The most liquid measure of the money supply - M1 - is up 4.8x since February 2020. Given the exorbitant inflation of the money supply, we are only in the early stages of price inflation. Cash-rich Technology companies can take several steps to combat inflation. Now is not the time for cash-rich Technology companies to … Continue reading How Technology Companies Can Fight Inflation
Tag: money supply
For a more accurate read on price inflation than the tall tale spun by the CPI, look no further than growth of the money supply. It is the forever growing money supply that enables the Federal Reserve to spend $120 Billion per Month on purchases of Treasuries and Government Agency Securities to maintain artificially low … Continue reading What Is The Real Rate of Price Inflation?
The fact is that the U.S. economy was more productive from a Labor Force Participation Rate perspective during the Financial Crisis as compared to where it stands today. The Labor Force Participation Rate stood at 66.0% in October 2008 and steadily declined until January 2020 when the Labor Force Participation Rate stood at 63.4%. The … Continue reading Fewer People Are Productive Today As Compared To The 2008 Financial Crisis
The punchline is that a significant percentage of new money creation over the past year was allocated to non-productive use cases. "Helicopter" money to individuals and non-performing firms are two examples. When capital is deployed for non-productive use (acquiring cryptocurrencies for example), that capital invariably bids up prices causing asset price inflation. Conversely, recipients that … Continue reading Rewarding Non-Productive Activities with New Money Leads to Price Inflation
Federal programs such as the CARES Act/ Pandemic Unemployment Assistance and other COVID-related Federal handouts are hurting retail businesses. Retail used to be a great way for young people to gain valuable sales and customer experience early in their career. Many readers will have held hourly jobs at grocery stores, restaurants and the like during … Continue reading Enhanced Unemployment Benefits Are Hurting Retailers
With the Money Supply (M1) up 358% since January 2020 (as of February 2021), there is simply zero percent probability that prices are not going higher. A 3-4x increase in M1 ought to inflate prices by a similar multiple. Most of the recent $1.9 Trillion (the actual cost will be higher), COVID spending program was … Continue reading The Ugliest Chart I Have Ever Seen
The Fed would have us believe "There's nothing to see here," (to quote Frank Drebin), as it relates to inflation. Consumer spending funded by government debt is of inferior quality as compared to spending funded by increased production. In January Americans spent their debt-funded government checks that were mailed out at the end of December. … Continue reading Long Rates Continue To Climb As Inflation Persists. Nothing To See Here.
Polling should show a Biden lead going into Tuesday's general election given that Democrats have historically participated in early voting in significantly larger numbers than have Republicans. Too Close To Call We believe that Tuesday's election between two fiscally irresponsible parties will be closer than many voters anticipate. Various polls show an early lead for … Continue reading Tuesday’s Election Will Be Closer Than What Polls Show
We believe there will be multiple fiscal stimulus rounds. When one considers the stalled economy, negligible Real GDP growth and high unemployment, it would seem that this $2 Trillion stimulus round under discussion won't be sufficient to satisfy the narrative that Government needs to do more. When one factors in runaway entitlements (table below), it … Continue reading Multiple Fiscal Stimulus Rounds Are Coming. Good News for Equities. Bad News for The Real Economy.
Icarus flew too close to the sun and the United States' fascination with debt may prove to be equally destructive. Yesterday the CBO published its long-term Debt-to-GDP estimates. Those figures show U.S. debt steadily increasing as a percentage of GDP ramping-up to 195% of GDP by 2050. If debt-funded stimulus, zero interest rates and expansionary … Continue reading U.S. Debt to Reach 195% of GDP by 2050