Friday, February 15, 2019


So lady Let me take a look at you now You're there on the dance floor Making me want you somehow Oh lady I think it's only fair I should say to you Don't be thinkin' that I don't want you 'Cause maybe I do

Tuesday, February 12, 2019

22 Trillion

Yeah, we finally got to $22 trillion in debt!  This was about 11 months after reaching $21 trillion on 3/16/2018.  And it was almost exactly 10 years after first reaching $11 trillion on 3/16/2009.  It should hit $23 trillion on about 12/31/2019.

If present trends continue, it will reach $44 trillion on about 2/28/2029.

Why are we celebrating again? Because we have discovered a way to create free money out of thin air, and it never needs to be paid back.

Sunday, February 10, 2019

Student Loan Forgiveness Fiasco

 The cost of education shifted from a societal investment — spread across the tax-paying public, in the name of a thriving society and economy — to an individual one. And no matter how astronomically priced that investment became, we continued to rationalize it as a worthwhile one. Even in a culture that idolizes high-profile college dropouts (Bill Gates, Steve Jobs), to refuse higher education in America has become tantamount to refusing to fulfill your potential. And if you refuse to fulfill your potential, any struggle can and will be blamed on you alone.

Saturday, February 9, 2019

Dubai is melting down

Wednesday, February 6, 2019

Bizarre Antarctica Conspiracy Theory

November 16, 2016. An amazing (but nearly 90% censored) Foreign Intelligence Service (SVR) report circulating in the Kremlin today states that the Antarctica “guardians” swiftly retaliated against the United States this past week by “creating/unleashing” a massive earthquake after the Obama regime sent “without invitation or permission” its Secretary of State John Kerry to initiate contact with them in the “barrier zone” that’s forbidden by all “known protocols” in dealing with these “entities”.
According to this report, the Obama regime, in their knowing that the anti-globalist forces loyal to President-elect Donald Trump were poised for a victory over them, dispatched Secretary of State John Kerry to Antarctica where he arrived on 11 November.
SVR analysts in this report note that Secretary Kerry’s attempt to persuade the “guardians” to interfere in a “temporal matter” was “quickly/immediately” rebuffed by these “entities” who then ordered him to leave the “barrier zone” and not to return.
Upon leaving the Antarctica “barrier zone”, this report continues, Secretary Kerry arrived in Christchurch, New Zealand, on 12 November, where he stayed overnight before his traveling to Wellington the following day.
In the early morning hours (6:02 am local time) of 13 November while Secretary Kerry was sleeping in Christchurch, however, this report notes, this region was struck by a powerful 7.8 magnitude earthquake—and that SVR analysts state was a “predictable consequence” known to be used by these Antarctica “guardians” as a “warning message” not to interfere with their “mission/research”.

Monday, January 14, 2019

The National Debt doesn't matter so pump money into the economy with reckless abandon

People like Stephanie Kelton, Sanders' economist in 2016, a professor at Stony Brook University, and a proselytizer for this view toward currencies and national economies, argues that the government essentially prints money each time it authorizes new unpaid for programs and that it hasn't hurt the economy by causing runaway inflation. 
What keeps politicians in check with what they can promise to voters. Or should there be a brake? Kelton: The brake is inflation. If policymakers run wild, cutting taxes and pumping money into the economy with reckless abandon, inflation will spike and voters will (presumably) check those politicians at the ballot box.

Umm, there is an argument that the National Debt doesn't matter.  but I don't believe that voters will be any sort of check on government spending.  They (if they are recipients of it) will love it.  She doesn't address the traditional argument that raising interest rates will be a check on inflation.

I think this is just proclaiming the new pseudo-scientific economic gospel - MMT - and using it as an excuse to increase government spending.  She blinded me with science!

Thursday, January 10, 2019

Powell is very worried about the growing amount of US debt

Federal Reserve Chairman Jerome Powell is concerned about the ballooning amount of United States debt.  “I’m very worried about it,” Powell said at The Economic Club of Washington, D.C. “From the Fed’s standpoint, we’re really looking at a business cycle length: that’s our frame of reference. The long-run fiscal, nonsustainability of the U.S. federal government isn’t really something that plays into the medium term that is relevant for our policy decisions.”  However, “it’s a long-run issue that we definitely need to face, and ultimately, will have no choice but to face,” he added.

Why is he worried?  We haven't reached infinity yet.  It's too late to do anything about the rising debt and nobody cares. He needs to stop worrying and to love the free lunch.

See also:

Do rate cuts cause recessions?

I just read an interesting theory that recessions are caused by rate cuts.  Usually, you would think that a rate cut would help prevent a recession.

it's not the rate hikes that stifle economic growth and send stocks sliding that traditionally telegraph the start of a recession - it's the first rate cut following a tightening cycle that is usually the trigger. Case in point: the last three recessions were all preceded with the Fed cutting, i.e., the Fed loosened policy within three months before the previous three recessions, cutting by 0.25% in 1991, 1.5% in 2001 and 0.5% in 2007. ... the Fed is now too late to save the economy, to wit: "the Fed eases immediately prior to a recession", which is also why the steepening yield curve we are experiencing now is a far more ominous reversal to the recent flattening trend than if the curve had merely continued to flatten.

Maybe the Fed should just keep hiking until the recession starts instead of trying to predict recessions.  (After all, a 2.5% rate isn't that high and by itself won't cause a recession.)  Instead the predictions become self-fulfilled prophecies.

Friday, January 4, 2019

Is Medicare going to kill us?

Karl Denninger thinks so.  Read Cut The Crap - NOW.

There is no "entitlement crisis" in Social Security. It is all in the medical side and it is going to bankrupt the nation and government both at the state and FEDERAL level unless it is stopped right here and now. The truth of the nation from a fiscal perspective is simply this: If the medical monopolist crap is not broken now fiscal collapse at local, state and federal levels is a certainty. There is absolutely no possible way out of this box through higher taxes, cost-shifting, economic "growth", more borrowing or even all of them at once. "Hide the sausage" games just flat-out don't work.

He might be on to something, so I'll bite.  Question:  How much did the government spend on Medicare (not including Medicaid) in November?  This is an easy answer to find: $77 billion, found on page 3 of the Monthly Treasury Statement.  This is the second highest government outlay, behind Social Security, which however is mostly funded with taxes.   The corresponding number for Medicaid isn't easy to find, besides which Medicaid is partially paid by the states.  So I will just focus on Medicare.

Since this number is so easy to find, I think I will update it monthly.

Thursday, January 3, 2019

New mersenne prime

It is 282,589,933-1 having 24,862,048 digits.  It is the 51st Mersenne Prime.

This is an enormous number.  And each increase in the power of two means a number twice as big.  I wouldn't be surprised if this is the last Mersenne Prime number found for a long, long time.  Of course it was less than a year between discovery of the 50th and 51st mersennes, so who knows.

Monday, December 31, 2018

Hyperinflation won't happen here

The Case for Hyperinflation All the [financial] writers base their hyperinflation argument on America’s: 

  •  out of control federal deficits 
  • spiraling debt, 
  • poor economy, 
  • reluctance to raise taxes, 
  • loss of control over the money supply. 

The Case For Inflation – Not Hyperinflation – Happening [In my opinion, however,] hyperinflation is something that is easy to say [and] makes headlines but is more difficult to achieve. The question is not, is it possible, but, [rather,] is it probable in America today. I think the circumstances make the probability low… 
Conclusion I respect many of the writers who believe that we will experience hyperinflation [but] I think most of them are jumping the gun. At this point none of the economic or political factors required to set off hyperinflation are present. [Indeed,] careful analysis of theory, fact, and history leads me to conclude that inflation/stagflation is our future. It is quite a leap of fancy to say we are certain to have hyperinflation. [Frankly,] I think it is political science fiction to think that the Fed or any politician would let hyperinflation happen here.

Wednesday, December 26, 2018

Medicare will be depleted in 2026

Even after this date, the expenditures will exceed income by only about $50 billion per year.

Year  Income Exp  Deficit
====  ===== ===== =====
2026  470.8 522.7 −51.9

Sorry, I'm not going to get excited about another $50 billion/year added to the deficit in 2026.

Losing Control by 2024

I have previously made the claim that by 2032, when Social Security becomes insolvent, that the US will face a fiscal crisis.  Now I am reading that it could come even sooner:

If the games do not stop by 2024 Medicare will run out of money and be forced to curtail care for Seniors or attempt to throw the entire deficit in its spending into the Federal Budget.  At that point The Fed will lose control entirely as will Congress, since effectively shutting off Medicare for Seniors will prove politically impossible.  We are talking about $2 trillion a year deficits forever once this occurs and the market will not allow that to happen.

I am not endorsing this opinion, since I have made enough inaccurate predictions, and I think that our system is more resilient than I had previously thought.  Nevertheless it is something to consider:

Could the Fed and Congress lose control of the system by 2024?  What this would look like is $2 trillion/year deficits and resulting inflation, then hyper-inflation.

Can somebody convince me that this is not a likely scenario?

Monday, December 24, 2018

If solar panels are so clean, why do they produce so much toxic waste?

Solar panels often contain lead, cadmium, and other toxic chemicals that cannot be removed without breaking apart the entire panel.  Disposal in “regular landfills [is] not recommended in case modules break and toxic materials leach into the soil” and so “disposal is potentially a major issue.”

2018 - the year everything changed

I keep trying to read this beast, but it is huge. I can't find a coherent theme. This is the best I can glean out of it: "If equity markets regress to the mean while the 38-year-old bond bull market turns into a bear, we will witness some serious wealth destruction."

It is very interesting, but could use an editor.  Anyways I would be well-worth taking a few hours to read it.

Friday, December 21, 2018

Why do I find it hard to write the next line

 [Verse 1]
So true funny how it seems
Always in time, but never in line for dreams
Head over heels when toe to toe
This is the sound of my soul
This is the sound
I bought a ticket to the world
But now I've come back again
Why do I find it hard to write the next line
Oh I want the truth to be said

 [Chorus] Huh huh huh hu-uh huh
I know this much is true
Huh huh huh hu-uh huh
I know this much is true

 [Verse 2]
With a thrill in my head and a pill on my tongue
Dissolve the nerves that have just begun
Listening to Marvin (all night long)
This is the sound of my soul
This is the sound
Always slipping from my hands
Sand's a time of its own
Take your seaside arms and write the next line
Oh I want the truth to be known

[Bridge] I bought a ticket to the world
But now I've come back again
Why do I find it hard to write the next line 
Oh I want the truth to be said

Comment:  Why is the phrase "Why do I find it hard to write the next line" in there?  It sounds like the song writer couldn't find anything that fit. But the "official" explanation is "True is about how difficult it is to be honest when you're trying to write a love song to someone."

And supposedly, this has a reference to Lolita by Vladimir Nabokov with "Take your seaside arms".

Now what does "I bought a ticket to the world" mean?

Federal Reserve Rate Hike

December 11, 2007 - the Fed reduces the Fed Funds rate from 4.5% to 4.25%.
December 19, 2018 - the Fed increases the Fed Funds rate from 2.25% to 2.5%.

Note that in the first case, the rate is reduced and in the second it is increased, but these are converging.  Especially if you take into account that by March 18, 2008, the rate was reduced to 2.25%.  If the Fed reduces rates by 1/4 percent in March then these will match exactly.

Thursday, December 20, 2018

If you leave

If you leave, don't leave now
Please don't take my heart away
Promise me, just one more night
Then we'll go our separate ways
We've always had time on our side
Now it's fading fast
Every second, every moment
We've gotta make it last

I touch you once, I touch you twice
I won't let go at any price
I need you now like I need you then
You always said we'd still be friends someday

If you leave I won't cry
I won't waste one single day
But if you leave don't look back
I'll be running the other way
Seven years went under the bridge
Like time was standing still
Heaven knows what happens now 
You've gotta say you will

I'll touch you once, I'll touch you twice
I won't let go at any price
I need you now like I need you then
You always said we'd meet again

I touch you once, I touch you twice
I won't let go at any price
I need you now like I need you then
You always said we'd still be friends

I touch you once, I touch you twice
I won't let go at any price
I need you now like I need you then
You always said we'd meet again someday

If you leave
If you leave
If you leave
Don't look back
Don't look back

Comments: I really like this song.  I just want to point out that the singer is pathetic.  The guy is getting dumped and he wants to know if they can still be friends ("you always said").

Tuesday, December 18, 2018

A brief history of fat

This looks very interesting but I don't have time to watch it right now.

Saturday, December 15, 2018

The Fed is insolvent

Yesterday the Fed released its latest quarterly financial statements, showing that the value of their bonds is now $66.5 billion LESS than what they paid. And that $66.5 billion unrealized loss is far greater than Fed’s razor-thin $39 billion in capital. This means that, on a mark-to-market basis, the largest and most systemically important financial institution in the world is objectively insolvent. (It’s also noteworthy that the Fed’s financial statements show a NET LOSS of $2.4 billion for the first nine months of 2018.)
The Fed will say it doesn't matter because they intend to hold the bonds until maturity.  But that doesn't change the fact that they are insolvent.  This is a very early sign of a problem that will lead to hyperinflation.  If they keep buying bad assets (like U.S. government bonds that can only be paid back by issuing more), then they will have to monetize their losses.  
For the moment, quantitative easing has stopped.  But when the next recession hits, the government will spend like crazy, and borrow like crazy to get the money.  And the Fed will enable this by reinstating QE on a much larger scale.   They will buy an asset that nobody wants (one of an infinite number of treasury bonds) with the precious limited supply of Fed dollars.
How could the Fed get out of this situation?  It would be easy.  First, institute mark-to-market.  Second, stop sending the profits to the Treasury until the Fed's deficit is plugged.  But that won't happen.  It's easier to deny that there is a problem.