ECONOMICS: Axiom — Rent control makes everyone poor except politicians!

https://jeffjacoby.com/26719/as-any-economist-can-tell-mayor-wu-rent-control

As any economist can tell Mayor Wu, rent control never works
by Jeff Jacoby
The Boston Globe
January 29, 2023

*** begin quote ***

From the other side of the aisle, the renowned conservative economist Thomas Sowell agrees. Rent control policies, he said in a 2019 interview, turn everyone into losers:

“The tenants lose because they can’t find a place to stay. Landlords lose because they don’t make the profit they would have made otherwise. The builders lose because there’s no demand for apartment buildings if no one can make a profit on them.” By and large, observed Sowell, politicians are the only class of people who come out ahead. “They get the reputation of being for the poor and the downtrodden [and] preventing the evil landlords from raising the rent.”

As if that isn’t enough, rent control is infamous among economists for other negative impacts. It exacerbates racial discrimination in housing. It multiplies bureaucracy. It disproportionately hurts those it is intended to help. And what is true in America is true everywhere. When rent control has been tried in other countries, from Canada to Germany to Sweden, the outcomes have been dismal. Even communist Vietnam abandoned rent control after its destructive impact became apparent.

*** end quote ***

Why do “we” have to keep reinventing the wheel?  “We, The Sheeple” should immediately give any politician or bureaucrat that mentions “rent control” the pitchfork and torches treatment.

Argh!

—30—

ECONOMICS: Recongize reality and change the retirement age to 75 or 85?

https://www.zerohedge.com/personal-finance/raise-social-security-age-least-75

Raise The Social Security Age To (At Least) 75
by Tyler Durden
Sunday, Jan 29, 2023 – 06:30 PM
Authored by Ryan McMaken via The Mises Institute

  • On January 10, the French government announced plans to raise the retirement age from 62 to 64.

*** begin quote ***

One thing raising the age has going for it is that it’s been done before. A 1983 change very gradually increased the full-benefits age from 65 to 67. That’s much too little, and even an increase to age 75 would be a mild reform. Other reforms, up to and including abolition, should include means-testing pensions and totally defederalizing and decentralizing the program. But it’s also easy to imagine the tidal wave of opposition from activists who vehemently oppose even a very mild reduction in Social Security payouts. Raising the age won’t make Social Security just, prudent, or wise. But cutting federal spending is always the right thing to do.

*** end quote ***

As horrific this change wood be, it’s needed to prevent economic catastrophe.

Time to unwind the Ponzi scheme.  Those, that are close to their retirement age (i.e., 55), don’t have enough working time to adjust to the loss or reduction in Social Security benefits.  And, don’t forget that there is a terrible age discrimination problem when workers turn 40, 50, or 55. So evidently, those under 40 are going to take a real haircut.

I doubt the current crop od politicians and bureaucrats have any stomach for the pain to be inflicted on themselves and the general population.

One thing is for sure, “they” can’t print their way out of this one.

—30—

On Mon, Jan 30, 2023 at 10:39 AM Luddite wrote:

“Back in the day” when I was making some decent coin, I was always pleased each year when I reached the maximum income required on SS withdrawals each month. I remember a couple of years when I received some big January bonuses that they stopped taking out SS in April! In my opinion, the easiest solution to preserving SS is to remove the cap on income. I understand that the reason we even have a problem is because the crooks raided the fund years ago and have never paid it back, but given the current situation I believe removing the cap is the easiest and least painful solution. What say you? (Also understanding that I just poked the libertarian’s cage!)

# – # – # – # – # 

Taxation is theft. 

Starting from that basic principle, “eliminating the cap” merely allows the current plundering to continue. 

A radical reform is required to truly correct the problem.  Will some get hurt, yup. 

To minimize the pain, the young should be excluded, the old exempted, and the middle get the full retirement age adjusted. 

Say a 40 goes from 69 to 80, 50 goes from 68 to 75, 55 from 68 to 70. 

Then in 40 years social security goes away.

It’s only fair way to unwind the ponzi scheme.

Yes, fiscal reality sucks.  Economics is the dismal science. And, TANSTAAFL (“There Ain’t No Such Thing As A Free Lunch” From Robert Heinlein’s classic)!

Sigh.

—30—

ECONOMICS: Maybe I have to start looking at price per ounce?

https://www.zerohedge.com/markets/whats-your-line-sand-25-burger

What’s Your Line In The Sand? The $25 Burger?
by Tyler Durden
Thursday, Dec 22, 2022 – 09:22 AM

  • Authored by Charles Hugh Smith via OfTwoMinds blog,
  • The gag reflex kicks in at some point and we walk away because it is no longer worth the price.

*** begin quote ***

Everyone has a line in the sand when it comes to inflated prices they refuse to pay. For one Walmart shopper I observed, it was a carton of eggs for close to $10. She announced her line in the sand verbally, with great force and sincerity.

What’s your line in the sand, the point at which you simply refuse to pay the asking price? Is it the $25 burger? Or is it the $50 for two burritos and two beverages?

Each person’s line in the sand reflects their income, wealth, budget, social status and value system–what’s important to them. For some higher income folks, it might be the ridiculous “resort fee” that’s tacked onto the already overpriced resort room, hotel tax, excise tax, parking fees and the extra-special charge for Internet service.

For others, it might be the outrageous estimate for repairing a system failure in a nearly-new vehicle that is (surprise!) no longer covered by the manufacturer’s warranty. Hundreds of dollars for what?

*** end quote ***

Hmmm, now that’s an interesting pot question.

For me, it has to be the $9 “craft beer”.  I switched at my local bar from draft to bottles when the price was 7$ for a draft and 3$ for a bottle.  Maybe I have to start looking at price per ounce?  Or, milliliter!

Dining out has become a $100 proposition.  Isn’t that far beyond the average working stiff?  It certainly is getting there for the senior citizens and people with rug rats.

Sad. 

And it’s all caused by the politicians and bureaucrats “printing” money.

Where does the merry-go-round stop?

Soon I think.

—30—

ECONOMICS: All pensions, IRAs, and 401Ks — as well as Social Security — many not be there to “retire” on

https://www.realclearinvestigations.com/articles/2022/11/15/lost_retirement_horizon_why_401ks_are_not_ok_and_not_just_because_of_to_the_lousy_economy_864500.html#

Lost Retirement Horizon: Why 401(k)s Are Not OK (and Not Just Because of the Lousy Economy)
By John F. Wasik, RealClearInvestigations
November 15, 2022

*** begin quote ***

Fretting over your 401(k) lately? For all the current turbulence in these retirement plans – from their rocky recent market performance to asset managers’ politicization of their investments through the “environment, social and governance” agenda – the main problem lies in their flawed design decades ago, a range of retirement experts say.

They say many retirees – particularly the less well-off – are losing out because the tax-advantaged accounts favor the well-compensated who are better able to save; also, because of the plans’ temptingly relaxed borrowing rules, typically high fees, complexity, and a presumption of investing competence on the part of ordinary workers.

*** end quote ***

Let’s not overlook the fact that “social security”, in addition to being a racist wealth transfer program from poor minority men to rich white women, is un- or at least very under-funded. It seems unlikely that, at even the best rate of inflation of 2%, the “benefits” payment will be in “shrunken purchasing power’. In the case of “social security”, it’s likely to be reformulated as a “welfare” program with all sorts of income limits and regulations. The “golden rule” (i.e., he who has the gold makes the rules” means that the Gooferment will be making the rules. When the “can” (i.e., deficit, debt, interest expense) can no longer “be kicked down the road”, then Joe-SixPack will suffer. If I was young, I’d store my “wealth” in things the Gooferment can’t tax (i.e., precious metals in my backyard) or touch (i.e., all pensions, IRAs, and 401Ks are seized in exchange for “enhanced” social security “benefits”). It can happen here (i.e., FDR’s gold recall). Argh!

—30—

ECONOMICS: Social Security is a Ponzi scheme that is a national disaster and getting worse

https://www.dailysignal.com/2022/11/02/7-facts-biden-ignored-about-social-security-in-his-speech-to-florida-retirees/?utm_source=TDS_Email&utm_medium=email&utm_campaign=MorningBell&mkt_tok=ODI0LU1IVC0zMDQAAAGH2-4XvReNlf-88oulRzrqa4RzRxEmWEZbT5rnJoS1tumDrnI9892TnNi09M5trdns5w9_APQOfhNXa47MWqPTZVlYwUJcobrXBm7-PtbXZWG3ovRJ

7 Facts Biden Ignored About Social Security in His Speech to Florida Retirees
Rachel Greszler / November 02, 2022

  • Rachel Greszler is a research fellow in economics, budget, and entitlements in the Grover M. Hermann Center for the Federal Budget, of the Institute for Economic Freedom, at The Heritage Foundation. Read her research.

*** begin quote ***

Social Security is a bad deal for current and future workers. Social Security may have been a good deal for Biden’s generation, but it’s not a good deal for current and future workers. A Heritage Foundation analysis showed that the average younger worker could receive nearly three times as much as Social Security can provide if they were instead able to save Social Security taxes in their own retirement accounts. (The Daily Signal is the news outlet of The Heritage Foundation.) Even low-wage workers making about $20,000 a year could have 40% larger incomes in retirement as a result of saving on their own. And personal savings can be passed on to family members or friends, something that’s especially important for lower-income Americans, who are less likely to be able to save outside of Social Security and also for individuals with shorter life expectancies. One in five black men will die between the ages of 45 and 65, meaning they will pay tens or even hundreds of thousands of dollars into Social Security and could get little or nothing in return.

*** end quote ***

It’s often been asserted and proved that Social Security is a racist program that transfers wealth from poor minority men to rich white women.

If for no other reason, it needs to be eliminated.  I’m sure the financial gurus can transform the unfunded liabilities fairly.  Yes, it will be painful and not pretty.  I can foresee the under 40 participants getting a 25+ year bonds for their “benefit”.  The 40 to 67 get a similar but non-transferable bond ladder.  Current recipients will have to be paid out of the current budget.  It’s going to require pain, but it’s better than future financial disaster when all the politicians and bureaucrats who created the mess are long dead.

Argh!

—30—

ECONOMICS: Are “knowledge workers” next on the obsolesce curve?

https://www.bworldonline.com/opinion/2022/10/11/479904/five-ideas-that-will-reshape-capitalisms-next-century-2/

Opinion
Five ideas that will reshape Capitalism’s next century
October 11, 2022 | 5:38 pm

*** begin quote ***

THE GREAT KNOWLEDGE-WORKER CULL
First, they came for the agricultural workers. Then they came for the industrial workers. Now they are coming for the knowledge workers

THE RISE OF THE TRILLION-DOLLAR TRUST FUND BABY
In the next decade or so we will see the birth of a new kind of baby: trillion-dollar trust fund babies who are destined to inherit fortunes that are bigger than the GDPs of small countries or the stock-market valuations of large companies.

THE NEXT FRONTIER OF COMPETITIVE ADVANTAGE: GENETICS
The West has understandably remained nervous about exploiting the potential of genetic science since the horrors of the Holocaust. That is likely to change in the coming decades — indeed genetic science may be for the next 40 years what computer science was for the past 40 years.

THE NEW ROAD TO SERFDOM
The great clarion call of market societies is freedom: freedom to exchange the fruits of our labor in the marketplace for goods and freedom to express our views in the marketplace of ideas. Yet there is a growing risk that we are losing our freedoms not only to a new generation of intellectual censors but to watchers who monitor our every move.

*** end quote ***

I couldn’t find the fifth idea.  

But the first one is stunning. 

If I was a “knowledge worker”, then I’d be very concerened.

—30—

ECONOMICS: Energy is critical to life as we know it and it’s not “free”

https://www.realclearenergy.org/articles/2022/10/03/joe_bidens_energy_crisis_856943.html

Joe Biden’s Energy Crisis
By Rupert Darwall
October 03, 2022

*** begin quote ***

The West is experiencing its third energy crisis.

*** and ***

This time is different. The third energy crisis was not sparked by Saudi Arabia and its Gulf allies or by Iranian ayatollahs. It was self-inflicted, a foreseeable outcome of policy choices made by the West: Germany’s disastrous Energiewende that empowered Vladimir Putin to launch an energy war against Europe; Britain’s self-regarding and self-destructive policy of “powering past coal” and its decision to ban fracking; and, as Joseph Toomey shows in his powerful essay, President Biden’s war on the American oil and gas industry.

*** end quote ***

The USA went from a net exporter to a net importer all to be “green”.  Like “climate change” is a real thing!  And, if it was, that it’s not driven by China and India.

We have not built a gasoline refinery in the USA since the 70’s (or so I’m told).

This “electric car” stupidity is just beyond comprehension.

Hopefully the voters can start taking back control.

31T$ of debt should be a huge wake up call.

—30—

ECONOMICS: Cryptocurrency — no regulation needed — Caveat Emptor

https://www.zerohedge.com/crypto/secs-reckless-crusade-crush-cryptocurrency-market

The SEC’s Reckless Crusade To Crush The Cryptocurrency Market
by Tyler Durden
Wednesday, Sep 28, 2022 – 08:20 PM

Authored by Gerard Scimeca via RealClearMarkets.com

*** begin quote ***

The outcome of the SEC case against Ripple is critical in not just establishing a fair and just baseline for the protection of crypto investors, but as a test case in setting boundaries to stop overreach by federal agencies seeking to advance their power at the expense of efficiency. Crypto is popular and growing precisely because of its efficiency, flexibility, and vast utility in financial markets, benefits that can easily be quashed through intrusive and heavy-handed regulation. The ultimate arbiter of these issues is Congress, who must act, and soon, to help establish a clear framework to regulate crypto, and to limit the SEC’s power to occupy spaces where it simply does not belong.

*** end quote ***

Sorry, but all the Gooferment ever does is impede progress.

Is an “unregulated” market “dangerous”?

No, let the buyer beware and let the “invisible hand” of the free market quickly and efficiently discipline bad actors.

No bureaucrats required.

—30—

ECONOMICS: Biden buys votes with student loan forgiveness

https://schiffgold.com/key-gold-news/somebody-has-to-pay-for-student-loan-forgiveness/

Somebody Has to Pay for Student Loan Forgiveness
August 24, 2022 by Michael Maharrey

*** begin quote ***

President Biden is expected to announce student loan forgiveness on Wednesday (Aug. 24). The plan will reportedly cancel $10,000 in student loan debt for anybody making less than $125,000 per year.

A lot of people think this is like waving a magic wand — poof — the debt is gone. But somebody has to pay and that somebody is the American taxpayer.

Nothing the government does is free. Ultimately, student loan debt forgiveness will add to the already massive budget deficit. That means Uncle Sam will have to borrow more money that taxpayers will have to repay, either in higher taxes or the inflation tax.

*** end quote ***

And we know who all pay — the Taxpayers.

The economy will have more inflation to deal with and the moral hazards keep piling up!

—30—

ECONOMICS: Here’s at least on good idea to save “Mother Earth”

https://www.dailymail.co.uk/femail/article-11105347/People-share-clever-zero-waste-tips-including-brothers-sent-birthday-card-1973.html

Waste not, want not! Social media users share their genius ideas for reducing, reusing and recycling – from resending the same birthday card to making an ice cream cone out of a banana leaf

  • People around the world are re-thinking what can be reused or recycled
  • Many people are becoming more aware of their environmental impact
  • Bored Panda collated some people’s very clever yet unusual zero waste tips

By Ellen Coughlan For Mailonline
Published: 04:02 EDT, 13 August 2022 | Updated: 04:09 EDT, 13 August 2022

*** begin quote ***

With two billion tons of waste dumped every year around the world, people have started to re-think what can be reused or recycled.

Many are becoming more aware of their environmental impact as rubbish sent to landfill represents a significant amount of greenhouse gases which have contributed to climate change.

People from around the world have shared their best zero waste ideas on social media, with Bored Panda collating some in an eye-opening online gallery.

*** end quote ***

As you know, I’m not a big believer in the “Mother Earth” Galia worship. But as an fat old white guy injineer, waste indicates that a better process exists and should be deployed.

A banana leaf is a good substitute for that paper wrapped around the ice cream cone.  But I like the cones.

Only serving coffee in the patron’s own cup seems to be a substantial saving.

My personal favorite is the reused birthday card.  Not that I send paper cards, I use e-cards from Jacqueline Lawson. https://www.jacquielawson.com/ which are really beautiful and completely “recyclable”. Laugh!

—30—

ECONOMICS: Bitcoin exposes the weakness of fiat “money”

https://www.zerohedge.com/crypto/hidden-costs-fiat-bitcoin-standard

“The Bitcoin Standard” Exposes The Hidden Costs Of Fiat
by Tyler Durden Monday, Apr 11, 2022 – 03:03 PM
Authored by Archie Chaudhury via BitcoinMagazine.com,

*** begin quote ***

Dr.u Saifedean Ammos, author of “The Bitcoin Standard,” explained how fiat has hidden costs and why Bitcoin represents the next generation of money…

Detractors of Bitcoin often point to its costs – namely in the form of electricity used in proof-of-work mining and its perceived impact on the environment – as reasons for why it will never be a sustainable alternative to traditional fiat currency. These detractors often believe that Bitcoin is fundamentally unscalable, or more likely, come from the power structures that fiat currency has enabled, such as government or centralized financial institutions.

In his presentation on the main stage of Bitcoin 2022, Dr. Saifedean Ammous delivered a presentation meant to underscore the invisible costs of fiat money, and how it has been used for centuries to economically oppress the average citizen of a fiat-based economy. Dr. Ammous has long been a supporter of Bitcoin, and has written “The Bitcoin Standard” and “The Fiat Standard,” both of which have helped educate numerous individuals about the advantages of Bitcoin and the corruption that is ingrained in most fiat states.

Dr. Ammous started his speech by focusing on inflation and how using fiat money helps back a system that is inherently unequal. Dr. Ammous specifically cited how fiat inflation is used primarily for the needs of the government, saying that “The cost of fiat is currently 3.5% of all global wealth, and is used to finance government parasites, wars, and monopoly banksters.”

*** end quote ***

Inflation is the silent tax that has robbed “We, The Sheeple” of 99% of the purchasing power of their “dollars”.

The politicians and bureaucrats love it because unless you look for penny candy, or a nickel cigar you won’t see it.

That what this thrives count on.

Argh!

—30—

ECONOMICS: Is the American Empire in decline — seems that way

“In a few words: the West is in decline and our leaders are greatly accelerating and exacerbating this decline. They can cover this up with redundant arguments about what is and isn’t a recession for so long. But at some point either the inflation will get worse — perhaps by gas shortages in Europe this winter — and/or the unemployment rate will spike. At that point, the underlying dynamics will become too obvious to ignore; for politicians and the general public anyway. Economists will likely find some other redundant nuance to debate and distract.”

https://macrocosm.substack.com/p/is-this-or-is-this-not-a-recession?utm_source=substack&utm_medium=email

# – # – # – # – #

It certainly seems that the “can” has finally been kicked as far down the road as it can be.  And, some very ugly economic “chickens” are going to come home to roost.

Instead of learning from the malaise in Japan, or the abject failures of previous “bailouts”, the politicians and bureaucrats have continued to increase their spendthrift ways.

“We, The Sheeple” are going to feel the pain!

—30—

ECONOMICS: FT Opinion ignores that there is no way to pay the debt that has been created

https://www.ft.com/content/db0a2535-7292-4c84-9015-0d9c4af67713?segmentId=b385c2ad-87ed-d8ff-aaec-0f8435cd42d9

Opinion The FT View
US recession is a smaller danger than long-term inflation
The Fed needs to hold its nerve on tightening further
The editorial board

*** begin quote ***

Investors have spent much of this week puzzling over what this all means — edging up predictions for the future path of interest rates and for the chances of recession. But there is good news in some of it — it is hard to read the markets’ responses as indicating that investors think this ultra-high inflation is now a permanent feature of American life. The Fed has credibility. But it still needs to tighten further to justify that faith.

*** end quote ***

I respectfully disagree.

The current 30T$+ national debt and the guesstimated 226T+ in unfunded liabilities that our posterity will have to deal with is inescapable.

The Russian “sanctions” over Ukraine have put the USA on a collision course to crush the U$D.  (The fact that it’s the cleanest dirty shirt in the laundry is little comfort.)

For decades, responsible people have been pointing out that empires fall when their currency is debased.  Why should the USA be any different?

We have kicked the can down the road and we can see the end of the road.

End the FED and return to sound money.

—30—

ECONOMICS: If my leased car’s value is understated, ain’t I paying from more “leave value” than I am getting?

Ford eliminates end-of-lease purchase option for EVs

https://www.autoblog.com/2022/06/24/ford-ends-purchase-option-on-leased-vehicles/

# – # – # – # – #

The “game” may be having a “rules” change because used cars are more valuable than the lease’s return price.​

So that means you the leaser (i.e., sucker) paid more for the value of the lease than calculated and you can’t recapture that at the end of the lease by selling the “pig” privately.

Seems like something akin to theft by fraud.

—30—

ECONOMICS: There is no such thing as “price gouging”

https://patch.com/new-jersey/southbrunswick/s/i9a9w/baby-formula-shortage-prompts-nj-state-of-emergency-murphy?utm_source=nearby-news&utm_medium=email&utm_campaign=alert

Baby Formula Shortage Prompts NJ State Of Emergency: Murphy
Those looking to make a profit by increasing baby formula prices will face severe penalties in New Jersey, officials said.
Nicole Rosenthal, Patch Staff
Posted Wed, May 18, 2022 at 8:40 am ET

*** begin quote ***

NEW JERSEY – Gov. Phil Murphy declared a state of emergency in New Jersey on Tuesday amid an ongoing shortage of baby formula due to inflation, supply chain issues and recalls in the state and around the country.

The declaration was signed in order to activate New Jersey price gouging laws consistent with efforts at the federal level, according to Murphy.

“We firmly believe that New Jersey is the best place in the nation to raise a family, and during this challenging time, we want to support our
families with all of the resources at our disposal,” Murphy said in a statement.

“To any retailer who may try to take advantage of vulnerable families during this shortage, let me be clear that this reprehensible action will not be tolerated. And to any New Jerseyan affected by this shortage, rest assured that my administration will do everything in our power to ensure families have access to the formula they need.”

*** end quote ***

Once again, this is just Gooferment stupidity. There’s no such thing as “price gouging”. Higher prices are the signals from the market that makes TWO things happen — conservation of a scarce resource and an incentive to entrepreneurs to provide resources or alternatives. Baby formula is no different that any other commodity. Argh!

Like the hotels taking in refugees from a natural disaster MUST raise their prices to encourage “conservation”.  If the price is “too high”, then a family will squeeze into one room rather than spread out into two.  Then this will leave that other room free for some other family.  The market place “rations” scarce resources by higher priced.  

Also, entrepreneurs may open a spare bedroom during an emergency to make a few bucks because of those high prices.

Argh!

Real economists like Walter Williams have made much stronger arguments than I ever can. But it’s clear that politicians and bureaucrats never studied any economics or enjoy posturing for the publicity.

Argh!

—30—

ECONOMICS: Anti-trust? Let Musk buy Twitter. It’d would be a hoot!

https://www.spiked-online.com/2022/04/15/why-elon-musk-has-rattled-them/

Why Elon Musk has rattled them

  • His attempted takeover of Twitter has revealed just how terrified the liberal elites are of freedom of speech.

Tom Slater Editor 15th April 2022

*** begin quote ***

We stand here on the edge of tyranny… Elon Musk wants to buy Twitter. That, roughly speaking, has been the commentariat reaction in recent days as the world’s richest man has launched a takeover attempt of the social-media giant, citing his concerns about its censorious policies as his main motivation.

Musk revealed last week that he had become Twitter’s largest shareholder, with a 9.2 per cent stake. Now he’s offered to buy the whole company for a cool $43 billion, a nice premium on its current worth. As it stands, Twitter’s board is resisting and America’s great and good have gone berserk.

The Washington Post’s Max Boot was swift out of the blocks. ‘I am frightened by the impact on society and politics if Elon Musk acquires Twitter’, Boot tweeted. ‘He seems to believe that on social media anything goes. For democracy to survive, we need more content moderation, not less.’

*** end quote ***

What better way to break up Big Tech than to have some “wild card” break in?

—30—

ECONOMICS: The economy has yet to recover from covid, but the stock market is being inflated

https://www.zerohedge.com/markets/nothing-has-changed-except-everything

Nothing Has Changed, Except For Everything
BY TYLER DURDEN
MONDAY, MAR 28, 2022 – 09:30 AM

*** begin quote ***

The signs and symptoms I’m paying attention to are as follows (read this list slowly, and take it all in):

  • We have a market that saw the NASDAQ (an index) rise about 120% in less than 2 years off its March 2020 lows, despite the fact that our economy never materially recovered during the same period of time.
  • Our money supply (M2) rose between 21.7% and 26.92% year over year, between April 2020 and February 2021. Its long term YOY average rise, including this data, is just 7.16%. Prior to 2020, most YOY growth was between 3% and 5%.
  • Our inflation rate is at its highest point in about 30 years, and that is using a totally different method for measuring inflation than we used to. If we used the standards for measuring CPI in the 1980s, inflation would likely be at all time record highs for our nation.
  • We have the most material hot war in Europe since World War II taking place, with little visibility on how it will end. At the same time, relations with Russia and China have not been this contentious in decades. Russia and China also look to be posing a serious, calculated challenge to the U.S. dollar’s reserve status.
  • As I pointed out days ago, stocks relative to GDP are also in uncharted territory, where reversion to the mean would mean a minimum of a 40% drop from here.

But hey, Jim Cramer says he thinks “the bear market is over”. He’s on CNBC. I’m not.

*** end quote ***

Hard to imagine what will happen when the politicians and bureaucrats have “managed” the US into a horrific depression.

Sigh!

It’s not going to be pretty for the non-rich.

—30—

ECONOMICS: There should NOT be any taxes on “Virtual Currencies”

https://www.irs.gov/businesses/small-businesses-self-employed/virtual-currencies

*** begin quote ***

Virtual Currencies
 
Virtual currency transactions are taxable by law just like transactions in any other property. Taxpayers transacting in virtual currency may have to report those transactions on their tax returns.

What is Virtual Currency?

Virtual currency is a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value. In some environments, it operates like “real” currency (i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance), but it does not have legal tender status in  the U.S. Cryptocurrency is a type of virtual currency that utilizes cryptography to validate and secure transactions that are digitally recorded on a distributed ledger, such as a blockchain.

Virtual currency that has an equivalent value in real currency, or that acts as a substitute for real currency, is referred to as “convertible” virtual currency. Bitcoin is one example of a convertible virtual currency. Bitcoin can be digitally traded between users and can be purchased for, or exchanged into, U.S. dollars, Euros, and other real or virtual currencies.

*** end quote **

Sounds like they are defining “money”!

We don’t tax when “dollars” (i.e., Federal Reserve Note fiat greenbacks) are converted to Euros or visa versa.  So why are we taxed on “Virtual Currencies”?  For that matter, why are we taxed when buying gold or silver?  Doesn’t the Constitution define a “dollar” as an amount of gold or silver?

Argh!

Guess the IRS is going have a hard time finding all the non-custodial crypto wallets!!!

#endthefed 

If they can keep drugs out their prisons, how will the keep crypto out of a free society?

—30—

ECONOMICS: Inflation reduces real wages

https://www.theguardian.com/commentisfree/2022/feb/05/fed-raise-interest-rates-shaft-american-workers-robert-reich

The FED is about to raise interest rates and shaft American workers – again
Robert Reich — Sun 6 Feb 2022 01.00 EST

  • Policymakers fear a labor shortage is pushing up wages and prices. Wrong. Real wages are down and workers are struggling

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Fed policymakers are poised to raise interest rates at their March meeting and then continue raising them, in order to slow the economy. They fear that a labor shortage is pushing up wages, which in turn are pushing up prices – and that this wage-price spiral could get out of control.

It’s a huge mistake. Higher interest rates will harm millions of workers who will be involuntarily drafted into the inflation fight by losing jobs or long-overdue pay raises. There’s no “labor shortage” pushing up wages. There’s a shortage of good jobs paying adequate wages to support working families. Raising interest rates will worsen this shortage.

There’s no “wage-price spiral” either, even though Fed chief Jerome Powell has expressed concern about wage hikes pushing up prices. To the contrary, workers’ real wages have dropped because of inflation. Even though overall wages have climbed, they’ve failed to keep up with price increases – making most workers worse off in terms of the purchasing power of their dollars.

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It’s a fact of life the at the FED’s 2% inflation target is a joke.  The FED has debased the currency of 99% of its value with its “2% target”!  But over and above that, the inflation has been robbing poor people, working slobs, and senior citizens on fixed income.

So maybe a good liberal like Reich might be enlisted into the “End The Fed” movement.

IMHO we need to go back to “real money” aka gold and silver.

Under hard money, prices go down and real wages go up naturally.

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ECONOMICS: ‘The Great Reject’?

http://feedproxy.google.com/~r/zerohedge/feed/~3/0jJpXtjZ4no/atlas-shrugging-forget-great-reset-here-comes-great-reject

Atlas Is Shrugging: Forget ‘The Great Reset’, Here Comes ‘The Great Reject’
Zero Hedge by Tyler Durden

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It won’t work, and it brings to mind a particularly vivid example I once heard about a balloon disaster that still makes me cringe when I think of it:

A group of people were embarking on a balloon ride and as they were just a foot or two off the ground, the burner erupted into flames. The balloon pilot realized immediately what this meant and he leapt from the gondola which was still only a few feet off the ground.

One or two of the passengers were quick witted enough to realize what this meant and followed him. This set off a feedback loop: as the fire expanded, its hot air forcing the balloon higher, combined with the weight reductions as the first few people bailed out, the situation very quickly escalated past a point of no return.

The balloon had accelerated very rapidly to heights from which it was no longer possible to leap safely. The unfortunates who had hesitated and were trapped in a gondola being propelled higher by a fireball, to their inevitable doom.

That’s what our entire situation feels like today. The balloon is still hanging a foot or so above the ground, the canopy is on fire, and the people who have figured out what this means are bailing out while they can and in doing so they are accelerating the ultimate burn-then-crash of the entire system.

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Economics is called the “dismal science” for a very good reason.

It’s based on the idea that ALL resources are scarce and there are “laws” that describe how resources are used

It’s “dismal” because rarely are there enough resources to satisfy everyone’s “wants”.  (Notice I didn’t say “needs” because that’s a much lower standard. (Think what passes for a “good life” in a Third World country and you’ll have my idea of “needs” versus “wants”.)

In today’s economic climate, the “wants” have outstripped our Gooferment’s ability to supply the resources need to satisfy them. (Note the tax  & borrow to spend  on “wants”.)

So like the balloon example above, get off before the disaster.

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ECONOMICS: A “wealth tax” is tax on unrealized gains; not “income”

https://www.americanthinker.com/articles/2021/03/the_government_is_considering_a_financial_weapon_of_mass_destruction.html

March 25, 2021
The Government Is Considering a Financial Weapon of Mass Destruction
By John Klar

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In seeking to tax unrealized income from hyper-inflated capital assets, AOC, et al. are launching an aggressive, unconstitutional plan to destroy the national economy while growing government limitlessly.  Given her past pronouncements, she likely understands this travesty even less than she comprehends cow farts.

What is terrifying is not that AOC is calling for insane monetary policy and whole new means of tax takings.  What is terrifying is that almost no one is raising the fiscal alarm.

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And, like the income tax, that started by impacting the top per cent, it quickly came down on everybody.

There’s no way that such a tax doesn’t destroy the economy’s “seed corn”.

The rich don’t have a basement full of bucks like Scrooge McDuck in their basement.  It’s spent or invested and EVERYONE benefits.

Argh!

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ECONOMICS: The Gooferment is to blame for Texas’

https://www.washingtonpost.com/opinions/2021/02/18/texans-grid-outage-deregulation/

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Why Texans are cold and in the dark Texas’s predicament stems from a decision that state lawmakers made about 20 years ago to abandon the traditional model of fully regulated electricity utilities. Still used across many areas of the nation, these electric companies — described as vertically integrated utilities — do not compete for customers and are allowed to earn a rate of return on investment. They can raise rates only with the permission of state regulators. (Washington Post)

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All the Gooferment’s fingerprints are all over this crisis.

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ECONOMICS: Thought Experiments About the Minimum Wage

(Don Boudreaux) Tweet Here’s a letter to a high-school senior in Wisconsin who (I boast) reads Café Hayek: Mr. S___: Thanks for your e-mail. I share your negative opinion of Pres. Biden’s proposal to more than double the national minimum wage to $15 per hour.

Source: Thought Experiments About the Minimum Wage

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I’m sure that many of your classmates earn income by doing odd-jobs such as babysitting, mowing lawns, and shoveling snow. So ask them what they think would happen if government forced them to double the amounts that they charge to do these jobs. Do your classmates think that parents with young children will continue to hire as many hours of babysitting at (say) $30 per hour as they hire at $15 per hour? Will homeowners’ willingness to hire neighborhood kids to mow lawns be unchanged if the price of getting a lawn mown is forced up from (say) $25 to $50? Will neighbors be just as willing to pay (say) $40 to have snow shoveled off of their driveways as they are when they must pay only $20?

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Here’s another thought experiment.

We know that few heads of households (I believe less that 1%) earn on the minimum wage.

Soooooo.

Cui bono.

It’s a well known fact that when you increase the bottom of the pay scale all the level on top of that pay grade have to go up too.

So it’s union workers, politicians, and bureaucrats that make out the best.  Obviously, the taxpayers are much worse off, as well as a consumers, as price increases ripple thru the economy.

Argh!

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ECONOMICS: The death of the department store and the American middle class – Impact Lab

Department stores are also facing the reality that they are no longer the main way most shoppers discover or access new brands — which was once perhaps their main appeal as onetime innovators. Consumer brands have increasingly become focused on building connections with customers through their own stores, websites, social media platforms, and other online-only marketplaces. 

The death of the department store and the American middle class – Impact Lab

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Clearly, the handwriting is on the proverbial wall.

EVERYONE needs to reassess what this means in their own life.

My past advice seems to apply even more so now.

Success for your generation is: (1) ruthless financial discipline — no bad debt; (2) a life long interest in learning — education — a degree — they can’t take it away from you; (3) a NON-OFFSHORABLE white collar job in order to save big bux; (4) a blue collar skill for hard times — never saw a poor plumber; (5) one or more internet based businesses — your store is always open; (6) a free time hobby that generates income; and (7) a large will-maintained network of people who can “help” you.

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ECONOMICS: Focus on the downside

Guns are a big part of my life… they make me money, they keep me safe, they encourage a particular set of values and lifestyle….but sometimes it gets difficult to remember that there are other aspects of preparedness that may actually be more paramount.

Source: Focus

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If someone asked me what to do to increase resilience for 2021 I’d say “Wargame a scenario where you lose your job and can’t find another one at all or at the same wage and prepare for that”. That means clear debts as quick as you can, and start holding cash. Sure, you’ll lose some to inflation but I don’t see a Wewimar-esque hyperinflation coming yet. If you want to hedge your bets, split it among cash and metals. Here’s what I wold not do: I would not buy big ticket items just because I can, I would not buy anything on credit, I would not plan any expensive vacations, and I would not plan on having kids (because do you really want to take the hit of three months without a paycheck  and have the added medical expenses and the additional stresses all at a time when things are so uncertain?)

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Yeah, it’s easy to be an optimist, and if you’re lucky, it’ll always work out for you.

But when planning for contingencies, assume the worst, and all surprises will be to the up side.

When as the Big Fat Old Turkey couselling Fat Old White Men, who were laid off or fearing for “their” job — even though “your job” is really NOT yours — I would urge them to figure out their “burn rate” of mandatory monthly expenses and depending upon their situation of age, education, savings, debts, and skills — hot in great demand or not — then realistically plan for how long they would be out of work.

Sometimes the answer was that they’d never get another job like their last one. It’s a brutal honest truth that comes to all of us sooner or later. (In my case, it was later; I’ve see some who just turned 50 and were stunned to be unable to find work at all.)

So a word to the wise, be prepared.  In this economy, an emergency fund of two years burn rate is NOT out of the question.

AND, YOU MIGHT NEED MORE.

YMMV.

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