patrick.net

UkraineIsTotallyFucked says

Rate cut? (I don't think so unless maybe jobless numbers radically rise but others here think Powell is Biden's butt boy...)

For those that have been paying attention to my ramblings, the Fed is gonna reduce then eliminate QT over the next 5 months or so. They are running up against a hard limit as to how far they can reduce their balance sheet.

The market will perceive this as a rate cut. Then the Fed will start to cut the rate itself.

The Fed/Federal government has to prop up capital gains so that taxes flow freely into the Blue State coffers. If they don't some state/city checks are gonna start bouncing.

Misc says

The market will perceive this as a rate cut

Copium thinking.

Misc says

For those that have been paying attention to my ramblings, the Fed is gonna reduce then eliminate QT over the next 5 months or so. They are running up against a hard limit as to how far they can reduce their balance sheet.

The market will perceive this as a rate cut. Then the Fed will start to cut the rate itself.

The Fed/Federal government has to prop up capital gains so that taxes flow freely into the Blue State coffers. If they don't some state/city checks are gonna start bouncing.

Yeah, California's 2024 budget is $292 billion with a $73 billion deficit.

So the S&P 500 will have another great year in 2024 just it went up about 26% in 2023 ? The problem will this is that the capital gains tax likely will be paid in early 2025 after California's deficit year of 2024.

And that means California having to borrow (if allowed by state law) at a rate of at least 5% even for short duration like 1 or 3 years ?

https://calmatters.org/politics/capitol/2024/02/california-budget-deficit-balloons/

.

The folks who get the big gains are going to file their Quarterlies, just like they always do.

.

That is why I was trying to explain to Eman when he was overly promoting California, or at least his zip code or county.

California likely will see another round of tax increases to help cover for that $73 billion deficit (for a budget of $292 billion), which may ultimately depress real estate values.

.

Misc says

The folks who get the big gains are going to file their Quarterlies, just like they always do.

Okay, I understand as they pay their income taxes "in advance" throughout the year instead of a couple of months after the tax year is over. I suspect this is the +$20 million net worth households.

I wonder if there will be a major exodus if California raises taxes this year or next year, as far as those folks who file their quarterlies, such as they go to Nevada.
.

I'm still betting they will stuff California pensions with State IOUs, while selling off anything they can for cash today.

Misc says

I'm still betting they will stuff California pensions with State IOUs, while selling off anything they can for cash today.

What can they sell off ? what state owned property ? I'm not sure how much they can borrow or finance through bonds.

yeah, I can see they "borrow" from CALPERS using that scheme

I was hoping Mish of MishTalk would have mentioned this on Coast to Coast AM tonight, because of the significance of this for the size of California's economy.

George Noory the host of the show lives in California.

.

AD says

What can they sell off ? what state owned property ? I'm not sure how much they can borrow or finance through bonds.

They do what they have done before: issue IOUs. Banks buy them up. It should be unconstitutional because states aren't allowed to issue money.

AD says

yeah, I can see they "borrow" from CALPERS using that scheme

My grandpa retired from the shipyard in the early 1970's. His pension was $1500 month.

That was a "comfortable" amount of money until inflation hit hard. Inflation seems to be the plan to get out of sovereign debt.

Onvacation says

Inflation seems to be the plan to get out of sovereign debt.

I used to think that but these days I think planned financial collapse and forced onto CBDC instead. The inflation is just the icing on the cake.

You-Will-Own-Nothing-And-Be-Happy!

just_passing_through says

I think planned financial collapse and forced onto CBDC instead. The inflation is just the icing on the cake.

Yeah. I got into the weeds about that earlier this month here https://patrick.net/comment?comment_id=2042719 and here https://patrick.net/comment?comment_id=2042745

If you say so, Patrick.

B.A.C.A.H. says

If you say so, Patrick.

How does Google define a central bank?

B.A.C.A.H. says

If you say so, Patrick.

I don't know about the rest of those countries but the Marshall Island Money is tied to the US dollar
I have a 1989 Marshall Island Moon landing commemorative $5 coin in my collection.




It's worth about 5 bucks.

Onvacation says

My grandpa retired from the shipyard in the early 1970's. His pension was $1500 month.

A government shipyard like Mare Island ?

$1500 a month in 1972 is equivalent to about $9000 a month today based on 3.5% annual inflation since then.

Did they increase his pension by 3.5% a year on average ?

.

AD says

Did they increase his pension by 3.5% a year on average ?

Don't know. It just seemed like an incredible amount of money back when a can of soda was 5 cents.

https://www.activistpost.com/2024/03/federal-reserve-refuses-to-provide-records-of-foreign-gold-holdings.html

Federal Reserve Refuses to Provide Records of Foreign Gold Holdings

Weeks after Federal Reserve Chairman Jerome Powell evaded a sitting congressman’s questions about the central bank’s foreign gold holdings, the Fed has also declined to comply with a Freedom of Information Act request for records about such holdings.

The Federal Reserve’s lack of transparency comes amidst reports that countries are removing their gold and other assets from the U.S. in the wake of the unprecedented Western sanctions imposed on Russia over its invasion of Ukraine. According to a 2023 Invesco survey, a “substantial percentage” of central banks expressed concern about how the U.S. and its allies froze nearly half of Russia’s $650 billion gold and forex reserves.

Rep. Alex Mooney, R-W.Va., asked Powell about the matter in a December letter, only to have the Fed chair respond last month with evasive non-answers, telling him that the Federal Reserve does not own gold but holds it as a custodian for other entities—a fact that the congressman presumably already knew.

https://mises.org/mises-wire/price-inflation-comes-government-not-excuseflation-or-greedflation

Price Inflation Comes from Government, not from “Excuseflation” or “Greedflation” ...

The fault of inflation is not in business “monopoly,” or in union agitation, or in the hunches of speculators, or in the “greediness” of consumers; the fault is in the legalized counterfeiting operations of the government itself. For the government is the only institution in society with the power to counterfeit — to create new money. So long as it continues to use that power, we will continue to suffer from inflation, even unto a runaway inflation that will utterly destroy the currency.

Inflation, or whatever you want to call it, is nothing more than government taxation in stealth form. Only the government can conjure up new money from nothing, using it to bid away resources from private individuals.

“Control the coinage and the courts. Let the rabble have the rest.” Quote from Frank Herbert, Dune

Patrick says

For the government is the only institution in society with the power to counterfeit — to create new money.

The "creation" referenced in the Constitution refers specifically to specie, the only real money. Governments role is more in the realm of standardizing weights and measures, and even that is really still set by the market.
What I'm saying is there is not Constitutional provision that allows for mass printing, and only central bankers would want you to think there is.

Gold is killing it. It's fucked up, but if you've structured your investments for globohomo catastrophe, things are really playing out well.

Yeah, thing with that line of investment, if you aren't ready for the practical meaning of your profits, it's all for shit...

NuttBoxer says

The "creation" referenced in the Constitution refers specifically to specie, the only real money. Governments role is more in the realm of standardizing weights and measures, and even that is really still set by the market.
What I'm saying is there is not Constitutional provision that allows for mass printing, and only central bankers would want you to think there is.

Exactly, the Constitution is about the federal government overseeing the coining of money and to protect the public from counterfeit fraud. It was to establish standard currency to ensure free and legal interstate commerce.

.

AD says

Exactly, the Constitution is about the federal government overseeing the coining of money and to protect the public from counterfeit fraud. It was to establish standard currency to ensure free and legal interstate commerce.

You realize what happened don't you?

The Federal Reserve created more currency than they had specie for, this caused the "roaring 20's" but at the end of it with a credit contraction, they were shown to be acting in fraud - and they should have been disbanded (and executed, you can execute people for counterfeiting which is what they did), and gold was made illegal for Americans to own, and the dollar remained convertible to gold still but only outside of the nation. This was at a fixed rate from $35 an ounce (down from $20 an ounce about pre 1933).

The Federal Reserve keeps doing this, but good luck getting the average Joe Six Pack to understand that. The Federal Reserve really is as federal as Federal Express. It should be all rights be abolished, but if it was, it would really F up our system. In time, we WILL come kicking and screaming back to a specie standard, and you'll be able to buy a house for 10 ounces of gold, but you'll think twice about doing it, because you'll be buying a house in a war zone.

richwicks says

you'll be able to buy a house for 10 ounces of gold, but you'll think twice about doing it, because you'll be buying a house in a war zone.

I agree if the system collapses and the dollar goes to shit then we'll need lead more than silver and gold , and lots of lead in the form of 9 mm and 223 Remington. It will be based on bartering and also vital skills and supplies like food and potable water will be only valued.

Maybe when the system recovers, then gold could be used for currency.
.

AD says

richwicks says

you'll be able to buy a house for 10 ounces of gold, but you'll think twice about doing it, because you'll be buying a house in a war zone.

I agree if the system collapses and the dollar goes to shit then we'll need lead more than silver and gold , and lots of lead in the form of 9 mm and 223 Remington. It will be based on bartering and also vital skills and supplies like food and potable water will be only valued.

Maybe when the system recovers, then gold could be used for currency.
.

It's maddening to see a slow train wreck and having no ability to prevent it.

Patrick says

While they fuck you in the ass, they fuck you in the face is why.

AD says

I agree if the system collapses and the dollar goes to shit then we'll need lead more than silver and gold , and lots of lead in the form of 9 mm and 223 Remington. It will be based on bartering and also vital skills and supplies like food and potable water will be only valued.

Yep! Just want to pimp this excellent book on the TEOTWAKI 0subject again:

https://www.amazon.com/SHTF-Survival-Stories-Memories-Balkan/dp/B084DGF9QD

So many interesting observations and experiences, the best being that the Grey Market will be run by the Milita/Mafia, so if you're seen doling out silver rounds, they're going to follow you home, kill you and your family, and take your stash. Ditto if you whip out a plastic roll of silver rounds to bribe your way past a checkpoint. In fact, just possessing a single mini bar or coin will cause interest. And the guy you're buying from, whose ass does he need to kiss and who does he know?

Those guys will beat and snuff out any "Har, har, I prepped with coins and nobody else did, nyah nyah" of a pompous prepper pretty powerfully.

The better thing to do is wear some cheaper silver/gold jewelry like a thin chain and say "Oh, my grandma gave this to me for my communion, it's all I have", which satisifes the Greed AND the Thug Ego of the bad guys. "Ha, ha, little shit had to give me his communion necklace. We bad mothers!"

Grey Man and inconspicuous is the lifesaver.

Another glimmer of hope was that "Hey, but under socialism you guys had to give up all your guns, so how did you have weapons?"

And Selco was like "Well, that was the law, but... we still had a few old rifles laying around here and there."

I might be repeating myself, but I hope for your forebearance. Somethings just trigger the connections and I gotta share.