Finding the Money

Finding the Money is a documentary about the Magical Money Tree, that will be in theatres everywhere on May 3. where literally hundreds of people will pay to see it.  In it, economist Stephanie Kelton explains why the National Debt is a good thing - it should be called the National Savings Account instead.  The higher the debt, the more money "we" have.  There should be no debt limit, and healthcare should be free for everyone.  Oh also everyone is guaranteed a job. (This sounds like socialism).  We shouldn't worry about the deficit, instead we should be finding ways to increase it!

Julian Assange and Vault 7

Read: https://www.zerohedge.com/geopolitical/chris-hedges-crucifixion-julian-assange

 Julian Assange is in the news again.  I don't understand either side's position.  Julian Assange is an Australian citizen who was living in London, running WikiLeaks.  He has gone to extreme measures to fight extradition, which has been pending since November 2010, first to Sweden for alleged rape charges, and then since December 2017, to the United States.  He hid out in the Ecuadorian embassy from 2012 to 2019.   He was arrested on 11 April 2019, and has been in Belmarsh Prison ever since.  I don't understand why he doesn't just consent to extradition, and fight the charges in US courts, and then he could appeal his conviction there, if necessary.  If he wants to be a martyr for free speech then he would be much more sympathetic if he were actually persecuted and suffering in a prison in the US.

On the other hand, the attorneys for the US won't provide assurance that he won't face the death penalty.  Really, why so extreme?  Maybe it is because he leaked some hacking tools used by the CIA.

The 26 September [2021] Yahoo report alleges the following amongst other matters. The disclosure by WikiLeaks of exceptionally sensitive intelligence, relating to CIA hacking tools and known as “Vault 7”, caused the CIA director, Mike Pompeo, and other senior officials inside the CIA, to become “completely detached from reality because they were so embarrassed… They were seeing blood.” In 2017, Mr Pompeo publicly described WikiLeaks as a “non-state hostile intelligence service.” The designation as a non-state hostile intelligence service enabled the CIA to take far more aggressive actions. Some senior officials inside the CIA and the Trump administration discussed killing the applicant, requesting options on how to assassinate him. Discussions over kidnapping or killing the applicant occurred “at the highest levels”.

https://www.tareqhaddad.com/wp-content/uploads/2024/03/24.03.26-Assange-v-USA-Approved-Judgment.pdf , page 23.

What is Vault 7?  It is information about the CIA's covert hacking program.  WikiLeaks didn't spread the actual programs (malware, viruses, trojans, etc) or their source code, just information about their existence.  https://wikileaks.org/ciav7p1/

Does leaking information about CIA's hacking tools justify the death penalty?

I don't have a conclusion.

Notes on the Crisis

 See: https://www.crisesnotes.com/

This is a very interesting website.  The author is Nathan Tankus, an independent financial thinker, who not only doesn't have a PhD (someone should give him an honorary one), he apparently doesn't even have a bachelor's degree.  In the Crises Notes website, he does FOIA requests on old Federal Reserve memos and writes about them.

Read  https://www.crisesnotes.com/revealed-the-seven-secret-federal-reserve-books-i-won-through-foia/

I ran across this while searching for anything written by Zoltan Pozsar, a mysterious guy with a very cool name who has written research papers on the shadow banking system, but none of them are publicly available.  

The coming Real Estate Crisis

 Read: https://investmentresearchdynamics.com/uncategorized/the-collapse-of-cre-debt-is-accelerating/

March 2007: Ben Bernanke said the real estate problem was moderate.

June 2023:  Jerome Powell said the commercial real estate was under pressure but appears unlikely to threaten the broader financial system.

Read: https://www.forbes.com/sites/johnwake/2018/11/02/the-next-housing-bust/  (Note: this was written in 2018)

Real home prices peaked in 1989, the recession hit in 1990, home prices fell 7% from the peak until the end of 1990, the recession ended in the spring of 1991 but real U.S. home prices continued to fade for years until they bottomed out in 1997, down 14% from the 1989 peak eight years earlier.  In dollar numbers, real estate did not reach their previous 1989 highs until 2000 to 2002 in five selected cities (Boston, New York, Los Angeles, San Diego, and San Francisco).

Using the inflation-adjusted Case-Shiller Home Price Index, home prices peaked in Jan. 2006, the recession hit in Dec. 2007, home prices continued to fall for years until they bottomed out in about Jan 2012, having dropped about 30 to 45%.  Prices did not reach their previous highs until about 2017.

And now it looks like the 17-year cycle is repeating itself almost exactly.  House prices peaked about May 2022, dropped about 5% to 6% (depending on the city - in San Francisco they dropped 13%), and then recovered their previous highs as of October 2023 forming a double-top and are now declining again.  If history repeats, and it looks like it will, the recession should hit about January 2025, and then prices should continue to fall (adjusted for inflation) until about 2030.

I hope this doesn't happen, but I am just calling it like I see it.  There is definitely a 17-year pattern, and we see this in real estate, among other things.

2025 Budget

 See: Budget of the United States Government, Fiscal Year 2025 (whitehouse.gov)

I have just glanced at it, but I think it is totally unrealistic.  For example, the deficit in 2024 is given in the budget as $1.86 trillion, but I think it will be about $2.1 trillion.  The budget claims that the deficit will be reduced in 2025 to 1,781; in 2026 to 1,547; and in 2027 to 1,510.  After that it rises, but it is still below the 2024 number all the way through 2034 (which projects a deficit of 1,677, including interest).  The main reason for this is that taxes will go up drastically. 

The word "tax" is mentioned in the document 292 times (including mentions of tax credits and taxpayer).  The new taxes include: a minimum tax on billionaires, a 15% minimum tax on corporations with profits of more than $1 billion, a separate 21% minimum tax on corporations (I'm not sure what the difference is), increase of Medicare tax on incomes over $400,000, increasing fuel tax on high-end business jets, a surcharge on corporate stock buybacks, a separate 25% minimum tax on those with wealth more than $100 million (this may be the same as the billionaires tax), an increase in the top rate of corporations to 28%, raising the rates on foreign earnings to 21%, increasing the top rate on individuals who make more than $400,000 to 39.6%, an increase in capital gains tax for those earning more than $1 million, non-renewal of tax cuts set to expire in 2025, a Net Investment Income Tax that would go into the Medicare Hospital trust fund, expand limitation on deductibility of excessive employee renumeration, adopt the undertaxed profits rule etc.  

It projects the 2034 Debt Held By the Public to be only $45 trillion.  I think it will be about $70 trillion in 2034, but what do I know.  Let's see what the CBO thinks.

So the Whitehouse thinks that revenue as a percent of GDP will be 18.7% in 2025, and then rising every year to 20.3% in 2034.  The CBO thinks that revenue will be 17.1% in 2025 and 17.9% in 2034.  These are huge differences, for example just in 2025 the CBO thinks revenue will be about $5.0 trillion whereas the Whitehouse thinks that revenue will be almost $5.5 trillion.

See also: https://www.zerohedge.com/political/heres-whats-bidens-reckless-73-trillion-budget-and-heres-how-hell-pay-it

The BOI is not dead

 Ok, the headline is a very bad attempt at a pun.  BOI stands for Beneficial Ownership Information.  In a law passed in 2021, every business in the United States, including limited liability companies (LLCs), must file a report with FinCen as to who the true owners are by the end of 2024 (although some business are exempt, such as banks).  The reports are not very hard to file and there is no filing fee, but they do require an email address to register with FinCen.  The purpose of the BOI filing is anti-money laundering.

The National Small Business Association, an organization that represents 85,000 small businesses, sued the Department of Treasury in federal district court in Alabama arguing that the law requiring such reports was unconstitutional.  And they won!  Hurrah, no one needs to file reports with FinCen!  See the court order at: https://law.justia.com/cases/federal/district-courts/alabama/alndce/5:2022cv01448/183445/51/

The Alabama court said that it was unconstitutional because it "exceeds the Constitution's limits on the legislative branch and lacks a sufficient nexus to any numerated power to be a necessary or proper means of achieving Congress' policy goals".  And the decision applies only to the plaintiffs, the 85,000 small businesses represented by the NSBA, not the millions of other businesses

Ah, not so fast, the BOI is not dead.  Of course, the defendants appealed.  They are the government, with unlimited amounts of money to fight, and they are represented by the Department of Justice attorneys.  So, expect this decision to be overturned, and it may go to the Supreme Court.

Pentagon Review Finds No Evidence of Alien Cover-Up

 Read: Pentagon Review Finds No Evidence of Alien Cover-Up - Slashdot

US once considered program to reverse-engineer alien spacecraft, Pentagon report reveals - POLITICO

AARO Historical Record Report Volume 1 (defense.gov)

Detailed Analysis of the Government's Report on Unidentified Aerial Phenomena - The Debrief

But what about Project Kona Blue?  This wasn't covered-up, it just wasn't disclosed.  Got it?  

KONA BLUE: A Proposed UAP Recovery and Reverse-Engineering Program
KONA BLUE was brought to AARO’s attention by interviewees who claimed
that it was a sensitive DHS compartment to cover up the retrieval and 
exploitation of “non-human biologics.” KONA BLUE traces its origins
to the DIA-managed AAWSAP/AATIP program, which was funded through a 
special appropriation and executed by its primary contractor, a private
sector organization. DIA cancelled the program in 2012 due to lack of
merit and the utility of the deliverables. As discussed in Section IV 
of this report, while the official purpose of AAWSAP/AATIP was to conduct
research into 12 areas of cutting edge science, the contractor team, and
at least one supportive government program manager, also conducted UAP 
and paranormal research at a property owned by the private sector 
organization. When DIA cancelled this program, its supporters proposed 
to DHS thatthey create and fund a new version of AAWSAP/AATIP under a 
SAP. This proposal, codenamed KONA BLUE, would restart UAP 
investigations, paranormal research (including alleged “human 
consciousness anomalies”) and reverse-engineer any recovered
off-world spacecraft that they hoped to acquire. This proposal 
gained some initial traction at DHS to the point where a Prospective 
Special Access Program (PSAP) was officially requested to stand up this 
program, but it was eventually rejected by DHS leadership for lacking 
merit. As demonstrated by the proposal package and by statements from 
the originator, Senators Lieberman and Reid asked that the PSAP be 
established with the promise of additional funding. The proposed KONA 
BLUE lines of effort closely mirrored those conducted by the private 
sector organization for AAWSAP/AATIP.
KONA BLUE’s advocates were convinced that the USG was hiding UAP 
technologies. They believed that creating this program under DHS would 
allow all of the technology and knowledge of these alleged programs to 
be moved under the KONA BLUE program. The program would provide a 
security and governing structure where it could be monitored properly
by congressional oversight committees. This belief was foundational 
for the KONA BLUE proposal, based on the proposal documents and 
several interviewees who have provided the same information to AARO 
and Congress.
 The Oral History Initiative section of the KONA BLUE proposal was 
to collect data: “…from an already identified and calibrated list of 
retired, previously highly placed government, armed services, 
contractor and intelligence community individuals. The oral history
project will include gathering all information pertaining to the 
location of advanced aerospace technology and biological samples, 
including records, files, reports, photographs, as well as physical 
samples.” It is critical to note that no extraterrestrial craft or 
bodies were ever collected—this material was only assumed to exist 
by KONA BLUE advocates and its anticipated contract performers. This 
was the same assumption made by those same individuals involved with 
the AAWSAP/AATIP program. The SAP was never approved or stood up, and 
no data or material was transferred to DHS.
• KONA BLUE was not reported to Congress at that time because it was 
never established as a SAP and, therefore, did not meet the threshold
for congressional reporting. However, the Deputy Secretary of Defense 
provided a Congressional Notification concerning the program when it 
was identified in the spirit of transparency.

Deficit of $298 billion in February

 See: https://www.cbo.gov/system/files/2024-03/59973-MBR.pdf 

The fiscal year to date 2024 deficit is $830 billion for 5 months.  Interest for February was $69 billion. Defense spending for the month was $62 billion. We are still on track for a $2.1 trillion deficit for FY 2024.

The national debt as of 2/29/24 was $34.47 trillion. On 2/28/23 the national debt was $31.46 trillion. So it grew by 9.6%, and this is higher than the 8% long-term growth I see, but I think this will slow down slightly for the April to June quarter at least.

===========

Interest in February 2023 was $42 billion, so this was an increase of 64% over the same month in the previous year.

Revision: The National Debt will be $100 Trillion by 2038

 I just made a post saying that the national debt will be $100 trillion by 2035.   This uses a 10% annual growth in the total national debt.  I think this is too pessimistic, and I think 8% growth is more likely and we have until 2038 until we hit $100 trillion.  So here are the revised numbers.  The GDP growth is close to 5.5% annually but not exactly.

There is a gap of about 2.5% annually (8% growth in debt vs 5.5% growth in GDP) and this is about $700 billion for 2024.  I think the Fed will have to buy this much debt annually.  Maybe they should stop QT by July 1 and that way they aren't sucking money out of the system when it is needed to buy new government debt.  And then freeze their balance sheet for a couple of years until they need to start expanding it again.  There is no point in just shrinking the balance sheet until something breaks, unless that is part of their nefarious plan.

The pig butchering scam

 Have you ever received a text message from a stranger that seems to be a mistake?  If you reply, then you become a "pig" who is about to get butchered.  The person you are interacting with has a very detailed set of scripts that tells them how to respond to lure you in to their scheme.

Each criminal establishment compound has various scripts available to their staff while running the pig butchering scam. These scripts serve as very detailed guides that tell the staff how to respond to different situations and questions from their targets. These scripts are written by experts, doctors, and professors in psychology, as they are crucial to their success. Compared with traditional scams, pig butchering scams have evolved a lot, combining social engineering, internet technology, psychology, sociology, etc., into a complex new discipline. 

https://www.amlrightsource.com/news/pig-butchering-scams-are-spreading

The national debt will be $100 trillion by 2035

 This is a similar but slightly different calculation to the previous post.  I noticed that the national debt has been increasing at slightly more than a 10% rate from the year previous.  And elsewhere I saw a prediction from Social Security that GDP would increase at an average 5.5% pace.  Combine these and see what the national debt is a percent of GDP, and this is what you get.

The debt is rising $1 trillion every 100 days

 https://www.cnbc.com/2024/03/01/the-us-national-debt-is-rising-by-1-trillion-about-every-100-days.html

June 15, 2023: $32 trillion

Sept 15, 2023 (92 days later): $33 trillion

Jan 4, 2024 (111 days later): $34 trillion

This time will take longer because April should have a surplus because of taxes. But this could look like:

May 15, 2024 (132 days later): $35 trillion

Aug 31, 2024 (108 days later): $36 trillion

Dec 15, 2024 (106 days later): $37 trillion

March 15, 2025 (106 days later): $38 trillion

July 31, 2025 (138 days later): $39 trillion

Nov 15, 2025 (107 days later): $40 trillion

March 1, 2026 (106 days later): $41 trillion

 =================================

Since I am a doom-and-gloom guy, is this a problem?  The answer is no.  

1) The national debt and deficit goes up but the GDP (of which government spending is a portion) goes up as well, so the ratio of the debt to GDP remains about the same.  

2) The Fed has almost total control over the interest rates, so those aren't a problem. They should be about 4% going forward on a long-term basis. 

3)  As for where the money comes from to borrow, current bondholders and banks get interest (which is newly created money), so the money supply grows about the same rate as the debt.  

4) If this gets out of whack, the Fed can always engage in Quantitative Easing to buy more bonds.  Right now, the Fed is doing Quantative Tightening for another year or so until the Fed balance sheet reaches about $6 trillion, (with about $4 trillion of that being Treasuries).  They seem to expect that the private sector (and the government trust funds) can finance the rest of the debt.  But they may need to buy a certain percentage (20%?) of the newly issued debt on a consistent basis going forward.

I think we are on track to hit $1 quadrillion in national debt about 2090.  (Or is this 2070?). This will be long after I am gone.  But this is not a problem.

=========================

I put the numbers in a spreadsheet and did a trend analysis using the TREND() function in Excel.  The trend is to increase the national debt by $846 billion every quarter, or 1 trillion every 107 days.  Here is what popped up.  These should be similar numbers to those above.

Using the same trend, we should hit $50 trillion by 9/30/2028.