The Four Dimensions of the Fake Money Order

“If you don’t know where you’re going, any road will get you there,” is a quote that’s oft misattributed to Lewis Carrol.  The fact that there’s ambiguity about who’s behind this quote on ambiguity seems fitting.

For our purposes today, the spirit of the quote is what we’re after.  We think it may help elucidate the strange and confusing world of fake money in which we all travel.

For example, the monetary policy outlook immediately following last month’s FOMC meeting was as clear as a flawless (FL grade) diamond.  The principal message, if you recall, was that inflation was muted and the Fed, after suffering an overt beating from President Trump, would soon be shaving basis points off the federal funds rate.  You could darn near take it to the bank.

Wall Street took the news and acted upon it with conviction.  Investors piled into stocks and bonds without pausing to take a closer look for imperfections.  Why worry when fortune favors the bold? Continue reading

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Independence Day in America Circa 2019

The days are long and hot in the Northern Hemisphere when real American patriots raise the stars and stripes.  Today the free and brave, with duty and self-sacrifice, begrudgingly accept federal holiday pay to stand tall upon their own two feet.  Rugged individualism and uncompromising independence are essential to their character.

With purpose and intent, they assemble as merry mobs along the shoreline to celebrate American Independence.  Freedom lovers – descendants of Daniel Boone – gather to eat hotdogs and pitch horseshoes while downing tipples of corn syrup and fermented grain.  When the sun slips beyond the western horizon and the stars twinkle bright, they hoot and holler at the brilliance of fireworks and sparkling pyrotechnics.

These festivities certify that, even in an era of big government, there remains a time and place to revel in the virtues of representative self-rule.  All are welcome, of course, so long as their vehicles are registered, they’ve paid their income taxes, and have proper documentation. Continue reading

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How Beijing Uses Fake Money to Cannibalize the U.S. Transit Market

One of the more remarkable achievements of fake money creation is that it distorts and disfigures the world in odd and uncanny ways.  Dow (not quite) 27,000.  Million dollar shacks.  Over $13 trillion in subzero-yielding debt.

You name it.  Any and every disfiguration is possible with enough fake money.

However, when it comes to the full range of ways fake money distorts the economic landscape, asset price inflation is merely a cheap facade.  The real, mega disfigurations pile up in the arena of international trade.  What’s more, they extend well beyond a gaping trade imbalance.

Currency wars, competitive devaluations, and the race to the bottom are all hazards formed out of the confluence of fake money, foreign exchange markets, and international trade.  So, too, the impetus for tit for tat trade tariffs and trade wars ties back to the deceit and deception of fake money.  Still, these facets aren’t the half of it.

To better understand what exactly fake money has wrought, a brief detour is in order.  You see, a world under the influence of fake money is a strange and curious place.  The clearest path between two points is not always a straight line. Continue reading

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Feeling the Heat of a Civilization on the Downside

Today we begin with a list.  A partial list.  And in no particular order…

Angela Merkel.  Donald Tusk.  Mario Draghi.  Donald Trump.  Jerome Powell.  Shinzo Abe.  Haruhiko Kuroda.  Theresa May.  Boris Johnson.  Mark Carney.  Xi Jinping.  Emmanuel Macron.  Vladimir Putin.  Justin Trudeau.  Juan Trump.  And many, many more…

These central planners – though they may not know it – are facing a no-win situation.  They’ve extrapolated the past and are attempting to preserve the status quo into the future.  Yet their efforts to perpetuate the upward growth curve of their countries and unions are useless against the relentless turn of history.

The political, financial, economic, and social foundations that have been in place over the last 75 years – and perhaps, over the last 220 years – are breaking down.  And no policy directive, no interest rate adjustment, no trade tariff, no five year plan, no extraordinary measures, no green new deal, and no technocratic prevarication is going to stop it.  Big Government doesn’t stand a chance. Continue reading

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