Debt is the Root of All Evil

What keeps us from revolt? To what do we bow our daily collective heads in fealty to?

The answer is Money.

What we call “money” today was a wicked genius invention that popped up right around the same moment in history when humans were working out other keen, life-altering inventions such as clocks, and printing presses.

“None are so hopelessly enslaved as those who falsely believe they are free.”

~ Goethe

A person in debt is a person controlled. But they think it was their own decision. Hence the Goethe quote above. A nation in debt is a nation controlled. The debt trap is especially insidious, and it relies on the illusion of free will combined with the full weight of ‘the law.’

By attaching a stated rate of interest to a loan, a person’s future output was yours if you were the holder of that note. What a stroke of pure (evil) genius! Set the rate high enough and the term long enough and you can get all of your money paid back plus another 100% of that amount or more, every bit of which was actually the future productive output (i.e. time) of the borrower.

Conjure up a promissory note out of thin air and then you get to skim the true productive output of that person, regardless of outcome. Whether they succeeded or failed in the endeavor, you still won. If they paid you back, the win was obvious. If they failed you often had collateral on the back end protecting your “investment.” No matter what, you won.

And even if that wasn't the case? Well, you lost the amount of effort on your end that it took to draft up the note. In other words, nothing really.

https://www.zerohedge.com/news/2018-04-28/end-our-empire-approaches

Are we in an 11 year cycle?

Ok, here is a theory, that we are at a point in the business cycle that matches the previous one, with a 11 year delay.  Let's see if we can prove or disprove it.

DJIA
Oct 9, 2007:  DJIA peaks at 14,164.
Jan 26, 2018: DJIA peaks at 26,616.   This is about 10.3 years later.

Fed Reserve Rate
June 2006: Fed raises rates for the last time in the cycle to 5.25%.  The first cut is in Sept 2007, to 4.75%
June 2018:  The Fed projected to raise rates to 2.0%, which I speculate will be the last one, because there won't be enough room to raise it more, with the 10 year at 2.75%.  This indicates a 12-year cycle.  (On the other hand, it could keep going for several years).

Housing Market
Summer 2005. "The booming housing market halted abruptly in many parts of the United States in late summer of 2005, and as of summer 2006, several markets faced the issues of ballooning inventories, falling prices, and sharply reduced sales volumes."   https://en.wikipedia.org/wiki/United_States_housing_market_correction

Summer 2018.  It is hard to get numbers, but the refinance index seems to have peaked about Jan. 2018 and applications have declined since then. We haven't seen a peak in the housing market yet, but it seems inevitable with rising rates and decreases in financing.  This would indicate a 13-year cycle.

This is obviously still a work in progress.  But it seems like housing will cause the next bust, just like in 2007-2008, and this may occur sooner.  So keep a tight eye on housing news, specifically when the housing market peaks.

Keto Military Diet

Here is a 3-day diet I have invented, based on the military diet, that I will try sometime.  I have omitted the bread, crackers and fruit.  It is almost a fast it is so low in calories.  Here it is:

Day 1 Breakfast: quiche, peanut butter (2 tbl), coffee.
Day 1 Lunch:  tuna (5 oz can)
Day 1 Dinner: meat, any kind (8 oz), can of green beans (15 oz).  Non-fat greek yogurt (5 oz).

Day 2 Breakfast: 2 hard-boiled eggs, butter, coffee
Day 2 Lunch: 4% fat cottage cheese (8 oz), 5 slices of small salami rounds (not lunch meat)
Day 2 Dinner: 2 hot dogs (without bun), broccoli and carrots (12 oz), greek yogurt.

Day 3 Breakfast: cheese (2 oz), 5 salami rounds, coffee
Day 3 Lunch: 2 hard boiled eggs, small side salad w/no dressing or croutons
Day 3 Dinner: 1 can tuna, greek yogurt.

You can add celery and cheese as a snack.

Update: 2/24/22

Possible options -

1. Add 2 slices of bacon (2 ounces) per day for breakfast.

2. Eat low carb ice cream (like Rebel or Halo Top) instead of yogurt.  This is more in the spirit of the military diet.

3. Add some green veggies, like brussels sprouts, broccoli or asparagus.

4. Cottage cheese isn't going to work.  Use silken tofu instead.

Why a recession is inevitable and it will be caused by the housing market tanking again

Read https://www.theautomaticearth.com/2018/04/the-mother-of-all-deflations/

We have made our economies fully dependent on banks creating loans out of thin air. Which is a ridiculous model, and as Steve says: “That is no way to run an economy”, but we still have. And if and when home prices start to fall, and fewer people buy homes, the money supply will first stop rising, and then start falling, and we will have the mother of all deflations.

Update:  I keep trying to find patterns and I keep being wrong.  But maybe we are in a 11-year cycle?  I.e. 2018 is like 2007.  So a major crisis in Sept. 2019?

New CBO Projections

The CBO just released their new 10-year budget projections.  I don't find it that interesting.  Yea it shows trillion-dollar deficits that increase each year, and a deficit of $1.5 trillion for the first time in the year 2028.  They are projecting that FY 2018 will only have a $804 billion deficit, and that FY2019 won't reach a trillion, only $981 billion.  Yea, right.  And that net interest will be at 3.1% of GDP in 2028 (which is well below the level at which I freak out).

I am however really interested in two upcoming reports they will issue.  The first is the next Long-Term Budget Projection.  The last one of those they issued was in March 2017, which is like an eternity ago, because so much has happened since then to increase the deficits.  I would like the deficit projections extended out to 20 years and see if the US will still be credit-worthy

The next is the 2018 Report on Long Term Projections for Social Security.  The last was issued in Oct. 2017, so it will be a while until the next one. 

Debtwatch March 2018

On Feb. 28, 2018, the debt held by the public was $1.515 x 10^13.

On Mar 31, 2018, the debt held by the public was $1.543 x 10^13, an increase of $278 billion or 1.8%.  

Update:  The interest paid in March was $33 billion per the Treasury, up from $23 billion in February.  This will number will continue to increase exponentially as interest rates rise and the base increases.