As geopolitical tensions rise, the Chinese political leadership tells the US government to desist pushing its “color revolutions.”
Original Article: “China Calls Out the USA for Instigating the Infamous Color Revolutions“
All too often, unscrupulous businesses weaponize the United States’ antitrust laws—which are only supposed to be utilized to protect consumers against higher prices and other consequences of monopoly power—for their own self-serving purposes. Professor Thomas DiLorenzo explained this problem more than a third of a century ago in a piece titled “The Rhetoric of Antitrust.” He wrote that “In theory antitrust regulation promotes competition in the marketplace but in reality its results are often anticompetitive. It is routinely used by businesses having problems competing.”
A key to understanding the difference between competition as a process benefiting consumers and competition as a misnomer for protecting those who are (or are afraid of) being outcompeted for consumer favor was revealed in an open letter on antitrust protectionism during the Clinton administration. The letter, signed by 240 professors across the country, made it clear that “consumers did not ask for these antitrust actions—rival business firms did.”
Although over twenty years have come and gone, this problem hasn’t gotten any better; antitrust protectionism has continued into the present day. The scrutiny the Federal Trade Commission (FTC) is currently giving the merger between Microsoft and game developer Activision is a testament to this sad reality.
As Joost van Dreunen from New York University’s Stern School of Business described the merger, “virtually no one opposes the deal, except Sony.” In other words, consumers are not against the merger. However, the biggest, most dominant firm in the video game industry wants it challenged. Why? This is because Sony would have its dominant position in video game platforms undermined by better and more flexible options for gamers that the Microsoft-Activision merger would make possible. Sony doesn’t even have to bear the costs of challenging the merger because the FTC is doing that for the company. As Tahmineh Dehbozorgi wrote in National Review: “Unfortunately, in this case, the FTC seems more interested in defending Sony’s dominant market position than in allowing a transaction that would enable Xbox to compete. Consumers that would gain access to new games from big and small developers, are getting hurt in the process.”
In other words, the FTC’s opposition doesn’t increase or maintain competition; it just keeps a rival to Sony (the largest firm in the video game industry) from getting closer to its scale in an industry where economies of scale are significant. When a larger (merged) rival becomes more efficient than when it was smaller, Sony would have no choice but to compete effectively with its more able rivals. That would increase competitive industry pressures and better serve gaming consumers, not harm them. That’s one of the many reasons why a slew of organizations and countries—including the European Union (which is not typically an ally of US businesses in the antitrust arena), Japan, Brazil, Chile, Serbia, and Saudi Arabia—have already approved the Microsoft-Activision merger. These groups and countries also ostensibly recognize that the deal would benefit consumers by adding a great deal of value to Microsoft’s Game Pass subscription service.
Game Pass—especially if it includes Call of Duty and other Activision games—can be cheaper and more flexible for many consumers, who would no longer have to buy each video game individually or purchase multiple consoles to get access to exclusive games. It would also allow consumers to try out games they are not sure they would like at a lower cost (as part of a bundle) than having to buy them up front.
Further, the proposed merger would create a new large-scale entrant into mobile gaming, giving Microsoft “a toehold in mobile gaming—where most people game and where Microsoft’s Xbox currently has virtually no presence.”
While Sony and the FTC continue to portray a “sky is falling” narrative about the Microsoft-Activision deal, Dehbozorgi noted that when Microsoft acquired Mojang, the company that developed Minecraft, nine years ago, none of the concerns came to be:
Since the acquisition, Minecraft has become one of the best-selling video games of all time. . . . The merger enabled Mojang to access greater resources and reach a wider audience through Microsoft’s distribution channels. Consequently, Minecraft became available on more platforms and cross-platform play became possible, breaking down barriers and fostering greater innovation in the industry. Microsoft has continued to invest in the game, adding new features and expanding its reach to new platforms.
Alas, the belief that monopoly abuses will follow in the wake of the Microsoft-Activision merger is more imaginative than proven. Even postmerger, Microsoft’s share of the market will be too low to give it that much power. Sony will remain the largest player in the market. While antitrust rhetoric often involves the “little guys” being abused by large firms, it is hard to see how Microsoft’s supposed efforts at abuse would work against a substantially larger firm that has dominated the gaming market for two decades.
Even what Sony is “selling” as the greatest competitive threat from the merger—making video game titles exclusive to Microsoft’s system—is difficult to take seriously, as Sony has done far more of that than any other console maker. If it would be monopolistic for Microsoft to utilize exclusivity, isn’t it worse that Sony—which has a far larger market share—has done exactly that? As legislators like Senator Kevin Cramer and others have noted, perhaps Sony should be the company in the FTC’s crosshairs, not Microsoft. Microsoft has even offered ten-year contracts as proof that it will not engage in these Sony-esque practices.
The Competitive Enterprise Institute’s Iain Murray has also noted several other important problems with the assertion that the Microsoft-Activision merger would be used to facilitate consumer harm. For instance, he has collected several public comments on the merger in the United Kingdom that deserve consideration. They include the following:
it is unlikely that Microsoft would make Call of Duty exclusive due to its multiplayer nature. Making Call of Duty exclusive to Xbox would only create a gap in the market that could be filled by a rival cross-platform shooter game; . . .
. . . the Merger will push Sony to innovate, such as by improving its subscription service or creating more games to compete with Call of Duty;
. . . the Merger is a reaction to Sony’s business model for PlayStation, which has historically involved securing exclusive content or early access to popular cross-platform gaming franchises . . .
. . . the Merger is pro-competitive in the mobile segment because it will create new options for mobile gamers and allow Microsoft to compete against Google and Apple, which are the two dominant mobile platforms.
Murray added:
Mobile gaming is a growth area. Microsoft/Xbox has virtually no presence in mobile gaming, while three quarters of Activision’s userbase, not to mention a sizeable portion of its revenue, derive from that area. This is most likely at the heart of the acquisition. Going from two large companies in the field to three is hardly a threat to competition.
As if these concerns with Sony and the FTC’s claims aren’t enough, Renata Geraldo has reported still more problems. She wrote that, while “The FTC is concerned Microsoft plans to withhold Activision titles, including Call of Duty, from Sony and other competitors,” Microsoft argues “it is not financially viable to remove Call of Duty from PlayStation.” Indeed, more profits are to be made from serving a rapidly growing market than from trying to squeeze its current customers. As Microsoft lawyers have argued (and Activision has echoed), “Paying $68.7 billion for Activision makes no financial sense if that revenue stream goes away . . . Nor would it make sense to degrade the game experience and alienate the millions of Call of Duty players who play together using different types of consoles.” While Sony turned down Microsoft’s offer of a ten-year guarantee against that very fear (Microsoft making Call of Duty an exclusive to its console), Microsoft has already completed such an agreement with Nintendo.
There are so many holes in the FTC and Sony’s opposition to the Microsoft-Activision merger that an analogy to Swiss cheese is in order. In fact, as Nate Sherer has summarized, the results are more likely to be 180 degrees from the imagined bogeyman: “the deal could well be a major victory for consumers and gamers alike, who are likely to benefit from expanded access, a greater selection of games, and lower prices.” So, we should leave it to gamers to decide which firms and combinations of offerings they prefer, rather than government antitrust regulators who may be carrying out their “Call of Duty” for powerful corporate rivals threatened with competition rather than for the consumers who would benefit from it.
John Klyczek joins Michael on the first episode of REKT. John (jakE) is the author of School World Order: The Technocratic Globalization of Corporatized Education. Topics include the behaviorist, collectivist, and eugenicist roots of public (and state-sanctioned private) education, the globalist organizations behind the stakeholder capitalism regime, and the making of “global citizens” through indoctrination and technocratic surveillance and control systems.
Get School World Order: Mises.org/Rekt1a
Find more work from John: Mises.org/Rekt1b
The usual suspects are “relieved” that Congress gave President Biden what he wanted on the so-called budget deal. Without sound money, however, the borrowing and spending regime will collapse sooner or later.
Original Article: “Sound Money Is Required for Real Budget Discipline“
To explain Japan’s economic problems, Paul Krugman employed a model that assumes people are identical and live forever. While admitting that the model is not realistic, Krugman nonetheless argued that his model could still offer solutions to the crisis.
In The Philosophical Origins of Austrian Economics, David Gordon wrote that Eugen von Böhm-Bawerk believed economic concepts must originate from reality and should be traced to their ultimate source. If one cannot trace them to their source, the concepts are meaningless.
Similarly, Ayn Rand suggested that concept formations are not arbitrary. The role of concepts is to integrate relevant existents, while the role of definitions is to identify the essence of the existents of a concept. According to Rand:
A definition is a statement that identifies the nature of the units subsumed under a concept.
It is often said that definitions state the meaning of words. This is true, but it is not exact. A word is merely a visual-auditory symbol used to represent a concept; a word has no meaning other than that of the concept it symbolizes, and the meaning of a concept consists of its units. It is not words, but concepts that man defines—by specifying their referents.
The purpose of a definition is to distinguish a concept from all other concepts and thus to keep its units differentiated from all other existents.
She adds: “The truth or falsehood of all of man’s conclusions, inferences, thought and knowledge rests on the truth or falsehood of his definitions.”
Milton Friedman declared that assumptions in various economic models can be detached from reality, writing:
The relevant question to ask about the “assumptions” of a theory is not whether they are descriptively “realistic,” for they never are, but whether they are sufficiently good approximations for the purpose in hand. And this question can be answered only by seeing whether the theory works, which means whether it yields sufficiently accurate predictions.
This way of thinking says our knowledge of economics is ambiguous. Since one cannot establish “how things really work,” the underlying assumptions of a theory don’t matter.
Do We Know Something about Ourselves?
Contrary to popular thinking, economics is not about gross domestic product, the consumer price index, or other economic indicators but about human interaction. For instance, one can observe that individuals are engaged in activities such as performing manual work, driving cars, or taking a walk, all actions being purposeful.
Furthermore, we can establish the meaning of these actions. Manual work may enable some people to earn money, allowing them to achieve goals like buying food or clothing. Dining in a restaurant may lead to the establishment of business relationships, and driving a car helps one to reach a destination.
The fact that individuals consciously pursue purposeful actions provides us with definite knowledge, setting the basis for coherently assessing an economy. Ludwig von Mises writes:
The physicist does not know what electricity “is.” He knows only phenomena attributed to something called electricity. But the economist knows what actuates the market process. It is only thanks to this knowledge that he is in a position to distinguish market phenomena from other phenomena and to describe the market process.
Physicists cannot directly verify assumptions because they know nothing directly of the explanatory laws or causal factors. In economics, however, human action is conscious and purposeful and not tentative. Anyone objecting to this concept contradicts himself, since he is engaged in a purposeful and conscious action to argue that human actions are not conscious and purposeful.
Knowing that people act purposefully permits us to evaluate the popular mainstream view that the “engine” of an economy is consumer spending driven by demand. We know that one cannot meet goals without means. However, means do not emerge out of nothing, as tools and machinery must first be produced. Contrary to popular thinking, the driving force is supply and not demand, since one’s demand is constrained by the ability to produce goods. The more one produces, the more goods one can demand.
In contrast, most economists believe the central bank should increase monetary pumping in response to an economic downturn. Money cannot promote real wealth generation, since it is simply a medium of exchange. Instead, increasing the supply of money undermines the wealth-generation process and leads to the boom-bust cycle. According to Murray Rothbard: “Money, per se, cannot be consumed and cannot be used directly as a producers’ good in the productive process. Money per se is therefore unproductive; it is dead stock and produces nothing.”
Is Predictive Capability a Valid Condition for Accepting a Theory?
The popular view that predictive capability determines the validity of a theory is incorrect. We can confidently say that an increase in the demand for bread will raise its price. This conclusion is true and not tentative. Will the price of bread go up tomorrow or sometime in the future? This cannot be established by theories of supply and demand but does not mean these theories are incorrect because they cannot predict the future price of bread.
Mises writes:
Economics can predict the effects to be expected from resorting to definite measures of economic policies. It can answer the question whether a definite policy is able to attain the ends aimed at and, if the answer is in the negative, what its real effects will be. But, of course, this prediction can be only “qualitative.”
Why Arbitrary Concepts Undermine Individual Well-Being
The arbitrary process of forming assumptions in economics should not be taken lightly. Rothbard writes:
But false assumptions are the reverse of appropriate in economics. For human action is not like physics; here, the ultimate assumptions are what is clearly known, and it is precisely from these given axioms that the corpus of economic science is deduced. False or dubious assumptions in economics wreak havoc . . .
For example, the central bank is required to pursue “price stability,” with the price level being a weighted average of prices of selected goods and services. From this, one can also infer that the average purchasing power of money is a weighted average of the purchasing power of money with respect to various goods and services.
Arithmetically, however, one cannot add up different goods in order to establish the average purchasing power of a unit of money with respect to different goods. For instance, the purchasing power of a unit of money could be established in the market as two potatoes and one loaf of bread.
Arithmetically, one cannot add up two potatoes to one loaf of bread in order to establish the average purchasing power of a unit of money with respect to bread and potatoes. If we cannot ascertain what something obviously is, it is not possible to keep it stable. A policy that is aiming at stabilizing a fiction can only lead to a disaster.
Conclusion
Conscious and purposeful conduct emanates from human beings. Consequently, in economics, we know and don’t assume. A theory based on assumptions that are detached from reality cannot be made valid simply because it generated accurate predictions during a particular time interval. Economic truths are immutable, not temporary.
In the pre-industrial world, aggression and physical domination were often labeled as “masculine” virtues because they were useful for survival. The rise of the cooperative market economy changed all that.
Original Article: “How Capitalism Redefined Masculine Virtue“
The Federal Reserve’s Federal Open Market Committee (FOMC) on Wednesday left the target policy interest rate (the federal funds rate) unchanged at 5.25 percent. This “pause” in the target rate suggests the FOMC believes it has raised the target rate high enough to rein in price inflation which has run well above the Fed’s arbitrary two-percent inflation target since mid-2021.
Yet, at Wednesday’s press conference announcing the FOMC’s decision, Fed Chair Jerome Powell also claimed that “Inflation remains well above our longer-run 2 percent goal” and “inflation pressures continue to run high and the process of getting inflation back down to 2 percent has a long way to go.”
Moreover, according to Powell, the labor market is red hot, with Powell stating “The labor market remains very tight” and “labor demand still substantially exceeds the supply of available workers.”
The Fed Wants It Both Ways
Both of these sentiments suggest that the Fed should keep allowing the target rate to rise. After all, if job demand is so high, that means continued increases to wage costs for employers plus more consumer demand for goods and services. That suggests more price inflation. Meanwhile, if measures of price inflation show that we have “a long way to go” that also suggests the Fed should keep allowing rates to rise.
In other words, all the facts presented by Powell himself point to a need for the Fed to stop pushing down interest rates and let them rise further. Yet, the Fed, for some reason, has decided now is a good time to hold the rate steady at 5.25 percent.
The Fed is certainly sending mixed messages, and apparently wants to have it both ways. Powell wants to announce he and the FOMC are firmly committed to combating price inflation by allowing interest rates to rise—and, by the way, allowing more securities to roll off the Fed’s $8.3 trillion balance sheet. At the same time, Powell also wants to claim that now is a good time to pause on rate hikes, even though the Fed’s favored PCE measure of price inflation is more than double the Fed’s target rate of two percent.
[Read More: “Powell Explains the Pause” by Robert Aro]
Of course, the reason for muddled messaging is not completely mysterious. The answer lies in examining the political situation. Fantasies about “fed independence” might blind some observers to the reality, but the Fed is a profoundly political institution, and must juggle a variety of political pressures. As it is, the Fed must seem like it is “doing something” about price inflation while simultaneously avoiding any moves that will cause the economy to slow to the point where it becomes politically problematic for the administration. The incoherence we now see from Powell is a direct result of the Fed’s desire to send several conflicting messages at once.
The Fed Rarely Resumes Substantial Hikes after a “Pause”
For cynical veteran Fed watchers, the pause immediately raises the question of whether or not this will turn out to be a permanent pause, followed in, say, six months by a drop in the target interest rate. After all, historical experience shows that when the Fed “pauses” it rarely goes back to any sort of sustained period of monetary tightening.
Over the past thirty years, there have only been a few occasions during which the Fed paused for more than a single month, and then went back to allowing the target rate to move upward again. This occurred briefly in 2017, and in 1996 and 1997. In the quantitative tightening period between the Dot-com Bust and the Great Recession, however, the Fed never “paused” longer than a single month. If the Fed fails to allow rates to climb again next month, we’ll have good reason to suspect that the Fed is done with this current round of rate hikes.
So, now that the FOMC has “paused,” will it ever start up with rate hikes again? The odds are against it, but it is possible. It will all come down to how much the Fed fears that price inflation will again head upward to politically damaging levels. That fear, after all, is the only reason the Fed has ever entertained the idea of allowing rates to rise anywhere near the current level of 5.25 percent. The last decade has shown us that the Fed clings to a bias very much in favor of ramming down interest rates again and again. This is what happened in the ten years of near-zero rates that followed the 2008 financial crisis. Every month, the FOMC would come out and say that the economy was “growing” and was showing “strength” yet repeatedly refused to raise rates.
The Fed Is Making It Up as It Goes
This Fed’s contradictory messages are so apparent that even some members of the media asked why the Fed is bothering to pause at all. As one reporter asked at the press conference, “what’s the value in pausing and signaling future hikes versus just hiking? … so why not just rip off the Band-Aid and raise rates today?”
Powell’s answer was to admit that the Fed and its legions of economists don’t actually know what the results will be of the Fed’s tightening, so they’re just going to take a wait-and-see attitude. This non-response from Powell highlights the fact that the Fed has long since abandoned its claim to have in place some kind of long-term plan for monetary policy. Gone are the days of “forward guidance” and we’re now in the days of “we’ll tinker with the economy and see what happens next.”
This makes sense given that a look back at the FOMC’s economic projects have been very, very wrong in recent years. According to the FOMC’s Summary of Economic Projections (SEP) from September 2020, for example, every FOMC member but one predicted that the target interest rate in 2022 would remain at 0.25 percent, with only one member venturing to suggest that the rate might get up to 0.75 percent in 2022. Projections for 2023 were not much more accurate with only three FOMC members predicting that the target rate would rise above 0.25 percent. By March 2022, most FOMC members were still predicting that the target rate in 2022 would be below three percent, and only five members guessed the rate might exceed three percent in 2023. Members were also way off on projections about price inflation and GDP growth.
The Fed Has Kept the Target Interest Rate Very Low for a Very Long Time
In fact, the Fed was so committed to ultra-low rates between 2008 and 2023 that the mismatch between price inflation rates and the federal funds rate was larger than anything we’ve ever seen before. That is, if we compare the federal funds rate to the Fed’s favored measure of price inflation—PCE inflation—we see that historically, the target rate was usually above the PCE inflation rate. The exceptions were in periods we know to be inflationary, such as in the mid 1970s under the Burns Fed.
If we look at this gap between the PCE and the target rate, however, the period between 2008 and 2023 really stands out as a remarkably long period during which the target interest rate remained at rock-bottom levels, well below the official price inflation rate. Indeed, this graph shows that going back at least as far as 1960, no other period comes even close to keeping the target rate so far below the price inflation rate for so long. Out of 177 months since the 2008 financial crisis was revving up in August 2008, only 16 months have seen the target interest rate rise above the official inflation rate.
With all that easy money sloshing around for so long, we can see that FOMC members have good reason to fear that inflation has not yet been tamed.
There Is No Fed “Independence.” Politics Is Guiding Fed Policy.
On the other hand, the Fed will encounter immense opposition to ongoing rate hikes if the economy obviously slows. But how to decide if the economy is getting “bad” or not? A lot will depend on whether or not policymakers at the Fed and in the federal government actually believe that the labor market is as tight as Powell has repeatedly insisted.
As I noted in a recent article on the jobs data, the Fed only ever refers to the job-growth data from the establishment survey. Powell conveniently ignores the data from the household survey which has actually shown a collapse in self-employment, and several declines in total employed persons in recent months. The establishment survey’s job-growth data is among the few economic indicators pointing to a strong economy right now. Numerous other indicators of manufacturing activity, consumer debt, bankruptcies, and the yield curve all point to economic trouble. If we consider these other metrics—and not just the Fed’s rosy labor picture—then the Fed pause is more easily explained: the Fed is pausing out of fear of weakening the economy to the point of alarming voters.
With the Fed, however, what Powell says publicly, and what is actually going on behind the scenes, are two different things. We can only guess what their real motivations are. It is a safe bet, however, that the Fed is trying to thread a needly here in which it somehow manages to bring down price inflation while also allowing the Biden administration to claim that the economy is in great shape. What happens next will depend heavily on what the regime will feel is necessary to buoy public support for the regime and its current ruling party.
Everything seems to be lining up perfectly for individual investors with Joe Biden and Kevin McCarthy making a debt ceiling deal. In fact, a sentiment poll reflects an ebullient investor class. According to an Investors Intelligence article titled “Assume the Positioning” (reprinted in Almost Daily Grant’s, June 1, 2023), “Just 23.3 percent of respondents are bearish on stocks, the lowest since January 2022, [when] the market scaled the summit of the everything bubble.”
But that same debt ceiling fix will unleash a torrent of US Treasury issuance that will overwhelm the markets leaving stock investors in its wake. Cem Karsan of Kai Volatility Advisors told Maggie Lake on Real Vision, “By most estimations . . . we’re going to have to issue $1.4 trillion in debt before the end of the year. That is a massive sucking sound out of asset markets.”
“There’s got to be buyers of that debt,” Karsan said, stating the obvious, “which means that money is going to come from somewhere. And if that means interest rates go higher, as that supply comes on the market, demand has to be met. That means equity markets or somewhere else, some other risk asset has to reduce liquidity.”
Another expressing concern about liquidity is Eurodollar University‘s Jeff Snider who says those who think the Fed is just printing money are missing the real story. Snider told Raoul Pal on Real Vision,
Nobody ever stops and thinks about what are these bank reserves and what do they actually do? Are they actually a form of base money? And the answer is no. And they haven’t been in decades. In fact, this was a major problem that Paul Volcker confronted in the late 1970s and early 1980s. Banks had found different ways of doing money in liquidity that didn’t involve these bank reserves.
The hyperfocus on the size of the Fed’s balance sheet and in turn that its increase obviously means more money has been created is wrong, says Snider, who points out that people don’t see the money destroyed in the shadow system. He also points out that it’s not the amount of the money stock that’s important but the circulation of money and credit in the real economy.
This year money is leaving the banking system and not returning. According to Reuters, “The FDIC said the $472 billion in deposit outflows in the first quarter was the largest it had recorded since it began collecting such data in 1984.” This deposit exodus in search of higher yields likely continued in the second quarter.
While we’re left believing that the Fed has printed a bunch of money that’s highly inflationary, in certain circumstances—especially 2008, 2009, and to a degree 2020, 2021, 2022, and now 2023—we know that there’s more deflation in the monetary system than whatever the Fed might have created in terms of bank reserves. Snider says banks are supposed to do intermediation as well as money creation but haven’t done either since 2008. Banks, he says,
want to just hold to the safest and liquid assets, and just try to pick up as many nickels as they can. Understanding that whether it’s in a couple months or a couple years, they’re going to go through another liquidity problem again, and have to worry more about safety and liquidity than they do about risk-taking.
In the simplest terms, banks just haven’t created enough money. Murray Rothbard explained how banks create money in The Mystery of Banking. Banks create money by lending to individuals and businesses, not, for instance, by parking money at the Fed’s reverse repo facility, where balances have grown from zero in March 2021 to over $2.1 trillion currently, earning 4.3 percent.
So, in Snider’s view, “Even though the Fed is creating all these trillions of bank reserves, there isn’t enough bank money around in the Eurodollar system which leaves it susceptible to what should be nothing. The smallest little thing can set off this major issue, because it’s that fragile.” Banks aren’t taking risks, and neither are money market funds, which are looking for safety before return.
If this reminds you of 2008, it should. According to Snider,
The 2008 crisis wasn’t really about subprime mortgages. That’s just where it began. And once it started to infect all of these major functions in the banking system, it led to the situation that we’re confronting now, where money didn’t circulate freely throughout the global Eurodollar system, which led to all sorts of problems.
Likewise, falling commercial real estate prices are infecting other things, leading to disruptions in the market, which leads to a lack of liquidity and more risk aversion. And more risk aversion means more lack of liquidity in these markets. Don’t count on the Fed to fix this mess. As Snider said, “The Federal Reserve and central banks are always looking backwards. They don’t see these things coming so there’s no help from them either. And pretty soon before you look around, markets are illiquid. Banks are struggling for funding. Some more of them are failing.”
Lyn Alden is another who is being kept up at night worrying about liquidity. She tweeted on June 1, “However, now that the Treasury cash drain is finished, and we start looking ahead past the debt ceiling, we are potentially encountering the next period of negative liquidity (rather than sideways liquidity).”
She wonders what will break next. Last September it was the United Kingdom gilt market and nearly the US Treasury market. In March a few regional banks with unusually high duration exposure and uninsured deposit exposure failed, and now she says we have to watch the small banks and the Treasury market.
Jeff Snider has his eye on September for a liquidity crisis. “So, if you’re thinking ahead, there’s probably a really good chance that something happens in September, if not beforehand.” Karsan echoes that view: “It’s not a coincidence that mid-August into mid-September is often a scary time.”
You can talk with your registered investment advisor about your stocks’ fundamentals, but as Karsan says, “It hasn’t been about fundamentals for decades now. That’s the narrative you hear on CNBC.” It’s liquidity that moves stock prices.
Stock investors—danger lurks, and Uncle Sam is going to crowd you out.
Most people agree that we are closer to nuclear war than at any time since the 1962 Cuban Missile Crisis. Some would even argue that we are closer now than we were in those fateful days, when Soviet missiles in Cuba almost triggered a nuclear war between the US and the USSR.
In those days we were told that we were in a life-or-death struggle with Communism and thus could not cede a square foot of territory or the dominoes would fall one-by-one until the “Reds” ruled over us.
That crisis was very real to me, as I was drafted into the military in the middle of the US/USSR standoff over Cuba and we could all feel how close we were to annihilation.
Fortunately, we had a president in the White House at the time who understood the dangers of nuclear brinkmanship. Even though he was surrounded by hawks who could never forgive him for aborting the idiotic Bay of Pigs Cuba invasion, President John F. Kennedy picked up the telephone for a discussion with his Soviet counterpart, Nikita Khrushchev, which eventually saved the world.
Historians now tell us that President Kennedy agreed to remove US missiles from Turkey in exchange for the Soviets removing missiles from Cuba. It was a classic case of how diplomacy can work if properly employed.
It is all too clear that we do not have a John F. Kennedy in the White House today. Although we no longer face a Soviet empire and communist ideology as justification for taking a confrontational tone toward Russia, the Biden Administration is still dragging the US toward a nuclear conflict. Why are they putting us all at risk? The same old “domino theory” that was discredited in the Cold War: If we don’t fight Russia down to the last Ukrainian, Putin will soon be marching through Berlin.
This all started with Biden promising to only send uniforms and medical supplies to Ukraine for fear of sparking a Russian retaliation. From there we went to anti-tank missiles, multiple-rocket launchers, Patriot missiles, Bradley fighting vehicles, and millions of rounds of ammunition. The Biden Administration announced last week that it would send depleted uranium ammunition to Ukraine, which poisons the earth for millennia to come. Rumors are that long-range ATACMs missiles are to be delivered soon, which could strike deep into Russia.
Apparently, F-16 fighter jets are also on the way.
The escalation rationale from Washington, we are told, is that since the Russians have not directly retaliated against NATO for NATO’s direct support of Ukraine’s war machine, we can be sure they never will respond.
Is that really a wise bet? It is clear to many that US-built F-16 fighters taking off from NATO bases with NATO pilots attacking Russians in Ukraine – or even Russia itself – would be a declaration of war on Russia.
That means World War III – something we managed to avoid for the whole Cold War.
Congress is silent – or compliant – as we lurch forward toward disaster for no discernable US strategic goal. Biden – or whoever is actually running the show – is forging straight ahead.
As we move into the US presidential election cycle one thing is clear: we desperately need a peace president to do for us what JFK did for the US during the Cuba crisis. Hopefully it won’t be too late!
While many believe that technology is key to a growing economy, technology is useless without entrepreneurship, which develops uses for technology.
Original Article: “Technology Is Meaningless without Entrepreneurship“