Somebody please ask Larry Summers about the Epstein thing.

An unpayable debt does not get paid.

I liked Zerohedge’s headline: Stocks, Bonds, & Bullion Rally After Powell's Perjury-Prone Presser

So we were told 40,000 times Wednesday that the 75 basis-point hike was the

BIGGEST RATE INCREASE SINCE 1994

See?

That historical 1994 hike would be the one on November 15, 1994, to 5.5% (the CPI then was running at 2.6%.)

Before that one, in 1994 there had been 5 previous hikes totaling 1.75%. Another 50bps hike would come February 1, 1995, yet the Fed was cutting again by July 6. Not sure what all this means though.

Friend of the show Peter Boockvar:

So the Fed is embarking on the most aggressive hiking cycle in 40 years but they estimate barely any impact on the unemployment rate. As for their estimate for GDP, it went from 2.8% last time to 1.7% now and next year they also expect 1.7% growth. NO central banker will EVER estimate a recession, keep in mind.

Remember that in February 2008 Bernanke and Paulson said "the nation will avoid falling into recession," two months after one had already started.

Here’s the NBER’s US Business Cycle Expansions and Contractions

Interesting that the 2020 recession officially started in February...

The mainstream narrative should therefore be reversed: the stock market did not collapse (in March 2020) because lockdowns had to be imposed; rather, lockdowns had to be imposed because financial markets were collapsing. With lockdowns came the suspension of business transactions, which drained the demand for credit and stopped the contagion. In other words, restructuring the financial architecture through extraordinary monetary policy was contingent on the economy’s engine being turned off. Had the enormous mass of liquidity pumped into the financial sector reached transactions on the ground, a monetary tsunami with catastrophic consequences would have been unleashed.

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Jeff Gundlach, June 7, 2022

…we should replace the Federal Reserve with the two-year treasury yield…we see that the Fed Funds rate follows the 2-year Treasury, and all you need to do is watch the 2-year Treasury, so you don’t need 800 PhD economists to set the Fed Funds rate on a lagged basis…

We’ve seen different messaging about the inflation rate. It started out that Janet Yellen, and others - Jay Powell - said it was transitory…then they tried the messaging it was good, which didn’t work very well, because nobody thinks inflation is good who is on a fixed sort of a salary or fixed income, then it turned into corporate greed, now it’s turned to Putin’s fault, but of course the inflation was largely fueled by excessive government spending. Inflation is always and forever a monetary phenomenon, and the outrageous increase in money supply and the deficit, and all those successive stimulus programs are certainly behind the inflation, with some of these variables also contributing, but the headline is of course the stimulus.

So we talk about inflation - I like to look at export and import prices as the best measures of inflation because they’re not screwed around with. When you look at the PCE and the CPI there’s all kinds of adjustments, substitutions, the methodology has changed a lot. In fact, if you ran the Jimmy Carter into Gerald Ford inflation rates, using the methodology we use today, inflation did not get to 14% [the December 1980 peak - RH], using today’s methodology. In fact in the late 1970’s, early-1980’s it only got to 9.1%, if you applied today’s methodology to that…so the inflation rate of 8.5% on the CPI using today’s methodology is exactly in line…with the inflation of the 70’s and 80’s…I think I was the first one to talk about the comparison of Jimmy Carter to Joe Biden, and that’s starting to become more mainstream…

Anyway, I like export and import prices because they are not adjusted, they’re just prices. So we see year over year exports are up almost 18%, and import prices are up about 12%, which if you average the two, the inflation rate is around 14% right now.

(I like how Gundlach thinks on using export prices, but expenses like health insurance, which CPI doesn’t even count directly, and housing/rent won’t show up below, and also are grossly undercounted in CPI/PCE.)

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Good new interview with my favorite socialist Greek economist politician, Yanis Varoufakis.

There was another interview in May 2018 with Varoufakis that I partially transcribed at the time. There were a number of outstanding quotes:

Even if you have fantastically scripted Constitutions, beautiful Congresses with wonderful procedures and so on, power is going to shift away from those processes. They’re going to become fig leafs for a system where power lives somewhere else…

Elections cannot be allowed to change economic policy…[Yanis Varoufakis quoting the German Finance Minister - RH]

Capitalism is being overthrown. Not by the Left...capitalism is overthrowing itself…

They [the Greeks] didn't just become left-wingers; our party went from 4% to 40% in two and a half years because of the Great Depression…

Progressives, left-wingers are a catastrophe...has anyone seen "The Life of Brian"? Remember the opening scene, where they all hate each other?...We are sectarian, we hate each other more than anything else, & when we did overthrow capitalism we created the Gulag…

Don’t let anyone tell you that the 2008 crisis ended–it never ended...In Germany it takes the form of negative rates that are eating into the pension funds of the average middle-class person who then turns against the political system and votes for the fascist…

They [the Germans] don't have unemployment, but they have the sense of "deflation" of their hard-earned savings, that creates the rise of xenophobia, racism and the ultra-right. In my country, we have a Nazi party in parliament, because we have a Great Depression…

The United States today, which is celebrating growth-what growth? You have 2 1/2% growth, all the things that shouldn't grow, grow. The things that should grow are not growing. You do not have any serious investment in good quality jobs in this country. You have wage stagnation…[remember, this is from 2018 - RH]

Come on, wake up! You can not say to Trump voters that they are idiots, and Putin duped them. You can say that, but then that's it - you lose them forever. And it's also not true…

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First They Came for Assange Yanis Varoufakis, April 16, 2019: “Pompeo described WikiLeaks as “a non-state hostile intelligence service.” That is exactly right. But it is an equally accurate description of what every self-respecting news outlet ought to be.”

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A few other Varoufakis quips I noted over the years:

• "Economics is banned in Europe."

• "An unpayable debt does not get paid."

• "This country must stop extending and pretending, we must stop taking on new loans pretending that we’ve solved the problem"

Yanis is a great example of how left and right (whatever those terms mean now) could set aside their tribal idiocies (and in America the D vs R red state/blue state nonsense,) and find common ground against the too-big-to-fail gangsters running - not just Greece, or Australia, but especially America.

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Yanis Varoufakis talking about an encounter with Larry Summers in 2015, from his book Adults in the Room. (Elizabeth Warren got the exact same speech.)

Summers looked at me intensely and asked a question so well rehearsed that I suspected he had used it to test others before me.

‘There are two kinds of politicians,’ he said: ‘insiders and outsiders. The outsiders prioritize their freedom to speak their version of the truth. The price of their freedom is that they are ignored by the insiders, who make the important decisions. The insiders, for their part, follow a sacrosanct rule: never turn against other insiders and never talk to outsiders about what insiders say or do. Their reward? Access to inside information and a chance, though no guarantee, of influencing powerful people and outcomes.’ With that Summers arrived at his question. ‘So, Yanis,’ he said, ‘which of the two are you?’

Alan Dershowitz, Jeffrey Epstein, Robert Trivers, Larry Summers