Best Cities in the World

 Source: https://www.bestcities.org/

1. London

2. New York

3. Paris

4. Moscow

5. Tokyo

6. Dubai

7. Singapore

8. Barcelona

9. Los Angeles

10. Madrid

11. Rome

12. Chicago

13. Toronto

14. San Francisco (ex San Jose)

15. Abu Dhabi, UAE

16. St Petersburg, Russia

17. Amsterdam

18. Berlin

19. Prague, Czech Republic

20. Washington DC

21. Istanbul

22. Las Vegas

23. Doha, Qatar

24. Seoul

25. Sydney

26. Beijing

27. Miami

28. Munich, Germany

29. Milan, Italy

30. San Diego

31. Bangkok, Thailand

32. Vienna, Austria

33. Dublin

34. Vancouver

35. Boston

36. Zurich, Switzerland

37. Melbourne, Australia

38. Budapest, Hungary

39. Houston

40. Seattle

41. Montreal, Canada

42. Hong Kong

43. Frankfurt, Germany

44. Sao Paulo

45. Tel Aviv

46. Copenhagen, Denmark

47. Calgary, Canada

48. Orlando

49. Atlanta

50. Dallas

51. Hamburg, Germany

52. Osaka

53. Lisbon, Portugal

54. Austin

55. Phoenix

56. Naples, Italy

57. Oslo, Norway

58. Denver

59. Stockholm, Sweden

60. Philadelphia

61. Riyadh, Saudi Arabia

62. Delhi, India

63. Buenos Aires, Argentina

64. San Jose

65. Brussels, Belgium

66. Portland, Oregon, US

67. Ottawa, Canada

68. Helsinki, Finland

69. Valencia, Spain

70. Brisbane, Australia

71. Warsaw, Poland

72. Minneapolis

73. Shanghai

74. Lyon, France

75. Adelaide, Australia

76. Edmonton, Canada

77. Marseille, France

78. Muscat, Oman

79. Athens, Greece

80. Stuttgart, Germany

81. Rio de Janeiro, Brazil

82. Baltimore, Maryland, US

83. Auckland, New Zealand

84. Cologne, Germany

85. New Orleans, Louisiana, US

86. Kuwait City, Kuwait

87. Kiev, Ukraine

88. Hanover, Germany

89. Perth, Australia

90. Minsk, Belarus

91. Bucharest, Romania

92. Nashville, Tennessee, US

93. Dusseldorf, Germany

94. Manchester, UK

95. Sacramento, California, US

96. Glasgow, UK

97. Mexico City

98. Salt Lake City, Utah, US

99. Raleigh, North Carolina, US

100. Krakow, Poland

The Budget Deficit for May 2021 was $132 Billion

The federal government incurred a deficit of $132 billion in May 2021, CBO estimates, compared with a $399 billion shortfall in May 2020. The federal budget deficit was $2.1 trillion in the first eight months of fiscal year 2021, the Congressional Budget Office estimates—$184 billion more than the deficit recorded during the same period last year. Revenues were up by an estimated $587 billion (or 29 percent), but outlays rose more—by an estimated $771 billion (or 20 percent).  https://www.cbo.gov/system/files/2021-06/57193-MBR.pdf

So the deficit for May 2021 is much lower than that for May 2020, but the fiscal year to date deficit is still higher than last year at this point.  There are still 4 months left in the fiscal year, and if the average deficit is $150 billion per month then the total deficit for FY 2021 will be about $2.7 trillion.

Reverse Repo Madness

 The Fed is putting its foot on the gas (by printing money to purchase Treasury securities) and the brake (with reverse repo) at the same time: "The Fed is walking a thin tightrope between fighting off financial asset deflation (a stock and bond market crash).  To do this it needs to continue printing enormous sums of money.  But it also has to avoid the money printing from translating into Weimar-scale hyperinflation and a crash in the dollar.  Along with this, the Fed also needs to prevent the Fed funds rate from going negative. The RRP mechanism is the Fed’s attempt to “mop up” the excess liquidity that has accumulated in large pools at the spectrum of financial intermediaries (banks, money market funds, GSEs)."  https://investmentresearchdynamics.com/the-feds-reverse-repo-madness/

The result is a system that is very unstable.  It would be logical for the Fed to ease its purchases of treasuries to prevent excess liquidity, but that causes the stock market to drop, which the Fed doesn't want.  You would think that banks would have an incentive to loan more money to get a higher return, but businesses don't want to borrow.

I don't understand what is going on.  Maybe the situation will fix itself after the quarter end on June 30, but it is also possible that we will have a crash shortly.  It is also possible that we will have a burst of hyperinflation, where there is a one-time reset of many prices by 20-40%.  Read the link. 

"The inevitable conclusion is hyperinflation followed by a collapse of the dollar and the stock and bond markets. My bet is that it is too late to prevent the inevitable."

M5 as of May 31 2021

M5 is a measure of money that includes M2, plus debt held by the public, less Treasuries owned by the Fed. Here is the current measure:

As of 5/31/21:

M2 (as of 4/01/21) = 20,108.6

Public Debt (as of 5/28/21) = 22,020.9

Fed Held (as of 5/26/21) = -5,087.2

----------------------------------------

Total = 37,042.3

On 4/30/21, this was at 36,937.8 and on 9/30/20 it was at 35,296.8.  This is up 104.5 during May and up 1,745.5 fiscal year to date, which is an annual inflation rate of 7.1%.  This is sustainable for the 4th month in a row.

I expected a huge jump in M2 which didn't happen, but the M2 is reported 2 months in arrears so this may show up next month.  The Public Debt actually dropped in May, which is very unusual.

Crisis in 2041

 

Here is my latest projection showing that public debt will exceed 150% of GDP in 2041.  Compare to the previous forecast showing this would happen in 2049.

What is going to happen in 2041? Probably nothing.  We don't know exactly what the limits are.  But at some point it is clear that the system will totally break down.  For example, look at the interest projection in 2041, which I have as $1,800 (million), which is about 3.8% of GDP. The latest Long-Term Budget Outlook by the CBO predicts that the average amount of interest, as a percent of GDP, after 2041 will be 7.0%.  So for instance in 2043, if GDP is $50.1 trillion, then the interest paid in that year could be $3.5 trillion instead of the $2.0 trillion I have forecast in that year.  The CBO projects that the Debt Held By The Public in 2051 will be 202% of GDP, which is much higher than my forecast.  So my forecast above is conservative compared to what the CBO projects.

To go out a limb and do a little speculation, I think the dollar will be rejected internationally as a reserve currency after 2040, to be replaced by a cryptocurrency which does not currently exist.  And I think the American Empire will collapse, similar to how the Soviet Union collapsed, and by replaced by several countries. 

And this all may happen even sooner than my projection.  The above chart assumes long-term inflation of 3.5%, but we have good evidence that 8% is a better number to use.

===========

Update: This is what the CBO says is likely to occur after 2040:

Persistently rising debt as a percentage of GDP would also pose significant risks to the fiscal and economic outlook, although financial markets currently do not reflect those concerns. In particular, that debt path would have these economic and financial effects:  1) It would increase the risk of a fiscal crisis—that is, a situation in which investors lose confidence in the U.S. government’s ability to service and repay its debt, causing interest rates to increase abruptly, inflation to spiral upward, or other disruptions—and  2) It would increase the likelihood of less abrupt, but still significant, adverse effects, such as expectations of higher rates of inflation, an erosion of confidence in the U.S. dollar as an international reserve currency, and more difficulty in financing public and private activity in international markets. https://www.cbo.gov/publication/57038

The Budget Deficit for April 2021 was $225 Billion

 The federal government incurred a deficit of $225 billion in April 2021, CBO estimates—less than one-third the deficit in April 2020. The federal budget deficit was $1.9 trillion in the first seven months of fiscal year 2021, the Congressional Budget Office estimates—$449 billion more than the deficit recorded during the same period last year. Outlays were 22 percent higher and revenues were 16 percent higher from October through April than during the same period in fiscal year 2020.

https://www.cbo.gov/system/files/2021-05/57127-MBR.pdf

M5 for April 30 2021

M5 is a measure of money that includes M2, plus debt held by the public, less Treasuries owned by the Fed. Here is the current measure:

As of 4/30/21:

M2 (as of 3/01/21) = 19,896.5

Public Debt (as of 4/29/21) = 22,056.1

Fed Held (as of 4/28/21) = -5,014.8

----------------------------------------

Total = 36,937.8

On 3/31/21, this was at 36,698.8 and on 9/30/20 it was at 35,296.8.  This is up 239.0 during April and up 1,641.0 fiscal year to date.  This is an annual inflation rate of 8.0%.

So actually I will call this SUSTAINABLE for the third month in a row because it is a hair below 8.0%.  If money supply only increased by $250 billion every month then I think we can live with the result.

However, note that M2 is 2 months behind because the Fed is hiding the current data.  But they can't do that forever.  When the March numbers are finally released at the beginning of June, they will show a huge increase.  I think M5 for May will show an increase of over $800 billion.

The Public Debt hits $22 Trillion

 As of 4/29/21, the public debt was at $22,056,055,138,417.67.

When did it first hit $11 trillion? On 5/31/12, within memory of this blog.  By the way, when did it first hit $5.5 trillion, one-half of $11 trillion?  On September 18, 2008, which was when the financial world almost collapsed during the global financial crisis.

So at current trends, this number will double every 9 years.  So it will hit $44 trillion on about May 1, 2030.  Add in another $6 trillion for governmental debt and this will mean the national debt is sure to hit $50 trillion about 1/1/30 , and then double every 9 years thereafter.

The National Debt is actually $123 Trillion

 See: https://www.truthinaccounting.org/library/doclib/Financial-State-of-the-Union-2020.pdf

"A new analysis of the latest available audited financial reports found the U.S. Government’s overall financial condition worsened by $9.84 trillion in 2020. Our measure of the government’s financial condition includes reported federal assets and liabilities, as well as promised, but not funded, Social Security and Medicare benefits. Our analysis includes $55.12 trillion in unfunded Medicare benefits and $41.20 trillion in unfunded Social Security benefits."

The total according to the above analysis is $123.11 trillion as of 9/30/2020 and this number goes up about $10 trillion/year.

The reason why the Treasury leaves these off the federal balance sheet is that Congress could pass laws to reduce or stop future benefits at any time.  But how likely is it that Congress would abolish Social Security and Medicare?  

The Budget Deficit for March 2021 was $658 Billion

The federal government incurred a deficit of $658 billion in March 2021, CBO estimates— $539 billion more than the deficit in March 2020.  The federal budget deficit was $1.7 trillion in the first six months of fiscal year 2021, the Congressional Budget Office estimates—almost $1 trillion more than the deficit recorded during the same period last year.

https://www.cbo.gov/system/files/2021-04/57018-MBR.pdf

I just wonder, have we ever had a monthly deficit of $1 trillion or more?  I don't think so, but it is coming.

======

The highest ever was in June 2020 with $863 billion deficit, then April 2020 with $737 billion deficit.  March 2021 is the 3rd highest ever.

M5 for March 31 2021

M5 is a measure of money that includes M2, plus debt held by the public, less Treasuries owned by the Fed. Here is the current measure:

As of 3/31/21:

M2 (as of 2/1/21) = 19,669.8

Public Debt (as of 3/31/21) = 21,971.3

Fed Held (as of 3/31/21) = -4,942.3

----------------------------------------

Total = 36,698.8

On 2/28/21, this was at 36,442.6 and on 9/30/20 it was at 35,296.8.  This is up 256.2 during February and up 1,402.0 fiscal year to date.  This is an annual inflation rate of 7.9%.

So actually I will call this SUSTAINABLE for the second month in a row.  If money supply only increased by $250 billion every month then I think we can live with the result.

But note that M2 is 2 months behind.  Obviously somebody at the Fed doesn't want to give the current numbers.  This was previously reported on a weekly basis.  And I am still expected a large jump when the stimulus financing comes in.

The February 2021 Deficit was $321 Billion

 In February 2021, the Treasury had $246 billion in revenue and outlays of $558 billion for a deficit of $321 billion.  Fiscal year to date, the Treasury had $1,434 billion of revenue and outlays of $2,482 billion for a deficit of $1,048 billion. https://www.cbo.gov/system/files/2021-03/57031-MBR.pdf

So the average monthly deficit is about $200 billion, and the deficit for all of fiscal year 2021 should be about $2.4 trillion.

The National Debt will hit $78 Trillion by 2028

 "The growth of the US debt spending is projected to exceed $78 trillion in 2028. The US economy will implode with the rate of debt like this. It is a matter of time before this country implodes into bankruptcy. Everyone seems to think massive debt is meaningless. Until one day, the economy collapses Zimbabwe-style, and they’re affected personally in the worst way. They will keep on kicking the can, as long as possible, or until the payment on the DEBT will exceed the budgets of DOD, Medicare, and Social Security. The guard rails have truly been removed. There is only the desire to spend, borrow and print money. Digital money will change that even more. If they find a limit, the government doesn’t just meet that need; it smashes through it. We used to have these limits in place, but because of the pandemic, they are spending with an excuse. But when the pendulum swings the other way, the Republicans will have to get an even bigger stimulus because who will ever try to do a Billion dollar plan when Trillion-dollar deals are now the norm. The USA never intends to pay the debt. A mother of all wars is what they are planning for. The only way to default. This societal experiment known as “America” is about over, regardless of what they are telling you. The Great Reset means The Collapse of the US Empire." --https://financearmageddon.blogspot.com/2021/03/only-zero-interest-rates-qe-are-keeping.html

I agree with all of the preceding except the $78 trillion in 2028 number.  I would like to see the projections on that.  My latest calculation is that the public debt should hit $30 trillion in 2028, and with intragovernmental debt about $6 trillion, the total national debt should be about $36 trillion in 2028.  (It is currently about $28 trillion).  I agree that the US is headed for disaster, but I think the pace may be slower than the above author is projecting.

The 2021 Long-Term Budget Outlook from the CBO

 This was just released by the CBO: https://www.cbo.gov/publication/57038

This is complete garbage and gobbledygook, designed to obfuscate rather than enlighten.  They state numbers only as a percentage of GDP, not in real numbers, yet they don't state what GDP is every year.  The word "trillion" is used only once in the entire document.  I can't tell after a quick perusal if they even include the current stimulus bill.

I will give them a tiny bit of credit for this one line in fine print on page 11:

  Gross Domestic Product at the End of the Period (Trillions of dollars) 22.0 32.9 46.8 66.0

The four numbers are the estimated GDP in the years 2021, 2031, 2041, and 2051.  They don't give any further details.  I guess you are supposed to interpolate.  There may be other CBO documents that state the estimated GDP but I don't see them referenced here.

I will wait until the current porkulus bill passes in a few days, and the Treasury issues debt to pay for it, which the Fed will buy.  So maybe sometime in May or June would be a good time to analyze this and do my own forecast.

===========

Update: Here is the last GDP forecast, issued by the CBO on Feb 11, 2021

Gross Domestic Product 21,000 21,951 23,082 24,066 25,127 26,249 27,359 28,425 29,506 30,623 31,751 32,933.

Each number is the end of year estimated GDP starting with 2020 and ending with 2031.

M5 for February 28 2021

M5 is a measure of money that includes M2, plus debt held by the public, less Treasuries owned by the Fed. Here is the current measure:

As of 2/28/21:

M2 (as of 1/1/21) = 19,394.6 (From https://fred.stlouisfed.org/series/M2SL)

Public Debt (as of 2/28/21) = 21,892.6

Feb Held (as of 2/24/21) = -4,844.6

----------------------------------------------

Total = 36,442.6

On 1/31/21, this was at 36,543.5 and on 9/30/20 it was at 35,296.8. So it actually dropped 100.9 during February and it is up 1,145.8 fiscal year to date.  This is an annual inflation rate of 7.8%.

This actually is a great result and we can call it SUSTAINABLE.  However, note that the public debt is about to soar after the next stimulus package comes through.  Also the Treasury cash is being depleted so the Treasury isn't really borrowing right now.  Also note that the measurement of M2 by the Fed changed since the last time I looked this, so it isn't comparable.  I now have to use M2SL instead of M2.  So this hides some of the money supply increase.  But this will come back in March.  So consider February a calm before the storm.

Also, the total National Debt just hit $28 trillion.  It hit $27 trillion on 10/1/20, only 5 months ago.  And it will quickly hit $30 trillion as soon as the stimulus bill is passed.  When was the National Debt at $14 trillion?  Sometime in 2010.  So that is about a 10.5 year doubling time and that doesn't sound too bad.  But just wait until the national debt hits $30 trillion.

Patient Zero

Very early on, numerous indications were given and made public in the Chinese social media that “patient zero” of the COVID-19 infection chain was a young scientist from the “Wuhan Institute of Virology”. Her name is Yanling Huang, born on October 20, 1988. She has been a member of the “Wuhan Institute of Virology” since 2012 and has published at least six scientific papers at this institute address. Since the end of 2019 she has disappeared and her photo and profile have been deleted from the institute's website (as well as her personal website).

https://www.researchgate.net/publication/349302406_Studie_zum_Ursprung_der_Coronavirus-Pandemie

CBO Budget and Economic Outlook 2021 to 2031

 https://www.cbo.gov/system/files/2021-02/56970-Outlook.pdf

This is supposedly a forecast of the budget deficits, debt, revenues, and spending for the next 10 years.  It is completely unreliable and will be obsolete within a month when Biden's $1.9 trillion stimulus package is passed.  It projects the Debt Held By the Public to be $22,461 at the end of FY 2021.  It is currently $21.750 tn, and by the end of the fiscal year it will likely be above $25 trillion.  It projects inflation at 1-2% for the next 10 years when the actual rate will be closer to 10%.  It projects that the annual deficit will fall to as low as $905 billion in 2024, when the actual number will be likely $3 trillion or more.

If you enjoy reading government propaganda and being lied to, read it.

M5 for January 31

M5 is a measure of money that includes M2, plus debt held by the public, less Treasuries owned by the Fed. Here is the current measure:

As of 1/31/21:

M2 (as of 1/18/21) = 19,560.4

Public Debt (as of 1/31/21) = 21,749.2

Feb Held (as of 1/27/21) = -4,766.1

----------------------------------------------

Total = 36,543.5

 On 12/31/20, it was at 36,140.5 and on 9/30/20 it was at 35,296.8.  So it is up 403.0 for the month of January and up 1,246.7 fiscal year to date.  This is an annual inflation rate of 10.6%.

Also note that the Public Debt didn't increase that much, from $21.63 trillion to $21.75 trillion. However, there was a sharp drop in Treasury cash, so Treasury is going to have to replenish their cash reserves in the next two months, which will cause the debt to soar.  I expect the debt to hit $22 trillion at least by the end of March.

The financial industrial complex created $403 billion out of thin air in only one month.  What would happen if this happens every month forever, but the rate of change actually increases? The total amount will double every 7 years.  I think the whole system can continue until we get to $1 quadrillion in about 40 years but it can't continue forever.  Anyways that is too much commentary.  I have vowed to only report the facts and not give political opinion.

Deja Vu all over again

House Impeachment Managers Deliver Articles To The Senate

The House of Representatives has delivered articles of impeachment against President Trump to the Senate, which is expected to begin a trial next week. Earlier in the day, House Speaker Nancy Pelosi named seven Democratic members of Congress as the managers who will argue the case for impeachment. Those managers brought the articles to the Senate on Wednesday evening. "What is at stake here is the Constitution of the United States," Pelosi said in a press conference announcing the managers. Pelosi appointed Reps. Adam Schiff, Jerry Nadler, Zoe Lofgren, Val Demings, Hakeem Jeffries, Sylvia Garcia and Jason Crow. Pelosi said Schiff will take the lead. "The emphasis is on litigators. The emphasis is on comfort level in the courtroom. The emphasis is making the strongest possible case to protect and defend our Constitution, to seek the truth for the American people," Pelosi said in a Wednesday press conference.

Source: https://www.npr.org/2020/01/15/796240568/house-set-to-vote-to-send-trump-impeachment-articles-to-senate

Date: January 15, 2020

M5 for December 31

I said I would shut down my blog, but I think this is important enough to note.

M5 is a measure of money that includes M2, plus debt held by the public, less Treasuries owned by the Fed. Here is the current measure:

As of 12/31/2020:

M2 (as of 12/21/20) = 19,197.0

Public Debt (as of 12/31/20) = 21,632.4

Fed Held = -4,688.9

---------------------------------------------

Total = 36,140.5

On 11/30/20, it was at 35,843.9 and on 9/30/20 it was at 35,296.8.  So it is up 296.6 for the month of November and up 843.7 fiscal year to date.  This is an annual inflation rate of 9.9%.