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.
Source: http://www.munknee.com/will-hyperinflation-happen-in-america-here-are-economic-political-worst-case-scenarios/

Medicare will be depleted in 2026

https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/downloads/tr2018.pdf

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.
https://market-ticker.org/akcs-www?post=234753

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?

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

https://www.forbes.com/sites/michaelshellenberger/2018/05/23/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

https://www.zerohedge.com/news/2018-12-22/david-collums-2018-year-review-year-everything-changed
https://s3.amazonaws.com/cm-us-standard/documents/2018-Year-In-Review-PeakProsperity-Final.pdf

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.

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."
https://www.theguardian.com/culture/2012/may/14/how-we-made-true-spandau-ballet

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.

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").

A brief history of fat

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

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.)   https://www.sovereignman.com/trends/its-official-the-federal-reserve-is-insolvent-24373/

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.

Massive Wealth Destruction Coming

URL: https://www.youtube.com/watch?v=y0Bq72cMOSY

Love Comes Walking In

Netflix is going down

Back in the middle of the summer, the stock price peaked at $423.21, and as I write this article it is currently at $269.70.  At this point, Netflix is bleeding cash at a rate that is staggering.  It has been projected that Netflix’s free cash flow will be negative 2.79 billion dollars in 2018, which will be the worst year that it has ever experienced.

Looking forward, Netflix will be steadily losing key content and subscribers to competitors, and it is inevitable that their borrowing costs will go up quite a bit. Without sufficient revenue to service their exploding debt, it is only a matter of time before Netflix flames out and is forced to surrender. Netflix shares are still worth $269.70 at the moment, but that won’t last for long.  Eventually the company is going to zero, and no amount of irrational optimism will stop that from happening.

http://theeconomiccollapseblog.com/archives/the-rise-and-fall-of-netflix-here-are-5-reasons-why-netflix-stock-is-crashing-as-the-company-heads-for-oblivion

$16 trillion in Debt Held By the Public

Debt Held By the Public hit $16 trillion on 11/30/18. The exact number was 16,044,318,195,178.80.
It first hit $15 trillion on 2/15/18.  It should hit $17 trillion about 9/30/2019.  It is on track to hit $32 trillion by 2028.

Instead of freaking out about this maybe we should celebrate it.  The US Treasury truly has discovered the free lunch.  It can create money out of thin air by issuing bonds that never need to be paid back.  Since it is free, why not do more of the same.  Free money, I tell you.  Why look a gift horse in the mouth?

Spider's Web

Spider's Web. Expose on the City of London.

The Exchange Stabilization Fund

This is very interesting stuff.

Eleven year cycle

Oct 9, 2007: DJIA peaks at 14,164.
Oct 3, 2018: DJIA peaks at 26,828.

Recession begins:  December 2007.  (The start of the recession wasn't officially declared until 12/1/2008 by the NBER).
Recession begins:  December 2018

Stock market meltdown:  Monday, Sept 28, 2008 (Rosh Hashanah)
Stock market meltdown:  Monday, Sept 30, 2019 (day after Rosh Hashanah).

See also:  11 year cycle
Are we in an 11 year cycle?

Doubling the Debt to the Public

It looks like Debt to the Public is about to hit $16 trillion, a nice binary number, within the next two months.  It currently (11/19/18) is at $15.941 trillion.  It hit $8 trillion on 3/1/2010, during the recovery from the Great Recession.

But when did it first hit $4 trillion?  That would be 11/28/2003, according to the Treasury website.
So it took about 6.3 years to double from $4 trillion to $8 trillion, and about 8.7 years to double again.  So it should hit $32 trillion about 12/31/2028 (about 9 years from now).  It will take only 5 more doublings to reach $1024 trillion.  At 9 years per doubling, that is in 2073.

Is this sustainable?  What if Treasury decides to default on the $1 quadrillion National Debt, what will be the impact on our world?  How can we prevent this cataclysmic event from happening? We already decided that the answer is not to cut any spending and that Social Security is sacrosanct.

Who owes the debt?  Personally, I disclaim any responsibility for it.  What about you?  Are you willing to be a good debt slave and pay up your $2.5 million share?  Why is nobody talking about this?

Debt blow out

I'm sort of obsessed with the national debt, which is why I started this blog.  I think if it grows just a little bit, that it might be sustainable indefinitely, and we can truly enjoy the free lunch.  If it grows too fast, however, then the laws of compound interest and exponential hyperinflation will take over and the whole thing will crash.  I think the growth should stay within 0.6% per month, which by the rule of 72 means a doubling every 10 years.  Any faster than this indicates danger.

Oct 31, 2018 ended with $15.843 trillion of Debt Held by the Public.  So I would allow a very generous $95 billion of government deficit spending for the month. 

Well guess what.  The month is only half over and the Debt Held by the Public is at $15.942 trillion.  so we have already deficit-spent $99 billion this month.  At this rate we will hit $16 trillion within a month.

So I think it is out of control.  We usually have a surplus in January, so maybe things will slow down a little.  But as of now, we are going too fast.

The 3-Year Hits 3%

Today (11/7/18) the yield on a 3-year Treasury bond was at 3.03%. 

When was the last time it was above 3%?  That would be 7/25/08, when it was at 3.01%.  The high for the 3-year in 2008 was 6/13/08 at 3.38%.

Next up is the 2-year bond.  It is at 2.96%. When will it hit 3%?

Map of proposed tunnel system under Los Angeles

https://www.theverge.com/2017/12/5/16737488/boring-company-los-angeles-map-tunnels
They’re not just empty tunnels; instead, a car on the surface would dodge traffic by taking a sort of elevator down, which would then move as a “sled” through the tunnels at speeds of 150 miles per hour. Bus-like “pods” would move non-car owners around the city, too.

Yellen says rising deficit is unsustainable

The United States is taking on too much debt right now, a problem that is will only worsen moving forward, former Federal Reserve Chair Janet Yellen said Tuesday.  "If I had a magic wand, I would raise taxes and cut retirement spending," Yellen told CNBC's Steve Liesman at the Charles Schwab Impact conference in Washington, D.C., who characterized the U.S. debt path as "unsustainable." 
https://www.cnbc.com/2018/10/30/yellen-says-rising-us-deficit-unsustainable-if-i-had-a-magic-wand-i-would-raise-taxes.html

Too much debt?  How could there be too much debt, we haven't reached infinity yet.  As for cutting Social Security, it will never happen.  She needs to stop worrying and love Big Brother's free lunch.

National Debt to hit $1 quadrillion by 2093

Read: https://www.zerohedge.com/news/2018-10-29/disaster-awaits-national-debt-will-be-6-times-size-economy
Which cites: https://reason.com/blog/2018/10/26/a-national-debt-6-times-the-size-of-the
which in turn quotes: http://www.crfb.org/papers/75-year-budget-outlook

Basically the CRFB is using the CBO's numbers but extending them from 30 years to 75 years.  Using the "Alternative Fiscal Scenario", which is actually the most realistic since it assumes the continuation of current policies (but not current laws), the CRFB projects that the national debt will be 600% of GDP by 2093.

I did my own calculation of what that actually means.  If GDP is currently $20.66 trillion (a number I got from the BEA), and it increases by an average of 3% per year, then in 2093 it will be $189.6 trillion.  6 times that is $1137 trillion (and increasing by $33 trillion per year).

So no worries, mate.  The National Debt can keep increasing, the only limit is infinity, right?  And the US government will never ever default, right?  And the promised Social Security payments will always be paid, right?  The US Government is eternal and the National Debt is sacrosanct.

If you have a problem with this analysis than you are a hater and need to go to indoctrination camp until you love Big Brother.

The interesting history of Delaware

I think Delaware is a little strange.  It is really tiny, less than 2,000 square miles with less than 1 million residents.  It used to be a colony called New Sweden, then it was conqured by the Dutch, and then the English (lead by the Duke of York).  The Duke of York then gave it or sold it or leased it (not sure which) to William Penn, the proprietor of Pennsylvania, who desired access to the sea.  At that time it was called the "Lower Counties on the Delaware".  Delaware was then governed jointly with Pennsylvania.

On June 15, 1776, just before the Declaration of Independence was signed, Delaware declared its independence from both Great Britain and Pennsylvania. It apparently separated from Pennsylvania because it wanted to maintain is "peculiar institution".

I have a theory. - Since many of Delaware's leading citizens (eg Bedford, Dickinson) also held property and office in Pennsylvania, and many of Pennsylvania's richest (eg Morris, Willing) got rich importing slaves through Delaware (both before and after Pennsylvania started taxing slave imports, as the PA Gazette and other colonial records confirm), I suspect one reason for separation was the realization by some of the richest citizens in both colonies that the radicals who were gaining the upper hand in the Pennsylvania Assembly would eventually combine with the newly-abolitionist Quakers and other minority sects to make slavery in Pennsylvania illegal. - Which they did, before the Revolution was won. - By separating Delaware, both the "Lower Counties'" slaveowners and those Philadelphians who wished to exploit the "Peculiar Institution" could purchase nearby property where they could keep their field laborers, skilled workers, and women who provided all kinds of domestic services, despite Pennsylvania's increasingly broad abolition law. http://www.answers.com/Q/When_did_delaware_separate_from_pennsylvania

So it is clear that Pennsylvania and Delaware are twins in my chart.  And I guess Maryland is a loner.

Twin States

What states are basically twins?  Sometimes they are best friends, sometimes they hate each other. Sometimes there is a geographical similarity. Sometimes they became states together. Some of this is just my opinion.  I think the north-south connection is stronger than an east-west connection.

Twins:
Alabama and Mississippi.  (east-west connection. These are almost mirror images of each other)
Alaska and Hawaii (Both became states in 1959).
Arkansas and Missouri (Arkansas was admitted in 1836, the next state after Missouri in 1821).
Arizona and New Mexico (east-west connection.  Both became states in 1912.)
California and Nevada
Colorado and Wyoming
Connecticut and Massachusetts
Florida and Georgia
Illinois and Indiana (east-west)
Idaho and Montana
Kansas and Nebraska (Note: You could also match Kansas with Missouri and Nebraska with Iowa)
Kentucky and Tennessee
Maryland and Pennsylvania (Mason-Dixon line)
Michigan and Ohio
Minnesota and Wisconsin (east-west)
New Hampshire and Vermont (east-west)
New Jersey and New York
North Dakota and South Dakota
North Carolina and South Carolina
Oklahoma and Texas
Oregon and Washington
Virginia and West Virginia (East-west)


Loners:
Delaware (should be part of Maryland)
District of Colombia (should be part of Maryland)
Iowa
Louisiana (it is just different)
Maine (maybe New Brunswick is a twin)
Rhode Island (should be merged with Connecticut)
Utah (could be matched with Nevada, leaving California a loner)

China's Economic Collapse

 I only watched the first minute, but I think it is worth watching.

Government borrowing

Read this article:    Federal Deficits Are Worse Than You Think

So the government publicly states that there spending is something like this:
Revenues:  $3.3 trillion
Outlays: $4.1 trillion
Deficit: $800 billion (added to the national debt).

But maybe a better way of looking at it would included the flow of funds, which would look something like this:
Tax Revenues: $3.3 trillion
Borrowed:  $9.0 trillion
Total Sources of Funds:  $12.3 trillion

Outlays (other than interest): $3.8 trillion
Interest:  $300 billion
Redemptions:  $8.2 trillion
Total Uses of Funds: $12.3 trillion

Because there is a lot of short-term debt that is redeemed, the government needs to borrow about $750 billion a month to keep afloat. 

As of October 18, the Treasury already borrowed $623 billion in just over 1/2 month and it used $566 billion of that to redeem expiring debt.  Only $57 billion was used for other spending.  Tax revenues as of that date were $147 billion.  The Treasury borrows about 77% of all the money it needs.

So another way of looking at the US Government is that it is primarily a bank with a benevolent arm.  Which leads to some other points.  1) It is a giant ponzi scheme which apparently can go on forever. 2) With that amount of cash sloshing about, it would be very easy to divert some of it to secret, off-shore programs.

And another thought.  The interest rate, while it is a cost to the debtor, is income to the creditor.  So it is to the benefit of the Federal Reserve, which is controlled by bankers, to increase the interest rate.  Interest on the national debt is free money, created by the US Government through its ponzi scheme, and given to the banksters for doing nothing, other than having the perverse ingenuity in creating such a system.

Dow drops 1700 points in the last 6 business days

The Dow hit an all-time high of 26828 on Oct 3.  Since then, it has gone almost straight down:

date	close	change	percent	cum change	cum percent
10/03/18	26828.39
10/04/18	26627.48	-200.91	-0.75%	-200.91	-0.75%
10/05/18	26447.05	-180.43	-0.68%	-381.34	-1.43%
10/08/18	26486.78	39.73	0.15%	-341.61	-1.28%
10/09/18	26430.57	-56.21	-0.21%	-397.82	-1.49%
10/10/18	25598.74	-831.83	-3.15%	-1,229.65	-4.64%
10/11/18	25052.83	-545.91	-2.13%	-1,775.56	-6.77%

A bear market is defined as a drop of 20%  from the prior peak so we aren't there yet, but that is where things are headed.  Assuming that this is the crash we have long been dreading, what does this mean?

Well, it seems to fit the "Ten or Eleven Year Financial Crisis Cycle" I wrote about on April 14, 2017.  At that time I predicted a crash on 9/11/18, so I am off by a month.  So, to compare:

Year	date	significance
1966	August	the first significant postwar financial crisis
1977	July 13	blackout in NYC, which followed a financial crisis
1987	Oct 20	DJIA drops 22% and the system almost collapses
1998	Sept 23	LTCM crisis
2008	Sept 15	Global Financial Crisis; Lehman goes bankrupt
2018	Oct 11	DJIA drops 1700 points since high on Oct 3

The problem with this analysis is that there was no recession in 1966, 1977  (it happened before in 1973-1975), 1987, or 1998.

However, assuming that this is "it", and not just a "buy-the-dip" drop, we can expect a recession to hit within a few months.  NBER, the official arbiter of recessions, won't call the start until about a year after the peak.  But its not too hard to determine - the unemployment rate is the main determiner.  In every recession, it starts shooting up like a rocket.  Right now, the unemployment rate is about 3.7%, a 40-year low.  If it jumps to over 5%, then we are there.

And then we can expect the government deficit to skyrocket because of increased spending and decreased revenues.  Maybe a $2 trillion deficit within a couple of years.

September surplus

The US government usually runs a surplus in September.
In September 2018, the surplus was $116 billion ($343 B receipts vs $227 B outlays).
In September 2017, the surplus was $8 billion ($349 B receipts vs $341 B outlays).
In September 2016, the surplus was $33 billion ($358 B receipts vs $325 B outlays).
In September 2015, the surplus was $91 billion ($365 B receipts vs $275 B outlays).

Which other month does the US usually run surpluses?  Other than April (when everyone pays their taxes).

Update: January usually has surpluses as well, at least in January 2018 ($51 billion) and January 2017 ($52 billion).  "Surpluses in January are boosted by the shift of certain payments, ordinarily made on the first of the month, from January to December because January 1 is a holiday."

October 3 was the high

The Dow Jones reached 26,828.39 on 10/3/18, an all-time high.  The peak in  the S&P 500 was 2930 on 9/20/19, but it came close to this on 10/3/18 with 2925.

So this really might be it.  Of course, I thought about 1/26/18 when it hit 26,616, and before that on June 19, 2017 when it hit 21,528.  To repeat what I said then: "At some point, it will hit a peak for this business cycle, and that might be it."

The 5-year rate is above 3%

Yesterday (10/3/18), the 5-year treasury yield rate went to 3.02%.  While it may drop below 3 again, I find this significant.  When was the last time the 5-year rate was at 3% or higher?  I think on 10/14/08, when it was at 3.01%.  (It dropped to as low as 1.26% on 12/18/08).  So almost exactly 10 years ago.

Debt Alert cancelled

At some point the system will start a slow-motion meltup when the debt will "float" away into infinity.  I see a red alert when the Debt Held by the Public increases by more than $100 billion for more than one month in a row. Thankfully, the debt increase has temporarily slowed down so we can relax a little and think optimistically.

For the record, the debt held by the public as of 9/28/18 (the last day of the 2018 fiscal year) is $15.771 trillion and this was actually lower than the month before.  Nothing to worry about folks, at least for the moment.  How about the government just freezes it at this level?

Social Security is now solvent until 2032

The CBO has published their data for the 2018 Long-Term projects for Social Security (https://www.cbo.gov/publication/54428).  Instead of writing a report, they just gave their data.  It shows that Social Security will not have benefit cuts until 2032, which is one year later than previously projected.  See Crisis in 2031. 

Calendar Year	Tax Revenues	Outlays with Scheduled Benefits	Outlays with Payable Benefits
2017	4.70	4.91	4.91
2018	4.54	4.95	4.95
2019	4.53	4.98	4.98
2020	4.55	5.10	5.10
2021	4.58	5.23	5.23
2022	4.60	5.33	5.33
2023	4.61	5.46	5.46
2024	4.61	5.57	5.57
2025	4.62	5.68	5.68
2026	4.66	5.78	5.78
2027	4.66	5.89	5.89
2028	4.67	6.01	6.01
2029	4.68	6.06	6.06
2030	4.68	6.13	6.13
2031	4.67	6.16	6.16
2032	4.62	6.20	4.62
2033	4.60	6.22	4.60
2034	4.57	6.25	4.57

This is really good news.  I'm not going to repeat the reasons why this would cause a major crisis, but this is really the end of the road, and its good that we have another year breathing room to try to figure out a solution.

I like to make wild inaccurate projections, so lets put a revised date on when this sucker is going down.  Sept 6, 2032 it is. You heard it here first.  Instead of mocking it, why not try to figure out if our system is sustainable indefinitely or how to fix it if it is not?

Why Ohio and Michigan hate each other

National Debt to reach $99 trillion by 2048

http://theeconomiccollapseblog.com/archives/destroying-america-it-is-being-projected-that-the-u-s-national-debt-will-hit-99-trillion-dollars-by-2048

With annual budget deficits of $6 trillion.

The author of the above article states: " Of course we will never actually see the day when our national debt reaches 99 trillion dollars.  Our government (and our entire society along with it) will collapse long before we ever get to that point.  In our endless greed, we are literally destroying America, and emergency action must be taken immediately if we are to survive."

I want to know when it will reach $1 quadrillion dollars.  And why does it have to end?  That is why I started using scientific notation to represent the debt.  Computers can represent extremely large numbers in floating point.  It is a long way until you reach infinity.

Puerto Rico is the newest tax haven

https://www.gq.com/story/how-puerto-rico-became-tax-haven-for-super-rich

A year after the tragedy of Hurricane Maria, the 51st state has become the favorite playground for extremely wealthy Americans looking to keep their money from the taxman. 

The super-rich can keep their U.S. passports but don't have to pay any income tax. 

Right Down The Line

Why New Mexico Hates Texas

Why Kansas Hates Missouri

US Government spent $433 billion in August

https://www.zerohedge.com/news/2018-09-13/us-government-spends-record-433-billion-one-month-deficit-explodes

Today, the US Treasury released the detailed budget deficit breakdown for the month of September and the first 11 months of the year, and the numbers are scary.

According to the latest Monthly Treasury Statement, in August, the US collected only $219BN in tax receipts. The real highlight of the August budget report was that government outlays, or total spending, soared to $433.3 billion, not only 30% higher than a year ago, but the highest government monthly outlay of any month on record.

The August deficit brought the cumulative 2018F budget deficit to over $898BN during the first 11 month of the fiscal year, up a whopping 40% over the past year.

Military Diet Day One

I've written extensively on the Military Diet before, because it is simple, easy and effective.  I'm trying it again. This is my latest attempt with notes and thoughts.

Breakfast

• One whole grapefruit.  This was a little expensive, it was over a pound, and it cost $1.60.  The official diet calls for 1/2 grapefruit, but I ate the whole thing.  What are you supposed to do with the other half?  Calories: 100.
• Peanut butter.  I looked at the individual servings, but they had sugar in them.  So I bought a 15-ounce plastic jar of natural peanut butter with only roasted peanuts and salt.  It was very oily, and it kept dripping off the spoon.  I ate several spoonfulls, probably 2 ounces.  Calories: 400. 

Breakdown

It's alright if you love me
It's alright if you don't
I'm not afraid of you running away
Honey, I get the feeling you won't

There is no sense in pretending
Your eyes give you away
Something inside you is feeling like I do
We said all there is to say

Baby Breakdown
Go ahead and give it to me
Breakdown honey take me through the night
Breakdown now I'm standing here can't you see
Breakdown, it's alright

Month 2 of the slow-motion meltup

On 7/31/18, the Debt Held By the Public was at $1.5569 x 10^13.
On 8/31/18, the Debt Held By the Public was at $1.5785 x 10^13, an increase of $216 billion in only one month, during which the economy was booming. I think that every month from here on out (with the exception of April) this number will increase more than $100 billion per month. 

Who is ultimately liable for defaulted student loans?

There are about $1.53 trillion of outstanding student loans. (See https://www.zerohedge.com/news/2018-08-28/how-us-education-became-debt-sentence.)  This number goes up more than $200 billion per year and is expected to be nearly $2 trillion by 2020, and $3.3 trillion by 2024.  Somewhere between 33% and 40% of this will be defaulted on.

It is not clear (to me) exactly who this is owed to, let's just call it Sallie Mae, although I don't think that is quite right, but let's pretend it is.  Sallie Mae sells bonds to finance its activities, but all of the bonds are bought by the Treasury.  In theory, students will get better jobs and just pay it all back.  However, at least $1 trillion will be in default by 2024.

What happens to this defaulted debt? It can't be discharged in bankruptcy, so it won't go away.  It is guaranteed by the U.S. Treasury, but I don't think the Treasury pays the accrued interest.  If you have a debt, but never pay it back and never pay interest on it, does it exist?

So the existential question is, does this debt "really" exist?  Of course it exists, it is in a computer somewhere but does it "really" exist?  There are two answers.  First, yes, and it should be added to the national debt because it is guaranteed.  Second, no.  It is an "off-balance-sheet" investment by the Treasury, a bad investment at that, but the funding for this came from borrowed cash, and it is already part of the national debt.  I am leaning towards the second answer, but am still puzzling this.

Now the real questions.  If student loan debt is really already part of the national debt and the national debt will never be paid back, then why does it matter if student loans are being default on?  And why should anyone ever repay their student loans, except as a moral obligation by those who benefited?  Are we inexorably headed indirectly into American-style socialism, with free college education for all? If we are, who is harmed by this?  Did I just talk myself into becoming a socialist?  What differentiates Bernie socialism from Venezuela socialism?

On Derision

When the tongue becomes a clapper in a cardboard bell,

when words fall dead from the air with a charnel smell;

when all that's right and good are declared to devils be,

And fools all sing the praises of each vile depravity:

Then wear you their derision with a kind of humble pride,

For 'tis no shame to garner such from people dead inside.

And should they corner you, stand fast upon your ground,

For better to be a noble ghost, than a cuck the world renowned.

https://www.reddit.com/r/The_Donald/comments/9axmdf/10000_germans_march_in_protest_of_mass/

48-year cycle of Renegade Presidents

I notice commonalities between these presidents.

Andrew Jackon

Andrew Jackson was elected president in 1828.  He is a personal hero of Donald Trump.  He is best known for kicking the Indians out of Georgia (although the "Trail of Tears" happened under his successor Martin Van Buren), for supposedly saying the Supreme Court has made its decision, now let them enforce it, and for abolishing the Second Bank of the United States, and for getting rid of the national debt (for the only time in the country's history).

Rutherford B Hayes

Rutherford B Hayes was elected president in 1876 (48 years after Andrew Jackson).  He lost the popular vote to Democrat Samuel J Tilden but won in the Electoral College in an intensely disputed election (similar in some respects to the 2000 dispute between Bush and Gore).  His name is almost synonymous with ending the Reconstruction of the South, which some people believe should have been continued.

Warren G Harding

Warren G Harding was elected President in 1920 (44 years after Rutherford B Hayes). He is known for being a tool of Wall Street (he appointed Andrew Mellon as Secretary of Treasury), for cutting taxes (which substantially increase tax revenues), and for opposing bonuses for WWI soldiers.  He gets credit for the booming economy of the 1920s: 

The top marginal rate was reduced annually in four stages from 73% in 1921 to 25% in 1925. Taxes were cut for lower incomes starting in 1923. The lower rates substantially increased the money flowing to the treasury. They also pushed massive deregulation and federal spending as a share of GDP fell from 6.5% to 3.5%. By late 1922, the economy began to turn around. Unemployment was pared from its 1921 high of 12% to an average of 3.3% for the remainder of the decade. The misery index, which is a combination of unemployment and inflation, had its sharpest decline in U.S. history under Harding. Wages, profits, and productivity all made substantial gains; annual GDP increases averaged at over 5% during the 1920s. Libertarian historians Larry Schweikart and Michael Allen argue that, "Mellon's tax policies set the stage for the most amazing growth yet seen in America's already impressive economy. Wikipedia

He is also known for scandals (the Teapot Dome Scandal) and for his extramarital affairs, both of which came to light only after his death.

Richard M Nixon

Richard M Nixon was elected President in 1968 (48 years after Harding).  He ran on a platform of law and order and rode the wave of outrage against the Supreme Court ('impeach Earl Warren").  He was not a conservative - he imposed wage-and-price controls, he established the Environmental Protection Agency, he enforced desegregation,and he opened up relations with Red China. After the Watergate scandal, he resigned on August 9, 1974 rather than be impeached.

48-year cycle

I remember when I was a kid reading "The Great Depression of 1990", which mentioned the Kondraetiff cycle, which was 51 years long.  But what if the modern version of it is about 48 years long.

Compare October 28-29, 1929 (when the stock market dropped 24% over the two days) with October 19, 1987 (when the stock marked dropped 23%).  Of course there were major differences, since the 1987 crash did not cause a recession, but this shows the 48-year cycle.

I've already mentioned Trump and Nixon, but look who was president 48 years before Nixon - Warren G Harding, whose administration was scandal-ridden.

The Great Recession of 2021-2023

Ok, I don't have any inside information or secret wisdom about this.  But I am thinking about the parallels between Richard Nixon and Donald Trump.  I don't care about the politics of this, but I wonder if there are some economic parallels.

LBJ was famous for the Civil Rights Act of 1974.  Under Obama, the Supreme Court voted to require homosexual marriage in 2015.  Nixon ran on a platform of "law and order" and his supporters were motivated by the desire to change the Supreme Court, which happened with the replacement of Earl Warren with Warren Earl Burger, who was supposedly a conservative (but voted for Roe v Wade).  And of course, Trump supporters are motivated by the desire to change the Supreme Court, with Neil Gorsuch being appointed and Brett Kavanaugh under consideration.

Jump ahead to the theory of a 48-year cycle.
January 11, 1973, the DJIA hit a cycle high of 1051.70. It then dropped 10% within a month and entered into a massive bear market with a low of 577 in December 6 1974 and did not exceed the 1973 milestone until 1982.  The recession officially began in November 1973 and it lasted until March 1975.  But then stagflation continued until 1982.

Suppose the 48 year cycle matches exactly (of course it won't) ?  Then we can predict these key dates:
November 2020 - Trump re-elected
January 11, 2021 - DJIA hits all-time high.
November 2021 - Recession officially begins
August 8, 2022 - Trump resigns instead of facing impeachment
December 6, 2022 - DJIA hits low
March 2023 - Recession officially over
2023 to 2030 - New president faces Great Malaise.  Even through the recession is over, it feels like it is continuing.

So what I am predicting from this superficial analysis is that the Good Times under our favorite president will last about another 2 years, before we sink into a 10 year period of Great Recession / Great Malaise.  (And then we will go back to a brief period of "normalcy" before everything goes to hyper-inflationary hell a al Venezuela).

Longest Bull Market in History

3,453 days since March 9, 2009. Maybe it will go on forever.