I’d like to get suggestions to my Monster Mash song.

• Old Lyrics
• New Lyrics (draft)

The most important lines remaining are the ending, although I’d be happy to get improvements to the rest of the song.

Old: [Outro (with Pickett providing Igor vocals)]

New?

(Video: Ending)

MICIMATT Context:

The ideology of MICIMATT is Liberal Hegemony — the aggressive propagation of democracy and free market economics

• Circulatory System = money
• Nervous system = influence
• Pathology = militaristic policy

• Phase 1 rationale: Anti-Communism
• Phase 2 rationale: Anti-Terrorism
  Phase 3 rationale: Anti-Authoritarianism

• US is an exceptional nation
• US has a historic duty to impose its political and economic model on the nations of the world
  • “Democratic” government (plutocracy)
  • “Free-market” economy (corporatocracy)
  • U.S. military supremacy needed to maintain order
  • U.S. “rules” supersede international law

In short: America’s elite control the world

MICIMATT’s greatest hits:

• Afghanistan
• Iraq
• Libya
• Syria
• Ukraine

David Hay:

To your point, that’s a great point, and I didn’t want to forget that, so I’m glad you brought that up, is that you can actually own Newmont Mining, which has been crushed for a variety of reasons. Some companies specific, they’ve shot themselves in the foot a bit, but it’s got a 4% dividend yield. So if you want to get a 4% yield rather than buy a 10-year treasury, which pays barely over that, I think Newmont Gold, Newmont Mining is way more attractive at this point. If you and I are right, and I think we both believe that the only plausible end game for the federal government, the US government is to basically get back to QE. QE six, maybe it would be at this point. Restart their magical money machine. And by the way I don’t think Jay Powell will be there for that.

So I’ve got a few renegade predictions. One is that we’re going to see rising interest rates and a rising oil prices and a recession. But I also think we’re going to see Jay Powell resign before… he just won’t go along with another QE. And I think he will then pass the baton to a more politically compliant individual. And at that point they will get back to doing QE. I just don’t see how they’ll avoid it. Now, they’ll try to delay it, they’ll try all kinds of other tricks before they get there. And if we’re right about that, and maybe I’m putting words in your mouth, you can correct me if you disagree with that. But if that is the ultimate outcome, I don’t see how gold doesn’t just go absolutely ballistic.

Grant Williams:

I’m surprised it hasn’t done that already, as anybody listening to me will probably know by now. Let me dig into that comment about Jay Powell because I find that really interesting. The impetus for QE has always and consistently come from within the Federal Reserve. So I’m curious as to why you think he might resign rather than go along with it. Where is the call going to come from for QE? Is it going to become a political issue rather than a central banking issue? And so, how does that transmission mechanism work?

David Hay:

Yes, I think there’s going to be tremendous pressure from say Congress and maybe even within the Fed itself to monetize. And I do have to give Jay Powell credit and my book Bubble 3.0, I wish actually was published in very early 2022. I was very critical of Jay Powell Powell and I think deservedly so. I think when he publishes his memoirs, he’d probably admit that one of his greatest mistakes was to assume that inflation was transitory in 2021. But I have to give him credit that I would’ve assumed under the severe market stress that we saw last year, which was the worst year for balanced portfolios since 1871. So you got killed in stocks, you got killed in bonds, at least longer term bonds. You would’ve thought that the old Jay Powell would’ve folded like cheap lawn furniture, and gotten back into his easy money mode, the big easy, but he didn’t.

He stuck to his guns. He’s continued to stick to his guns and found out that unlike 2018, that if he did that the world wouldn’t shake apart. So you got to give him credit. But I think he’s much more concerned about his legacy at this point than he is about being politically popular. But there’s sure a whole lot of people at the Fed that want to be politically popular. And I do think that’s one of the reasons why we are in a structural inflationary period is the politicization of the Fed that’s gone on. And he’s at this point kind of the lone opposer of that trend. But that’s why I think that he’s not long for this world, but I think it’ll be his choice. I don’t think he’ll be forced out, but I could be wrong about that. That’s a really extreme prediction, but I think it’s a different Jay Powell than we’ve had up until this time.

 

Read Original

I clipped this bit of the Grant Williams podcast I subscribe to to share with an article I wrote:

• What is the US Debt Endgame? (Google Bard Answers)

Summary:

In the latest episode of The Super Terrific Happy Hour, Steph and Grant are joined by an all-star panel of guests to discuss the macro environment as it pertains to inflation and how each of them is using their vast experience to position themselves correctly for the way they see the inflationary pulse playing out.

• James Davolos of Horizon Kinetics,
• Adam Rozencwajg of Goehring & Rozencwajg and
• Dave Iben of Kopernik Global Investors

join forces to offer a series of hugely enlightening perspectives about where the world finds itself, how we got here and, importantly, not only where we’re headed, but what to do about it.

Excerpt:

Adam Rozencwajg:

So what do you do? And it seems as though our best guess, and we read all the same people that I’m sure you all do. We read Zoltan, we read Louis and Charles Gave, we read Forest for the Trees, all these different things. What it seems as though the most likely system may or may not be, would be one where you trade… Take Brazil for example. Brazil sells a whole bunch of iron ore and soybeans to China. They get a ton of renminbi back. They can’t use their renminbi to buy a townhouse in Belgravia. So, what they do is they try to buy as many cheap Chinese goods as they can and with the imbalance that remains, they settle that via the Shanghai Gold Exchange in gold. And so people say, “Well, is that a gold standard?” Not really. In fact, it’s quite the opposite. A gold standard has gold as the center of value and fiat currencies as these proxies and slips of paper that you switch back and forth. This has a fiat currency, in fact a highly managed fiat currency at the center, holding value.

And then gold is used to transact on the margin and settle imbalances. So, it does represent a world where gold is more monetized or monetized or it has a monetary role more than it does today. But by no means is a gold standard or anything like that. Is this going to happen? We have absolutely no idea, but we are seeing more and more commodity settlement that is being done now outside of the dollar. And as I pointed out at the top of this interview, every time real assets in the past have gotten so out of whack with financial assets, it has tended to coincide with some shift, sometimes big, sometimes small, in how we conduct the global monetary plumbing system of the world. Is that a necessary condition? No. Is it scientific proof? No, but we operate in the dismal sciences and things like that, and so it’s something that we have noticed over and over again. And I think it could be beginning to happen right now, so we’ll have to wait and see.

All of these BRICS countries have been buying a ton of gold, tons, I suppose literally of gold, more than any time in the last 30 years. But on the flip side, not to talk out of both sides of my mouth here, everyone was waiting for this BRICS meeting earlier this year to be this huge announcement and clearly that did not take place. And so maybe things will happen more slowly or more quietly or maybe not at all. It’s just, I think, a tail risk that people should be more aware of than they have been in the past. How’s that for tempered?

Read Original

Economies run in cycles, both short and long-term.

With Debt levels running high, how will the long-term debt cycle be resolved? 1

I asked Google Bard’s AI 2 what it thought of 6 possible options I outlined for resolving high debt levels.

Upon receiving AI’s answers, I was reminded of a quote (incorrectly) ascribed to Winston Churchill:

Americans can always be counted on to do the right thing ..  after they have exhausted all other possibilities.

My base case estimate is a twist on this quote. It is not that America will attempt all other possibilities before finally settling on the “right thing,” but rather the resolution of high debt levels3 will likely involve pursuing nearly all available options together.  These options will not all be undertaken simultaneously, but all options will be attempted (except #5) before the cycle is resolved.

Here are the 6 options I presented to AI:

1. “Debt Jubilee”
2. Adoption of a hard money
3. MMT : Modern Monetary Theory
4. “Soft Default”
5. “Hard default”
6. Transition to a new system

Google Bard’s AI suggested another 4 other options:

• spending cuts
• tax increases
• government asset sales
• debt restructuring

[Read more…]