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If You Believe

IF YOU BELIEVE

If you believed they put a man on the moon
Man on the moon
If you believe there’s nothing up his sleeve
Then nothing is cool
REM – Man on the Moon

The REM song Man on the Moon, released in 1992, is a haunting melancholy tune, with Andy Kaufmann and his life and death as the focal point. For me, the lyrics always bring me back to the simpler time of my youth, when our antenna TV could get about eight channels, we had one rotary phone, one old used station wagon, lived in a row home, and a family of five could be raised on a truck driver’s income, with a stay-at-home mom.

It’s the references to the Game of Life, Risk, Monopoly, Twister, checkers, and chess, which invoke what we did for fun when we weren’t out riding bikes, playing stick-ball, roller hockey, or touch football in the streets. Were bad things going on in the world? Sure. The Vietnam War, Watergate, gasoline shortages and rationing, stagflation, and a myriad of other damaging challenges confronted the country, just as they always have throughout history.

One of the supposed historic moments in human history was the moon landing in July 1969, when I was six years old. I remember sitting on the floor in front of the TV and thinking how cool it was and how cool that I was allowed up at 11:00 pm to watch it. Another 600 million people were also watching. At the time, no one questioned what they were watching live on their TVs. It was the penultimate human achievement, with the goal set by JFK during Camelot before he was murdered by his own government, proving our technological superiority to the evil Soviets. To fail in this mission would have been too embarrassing to the leaders of our empire, only two decades into its infancy….

…click on the above link to read the rest…

DiMartino Booth: It Won’t Take Much More For The Fed To Break The Markets

Via Financial Sense,

The following is a summary of our recent FS Insider podcast, “Danielle DiMartino Booth: Problems at the Fed, More Volatility for the Markets.”

Danielle DiMartino Booth, founder of Money Strong and author of Fed Up: An Insider’s Take on Why the Federal Reserve Is Bad for America, warns that the US is more highly levered today than it was in 2008 and it won’t be long before rate hikes start to impact the economy.

Though our own Fed funds risk neutral index (see below) shows Fed monetary policy as still relatively loose and not yet a threat, a combination of slowing economic growth and further rate hikes will eventually usher us into the next downturn.

Here’s what Danielle told Financial Sense Newshour…

FISCAL, MONETARY POLICY IN CONFLICT

We just had a huge fiscal stimulus with the recent tax cut, but monetary policy is going in the opposite direction.

Eventually, she warned, we’re going to have one of those moments where the Fed overshoots and they’ve moved too far, too fast.

Though Danielle admits we don’t quite know when that point is yet, Fed monetary policy should now be seen as a headwind with the “final hike that breaks the market” much lower than in the past.

Source: Bloomberg, Financial Sense Wealth Management

DEBT A LARGE CONCERN GOING FORWARD

We’re on track for a trillion dollar deficit in 2019, at the same time China and others are buying fewer Treasuries.

It will be interesting to see if we hit 3 percent on the 10-year, as it might serve as a mental catalyst for markets, she said.

Danielle sees defaults heading higher, and thinks it’s not going to take too much more in rate hikes before it impacts the economy.

WE NEED A RETURN TO NORMAL MARKETS

We essentially have a lost decade behind us, Danielle said, and if the Fed pushes the economy into recession, expect more QE and debt.

Quantitative easing is problematic because it’s habit forming, she stated. She’s hoping the new Fed chair, Jerome Powell, will stop the next round of QE in its tracks and allow the market to go back to being a price discovery mechanism.

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

Olduvai IV: Courage
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Olduvai II: Exodus
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