds rate (which is why we should just replace the FOMC with it.)

Link

All bulled up

“Debt is your enemy because it takes away your freedom of movement and the creativity of your options. Yes, debt can make you money because it allows you to invest when the opportunity presents itself. Yes, debt can help you in the present and leave your problems for what you hope will be a better time in the future.

But debt defines your future, and when your future is defined, hope begins to die. You have committed your life to making money to pay for your past, and your spirit cannot take wing. Leave debt to businesses and corporations that have lives of their own. Stay away from it in your personal life. There is no sadder sight than the person with dreams and promise whose eyes have dulled and whose days are spent pushing the heavy wheel of debt toward an endless horizon.

How much better it is to be at zero and to become the man whose step is light because he has one dollar more than he needs in his pocket. When you are at zero, and if you are not driven by fantasies of perceived need, money has no control over you. You are free to make money work for you in your quest to live a meaningful life.”

Kent Nerburn, Letters to My Son

“The standard of living for the hundred years before 1970 we were growing at 2.3% per annum in real, per capita terms…the last 20 years we're growing at 1.3% per annum, so we've lost more than 40% of our growth rate against trend since 1970.”

Lacy Hunt