It's the Inflation, Stupid

Lying is bad, inflation is worse...

"It's the ECONOMY, stupid" said James Carville, famously, in 1992, writes Gary Tanashian in his Notes from the Rabbit Hole.

Half right, James. Today it's the "inflationary component and driver of the economy, stupid".

As the pre-election info wars start heating up with influencers, propagandists and morons on both sides of the aisle deploying their arsenals of bad information, it is time for this hidden little corner of the financial internet to weigh in.

Because lying is bad, and ignorance, insofar as it misdirects the electorate, may be even worse.

Mr.Speaker? Please weigh in for us with some prime propaganda and/or flat out ignorance:

Dear public, and especially dear young people, the Speaker would like you to look over there (at commies hiding under every rock) while corporate/financial socialism is practiced over here (by a Fed/Government/Banking alliance)...and the masses accept it as normal!

It is far from normal. It is the mechanics of a society long past disrepair and now entering its death rattle phase.

We all know this. Inflation eats away at productivity, makes asset prices go up and makes peoples' paychecks shrink in real terms.

Who owns the assets that are going up in price? Overwhelmingly, the wealthy, of course. Who holds the shrinking paychecks? The other 90-something percent.

The Fed literally prints higher asset prices because at every point that it is politically expedient to do so, it prints funny munny, AKA US Dollars (more munny units chasing finite assets = price increases). The Fed, in conjunction with the government's Treasury department, does this in one form or another by increasing the public's debt through bond market manipulation (QE) and other forms of MMT (Modern Monetary Theory), err, that is...TMM (Total Market Manipulation).

"Modern Monetary Theory" is a fancy name for robbery and destruction. And the seeds of a revolution (hopefully cultural rather than with 'live bullets') that never seems to arrive in any right-minded way because they've got the people looking under rocks and at each other instead of at the system, which is the culprit.

The economy runs on inflation. All you have to do is look at the chart of Debt-to-GDP to know beyond any doubt that the American economy is a sham. Every grey shaded area is a recession. As if by magic, the public debt relative to GDP increases into/through those recessions. This keeps the economy from clearing the excesses of the previous inflationary phase and re-props asset prices. Not rocket science.

Debt-to-GDP is another way of keeping the inflation going. Unless you think leveraging debt is some kind of "value".

In the minds of the MMT gang, it is. Or just maybe they don't give a flying fuck as long as the system as it is hums along, letting "them" eat cake while "they" benefit. What say you, Mr.Johnson?

The Speaker wants you to look under those rocks. He wants you to see Bernie, AOC and Mamdani under there. And they are under there! But they are under there for a reason. That reason being that we have screwed the pooch for too many decades now and the public is cottoning on to the problem, even if it does not know exactly where to look.

Inflation = asset price increases = asset owners (AKA the wealthy) getting richer + the other 90% falling further behind = scapegoating of "other" political entities when it is actually a corrupt system – spanning decades – vs. all of us as Americans.

While not allowing myself to get off the track of my main job, which is managing this mess from a financial perspective, I'll probably be compelled to write a couple more financial/political posts as I see more utter bullshit cropping up like the misdirection and blathering coming out of the Speaker's mouth.

As a society, I think we've hit peak "stupid". It can only get better from here on. Eh? But only if more people wake up and look under the right rocks.