Tag Archives: Federal Reserve

Political Or Good Policy?

Posted on by

At a time when Americans are still dealing with inflation, the Federal Reserve has cut interest rates by half a percentage point.

On Wednesday, Breitbart noted:

The Federal Reserve moved to cut interest rates by a half percentage point—the first reduction since the central bank cut rates to near zero when the pandemic struck in 2020—in a vote of confidence that inflation will continue to moderate and an attempt to fend off a further increase in unemployment.

“Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have slowed, and the unemployment rate has moved up but remains low. Inflation has made further progress toward the Committee’s 2 percent objective but remains somewhat elevated,” the Fed said in a statement.

…Fed officials have also said that they now view the risks to their mandate to maintain full employment to be greater than the risks of a resurgence of inflation. Earlier this summer, the unemployment rate tripped the Sahm Rule threshold by rising more than a half a percentage point above its recent low, typically a signal that the economy is already in a recession. Claudia Sahm, whose research is behind the rule, has said she does not think the economy is currently in a recession but worries that restrictive monetary policy could unnecessarily increase unemployment even more.

The article concludes:

The longer-run projection for the fed funds rate rose to 2.9 percent, four-tenths of a point above the 2.5 percent the Fed had consistently projected from 2019 through the end of last year. In the June projections, officials had indicated an expectation for a longer run rate of 2.8 percent.

On the other hand, unemployment is now seen as going higher. When the Fed last released projections in June, officials forecast a four percent rate of unemployment at year-end. The new projections have unemployment rising to 4.4 percent. Next year, unemployment is seen as staying at 4.4 percent, up from the earlier estimate of 4.2 percent. Similarly, the median projection for economic growth ticked down to two percent from 2.1 percent this year.

Eleven officials voted for the rate cut. One Fed governor, Michelle Bowman, dissented, preferring a quarter-point cut.

I am not an economist, so I don’t have a lot to say about this. However, I do think inflation has continued to be a problem that cutting interest rates might exacerbate. I am hoping that the Federal Reserve has made the right decision for the right reasons and that this is not a political move.

Who Is The Threat?

Posted on by

In 1787, Benjamin Franklin responded to a question about the new Constitution with the phrase “a republic, if you can keep it.” Our Founding Fathers envisioned a country with a weak central government and strong state governments. In the early 1900’s a number of things happened that paved the way for a strong central government and weak state governments. The year 1913 was a banner year for those who wanted a strong central government—federal income tax was passed, the federal reserve was created, and the direct election of U.S. Senators was passed. The direct election of U.S. Senators meant that the Senators were no longer subject to recall by their states if they did not represent their state. If a Senator sponsored a bill that would harm his state in some way, the state legislature would recall him. Woodrow Wilson was President when these three things happened. Signing these three things into law significantly shifted the balance of power in America from the states to the central government. The Inflation Reduction Act would never have passed the Senate if Senators were appointed by their states rather than elected.  One illustration of the growth and centralization of government is the fact that in 2023, twenty-five percent of all jobs created were government jobs. We are also in a situation where the majority of our laws are not laws—they are regulations passed by unelected bureaucrats. Any law passed by Congress was probably written by lobbyists. Our tax code is a shining example of what lobbyists can accomplish. According to the Tax Foundation, “There’s the literal statutes that Congress has passed (Title 26 of the U.S. Code). The Government Printing Office sells it spread over two volumes, and according to them, book one is 1,404 pages and book two is 1,248 pages, for a total of 2,652 pages. At perhaps 450 words per page, that puts the tax code at well over 1 million words. (By way of comparison, the King James Bible has 788,280 words; War and Peace runs 560,000 words; and the Harry Potter series is just over 1 million words.)”

The bureaucracy that has been ensconced in America in the past one hundred years or so does not want to give up the power it has co-opted. The biggest current threat to that power is President Donald Trump. He won’t be able to undo a hundred years of unconstitutional behavior in four years, but he will be able to make a beginning. President Trump is a serious threat to our own entrenched bureaucracy, and they are not going to give up their power easily.

President Trump has been accused of being a ‘threat to our democracy.’ First of all, we are a Republic–not a democracy. Secondly, the only threat that President Trump poses is a threat to the entrenched bureaucracy that has perverted the ideas that our Founding Fathers tried to enshrine in our government.

The New Jobs Report

Posted on by

On Friday, The Epoch Times posted an article about the latest jobs report. The economy is cooling down, which will probably provide the Federal Reserve with an excuse to lower interest rates in the hope of providing a Democrat election victory.

The article reports:

The U.S. economy created fewer jobs than the market projected in August as the overheated labor market of the past few years continues to show signs of cooling off.

Last month, payrolls increased by 142,000, falling short of the consensus estimate of 160,000, according to the Bureau of Labor Statistics (BLS).

The unemployment rate eased to 4.2 percent, down from 4.3 percent in July. This was in line with economists’ expectations.

Average hourly wages surged at a higher-than-expected pace of 0.7 percent, up from a 0.1 percent drop in July—this was revised from the initial report of 0.2 percent growth. Average hourly earnings also climbed to a better-than-expected year-over-year rate of 3.8 percent, up from 3.6 percent.

The labor force participation rate was unchanged at 62.7 percent. Average weekly hours ticked up to 34.3 from 34.2.

Much of the job creation was concentrated in construction (34,000), health care (31,000), government (24,000), and social assistance (13,000).

There were some other interesting numbers in the report:

So far this year, the total number of downward job revisions equals 372,000.

The number of people working two or more jobs increased by 65,000 to 8.538 million.

In August, full-time jobs plummeted by more than 400,000, and part-time employment increased by 527,000.

Inflation is hurting all Americans, and until the government stops its runaway spending, inflation will continue to be a problem.

 

 

This Won’t Be A Surprise To Most Americans

Posted on by

On Wednesday, The Daily Caller posted an article about the Biden administrations’ reporting of the jobs reporting during the past year or so.

The article reports:

The federal government overestimated the number of jobs in the U.S. economy by 818,000 between April 2023 and March 2024, according to data from the Bureau of Labor Statistics released Wednesday, stoking fears of a slowdown in the U.S. economy.

Economists at Goldman Sachs (GS) and Wells Fargo anticipated the government had overestimated job growth by at least 600,000 in that span, while economists at JPMorgan Chase had predicted a lesser decline of 360,000, according to Bloomberg. The downward revision follows a trend of the BLS overestimating the number of nonfarm payroll jobs added, with the cumulative number of new jobs reported in 2023 roughly 1.3 million less than previously thought as of February 2024

The article concludes:

Wednesday’s downward revision has also heightened concern that the Federal Reserve has waited too long to begin cutting interest rates, Bloomberg reported. If the FOMC hesitates to cut rates for too long, it could result in recession instead of a soft landing — an economic slowdown in which inflation is brought down without causing recession.

The Federal Open Market Committee (FOMC) decided to hold its target federal funds rate between 5.25% and 5.50% in July, marking the eighth meeting in a row the FOMC has decided to keep rates at their current 23-year high.

“Wall Street is increasingly waking up to the fact that the economy post-covid has never been as good as the government bean counters claimed, and a recession may have already begun,” Antoni told the DCNF. “These revisions are a violent shove in the direction of reality.”

The economic rebound has been slowed by government policies that are not totally related to interest rates. Government regulation and tax policy play a big role in America\s economy. If a Democrat is elected President in November, you will see tax rates skyrocket and the economy stumble.

The Rest Of The Story On Inflation

Posted on by

On Friday, the Associated Press posted an article about the current state of inflation.

The article reports:

WASHINGTON (AP) — Wholesale prices in the United States rose by a larger-than-expected 2.6% last month from a year earlier, a sign that some inflation pressures remain high.

The increase, the sharpest year-over-year increase since March 2023, comes at a time when other price indicators are showing that inflation has continued to ease.

The Labor Department said Friday that its producer price index — which tracks inflation before it reaches consumers — rose 0.2% from May to June after being unchanged the month before. Excluding food and energy prices, which tend to bounce around from month to month, so-called core wholesale prices increased 0.4% from May and 3% from June 2023.

The increase in wholesale inflation last month was driven by a sizable 0.6% rise in services prices, led by higher profit margins for machinery and auto wholesalers.

By contrast, the overall prices of goods fell 0.5%. Gasoline prices tumbled 5.8% at the wholesale level. Food prices also dropped.

The producer price index can provide an early sign of where consumer inflation is headed. Economists also watch it because some of its components, notably healthcare and financial services, flow into the Federal Reserve’s preferred inflation gauge — the personal consumption expenditures, or PCE, index.

Most of the media reported that inflation was slowing based on the producer price index. That number was used to fuel speculation of a federal reserve rate decrease by the end of the year. That likely caused the bump in the stock market yesterday. It’s nice to celebrate a drop in food as fuel prices, but where are they in comparison to where they were four years ago? The Biden administration is hoping you won’t remember.

When Radical Isn’t Radical–It’s Original

Posted on by

I am not an economist, but I am an observer of the obvious.

In a recent speech, President Trump talked about ending the Income Tax and restructuring the Federal Reserve. Either or both of those things would be good for all Americans and for the American economy.

Before 1913, the United State had neither the Federal Reserve nor the Income Tax. Both measures were passed in 1913. On February 25, 1913, the 16th Amendment (Income Tax) was certified as part of the U.S. Constitution. On December 23, 1913, the Federal Reserve Act created the Federal Reserve.

The men who met at Jekyll Island to create the Federal Reserve represented 25 percent of the wealth of the entire world. They met in secret, and their identities were concealed for many years afterward. Their goal was to keep that 25 percent of wealth in their hands. They created the system for the purpose of keeping New York City banks as the center of America’s wealth. The federal reserve created a system where money could be created out of nothing and loaned out through a leverage system to create interest. For example, over a 30-year mortgage, a bank can earn more from the sale of a house than any contractor who worked on the house.

The Income Tax was supposed to only impact the top 1 percent of Americans. Before 1913, the government’s expenses had been handled through tariffs.

To end the Income Tax, you would have to end the Welfare State. One way to do that would be to tax welfare benefits but not wages. When it becomes more lucrative to work than to collect welfare, it is possible that the work ethic that used to be part of American culture might be revived. You would also have to slash the bloated bureaucracy. The economic boom created by ending the Income Tax would give those who lose their jobs in government a great job market in which to search for new jobs. We need to get rid of any government department that is not successful–has education improved since the Department of Education was created? What has Housing and Urban Development accomplished? How many people in the Justice Department would have to be fired to end the corruption? You no longer need the Internal Revenue Service. You see where I am going with this.

The opposition to this plan would come from federal workers (fear of losing their jobs). Opposition would also come from Washington swamp creatures who would see it as a threat to their power (in Washington controlling money is power). It would also come from welfare recipients.

The other issue would be Social Security and its related taxes. That could be worked out easily by balancing payments to people who have paid into the program for more than forty years with alternatives for younger workers. With a retirement age of 70, most Americans pay the most into Social Security from about the age of 30.

This is all possible if Americans are willing to elect a businessman who has the economic knowledge to put it all together.

Imagine a world where you get to keep all of what you earn and the government cannot intimidate you about your taxes.

The Choice Is Between Bad And Awful

Posted on by

On Wednesday, Armstrong Economics posted an article about inflation and recession.

The article reports:

Federal Reserve Bank of Minneapolis President Neel Kashkari has advised against anticipating near-term rate cuts. While speaking to the Financial Times, the Fed president stated that people would simply prefer a recession to continued inflation.

“I have learned that the American people—and maybe people in Europe equally—really hate high inflation. I mean, really viscerally hate high inflation,” he told the Financial Times’ The Economics Show podcast. Kashkari is speaking as if we are not already in a recession. It is not difficult to understand the “visceral” hatred people around the world feel toward rising prices. The effects of inflation are felt with every purchase, causing the average person to adjust their entire lifestyle.

The article concludes:

Real prices have far surpassed anything they calculate in CPI. Everyone understands that prices have risen far more than the arbitrary number the Fed provides us. Taxes are continually increasing for everyone in every tax bracket. The government not only adds to inflationary issues with their spending but then expects their citizens to foot a portion of the bill with taxes, which will simply never be enough.

Then we have Washington telling the masses to blame corporations for price gouging while raising their taxes and making it increasingly difficult to conduct business and maintain a large workforce. It is not that the people would prefer to be in a recession, the real issue is that countless people are entering survival mode. People everywhere want to hold onto whatever they may have out of fear for the future, but they are unable even to hoard as real prices now demand they hand over whatever they have to maintain their lives.

In a recession, consumer spending drops, and people lose their jobs. A service economy such as the one America currently has is more vulnerable to recession than a manufacturing economy. A recession creates hardship for working families.Inflation impacts both working families and retirees. Either one is a bad deal. The most practical way to deal with inflation in America would be to cut government spending and to resume domestic oil production. Both of those things would help revive a miserable economy.

The Root Causes Of The Current Inflation

Posted on by

On Wednesday, Breitbart posted an article about the cause of the level of inflation Americans are currently dealing with.

The article quotes Neel Kashkari, who runs the Federal Reserve Bank of Minneapolis.

The article reports:

Surging immigration is keeping inflation and interest rates high, Fed honcho Neel Kashkari said in an interview with the Telegraph.

Kashkari, who runs the Federal Reserve Bank of Minneapolis, said he’s not ready to consider cutting rates until he sees “several months of real progress on inflation.” The flood of immigrants, he argued, is hindering that progress.

U.S. borrowing costs are likely to stay put for “an extended period of time,” Kashkari warned.

He’s particularly freaked out by the booming demand for housing, which just won’t cool off despite sky-high rates.

Kashkari’s immigration bombshell runs directly contrary to the claims by the Biden administration and its allies that surging immigration is keeping down inflation by depressing wages.

Kashkari said that “dramatic increase in immigration” is boosting housing demand. More people working from home and years of underbuilding aren’t helping either. It’s a perfect storm that’s keeping the housing market red-hot.

The article concludes:

He (Kashkari) also noted that services inflation had been “much stickier” in the past few months, making it even tougher to justify rate cuts.

“In the second half of last year, we saw very rapid disinflationary progress, and that was comforting for all of us because the economy was strong and inflation was falling quickly. I expected and hoped that that was going to continue in the first quarter of this year [but] inflation has more or less moved sideways,” Kashkari said.

Like other Fed officials, Kashkari said he needs solid proof that inflation is heading back to 2 percent before he’s comfortable with rate cuts.

“I want to see evidence that inflation is headed well back down towards the 2 percent target. I’m not saying that we have to get all the way back down to 2 percent before we start cutting, but I need to be convinced that that’s where we’re headed before I would be comfortable normalizing interest rates,” he said.

Rate cuts could result in people feeling better about the economy (a good thing in an election year), but they could also create even more inflation.

 

Does Anyone On The Political Left Go Grocery Shopping Or Buy Gasoline?

Posted on by

On Thursday, BizPacReview posted an article about the mainstream media’s spin on America’s current economy. If it were not sad, it would be funny.

The article reports:

MSNBC host Stephanie Ruhle is telling Americans not to believe their lying eyes, that President Biden’s economy is fantastic and they are better off economically than they mistakenly believe.

The condescension and gaslighting have kicked into full gear as the presidential election nears. Despite Americans struggling to put food on the table, a roof over their heads, and clothes on their children’s backs, Ruhle is telling them they are basically dimwitted and don’t appreciate how good they have it.

“We need an economic explainer,” Ruhle told the president and CEO of the Federal Reserve Bank of Chicago, Austan Goolsbee. “People are confused, they’re exhausted, but they’re also doing quite well.”

“Ruhle, who hosts MSNBC’s ‘The Eleventh Hour,’ had been discussing a recent Federal Reserve report that ‘shows people are still struggling to cover day-to-day expenses, even as inflation has slowed.’ She noted how some major brands are responding by enticing consumers with slashed prices, ‘Target says it is cutting prices on 5,000 essential items, things like milk, butter, pet food. Wendy’s is now offering a $3 breakfast deal. And rivals like McDonald’s are offering new lower-priced value meals,’” Fox Business reported.

The article includes the following screenshot:

This is not the result of corporate greed as President Biden likes to claim–it is the result of companies trying to stay in business after their operating costs skyrocket. Anyone who eats and drives knows that we were much better off four years ago. The problem with inflation is that prices very rarely go back down to where they were.

April Inflation Statistics

Posted on by

On Tuesday, CNN reported that according to Bureau of Labor Statistics data released Tuesday inflation in April was the highest it has been all year.

The article reports:

Wholesale inflation picked up in April to its highest rate in a year, according to Bureau of Labor Statistics data released Tuesday.

The Producer Price Index, which measures the change in prices that manufacturers pay to suppliers, was 2.2% for the 12 months ended in April, according to Bureau of Labor Statistics data released Tuesday.

That gain is higher than what was seen in March, which was downwardly revised from 2.1% to 1.8%.

On a monthly basis, prices rose 0.5%, a faster pace than March’s 0.1% loss (also downwardly revised) and ran much hotter than what economists had anticipated. Economists were expecting a monthly gain of 0.3%, according to FactSet consensus estimates.

“The concern here is that we now have a trend, an upward trend in producer prices, which can only be passed through to consumers and result in upward pressure on consumer price inflation over the coming months,” Kurt Rankin, senior economist for the PNC Financial Services Group, told CNN in an interview.

And that means interest rates will stay higher for longer and could further delay the Federal Reserve’s plans for cuts on that front, he said.

…While higher energy costs (up 2% in April) helped to push goods prices higher, services inflation is what drove up the overall PPI last month. Nearly three-quarters of the April monthly gain was attributable to price hikes seen by producers of services, according to the report.

Services providers saw a 0.6% increase in prices for the month, the fastest pace seen for that category since March 2022, Rankin noted.

“Services has been the issue over the past year as consumers continue to spend money, and costs for services-oriented businesses is still stronger than goods inflation; but goods producer prices are now also rising after having fallen through most of 2023,” he said.

This is bad news for consumers and also bad news for the Biden administration that wants to get re-elected in November. The promise of cutting the interest rate before the election to bring consumer costs down will not be kept if inflation continues on its current path.

Bidenomics At Work

Posted on by

Aside from what you are paying for groceries and gasoline, have you looked at mortgage rates and home sales right now?

On Monday, One America News reported the following:

Sales of new U.S. single-family homes fell more than expected in October, likely as higher mortgage rates reduced affordability, but the housing segment remains supported by a persistent shortage of previously owned properties on the market.

New home sales dropped 5.6% to a seasonally adjusted annual rate of 679,000 units last month, the Commerce Department said on Monday. September’s sales pace was revised lower to 719,000 units from the previously reported 759,000 units.

Economists polled by Reuters had forecast new home sales, which account for a small share of U.S. home sales, would fall to a rate of 723,000 units.

New home sales are counted at the signing of a contract, making them a leading indicator of the housing market. They, however, can be volatile on a month-to-month basis. Sales increased 17.7% on a year-on-year basis in October.

The stock of previously owned houses on the market is nearly 50% below it’s pre-pandemic level, according to the National Association of Realtors, which last week reported that home resales plunged to more than a 13-year low in October. Most homeowners have mortgage rates under 3%, making many reluctant to sell, boosting demand for new construction.

According to The Mortgage Reports, the mortgage interest rate in 2021 was 2.96 percent. In 2022, it was 5.34 percent. The current mortgage rate, according to Nerd Wallet is about 7.5 percent. That is a significant increase. Interest rates were artificially kept low for a number of years. That was not sustainable. However, the rate of increase (the Federal Reserve’s attempt to curb inflation) has hurt real estate sales. At one point many years ago because of a job change, we were forced to take out a mortgage at 8.5 percent (giving up a mortgage of 4 percent). If you are sitting on a 3 or 4 percent mortgage right now, the last thing you want to do is move and take out a 7.5 percent mortgage. Bidenomics has hurt Americans across the board. We need a new President with a new approach to the economy.

It’s Past Time For This!

Posted on by

On Tuesday, The Epoch Times posted the following headline:

The Time to Audit the Fed Is Here

A site called worldtraining.net explains some of the history of the Federal Reserve:

On June 4, 1963, a little known attempt was made to strip the Federal Reserve Bank of its power to loan money to the government at interest. On that day President John F. Kennedy signed Executive Order No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve. Mr. Kennedy’s order gave the Treasury the power “to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury.” This meant that for every ounce of silver in the U.S. Treasury’s vault, the government could introduce new money into circulation. In all, Kennedy brought nearly $4.3 billion in U.S. notes into circulation. The ramifications of this bill are enormous.

        With the stroke of a pen, Mr. Kennedy was on his way to putting the Federal Reserve Bank of New York out of business. If enough of these silver certificates were to come into circulation they would have eliminated the demand for Federal Reserve notes. This is because the silver certificates are backed by silver and the Federal Reserve notes are not backed by anything. Executive Order 11110 could have prevented the national debt from reaching its current level, because it would have given the government the ability to repay its debt without going to the Federal Reserve and being charged interest in order to create the new money. Executive Order 11110 gave the U.S. the ability to create its own money backed by silver.

        After Mr. Kennedy was assassinated just five months later, no more silver certificates were issued. The Final Call has learned that the Executive Order was never repealed by any U.S. President through an Executive Order and is still valid. Why then has no president utilized it? Virtually all of the nearly $6 trillion in debt has been created since 1963, and if a U.S. president had utilized Executive Order 11110 the debt would be nowhere near the current level. 

The Federal Reserve creates money out of thin air and then loans it to the government at interest. It’s a great scheme.

The Epoch Times reports:

This week, Sen. Rand Paul is pushing an amendment to a major spending bill that would finally do what should have been done decades ago. It should have been an annual undertaking for the past 100 years. He wants a thorough and external audit of the Fed, using prevailing accounting standards to figure out where the billions and trillions are coming from and where they’re going.

Please follow the link to read the entire article. This needs to be done.

Moving To Protect Americans’ Money

Posted on by

On Wednesday, The Washington Examiner reported:

House Republicans have advanced a bill that would stop the Federal Reserve from issuing digital currency, sending the legislation to the House for a vote.

The House Financial Services Committee voted Wednesday to advance the legislation, which was sponsored by Rep. Tom Emmer (R-MN). The bill is dubbed the Central Bank Digital Currency Anti-Surveillance State Act. It won support from Republicans and drew opposition from some Democrats on the committee.

If you want the government to have full control over how much money you have and how you spend it, Central Bank Digital Currency is for you. It is one of the worst ideas to come along in a long time.

The article notes:

“The CBDC Anti-Surveillance State Act underscores that fact and protects Americans’ privacy and our financial system from the risks a CBDC would pose,” said committee Chairman Patrick McHenry (R-NC). “It builds on the principles that Republicans developed last Congress to guide our evaluation of a potential CBDC.

“The bill, led by Whip Emmer, emphasizes those principles and ensures that the Federal Reserve cannot issue a CBDC without congressional approval,” he added.

Democrats, though, blasted the legislation as being antithetical to innovation and competition.

“Unfortunately, this bill, which I will call the CBDC anti-innovation act … would commonly shut down important work the Fed is doing to research a potential U.S. CBDC,” said the committee’s Ranking Member Maxine Waters (D-CA). “Instead of taking steps to ensure the United States wins the digital currency space race against emerging powers like China, Republicans are making baseless attacks against the CBDC that does not even exist.”

Remember, the Democrats are the people who want to control the car you drive and the stove you cook on. They are the last people I want to control my income and my spending.

Dangers of Digital Currency

Posted on by

Author: R. Alan Harrop, Ph.D

Given the harsh reality that today’s Democrat Party follows Marxist principles which will destroy this country as we have known it, the best starting point is to oppose any new initiative coming from the Biden regime. Their newest, and arguably, the most destructive of their many destructive policies is that of a digital currency. They are currently “testing the waters” so to speak and we must not allow them to implement this
idea. There are many reasons to oppose a digital dollar; here are a few of them.

According to the Biden regime, a digital form of currency (Central Bank Digital Currency, CBDC) would be issued and controlled by the Federal Reserve and replace paper money in most if not all transactions. To a great number of people, myself included, who rely very heavily on their credit cards for most financial transactions this may seem to be a logical step. But it is much more. First, a digital currency would be totally
controlled by the Federal Reserve which is an agency frought with many problems since its inception in 1913, but most importantly the people do not control or select its members. We cannot vote them out of office if we so desired, consequently we lose control over our money system. Very bad idea. Second, digital currency
is not backed by any tangible asset that has inherent value such as gold, silver, oil, etc. Third, and this is critical, the government would not only be able to track all your expenditures but would be able to stop or limit you from purchasing items they do not think you should have. Like gasoline powered cars, meat, gas stoves, guns, ammunition to name just a few.. Why in the name of all that is holy, would any sane person want to give the government total control over your finances? Without the ability to spend what you want on whatever you want, you have lost your freedom. Period. No wonder Marxist governments like China are moving towards digital currency. Fourth, the money you have accumulated can be lost if the system is either hacked or is compromised by an attack on the electrical grid. We all know how totally preventing this type of hacking is already not possible. Fifth, say you wanted to go to a local bank (most of which will be eliminated) and withdraw some cash. Sorry, you will no longer be able to do so.

You must stay abreast of what is going on with digital currency and let your elected officials know that you are opposed and want it stopped. Like all destructive Marxist social programs (e.g. Medicaid) the Democrats will try to sell this idea with phony advantages. Do not be fooled. This is one of the most, if not the most destructive Marxist ideas and the Republican controlled U.S. House of Representatives must block
digital currency, if our country is to survive

 

The American Economy Under The Biden Administration

Posted on by

On Wednesday, The Washington Free Beacon reported the following:

U.S. business activity contracted for a fifth straight month in November, with a measure of new orders dropping to its lowest level in 2-1/2 years as higher interest rates slowed demand.

S&P Global said on Wednesday its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to 46.3 this month from a final reading of 48.2 in October. A reading below 50 indicates contraction in the private sector. Activity is slumping under the weight of the Federal Reserve’s most aggressive interest rate-hiking cycle since the 1980s aimed at curbing inflation by dampening economic demand.

The flash composite new orders index dropped to 46.4, the lowest level since May 2020, from a final reading of 49.2 in October. Outside the initial wave of the COVID-19 pandemic, this was the worst reading since 2009.

The article concludes:

Average input prices increased at the softest rate in two years, but factories still faced challenges finding skilled labor. This suggests the slowdown in inflation will be gradual as wages remain sticky.

The survey’s flash services sector PMI decreased to 46.1 from 47.8 in October. Services businesses also reported weak demand and a moderation in input prices.

I am not an economist, and I do not totally understand what these numbers mean. Generally speaking, inflation is a problem and the rising interest rates that are supposed to combat it are a problem. It is my understanding that the solution to the inflation problem could be found in bringing back domestic energy production and limiting government spending. The new House of Representatives that will be sworn in in January does have the power to cut government spending; however, it is doubtful that they have the power to overrule the Biden administration’s restrictions on domestic energy production. All of us need to be concerned for the people in the colder regions of America this winter. Heating costs will be very high, and many people are going to suffer because of brownouts and energy costs. All of this is the result of the Biden administration’s energy policies. The war in Ukraine is a contributing factor, but not the main cause. Energy prices began to rise in January 2021 and have continued to rise since (with a few pauses). Energy is an international commodity and is subject to supply and demand. The way to bring energy costs down in America is to get back to producing our own energy. That is also the way to curb inflation.

I Really Love This Idea

Posted on by

On Thursday, The New York Sun posted an editorial by Larry Kudlow about the Federal Reserve.

The editorial states:

Can we please get a Federal Reserve with a backbone? Here are a couple thoughts on today’s wussy Fed announcement that it is going to move faster on tapering bond purchases and there might be three little bitty rate hikes next year. And, oh yeah, Jay Powell told the press conference he was confident inflation would drop to two percent by the end of next year.

Wanna bet? On that bet, I’m taking the under. Know who the best inflation forecaster in the country is? Senator Manchin. Numero uno. I don’t even know if he talks to economists, but since last winter when the $2 trillion Democrat so-called relief package was implemented, Joe Manchin has been warning about inflation.

That’s why he has argued consistently all year that President Biden’s big government socialist bill should be paused until inflation is clearly falling. Which it is not. CPI up 7 percent, PPI up 10 percent, and today we got another whopper, with an 11.7 percent rise in import prices. How about that?

Joe Manchin, by the way, in his original memo to Senator Schumer, called last summer for the end of quantitative easing.

Mr. Manchin makes me feel proud to be a former Democrat, as were both of my presidential bosses — Ronald Reagan and Donald Trump.

The editorial continues:

Finally, I have another idea for a new Fed chairman if Joe Manchin won’t take the job. How about Elon Musk? Time Magazine’s man of the year. How can I say such an outrageous thing? Several reasons. I worked with him several times in the White house and he’s very smart and savvy.

The mere fact that socialist Senator Warren is attacking him for not paying his “fair share” of taxes is by itself a fabulous endorsement of Mr. Musk’s philosophy, business prowess.

Am I saying anybody Mrs. Warren opposes gets my stamp of approval? Yes. I’m tired of her left-wing progressive woke whining. And her desires to tax and regulate anything that moves in business and the economy.

Meanwhile, Mr. Musk, who’s the biggest E-V car seller in the country, has said publicly he does not want E-V auto or battery subsidies from the federal government. Indeed, he has come out against the entire reckless tax, spend, and regulate Biden policies.

Unlike GM and the unionist car-makers, Mr. Musk is non-union and will not put his nose into the public trough.

My kind of guy. I doubt if he ever talks to economists. That’s probably why he’s such a good conservative, libertarian thinker.

And incidentally, Mr. Musk has been selling about $3 billion worth of stock at the prevailing capitalist gains tax rate of 23.8%. The Musk stock sale would generate $714 million of revenues to the federal government.

Mr. Kudlow also notes that the Federal Reserve is continuing Quantitative Easing, the practice of buying up the debt and pumping up the money supply, at a time when inflation is rapidly increasing. We need someone at the Federal Reserve that will put the brakes on that practice so that we can being to rein in inflation.

Has Anyone Listened To What This Lady Is Saying?

Posted on by

Yesterday Breitbart posted an article about Saule Omarova, President Joe Biden’s nominee for the Office of the Comptroller of the Currency (OCC).

The article reports on some of her statements regarding her plans for America:

Omarova spoke at the Law and Political Economy (LPE) Project’s “Law & Political Economy: Democracy Beyond Neoliberalism” conference in March.

Omarova discussed one of her papers, “The People’s Ledger How to Democratize Money and Finance the Economy,” which would help “redesign” the financial system and make the economy “more equitable for everyone.”

She said it would change the “private-public power balance” and democratize finance to a more systemic level.

During her explanation of her paper, she said that the Federal Reserve, the nation’s central bank, can only use “indirect levers” to “induce private banks to increase their lending.”

Her paper calls for eliminating all banks and transferring all bank deposits to “FedAccounts” at the Federal Reserve.

During her conference speech, she said, “There will be no more private bank accounts, and all of the deposit accounts will be held directly at the Fed”:

Please follow the link to the article to see the video.

The article reports:

Omarova said her proposal would give the Fed more “proactive” monetary policy tools, such as “helicopter money.” She also pondered how the Federal Reserve could “take money” from Americans during an inflationary environment.

A former senior government official told Breitbart News that if the Senate were to confirm Omarova, she would have the “most powerful, least accountable” position over America’s banking system.

When talking about FedAccounts, the former senior government official said, “The Democratic Party over the last couple of administrations, they want the government to essentially take over a lot of financial functions from banks.”

We need to keep this lady as far away from our currency as possible.

Incredible Coincidence?

Posted on by

Yesterday The New York Post reported the following:

Federal Reserve Chairman Jerome Powell sold between $1 million and $5 million in stocks at the beginning of October 2020 — a month that turned out to be the worst for Wall Street since the beginning of the COVID-19 pandemic.

The transaction, which is noted on a public disclosure form Powell signed off on in May and was first reported Monday by The American Prospect, is an uncomfortable echo of activities that led to the recent resignations of two regional leaders of America’s central bank.

The disclosure form indicates that Powell sold the Vanguard Total Stock Market Index Fund shares on Oct. 1, 2020. Ten days earlier, a separate sale of shares from the same fund netted the Fed chair between $50,000 and $100,000.

As Powell played the market, he was calling on Congress to pass a second COVID-19 relief bill even as negotiations between lawmakers and the Trump administration were in a stalemate. The American Prospect, citing Powell’s public schedule, reported that he had spoken with then-Treasury Secretary Steven Mnuchin four times on Oct. 1, as well as with House Speaker Nancy Pelosi (D-Calif.).

The article concludes:

Separately, Bloomberg News reported on Oct. 1 of this year that Federal Reserve Vice Chairman Richard Clarida had moved between $1 million and $5 million out of one mutual fund and into two other funds on Feb. 27, 2020, the day before Powell signaled a potential interest rate cut due to the pandemic.

The disclosures have drawn the ire of Sen. Elizabeth Warren (D-Mass.), who wrote to the head of the Securities and Exchange Commission (SEC) earlier this month to ask for an investigation into whether Rosengren, Kaplan or Clerida had violated insider trading rules. In a Senate floor speech Oct. 5, Warren called out Powell and said he had “failed as a leader.”

However, other lawmakers have lined up behind Powell as President Biden nears a decision about whether to nominate him for a second four-year term that would begin in February. Fox Business Network reported Monday that at least eight Republican senators have said they would vote to confirm Powell for a second term.

The Federal Reserve did not respond to requests for comment about Powell’s transactions.

Mr. Powell’s biography notes that he is a lawyer who has worked in the investment banking field. I suppose this would give him the knowledge to make the kind of stock trade he made at the time he made it. However, I do think we need to take a really good look at the financial transactions of those in government. It seems as if there are a lot of people in government who seem to have an uncanny knack for buying and selling stock and stock options at exactly the right time.

Is The Misery Index Back?

Posted on by

In the 1970’s Chicago Economist Robert Barro coined the phrase ‘misery index.’ The phrase was used to describe a number obtained by adding the unemployment rate to the inflation rate. During the Carter administration, that number ranged between 12 and 17 percent. During the Trump administration, that number ranged between 5 and 7 percent. I shudder to think where it is headed during the Biden administration.

Yesterday The New York Post posted an article about the current rate of inflation.

The article reports:

Inflation continued to surge in July, but appeared to settle close to the fastest pace in almost 13 years as the economy continues to emerge from the pandemic, the feds said Wednesday.

The Labor Department’s Consumer Price Index, which measures a basket of goods and services as well as energy and food costs, jumped 5.4 percent in July from a year earlier.

That’s the same as June’s 5.4 percent year-over-year rise in prices, which marked the biggest 12-month rise since August 2008, just before the financial crisis sent the US into the worst recession it had seen since the Great Depression.

Consumer prices rose 0.5 percent from the month prior, the Labor Department said.

Economists surveyed by Dow Jones expected a 5.3 percent year-over-year spike in July and monthly increase of 0.5 percent.

The core consumer price index, which excludes volatile food and energy costs, rose 4.3 percent from a year ago, lower than the 4.5 percent year-over-year jump that the index saw in June, which marked the fastest acceleration since 1991.

The article concludes:

Federal Reserve officials have so far maintained their position that inflation is mostly temporary and will likely subside this year. They’ve cited this as a reason why they haven’t yet pulled back on their economic support measures like the bond-buying program.

Last week’s July jobs report showed that the country added a whopping 943,000 jobs in the month, more than expected, in a sign that the labor market recovery could finally be gaining steam.

Fed officials have said they will look for more confirmation of that in the next few jobs reports before a tapering of their financial support measures will be considered.

“I think this keeps taper talk on the table because inflation is staying relatively high and transitory may mean a little longer,” Minopoli said.

“If the supply chain kinks and businesses raising prices remains sustained, ‘transitory inflation’ might be a little less transitory than Fed Chair Powell will like and the hawks at the Fed may push a little harder on timing and speed of taper,” he added.

I remember the 1970’s–gas lines and all– and I don’t want to go back there.

The Trump Economy

Posted on by

Newsmax posted an article today about the state of the American economy.

The article reports:

Companies in the U.S. ramped up hiring at the start of the year, taking on the most workers since May 2015 and indicating the labor market remains robust, a report on private payrolls showed Wednesday.

Employment at businesses increased by 291,000 in January after a revised 199,000 gain in the previous month, according to data from the ADP Research Institute.

The article includes the following statistics:

  • The larger-than-expected gain was broad-based and included the biggest advance in service industry payrolls since February 2016, including a record surge in hiring at leisure and hospitality companies in data back to 2002.
  • The report is in line with last week’s statement from Federal Reserve policy makers following their meeting on interest rates. The Fed said that “job gains have been solid, on average, in recent months.”
  • Economists monitor the ADP data for clues about the government’s job report. The Labor Department’s employment data due Friday is expected to show a 150,000 gain in private payrolls and an unemployment rate remaining at a 50-year-low of 3.5%.
  • The government figures will also include annual revisions. In August, the Labor Department’s preliminary benchmark projections showed the number of workers added to payrolls will probably be revised down by 501,000 in the year through March 2019. ADP’s report follows a different methodology than the government’s, and the two do not directly correlate with each other.
  • ADP report showed goods-producing payrolls rose 54,000 in January, while service-provider employment increased 237,000.
  • Hiring in construction jumped 47,000, the most in a year, and manufacturing showed a 10,000 increase in January, which was the biggest gain in 11 months.
  • Payrolls at small businesses increased by 94,000 last month, the most since July 2018; rose 128,000 at medium-sized companies and 69,000 at large firms.
  • ADP’s payroll data represent about 411,000 firms employing nearly 24 million workers in the U.S.

President Trump was mocked during the election campaign for saying he could bring back manufacturing jobs and turn the economy around. His trade agreements have done what other politicians considered impossible. I should note that people who think something is impossible don’t attempt to accomplish it. Maybe we need to elect people who are willing to attempt the impossible rather than those who simply make empty promises.

Good Economic News For Americans

Posted on by

According to Investopedia:

A FICO score is a type of credit score created by the Fair Isaac Corporation. Lenders use borrowers’ FICO scores along with other details on borrowers’ credit reports to assess credit risk and determine whether to extend credit. FICO scores take into account various factors in five areas to determine creditworthiness: payment history, current level of indebtedness, types of credit used, length of credit history, and new credit accounts.

Yesterday The Federalist posted an article about how the Trump economic policies have impacted the FICO scores of Americans.

The article reports:

Americans’ average FICO score has hit an all-time high of 706 on the personal credit rating scale. Ethan Dornhelm, the vice president for scores and analytics at FICO, told CBS News that a score of more than 700 basically qualifies individuals for just about any credit at favorable terms.

FICO scores range from 300 to 850. A score above 700 is considered great, and a score above 760 is considered excellent. This high national credit score may be largely attributed to the strong economy, with its historically low unemployment rate, and the Tax Cuts and Jobs Act.

“This record-long stretch of economic growth has helped minimize reliance on debt to pay the bills,” said Joel Griffith, a research fellow at The Heritage Foundation. “Low interest rates help ensure a greater portion of loan payment goes to paying down principal rather than merely making interest payments.”

Creditworthiness is now increasing, which means Americans have the ability to rely on their paychecks, not just borrowing from their futures, to fulfill their financial obligations.

Americans’ average FICO score hit a low during the financial downturn of 2008, with a score of 686. After the recession passed, the nation’s average FICO score continuously grew.

Is giving Americans more access to larger lines of credit such a good thing? According to Griffith and Federal Reserve Bank data, U.S. household debt is also declining. Even now that Americans are able to take on more debt, they are not. They’re paying off their credit cards and increasingly lowering their other debt.

Unfortunately, this national accomplishment has not been a topic discussed among 2020 Democratic nominees. Why have the Democratic presidential candidates shied away from talking about the economy? Because, they call for an economy that “works for everyone,” when the current system is working for more people than ever before.

A Gallup poll shows that 88 percent of Americans believe the current U.S. economy is either “fair,” “good,” or “excellent.” That’s because this economy has provided 5.1 million new jobs and dropped the unemployment rate to 3.7 percent — the lowest rate in nearly half a century.

Leadership and economic policies make a difference to ALL Americans. The tax cuts and economic policies of President Trump have ‘worked for everyone.’ The government cannot create an economy the ‘works for everyone’ by taking money from people who earn it and giving it to people who did not earn it. An economy  that ‘works for everyone’ is created when everyone has the opportunity to find a job or start a company and create their own success.

It’s Better To Owe Money To A Friend Than To Owe Money To Someone Who Is Not Your Friend

Posted on by

America’s runaway spending is a problem. So far no one in Washington has either the power or the will to bring that spending to a screeching halt. But at least we are being a little wiser in our borrowing habits.

CNS News posted an article today with the following headline, “Japan Surpasses China as Top Foreign Holder of U.S. Debt.” It would be better if we had no debt, but at least the majority of our debt is held by a country that is not out to destroy us.

The article reports:

In May of this year, the Chinese owned $1,110,200,000,000 in U.S Treasury securities and the Japanese owned $1,101,000,000,000. In June, however, Chinese ownership of U.S. Treasury securities rose only to $1,112,500,000,000 and Japanese ownership climbed to $1,122,900,000,000.

That marked the first time since May 2017 that entities in Japan have owned more U.S. Treasury securities, as estimated by the U.S. Treasury, than entities in China.

In May 2017, the Japanese owned $1,111,500,000,000 in U.S. Treasury securities and the Chinese owned $1,102,200,000,000. In June 2017, Chinese ownership of U.S. Treasury securities increased to $1,146,500,000,000 and Japanese ownership declined to $1,090,300,000.000.

Chinese ownership of U.S. Treasury securities, according to the estimates, peaked in November 2013 at $1,316,700,000,000.

…The Federal Reserve owns more U.S. Treasury securities than either Japan or China. As of June 27, according to the Federal Reserve’s balance statement, the Federal Reserve owned $2,110,256,000,000 in Treasury securities.

U.S. Treasury securities held by entities in Hong Kong are counted separately from those in Mainland China. According to the Treasury’s estimate, entities in Hong Kong owned $215,600,000,000 in U.S. Treasury securities in June.

Entities in the United Kingdom were the third largest foreign holders of U.S. Treasury securities after Japan and China. In June, entities in the U.K. owned $341,100,000,000 in U.S. Treasury securities.

The article concludes:

In explaining its methodology for estimating foreign holdings of U.S. Treasury securities, the Treasury explained that some countries have higher numbers because owners of Treasury securities from third countries “entrust the safekeeping of their securities” to institutions in these countries.

“Imperfections caused by ‘custodial bias’remain in the current MFH [Major Foreign Holders of U.S. Treasury Securities] table,” said the methodology statement. “Some foreign owners entrust the safekeeping of their securities to institutions that are neither in the United States nor in the owner’s country of residence. For example, a German investor may buy a U.S. security and place it in the custody of a Swiss bank. In both the SLT and the periodic surveys of holdings of long-term securities, such a holding will typically be recorded vis-a-vis Switzerland rather than Germany. This ‘custodial bias’ contributes to the large recorded holdings in major custodial centers including Belgium, the Caribbean banking centers, Luxembourg, Switzerland, and the United Kingdom.”

It truly is time to cut our spending. We owe too many people too much money.

Trying To Level The Playing Field Has Its Challenges

Posted on by

Fox Business posted an article today about the devaluing of the Chinese yuan. The devaluing of the Chinese currency (currency manipulation) has been used by China for decades to grow their economy at the expense of America. It has been used to lure manufacturing away from America, impact our trade balance, and generally work against the American economy. We have needed to combat this practice for decades, but no President had the courage.

The article reports:

The onshore Chinese yuan weakened to worse than seven per U.S. dollar, hitting its lowest level since 2008, as Beijing looks to cushion the blow from Trump’s tariffs. A weaker yuan makes Chinese goods cheaper for overseas buyers, which may be necessary as China just lost its spot as the US’s biggest trading partner.

Trade data released Friday by the Department of Commerce showed U.S. imports from China fell by 12% in the first six months of the year, allowing Mexico to supplant it as the U.S.’s biggest trade partner.

“China dropped the price of their currency to an almost a historic low,” Trump tweeted Opens a New Window. on Monday. “It’s called “currency manipulation.” Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!”

Last week, Trump said beginning Sept. 1 the U.S. would place a 10% tariff on the remaining $300 billion of Chinese goods. He went ahead with the announcement despite objections from his advisers.

The president warned he could “always do much more” with respect to tariffs, adding the 10 percent tax could go “well beyond 25 percent” if necessary. Earlier this year, the administration placed a 25% tariff on $250 billion worth of Chinese goods.

Weakening the yuan isn’t the only form of retaliation Beijing took on Monday. It also ordered state-owned enterprises to stop purchases of U.S. agricultural products, according to a Bloomberg report, citing people familiar with the situation.

That is a reversal from just last week, when Beijing said it had purchased several tons of U.S. soybeans Opens a New Window. as a gesture of a goodwill amid trade negotitations. Before the trade war began, China was the largest buyer of U.S. soybeans, accounting for 70% of all purchases, but their imports have fallen by 97% since the trade war began.

The article notes:

Over the weekened, The Trump administration pushed back against the idea the trade war was hitting the wallets of U.S. consumers.

“China has strategically gamed the tariffs by slashing their prices and by devaluing their currency,” White House trade advisor Peter Navarro told “Fox News Sunday.”

This trade dust-up with China may get ugly, but it is something that has to be done.

The Economy Continues To Move In A Positive Direction

Posted on by

Ed Morrissey posted an article at Hot Air today about the latest economic numbers. As usual when a Republican is President, the ‘experts’ were surprised that the numbers were better than expected.

The article reports:

It’s not great news for the White House, but it could have been a lot worse. The US economy’s growth slowed to 2.1% in the second quarter, down a full point from Q1. However, with economists predicting a recession right around the corner, the growth is still substantial enough to look positive:

Real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the second quarter of 2019 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.1 percent.

The Bureau’s second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see “Source Data for the Advance Estimate” on page 2). The “second” estimate for the second quarter, based on more complete data, will be released on August 29, 2019.

The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment, exports, nonresidential fixed investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased (table 2).

The deceleration in real GDP in the second quarter reflected downturns in inventory investment, exports, and nonresidential fixed investment. These downturns were partly offset by accelerations in PCE and federal government spending.

President Trump weighed in on Twitter:

The article at Hot Air concludes:

“Not bad” is a little bit of an understatement, actually. It’s pretty good, especially in the context of the global economy. That’s the bigger anchor, especially the trade disputes that at least for one quarter hit our exports hard.

The steady growth with low inflation should result in the Federal Reserve lowering interest rates in the near future.