Now is Not Then

Stop looking back in history to see what to do now!

The inflation rate was 1 percent in 1965 & hit 14 percent by 1980.  Volcker took the radical step of switching Fed policy from targeting interest rates to targeting the money supply.

Volker was an economist. Powell is a lawyer.

The Phillips Curve was a (dumb) theory and still is.

We do not have a monetary problem!

Us versus them Mind Set is the problem!

Us with them is the solution!

  • There is plenty of oil in Iran. Honor the agreement the world signed, and Trump cancelled. Let everybody buy oil from Iran and pay for it with any fiat currency they want.
  • Tear down those trade barriers Trump erected and let the goods and services flow without government intervention.
  • Stop the Fed’s bloodletting. It did not cure fevers in humans in the past and it won’t cure the QE fever caused by Wall Street’s financial crisis.  
  • Replace the Fed with an AI program, free of government intervention, that will only supply the necessary liquidity for markets to function. Nothing more. Not economic growth! Not employment! Not happiness!
  • Regulate Wall Street to prevent it from causing another QE solution to problems they create.
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Flags are UP!

They tell the truth more often than Powell, looking at his data from the past and what it meant when I was in Grad school.

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The Milgram Experiment Redux

Look it up.

This time, Chairman Powell is wearing the white jacket, posing as: “The Authority,” telling unsuspecting dupes, us, to pull the switch sending deadly shock waves into other dupes.  Why? Because we have learned to obey orders from people in white jackets at big institutions.

First he tells us repeatedly that his actions above will not cause inflation.

A Brief History of Monetary Mistakes

BYCHRISTOPHER LEONARD, Fortune magazine

22, 2021 at 7:34 AM PST

“The Federal Reserve is a uniquely powerful institution: It is the only entity in the world that can create new U.S. dollars out of thin air. And the Fed has exercised this power on an unprecedented scale over the past decade or so. Between 2008 and 2014, the Federal Reserve created roughly three times as much money as it had created between 1913 and 2007. In other words, it crammed about 300 years’ worth of money growth into a few short years. And then when COVID hit in 2020, the Fed printed about another 300 more years’ worth of money in a period of months—some $3 trillion.”

Bernanke used the first $1.5 Trillion to bail out Wall Street from it’s financial fiasco, that dammed near caused the biggest depression the world had ever seen. Yellen added a couple of trillion to that for good measure, and then Powell doubled down to get us in the mess we are currently in. To top it off. Two members of Powell’s board were caught trading on inside information of this uncalled-for stimulus.

Now we are going to allow him to punish us for his mistakes by causing a recession???

The economy is too strong, so lets cause million of people to lose their jobs???

It’s time to ask Powell to turn in his white jacket!

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Who Knows?

Nobody knows what the Fed is going to do…not even the Fed! The data doesn’t know either and won’t know until next year, and then it will be revised 6 months later. Start looking at what makes things happen. Nobody knows what NFL team is going to win but you have a good idea of who has the best young players and who has a bunch of beat up old greats. Therefore, you have a good idea of where to place your bets for the future, and I don’t mean, next week or next month.

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Who’s Short Tech?

If it is kids who are new to the market, it will be short lived. If it is Hedge Funds who are naked…it could be spectacular! Last chance to lock in some profits for the year, and I intend to.

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Que Sara, Sara.

But who knows what will be?

In the words of one visionary:

“Some of the best minds of our era are still in thrall to an older way of seeing and thinking We’ve left our future, in other words, largely in the hands of people whose single greatest characteristic is that they are bewildered by the present. Our current leaders like things as they are. The words “potential” and “threat” rhyme in their consideration. They don’t appreciate that puzzles such as the future of United States–China relations or income inequality or artificial intelligence or terrorism are all network problems, unsolvable with traditional thinking.”                                                                                                       J.C. Ramo

Imagine this is all a game, being played by three teams, The West, Asia, and “The Others”. West has a play book autographed by Knute Rockne; Asia has a play book written in Python (whatever that is). The Others don’t have a play book.

The West team don’t like each other, and they dislike, The Others, even more; but they absolutely hate Asia, who refuses to play by their rules. The West hasn’t won a game this season. Asia has won some and lost some. The Others, refuse to play until somebody pays them.

Who are you going to bet will win?

Wrong question.

Don’t you realize, we’re all in the game, but most of you are sitting on the bench and don’t know what you are watching. IT’S A REVOLUTION. A TECHNOLOGICAL REVOLUTION! The solutions will not be found by sifting through the ashes of the past. The solution begins by taking down all the stupid trade barriers.

Stop taking it personal, America, it’s only business.

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Get off the Bench & Get in the Game

The sky is not falling!

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A Light at the End of the Tunnel?

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We’ve Been Here Before

Yes, the news is all about inflation and the crashing financial markets. War in the Ukraine is a distant 3rd place as far as forthcoming elections are concerned. To put this in perspective, I recommend the book that the following clip is taken from:  

“The primary professional criticism of inflation numbers in the 1970s was that they overemphasized the rising costs of volatile components such as energy and food and overstated the impact of rising prices on both the system as a whole and on individual families. Because energy costs spiked sharply and quickly after the Arab oil embargo in 1973, it appeared that inflation had jumped. Of course, it did jump, but critics rightly pointed out that those prices also receded quickly after the crisis abated.”  

Karabell, Zachary. The Leading Indicators: A Short History of the Numbers That Rule Our World (p. 128). Simon & Schuster. Kindle Edition.

Yes, we had a war then, too, Vietnam, and a political scandal, White Water. Most importantly, realize that GDP, CPI, Unemployment, and Consumer Confidence do not accurately measure what happened, is happening, or will happen in the economy. They are seriously flawed indicators that have been revised many times… because they didn’t work.  

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1 Parking Place Left @ VCSH

Five of the 9 SPY ETF Segments now have a negative Upside Potential Ratio (search this site for definition). That means, they have more downside risk than upside potential. Which ones are they? XLC, XLY, XLF, XLI and XLU.

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