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The reasoning is so simple, a fifth grader could understand it – which is probably why the Biden administration doesn’t.

Having used up all of the rest of the batshit, insane, counterintuitive economic dirty tricks left in the “we’ll literally do anything but cut spending” bag, the Biden administration is pushing what could be the most destructive idea for our country since prohibition: taxing unrealized gains.

As part of its budget proposal for the 2025 fiscal year, the Biden administration is trying to raise an addition $4.3 trillion over 10 years in the worst way possible: imposing a minimum tax equal to 25 percent of a taxpayer’s taxable income and unrealized capital gains less the sum of their regular tax, for taxpayers with wealth over $100 million.

Putting aside the fact that this high-risk idea only amounts to a pittance, $430 billion per year (25% of which we just sent to foreign nations over the weekend in one fell swoop of a pen and it’s only April), the introduction of taxing unrealized gains could be one of the worst slippery slopes we ever dare to roll our country’s economy down.

I mean, shit, we could save $1 trillion just by not sending $100 billion a year to other nations for starters. But I digress. For an outline of exactly what an unrealized gains tax is, here’s the American Institute on Economic Research:

A tax on unrealized capital gains means that individuals are penalized for owning appreciating assets, regardless of whether they have realized any actual income from selling them.

If you purchased a stock for $100 this year, for example, and it increased to $110 next year, you would pay the assigned tax rate on the $10 capital gain. You didn’t sell the asset, so you don’t realize the $10 appreciation, but must pay the tax regardless.

…click on the above link to read the rest of the article…

The Copper Supply Shortage Is Here

April 25, 2024

The Copper Supply Shortage Is Here

With the AI boom and green energy push fueling fresh copper demand, and with copper mines aging and not enough projects to match demand with supply, the forecasted copper shortage has finally arrived in earnest. Coupled with persistently high inflation in the US, EU, and elsewhere, I predict the industrial metal will surpass its 2022 top to reach a new all-time high this year:

Copper vs USD, 5-Year Graph:

Source: tradingview.com

The AI boom is stoking the need for more data centers, which will require around a million metric tons of copper by 2030. Meanwhile, this year’s deficit of 35,000 tons is expected to rocket up to a staggering 100,000 tons in 2025.

Electric car batteries and EV charging stations also depend on copper, adding to the problem of there not being enough activity at existing mines, or the development of new ones, to satisfy the industrial need. Says Bank of America analyst Michael Widmer:

“The much-discussed lack of mine projects is becoming an increasing issue for copper.”

While many mainstream forecasts depend on a solid economic rebound to keep demand for copper up, inflation is here to stay, especially as the Fed is likely going to be forced to cut interest rates at some point this year. Even with just one 2024 rate cut instead of the three that markets originally expected, higher USD prices for copper and other commodities like gold are on the way. Out-of-control inflation will drive prices higher even if the oomph gets sucked out of the AI bubble, or we see other signs of an economic “hard landing.” As Peter Schiff said last month,

“I think we’re on the verge of the biggest bull market in commodities since the 1970s…They’re cutting rates because they have to avoid a financial crisis — a banking crisis.”

…click on the above link to read the rest of the article…

Cashless Society: WEF Boasts That 98% Of Central Banks Are Adopting CBDCs

April 25, 2024

Cashless Society: WEF Boasts That 98% Of Central Banks Are Adopting CBDCs

Whatever happened to the WEF? One minute they were everywhere in the media and now they have all but disappeared from public discourse. After the pandemic agenda was defeated and the plan to exploit public fear to create a perpetual medical autocracy was exposed, Klaus Schwab and his merry band of globalists slithered back into the woodwork. To be sure, we’ll be seeing them again one day, but for now the WEF has relegated itself away from the spotlight and into the dark recesses of the Davos echo chamber.

Much of their discussions now focus on issues like climate change or DEI (Diversity, Equity, Inclusion), but one vital subject continues to pop up in the white papers of global think tanks and it’s a program that was introduced very publicly during covid. Every person that cares about economic freedom should be wary of Central Bank Digital Currencies (CBDCs) as perhaps the biggest threat to human liberty since the attempted introduction of vaccine passports.

The WEF recently boasted in a new white paper that 98% of all central banks are now pursuing CBDC programs. The report, titled ‘Modernizing Financial Markets With Wholesale Central Bank Digital Currency’, notes:

“CeBM is ideal for systemically important transactions despite the emergence of alternative payment instruments…Wholesale central bank digital currency (wCBDC) is a form of CeBM that could unlock new economic models and integration points that are not possible today.”

The paper primarily focuses on the streamlining of crossborder transactions, an effort which the Bank for International Settlements (BIS) has been deeply involved in for the past few years…

…click on the above link to read the rest of the article…

Oil prices aren’t the Fed’s biggest problem right now — American demand is, says an economist

April 24, 2024

Oil prices aren’t the Fed’s biggest problem right now — American demand is, says an economist

Inflation could see a resurgence in 2025, BlackRock strategists warned. Jonathan Kitchen/Getty Images

“I think what’s difficult for the Fed currently is actually the part of CPI that is being driven by demand, rather than the supply issues or the energy issues, which are perhaps easier to deal with,” Samy Chaar, the chief economist of Lombard Odier, told Bloomberg TV. The Swiss private bank managed 193 billion Swiss francs, or $212.8 billion, in assets at the end of December.

A key inflation metric for the Fed, the Personal Consumption Expenditures Price Index, was little changed in March over its 2.8% reading in February. Federal Reserve chair Jerome Powell highlighted the index earlier this week as he signaled that interest rate cuts may come later, rather than sooner.

The US economy has been strong, with job growth and retail sales also rising more than expected for the month of March.

“The problem with the US is the sticky part that comes from services. Services is demand, and that demand needs to come from somewhere — and that’s a robust economy,” Chaar told Bloomberg. A gauge from the Institute for Supply Management showed the US service sector expanded moderately in March.

“Consumers are consuming because they have jobs, because they have rising incomes,” Chaar said.

This means inflation is fueled by demand rather than oil supply, even if a rise in energy prices complicates the Fed’s job, he said.

The Fed is now trying to engineer a soft landing for the hot US economy without causing it to tip into a recession.

“I would say the biggest challenge here for the Fed is to manage the demand of the US economy,” Chaar said. “It comes from domestic America, not from the Middle East.”

What the Rising Gold Price Signals

April 24, 2024

What the Rising Gold Price Signals

The recent run-up in the gold price has not garnered the attention among the mainstream financial media outlets as it should. Gold has, in part, been overshadowed by the rise in the price of bitcoin and other cryptocurrencies.

Naturally, the financial press, which is really an arm of the government and its central bank, wants to ignore, as much as possible, references to gold as protection against the continuing increase in the price level which itself has been deliberately understated by monetary officials. The media and government understand that precious metals are the ultimate security against runaway inflation and economic collapse.

While the increase in the gold price has reached nominal highs, it and the price of silver have not passed their all-time 1980 highs in real terms. Adjusted for inflation, gold would have to rise to about $3590 an ounce while silver would have to surpass $50 an ounce. Both are poised to exceed these watermarks in the not-too-distant future.

Precious metals will continue to escalate unless the Federal Reserve radically changes its interest rate policy to combat inflation as former Fed Chairman Paul Volcker once did. Volcker raised interest rates to double-digit levels which caused gold prices to fall. While Volcker could get away with such actions (because, at the time, the U.S. was still a creditor nation), current Chair Jerome Powell cannot because of the enormity of public and private debt. Double-digit interest rates would collapse the economy and plunge millions of Americans into bankruptcy.

The rising price of gold is anticipating some of the promised policy actions of the Fed. Since the end of last year, the central bank has indicated that it would be cutting interest rates. In addition, Powell is considering ending the Fed’s “Quantitative Tightening” (QT) program. Both are highly inflationary.

…click on the above link to read the rest of the article…

War, fear of war spur global military spending to new record: SIPRI report

April 23, 2024

War, fear of war spur global military spending to new record: SIPRI report

New high of $2.4 trillion is the ninth straight annual increase, suggesting the trend will continue, research institute says.

The world spent $2.4 trillion on military forces last year, the highest amount ever recorded by the Stockholm International Peace Research Institute (SIPRI).

SIPRI has been monitoring military expenditures since 1949 and found in its annual report released on Monday that in 2023 they rose to 2.3 percent of the global gross domestic product (GDP) from 2.2 percent the year before.

It meant that every man, woman and child on the planet was taxed an average of $306 for military spending last year – the highest rate since the Cold War.

The increased spending exactly matched the global rate of inflation of 6.8 percent, so it doesn’t necessarily translate into greater military efficacy everywhere.

But as SIPRI said, spending was not evenly spread out because “world military expenditure is highly concentrated among a very small group of states”.

The United States remained the biggest spender at $916bn, representing 37 percent of the world’s military outlays. China came second with an estimated $296bn.

Russia was third at $109bn although SIPRI considers this an underestimation “due to the increasing opaqueness of Russian financial authorities since the full-scale invasion of Ukraine in 2022”.

India came fourth at $83.6bn.

The rate of increase in military spending was also uneven with European budgets ballooning due to the war in Ukraine.

The belligerents

Ukraine increased its defence spending by 51 percent to $64.8bn – not including $35bn in military donations from allies. That meant it was devoting 37 percent of its GDP and nearly 60 percent of all government spending to defence, SIPRI said.

…click on the above link to read the rest of the article…

Black swan hedge fund says Fed rate cuts will signal market crash

April 23, 2024

Black swan hedge fund says Fed rate cuts will signal market crash

Federal Reserve Board Building in Washington

NEW YORK, April 22 (Reuters) – While U.S. financial markets debate the timing of interest rate cuts, one tail-risk hedge fund is warning that investors should make the most of recent economic optimism while it lasts, as a shift to lower rates will signal a dramatic market crash.

“This is a case of be careful what you wish for,” said Mark Spitznagel, chief investment officer and founder of Universa, a $16 billion hedge fund specializing in risk mitigation against “black swan” events – unpredictable and high-impact drivers of market volatility.

Spitznagel’s view is not widely held. The much-anticipated shift to a less restrictive monetary policy by the Federal Reserve has helped buoy stocks and bonds in recent months, although signs of stubborn inflation have eroded expectations for how deeply the central bank will be able to cut interest rates in 2024.

Spitznagel argues that such a shift would likely take place only when economic conditions deteriorate, creating a challenging environment for markets.

“People think it’s a good thing the Federal Reserve is dovish, and they’re going to cut interest rates … but they’re going to cut interest rates when it’s clear the economy is turning into a recession, and they will be cutting interest rates in a panicked fashion when this market is crashing,” Spitznagel said in an interview with Reuters.

Funds such as Universa often use credit default swaps, stock options and other derivatives to profit from severe market dislocations. Generally they are cheap bets for a big, long-shot payoff that otherwise are a drag on the portfolio, much like monthly insurance policy payments.

…click on the above link to read the rest of the article…

Don’t Talk To Me About Solutions

April 22, 2024

Don’t Talk To Me About Solutions

The System Itself is the Problem

It’s 2024 and I’m suspicious of “solutions”. Solutions to what, exactly? The excess greenhouse gases in the atmosphere that have already seen us breach the 1.5 degree limit set by the Paris Agreement? The ocean acidification that’s bleaching corals en masse? The rampant deforestation and habitat destruction that’s seen half of the world’s wilderness turned into farmland? How about the economic system with its limited prescription of value that converts what is priceless into profit? The political gridlock on climate thanks to our addiction to fossil fuels? The record-breaking profits of those energy companies with plans to double global extraction? Or the debt bondage that keeps the global south trapped in poverty? The political hierarchy that means the world’s most war-mongering country calls the shots? How about resource scarcity for an energy transition? How about water shortages? Genocide?

There’s no magic bullet for this level of complexity. What is clear—more and more as the months go on and climate goals, peace goals and equity goals are sacrificed in the name of imperialism—we need systems revolution, not systems reform. The world is looking at food shortages, droughts, a financial crisis, world war three and worsening impacts of the climate and biodiversity crisis, not to mention the likelihood of an authoritarian elected to the most powerful position in the world. This is an unprecedented eco-crisis. We need to change how we organise. And we need to organise.

I like “eco”: it comes from the Ancient Greek “οἶκος”, (pronounced eek-os) meaning household, which is the root of ecosystem, ecology, ecophilosophy etc etc. We consider “eco” to signify the environment, but what it reveals is that the environment is our home; the wide-scale wilderness of the planet itself is our home; our household, if we can step up to the role of stewards…

…click on the above link to read the rest of the article…

Give Me Liberty or Give Me Debt

April 22, 2024

Give Me Liberty or Give Me Debt

Some people are more observant than others. Some are more capable of thinking outside the box than others. Whether this is by nature or nurture is a moot point.

When we are children, we tend to look upon the world in all its wonder. We are amazed at what exists and we absorb it like a sponge. Then, when we are in our teens, we begin our second wave of discovery. We begin to pay more attention to the things that we find confusing; we become absorbed in issues like world hunger, warfare and political strife. These situations seem senseless and we repeatedly ask, “Why should these things be?”

Typically, in our twenties, we have not yet found any solid answers and our mood turns from interest to anger. We tend to gravitate toward liberal philosophy, as liberal philosophy tells us what we would most like to hear; that these terrible things should not exist and that we should take every step available to us to end the injustices of the world – at whatever cost to ourselves and others.

Most of us continue in this approach for several years, but in our thirties we begin to recognize that, no matter how many steps are taken in this effort, the problems seem to be self-renewing and, at that point, a split occurs in philosophical outlook. Many people cease to grow at this point, as they do not want to live in a world where it is necessary to accept that suffering of one type or another is perennial. They may become increasingly stubborn in this view and, from this point on in life, tend to dig in their heels increasingly and fail to continue to grow in their understanding of the world.

…click on the above link to read the rest of the article…

Kick Back, Watch It Crumble

April 22, 2024

Kick Back, Watch It Crumble

Monetarily and fiscally there seems to be no other way to describe our government’s actions other than willingly and excitedly driving the country full speed ahead toward the death of the dollar.

The title to this post comes from one of my favorite NOFX songs, Dinosaurs Will Die.

While I’m sure the band in absolutely no way agrees with most, if not all, of my political leanings, the critiques they raise about the music industry in the song could serve just as well as many of the questions I want to ask of legacy mainstream media and politicians from both sides of the aisle in our government.

Leading those questions, for me, is this one: Doesn’t it elicit a hopeless feeling sometimes that we always have to learn the hard way in this country?

Few things are surer than taxes and death, but one of them is that our powers that be will make up any excuses necessary, scapegoat anything possible, and generally exercise every single possible wrong decision before reluctantly realizing that a consequential, uncomfortable yet important, proactive adult decision needs to be made and/or communicated to the American public.

Nobody ever wants to fess up to doing something wrong and nobody has a tolerance for even an ounce of discomfort, even when it accompanies an obvious decision that is in the best interest of our nation.

There have been too many examples in recent memory to name, but one of the latest bouts of us acting like a scared 6 year old with an aversion to reality was the farce of the Fed and Biden administration constantly telling the nation that inflation was transitory, when that has turned out to be the polar opposite of the truth.

Janet Yellen, unable to ascertain a clue in the real world, looking for one in the virtual world.

…click on the above link to read the rest of the article…

Living on Uneasy Street

April 21, 2024

Living on Uneasy Street

It’s nice to anticipate sunny weather, but it’s a good idea to carry an umbrella just in case the forecasts prove overly optimistic.

Yes, the market will rally if World War III didn’t start last night. The market will also rally if World War III does start, because the Federal Reserve will surely lower interest rates.

We chuckle uneasily at gallows humor here on Uneasy Street because we’re still required to maintain an upbeat veneer of endlessly cheerful optimism even as we sense that the forces currently in play are beyond the control of individuals or groups, no matter how powerful they may be, and that these forces will follow a course to an end no one can predict with any degree of upbeat confidence.

Back when we lived on Easy Street, things were getting better for everyone in varying degrees and the ladder of social mobility was available to all: anyone could improve their prospects by putting in the effort.

Fortunes were being minted, lists of reasons to be optimistic proliferated like overfed rabbits and spots of bother ran off the road on their own, requiring nothing of us.

Life on Uneasy Street is, well, different. The lists of reasons to be optimistic are still everywhere, but they now ring hollow, as those conjuring the lists sound increasingly frantic: come on, people, get with the program, it’s all gonna be wunnerful, AI, AI, AI, Roaring 20s, blah blah blah.

The only true believers are those paid to shill the optimism by those seeking to maximize their profits via selling the sizzle rather than the actual steak. The entire exercise of trying to convince us that we still live on Easy Street is simply more evidence that Easy Street is a figment of imagination.

…click on the above link to read the rest of the article…

Markets Are Biting Their Lips over Global Chaos

April 21, 2024

Markets Are Biting Their Lips over Global Chaos

And Fed Chair Powell is joining them because suddenly nothing is going right for his soft-landing plans!

Rising Middle-East tensions are driving up the price of crude oil and driving down the price of stocks and value of bonds. Analysts are saying oil could go to $100/bbl if the conflict between Israel and Iran goes any further. If Israel responds to the recent attack by Iran, some think Iran is likely to fight back with the West in a variation of what it has already done via its proxies. In the worst-case scenario for oil, Iran will block the Strait of Hormuz to tanker traffic, using its proxies to do there as they have already done on the other side of the Arabian Peninsula (or doing that directly, themselves, from Iran). That could raise oil to $130/bbl, which would blow the doors off inflation. Societe Generale puts the risk at $140/bbl if the US gets involved. For now, however, the oil market is just biting its lips … like this:

Well, that’s Fed Chair Jerome Powell, but he is biting his, too, as everything turns against his flight plans for a soft landing at the end of his own war … with inflation.

That’s because the Fed pumped so much money into the economy during the Covid lockdown fiasco that he can’t get the surplus money out quickly enough. As noted yesterday, and caught in the news again today, Powell has clearly pushed rate cuts back once again. In fact, Bank of America is now resetting its calendar for the first cut to March of next year (going for a different March than the one most analysts originally thought they would get…

…click on the above link to read the rest of the article…

Israeli Missiles Hit Iran, the Price of Oil Jumps 3 Percent

April 21, 2024

Israeli Missiles Hit Iran, the Price of Oil Jumps 3 Percent

In a game of tit for tat, Israel strikes back at Iran for Iran’s missile launch against Israel. Iran’s attack on Israel was in response for Israel illegally striking an Iranian embassy in Syria.

Israeli Missiles Hit Site in Iran

The NPR reports Israel launches missile strikes into Iran in response to Tehran’s attack Sunday

Reuters reports Israeli Missiles Hit Site in Iran.

Israeli missiles have hit a site in Iran, ABC News reported late on Thursday, citing a U.S. official, while Iranian state media reported an explosion in the center of the country, days after Iran launched a retaliatory drone strike on Israel.

Iran’s Fars news agency said an explosion was heard at an airport in the central city of Isfahan but the cause was not immediately known. Iran suspended flights over the cities of Isfahan, Shiraz and Tehran, state media reported.

Several Iranian nuclear sites are located in Isfahan province, including Natanz, centerpiece of Iran’s uranium enrichment program.

Some Emirates and Flydubai flights that were flying over Iran early on Friday made sudden sharp turns away from the airspace, according to flight paths shown on tracking website Flightradar24.

Israeli Missile Hits Iran, U.S. Officials Confirm

CBS reports Israeli Missile Hits Iran, U.S. Officials Confirm

Two U.S. officials confirm to CBS News that an Israeli missile has hit Iran. The strike follows last weekend’s retaliatory drone and missile attack against Israel, which Prime Minister Benjamin Netanyahu had vowed to respond to.

Officials were tightlipped about the location or extent of the Israeli strike. When reached by CBS News, the Israeli Defense Forces had no comment on the attack.

…click on the above link to read the rest of the article…

Why Is Gold Rising Now, Where Is It Headed Tomorrow?

April 20, 2024

Why Is Gold Rising Now, Where Is It Headed Tomorrow?

Needless to say, we at VON GREYERZ spend a good deal of time thinking about, well… gold.

The Complex, the Simple, the Math and the History

Year after year, and week after week, there is always a new way to examine gold price moves and decipher the obvious and not-so obvious forces which flow behind, ahead, above and below its monetary and, yes, metallic, move through time.

Today, deep into the early decades of the 21^st century, and well over 100 years since the not-so immaculate conception of the Fed in the early 20^th century, we could (and have) spent pages and paragraphs on key turning points in the rigged to fail history of paper vs. metallic money.

At times, this effort can and has seemed intense and even complex, with all kinds of historical facts, mathematical comparisons and “big events.”

The turning points of gold’s relationship with fiat currencies, and its role in preserving wealth, for example, are known to an admitted minority—as only about 0.5% of global financial allocations include physical gold.

Gold’s Language

Yet the need, role and direction of gold is fairly blunt, at least for those with eyes to see and ears to hear.

History, for example, has some clear things to say about paper money.

And so does gold.

From the Bretton Woods promises of 1944 and Nixon’s open and subsequent welch on the same in 1971 to the 2001 outsourcing of the American dream to China under Clinton (and the WTO) or the recent weaponization of USD in Q1 of 2022, gold has been watching, acting and speaking to those who understand her language.

The Big Question: Why Is Gold Rising Now?

…click on the above link to read the rest of the article…

What are Mises’s Six Lessons?

April 20, 2024

What are Mises’s Six Lessons?

Ludwig von Mises’s Economic Policy: Thoughts for Today and Tomorrow has become quite popular recently. The Mises Book Store has sold out of its physical copies, and the PDF, which is available online for free, has seen over 50,000 downloads in the past few days.

This surge in interest in Mises’s ideas was started by UFC fighter Renato Moicano, who declared in a short post-fight victory speech, “I love America, I love the Constitution…I want to carry…guns. I love private property. Let me tell you something. If you care about your…country, read Ludwig von Mises and the six lessons of the Austrian economic school.”

The “six lessons” he is referring to is Mises’s book, Economic Policy: Thoughts for Today and Tomorrow, which was republished by our friends in Brazil under the title “As Seis Lições” (“The Six Lessons”).

If you are interested in what Mises has to say in this book, which is a transcription of lectures he gave in Argentina in 1959, here’s a brief preview, which I hope inspires you to read the short book in full. As a side note, if you are an undergraduate student who is interested in these ideas, the Mises Institute’s next Mises Book Club is on this text (pure coincidence!).

Lecture One: Capitalism

Mises begins his first lecture with an overview of the development of capitalism out of feudalism. Businesses began “mass production to satisfy the needs of the masses” instead of focusing on producing luxury goods for the elite. These big businesses succeeded because they served the needs of a larger group of people, and their success wholly depended on their ability to give this mass of consumers what they wanted.

…click on the above link to read the rest of the article…

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