TRUE DOLLAR JOURNAL

Decoding the NBER: The Only Chart You Will Need, Ever, to Know When the USA Economy is in Recession.

2024-01-12T07:49:00.000-08:00

The National Bureau of Economic Research (NBER) stands as the official arbiter of U.S. business cycles, holding the weighty responsibility of declaring recessions – a term that sends shivers down spines and impacts markets from Wall Street to your local grocery store. Founded in 1920 by a group of prominent economists, the NBER emerged from a post-World War I desire for deeper understanding of economic fluctuations. However, its role as recession referee wasn't preordained. Initially focused on research and data analysis, the NBER gradually gained wider recognition for its objective and meticulous approach to economic cycles. By the 1950s, its recession pronouncements carried increasing weight, becoming the unofficial benchmark for government policy and media narratives. This de facto authority solidified by the 1980s. The National Bureau of Economic Research (NBER), specifically its Business Cycle Dating Committee, is responsible for officially declaring recessions in the United States. In their mumbo-jumbo, the men and women of the NBER emphasize that a recession must be a significant decline in economic activity that is spread across the economy and lasts for more than a few months. It's important to note that the NBER typically waits until well after a recession has begun before officially declaring it. In other words, by the time recessions are over, the NBER declare that we have recently lived through one Of course, what the NBER calls a "recession" really is just a significant decline in the true productive employment as government employment in the main is make-work, akin to high-paid welfare. That is the proper nuance description of it. Lack of transparency means the members of the NBER do not wish 1) to be out of status, prestige 2) the ordinary man to know when recessions are underway. My formula perfectly matches their declarations, hence it is predictive of what they will call recessions anyway. Further, my formula better captures the truth of more recent times when the NBER called too soon the end of recessions owing to political pressure, especially after the dot com bubble burst and 9/11. What they, the NBER, call "recessions" in effect are what the layman cares about, employment, if he is not a government worker. But the truth is, recession mostly is empty word. The USA economy still experiences depressions and the trade cycle has never gone away. Recession is the chosen word to give the air that central bankers have their hands on the economy controlling it so that no one suffers.

I know better how to declare recessions than the NBER.

This simple formula accurately pulls back the curtain on the NBER and shows when recessions happen. Also, it shows the NBER prematurely declared recessions over in 1991 and 2002.

The NBER method is not transparent. They simply do not lay down their cards on the table, ever. Now, you need not rely upon them. Instead, use my formula.

Trump Announces His Candidacy for 2024. The TDJ Reveals the Strategy for Victory for 2024.

2022-11-16T16:24:00.001-08:00

President Donald J. Trump, the 45th President of the United States kicked off the 2024 presidential election race by announcing his candidacy for the Republican nomination. His announcement came as no surprise.

The former president faces a big challenge, perhaps a far bigger one than defeating the first woman presidential candidate in what was supposed to be an historic win for her and feminist womanhood everywhere.

Once again, Trump will be running against the Establishment—the billionaire class of globalists along with their controlled media, the major pension systems of states' governments and their media, as well as with countless grievance groups and the leftist-progressive blogosphere.

Safe States

Here is what the safe situation looks like for whomever ends up being the nominees for the Democrats and the Republicans. As you can see, the Democrats have a slight edge, five electoral votes.

These states reflect a margin of victory of at least 175,000 in 2020. It is likely too hard to flip 175,000 to vote from their usual voting.

Safe States Plus Tougher to Flip States

As you can see here, once tougher-to-flip states get added to their respective sides, the Democrat candidate opens up a bigger lead, sixteen electoral votes, up from five. That is a better than three times gain.

Safe, Tougher-to-Flip Plus Less Likely

As you can see, the Democratic Party candidate has a big advantage once the next layer of states gets added, the states less likely to flip, but which are possible.

At this point, the Democratic candidate has an easy road. He or she need only play offense. The Republican candidate must play both offense and defense.

The Republican candidate must takeaway from the Democrat both North Carolina and Georgia to have a shot.

Trump won North Carolina by 74,583 votes in 2022 while he lost Georgia by 11,779 votes. Keep an eye on the Walker versus Warnock run-off for the Senate seat still up for grabs in 2022.

Vulnerable States

Democratic Party Candidate Won States 2020

Republican Party Candidate Won States 2020

The Winning Strategies

For the Democratic Party candidate, it is simple. Win Georgia and any of the vulnerable GOP states and the presidency remains with the Dems. The Dem candidate should spend his or her time in Georgia, Arizona, Wisconsin, Maine 2, Nebraska 2.

For the Republican Party candidate, winning Georgia and North Carolina must happen. However, winning both is not enough. The candidate should strive to win the most vulnerable states of Arizona and Wisconsin. After doing that, victory road will come with a few options, the easiest being vulnerable Nevada.

The Republican candidate ought to learn about the most pressing issues in these states and then pledge signing into law, a government to solve the problem.

The days of talking big about things that affects all Americans nationwide are long over. The way to win is to localize the campaign only in the handful of states that will decide 2024.

Bitcoin and All of the Other Cryptos are Highly-Speculative Tech Ventures with Falling Worth Relative to Commodities, Crypto is Not a Banknote Currency Replacement.

2022-10-16T06:22:00.001-07:00

BTC has a long way to go down. Likely, it is over-priced relative to the crappy USD by $14,000.

What should have been learned about Bitcoin?

1. It is not an inflation hedge.

2. It is not digital gold.

BTC rode the massive Quantitative Easing scam of the Federal Reserve and all of the concurrent debt monetization by central bankers in all of the major economies between 2009 and 2022.

Supply chain shortages exposed that inflation, which had been sloshing into stocks and crypto for more than a decade even though per capita sales of actual stuff had not been growing in developed economies.

BTC, though the best-known cyptocurrency, is horrible. It is not a useful transaction medium for retail purchases. Because it is divisible into small units, it is not even scarce.

More so, cryptocurrencies and cryptotokens, with which BTC competes, are not scarce nor rare. Likely, there are at least 383.958 billion individual coins available from the 21,331 named blockchains established and available for trade. The barrier to entry to create a new blockchain and associated name coin nearly is non-existant.

The ongoing devaluation of banknote currencies of the various banking systems (e.g., Federal Reserve, Bank of Japan, EUropean Central Bank, Bank of England, etc.) has exposed crypto and blockchains to being more like highly-speculative stocks with extremely unknown futures.

Bitcoin continues to reveal itself mostly as a medium for illegal activities such as illicit drug dealing and prostitution among other things. See my April 2022 work where I provide a reasoned estimate for BTC ( Bitcoin (BTC) is Massively Over-Priced in 2022. BTC Still is Not Digital Gold. Where is the Ukraine-Russia War Premium? The Speculation Range for Bitcoin. )

The Failing Sales of New One-Family Houses. Yet More Proof of the Super Depression, Ongoing since the 2007-08 Crash.

2022-08-24T06:29:00.003-07:00

Today, in my feeds, came this by Wolf Richter of Wolf Street, Sales of New Houses Collapse (in the West by 50%!) Inventories & Supply Spike to High Heaven, Worst since Peak of Housing Bust 1

The whole article is a worthy read, but this graph stands out.

Sales of new, one-family houses plummeted to one-third of sales (300,000, 2010-2012) of where sales were after 9/11 (900,000, 2002), right before Federal Reserve bankers pumped up the residential realty bubble by allowing commercial bankers to make No Doc loans. Sales today are only 56% of that 2002 figure.

The Secular Trend Indictment

Yet, it is even worse than that if you account for the secular trend, i.e., population growth. For a true assessment, those sales points ought to be divided by the population to remove the effects of population growth.

The 2002 USA population was 287.6 million. Today's population is 332.4 million. Thus, population grew 15.6%. Housing sales rate ought to have grown by the same amount from 2002, which would have 1.040 million new one-family houses sold annually.

Instead, roughly half the amount of houses are being sold at that is after a two-year juicing of the residential realty market with Fed Res bankers buying up over $1.3 trillion in mortgage-backed securities between 2020 and early 2022 while having kept interest rates artificially low during that buying period.

Failure of Quantitative Easing

All of the chattering about whether or not the USA economy is in recession is foolery. The USA economy has been in a full-blown economic depression since the 2007-08 crash.

Federal Reserve central bankers led by chairmen Bernanke, Yellen and now Powell, have been struggling in vain for fourteen years to manipulate banking and hence credit to restore the economy to normalcy. They have failed, repeatedly.

Quantitative Easing does not work. It has not worked in Japan since 1989 (see the TDJ's LOST DECADES ARE BECOMING THE LOST QUARTER CENTURY WITH ABENOMICS) and it has not worked in the USA since 2002.

So Much for Quantitative Tightening in 2022. Chairman Powell and Federal Reserve Bankers are Failures. Quantitative Easing Ought to be Restricted by Law.

2022-08-18T09:30:00.003-07:00

The Federal Reserve has managed only to shrink its US Treasuries balance sheet a tad. Fed Res bankers claimed they would shrink their recklessly formed balance sheet by $95 billion a month starting 1-June-2022.

Well here we are, two months later. The balance sheet has come down only −0.87% with respect to US Treasury holdings. That is not even one percent! Fed Res bankers actually have added 0.374% more mortgage-backed securities to their balance sheet!

Source: Federal Reserve, 18-August-2022

What most fail to see is this: If the US economy functioned properly and if the US Congress functioned properly, the dollar sum for US Treasury new issuance and new issuance of mortgage-backed securities on the Federal Reserve balance sheet would be $0.

Fed Res bankers claimed they would decrease US Treasury holdings by $60 billion a month and mortgage-backed securities, typically underwritten by corporations of Congress, Freddy Mac and Fannie Mae by $35 billion a month.

Chairman Powell and his supporting cast of Fed Res bankers lack credibility.

At this point, there ought to be laws that prohibit the Federal Reserve from running a balance sheet greater than a few percent of GDP, perhaps no more than 5%. Right now, the Fed Res balance sheet is 38% of current dollar quotation GDP.

How could anyone rationally believe the US economy is normal and has been normal since 2008 when the Federal Reserve has been responsible for the equivalent of 38% of the current economy?

The story of Japan since 1989 easily could predict what would happen to the USA. I told readers of the True Dollar Journal that story in LOST DECADES ARE BECOMING THE LOST QUARTER CENTURY WITH ABENOMICS way back in 2013.

From that work, here is my indictment against Quantitative Easing. QE is what failed governments do.

Bloomberg Commodity Index - More Proof of the Super Depression, 2009 - 2022

2022-08-06T16:43:00.006-07:00

Recently, there has been a dust up over the definition of recession. The Joe Biden Administration team were out in full force denying the US economy is in recession in spite of real GDP declining now for one-half of a year.

Never mind the 2022 recession. Americans have been living through an economic depression since 2009, , which followed the 2007-08 economy crash. I have named the long depression, the Super Depression

Elsewhere on the True Dollar Journal, I have shown you this truth with these works:

Now, though, I wish you to focus on this chart first. The chart plots the data of the Bloomberg Commodity Index.

According to Wikipedia,

The BCOM tracks prices of futures contracts on physical commodities on the commodity markets. The index is designed to minimize concentration in any one commodity or sector. It currently has 23 commodity futures in six sectors. No one commodity can compose more than 15% of the index, no one commodity and its derived commodities can compose more than 25% of the index, and no sector can represent more than 33% of the index (as of the annual weightings of the components).

During economic expansions, commodity prices ought to rise and rise faster toward the top of an expansion. In the quest for profits, firm operators become willing to pay most any price asked to acquire the commodities needed to produce their products as commodities supplies become squeezed. Firm operators will take out loans to do so.

Yet, since market prices always are quoted in then-current dollar quotation, the total of currency in circulation matters.

From 2004 to 2013, or nine years, currency doubled. From 2013 to 2020, or seven years, Federal Reserve bankers doubled currency again. In only two years, from 2020 to 2022, Federal Reserve bankers managed to increase currency by one-and-one third times.

In times before, it took longer for Federal Reserve bankers to double the currency. It took 11 years for the doubling between 1970 to 1981. After the Paul Volker-Federal Reserve reset against inflation, it took 15 years for doubling to happen between 1981 and 1995.

So if there is a long decline in commodity prices as we see between 2011 to 2020, we can be sure the economy has been contracting. While it is true that commodity prices rose between 2009 and 2011 and again between 2020 and 2020, those blips happened not because the economy was near prosperity tops both times. Rather, a sudden dump of dollars in circulation along with checking account credits, i.e., rapid inflation, led to rapid commodity price rises.

In spite of increasing the currency between 2011 and 2020, Federal Reserve bankers could not halt the decline in commodity prices. The decline came owing to a contracting economy over a long stretch.

For a brief on the Powell Stimulus Inflation, see my work, Central Bankers Credit Scores Are Falling Fast Hence the Major Rotation into Commodities by the Prudent.

Amazon Versus Dollar Tree, A Tale of Two Stocks, or Indicators of the USA Economy

2022-07-21T08:42:00.005-07:00

Is commentary needed? As Americans feel the effects of $8.9 trillion in hyper-inflation by the Federal Reserve, aka Quantitative Easing, or what is the buying of new debt issuance of Congress by whipping up checking account credits ex nihilo, Amazon has tanked while Dollar Tree has rocketed.

This should be clear as to why. Amazon sells products in all kinds of prices, from tens of thousands of dollars to a few dollars while Dollar Tree sells household goods, mostly, priced at one US dollar or at most one and a quarter US dollars.

As Americans struggle to survive under the Biden Administration, which at every turn shrinks supply and thus pushes prices higher, they are switching where they shop.

Dollar Tree

Amazon

Quantitative Easing and the USA Super Depression (2009 to 2022 and Beyond!). Taking Away QE Exposes the Depression Already Here.

2022-06-24T09:56:00.005-07:00

Yesterday, I came across this work: Powell Hikes Herald “The Minsky Moment”. This is a good read and you could learn much in 5 minutes. Yet, there is so much more to the story.

The USA has been in economic depression since 2009. QE merely has papered over the decline by making current dollar quotations higher for equities.

Yet, because of lockdowns, QE dollars went into things rather than stocks and bonds. That made the inflation (QE) obvious.

If they economy had been growing, there would have been no need for Quantitative Easing.

Now, taking away QE, it should be clear that we're in an economic depression that is only going to get worse. Prices will remain high for a long time until all people who should go bankrupt in fact do.

That is going to to take years. Likely though, the Fed Res will not let that happen. But on lower output, the next round of QE will increase prices again since goods output will not grow to match.

ASEAN, India, China and De-Coupling

At some point, as ASEAN countries with favorable demographics continue to grow and continue to integrate with aging China (soon to be #1 economy), aging Japan, and aging Korea, and with upcoming integration with growing India (#3 economy), all of these countries along with other RCEP members Australia and New Zealand will de-couple from the USA-US Dollar system.

So too will oil exporters from the Middle East move toward settling oil in something other than dollars, perhaps Rupees or Yuan. Russian oil and natural gas will continue to flow into East Asia, South Asia and soon Southeast Asia.

The end of the USA as a world power might be closer than one believes.

Where Should You Bet Your Dollars? What are the Best Markets Right Now? Stocks Versus Commodities.

2022-06-22T14:00:00.007-07:00

We get hit with way too much propaganda and not enough honesty, whether from Federal Reserve Chairman Powell, Treasury Secretary Yellen or countless TV pundits.

Of course, people like Powell and Yellen are rather corrupted individuals, co-opted by the system they work to protect that benefits those at the very top, the so-called one percent of the one percent.

Excessive inflation done by the Federal Reserve both under Yellen when she was chair and Powell, through the evil of Quantitative Easing, first caused a long bubble in stocks, which began to burst on 7-November-2021. Because of that burst, trillions of dollar currency growth, the result of that QE inflation, has found its way into commodities of all kinds, but mostly oil and natural gas.

From the 2009 Low to the 2021 Peak

Wilshire 5000 in Ratio Scale

Rightly, one way to look at things is from the March 2, 2009, low of the Wilshire 5000 to its last peak November 7, 2021. To make for a comparative analysis, I have turned prices into index numbers.

Table as of 23-June-2022

For the live table, jump to the end.

Defensive Versus Offensive

The table gives you an idea of how to play defensively or offensively.

The strongest defensive plays include these: agricultural commodities, commodities broadly, energy, energy producers, gold, oil, oil and natural gas producers, utilities and to a lesser extent, base metals, oil and natural gas services providers, consumer staples.

The strongest offensive plays include these: Internet-based products providers, semiconductors, technology broadly, consumer discretionary, biotechnology.

Live Table

Since the peak, the bets yielded the biggest losses would have been on Internet related stocks.

The best bets would be on energy commodities such as oil and natural gas followed by commodities, broadly, which includes the effects of energy commodity prices, and the producers of energy commodities.

Anything tech related can be viewed as a discretionary consumer product. That includes green energy. Green energy is little more than a luxury consumer product.

As you can see, financial firms, industrial firms, and telecom firms fall in lockstep.

Relocate in the USA for 2022. State Income Taxation Thoughts.

2022-06-19T13:05:00.001-07:00

The states highlighted in purple lack state income taxes. So all other things being equal, you are better off living in one of these states relative to all others.

The average hourly wage is now $31.85. That comes to $66,248 a year. Are the other states worth premiums? That is a question one must ask oneself.

So what happens once we calculate state income taxation and sales taxes? For the sales taxation calculations, it is assumed someone would spend half of his or her income subject to income taxation, if any, with the sales tax portion taken from the stash of income net of state of taxation and taxation to Congress since the other half gets spent fully.

Average Wage

One and Half Times Average Wage

Two Times Average Wage

Bitcoin in 2022 is a Massive Failure! The Bitcoin Crash Continues. Bitcoin Heads Toward $0 and Not $100,000 as Touted by Many Since 2021.

2022-06-17T05:47:00.002-07:00

Bitcoin has failed. It was touted as digital gold, as an inflation hedge, i.e., a way to store the buying power of past earnings.

BTC is merely a device mostly to buy and sell illegal drugs and prostitution tricks along with some time-insensitive transactions in countries with even worse inflation policies than the Federal Reserve.

The 7-Nov-2021 peak was $67,566.83. BTC is now down -68.9%! If It were an inflation hedge, it would be rising after every release of CPI report by the Bureau of Labor Statistics. Rounded up, that is a 70% drop in only 218 days or roughly 6/10ths of a year!

A comparable drop over the next 218 days would get the price down to $6,530.

Back on 8-April-2022, I wrote that Bitcoin was massively overpriced at its price of $43,356.26, which was more than double where it is today (See: Bitcoin (BTC) is Massively Over-Priced in 2022. BTC Still is Not Digital Gold. Where is the Ukraine-Russia War Premium? The Speculation Range for Bitcoin). In the article, I gave you readers a price closer to $4,367.62, as a realistic price for BTC and a trading range to watch for buy and sell signals.

Blockchain tech has a future in commerce. The digital representation of property, i.e., the right of ownership, in uniform, graded things, which then can be traded on organized exchanges, makes sense.

Yet, unless there would be worldwide government collapses and the end of commercial banking with their respective protectorates, central banks, there is little reason for cryptocurrencies, except for illegal activities.

Any worldwide collapse where Bitcoin prevails must be predicated upon electricity still being generated and firms that provide the Internet still running. That seems unlikely, except, perhaps for Elon Musk's Starlink. Individuals still would need to generate their own electricity to power their own computing equipment and Musk's Starlink would still need to generate electricity to power data centers that operate the Starlink system.

Central Bankers Credit Scores Are Falling Fast Hence the Major Rotation into Commodities by the Prudent

2022-06-12T08:02:00.004-07:00

Today, I listened to a rather clever fellow, David Murrin, ax ex-JP Morgan trader and current hedge fund manager talk about the current state of economic affairs and possible futures. This is worth a watch / listen.

Murrin is a proponent of collective behavior. Yet, Murrin has fallen for an illusion.

No man lives in the head of any other man. All behavior is mind-localized to individuals. Even in mobs, as there is one snowflake that kicks off an avalanche, so too there is one leader, that kicks off a chain reaction of mimicked behavior.

There is no doubt a biological component that prompts individuals to mimic nearby others so as to generate a safety-in-numbers result. Yet, that does not justify a belief in collective behavior as one individual in a herd can be killed off only one at a time and once one gets killed, the others continue to run free.

People tend to look closest to see what the nearby guy is doing and they mimic. With the advent of mass media, it becomes easier to expand the scope of what is seen as the nearby guy. When the players of mass media concoct a nearby guy for their purposes, we call that attempting to forge public opinion.

Always, there are some who hit upon the notion that being the leader being mimicked can be profitable relative to the ones who follow. And so those leader types become deceptive in outward appearance by design so as to lead followers to give up more of their right of ownership (i.e., property) in possession most often (i.e., chattel), in trades of property for property.

Inflation is credit score of central bankers. The higher the inflation, the less creditworthy central bankers are and their member bankers are.

Irredeemable bank note currency long ago replaced money (i.e., coined metal by weight and fineness). Money always had been the highest form of credit (i.e., it is a claim against the property of others who are yet unnamed or unknown). Today, banking systems' bank nots are the highest form of credit.

As central bankers inflate excessively, it becomes clear. Their credit worthiness can not be trusted. Smarter ones begin to see that property already traded away to take on bankers' credit was given away too cheaply.

Thus smarter people seek to pass off this unworthy generalized credit for property in real things, which have been recognized as things that people will need in the future to survive or to enhance themselves. Hence there is a scramble to trade away dollars for commodities, with oil and natural gas being the kings of commodities and particular crops such as wheat running close behind.

Under the current global trade regime that has trade settlement for commodities happen in U.S. dollars, other bank note currencies first must be swapped for dollars. Hence, these other generalized credit bank notes become worth even less in trades first for dollars since dollars have more worth being the trade settlement currency, which fewer people wish to hold as they scramble to buy real things, such as future claims on natural resources.

One must keep in mind also that as tens to hundreds of millions become unprofitable, i.e., their labor based on their skills becomes not sought after, their ability to trade their property in their work through time, i.e., labor, for property in other things, falls. That means those who produce other things will fall as there are ever fewer people with whom to trade. As this goes on, those who are inefficient at producing other things even in the face of rising prices being returned to themselves will go to ruin. The Axiom of Profit always holds sway—the sum of sales must at least break even or the producer goes to ruin.

Of course, the sum of sales is the summation of price times quantity. If quantity is falling faster than price is rising, sales will fall. Beyond the break even point, loss happens.

So even the production of sought-after commodities will fall eventually as many less efficient commodity producers eventually become inefficient ones since the quantities sought fall on rising prices. Those inefficient producers will go to ruin. Hence, far-seeing individuals now seek property (right of ownership) in commodities that in future, the fewer others who still have the means to bid, will seek.

The rotation out of generalized credit (bank credit) and risk credit (expected future earning power of firms fractionalized as shares of stock) and into real things, i.e., commodities of highest expected worth, will go on until too many get priced out of buying those real things. Eventually, those with property in real things will need to accept lower winning bids so they can gain generalized credit to buy property in things they wish to possess.

However, the time by which all of this winds through can take years, maybe at least a decade ahead.

Actually, Inflation was Highest Between 2020 and 2022 After Record Inflation Between 2009 and 2019. High Prices are the Effects of Years of Inflation.

2022-06-11T07:29:00.002-07:00

It is all over the news. Inflation is at a 41-year high (see: U.S. Inflation At Highest In Four Decades As Fuel Prices Soar). Yet, that is not the truth. The current dollar quotation prices of many items might be at 41-year highs, but inflation happened first and for a long time, between 2009 and 2019 and again between 2020 and 2021.

The high prices now are the effects of inflation. Inflation means a rise in circulating bank credit, i.e., in US dollars whether in wallets or in demand deposits, e.g., checking accounts. Rising prices does not mean inflation. Prices are effects and not causes. Prices can not cause themselves.

The Federal Reserve and Congress have colluded to inflate the currency since 2009. They did so because Americans entered into the Super Depression in 2009 after the Great Crash of Late 2007 into 2008.

Here is the true picture of inflation:

Federal Reserve - Congress inflation added $8.6 trillion in circulation but failed to add $8.6 in new goods and services over the same time.

Between 2009 and 2019, the effect this inflation, known as Quantitative Easing, went into stocks. Between 2020 and 2021, the effect of Quantitative Easing inflation went into house prices.

Since 2021, the effect of Quantitative Easing inflation has been to go into food prices and energy prices.

Always remember. Inflation is the cause. Rising prices is the effect.

Notice how everyone enjoyed inflation when stock prices were rising and hence their 401ks were rising. Now that food and energy prices are rising, which is causing stock prices to fall, people are whining about the very same inflation they once cheered about.

Supposedly, inflation is supposed to slow down as the Federal Reserve has promised to stop buying mortgage-backed securities and US Treasury bills, notes and bonds. We shall see.

Gallup Confidence Index Versus True GDP

2022-05-31T10:22:00.003-07:00

The Gallup Organization Confidence Index is a fairly good proxy of the state of the economy, at least for all years except the era of massive Quantitative Easing. That stands to reason as QE hides true prices and hence the true state of affairs.

Hollywood's Television and Internet Streaming are Superfluous. So Why Is There No Carbon Tax Imposed On Such Things?

2022-05-27T09:35:00.005-07:00

Yesterday, oilprice.com reported about yet another politicians' driven scheme to tax bogeyman firms for the production of their products, in this case, steel (see: How Would A Carbon Tax Impact The Steel Industry?).

There is talk always about imposing carbon taxes on necessary goods, you know, steel to make girders to make buildings, or to make car bodies, or oil and natural gas, to fuel cars, heat homes, cook food.

Have you noticed ever that "sin" taxes always get called for their imposition by Hollywood and New York news propagandists upon things, which such propagandists turn into sins through their visual imagery and story telling? Where carbon taxes ought to be imposed are upon the production of superfluous goods, you know, like entertainment. No one needs paid entertainment to survive. Everyone needs sufficient food, warm or cool houses, clothing and the like. People need transportation as well.

If there is to be righteous carbon taxation, such taxation should fall upon all things superfluous, such as television broadcasting and television receiving, Internet streaming, paid admission sports, whether professional or at the university level, paid admission to movies as well as Broadway plays, luxury yachts, luxury cars, recreational vehicles, video game consoles, video games and so on.

Of course, many claim, rightly, that if you tax something, you get less of it. Well good then. If carbon truly is an evil and truly there is man-made global warming, then all things not needed to sustain life ought to be taxed.

The Big Lie that global warming needs to be ended. Simply, it is not scientific to claim the existence of global warming much less man-made global warming. For the indisputable scientific proof of the non-existence of global warming, see my work here on the True Dollar Journal: IN 2020, THE 'MAN CAUSES GLOBAL WARMING' FALSE ACADEMIC PREACHING MUST COME TO AN END. WORLDWIDE LYING MUST STOP FOR MANKIND TO RESUME ADVANCING AND PROGRESS

Accelerating Average of Cars and Light Trucks Since 2001 Reveals the Hidden Super Depression

2022-05-26T10:32:00.006-07:00

A few news outlets have reported the average age of cars and light trucks hitting an all-time high of 12.2 years (see: Average age of cars on U.S. roads hits 12.2 years [Yahoo!].

This ratio chart (semi-log scale) reveals much. The source data comes from Average Age of Automobiles and Trucks in Operation in the United States [Bureau of Transportation Statistics].

You need not know much about logarithms. With the ratio chart, the steepness or slope of the line is an exact measure of the rate of change in the data.

Between 1995 and 2001, the average age of light vehicles rose likely as true prices rose owing to increased credit put into car loans, which let car loan terms increase from three years to five years and more.

Yet from the 2001 crash until today, 2022, there has been great acceleration in the average age of light vehicles. This is owing to Super Depression, which the Federal Reserve managed to keep from the minds of people through its massive quantitative easing.

This evidence supports the True Dollar Journal's True GDP chart, which shows the economy has been shrinking since Q4 2007.

Federal Reserve central bankers were quite clever with their Quantitative Easing, papering over the decline with the majority of that QE going into stocks until late 2021, but no longer can the Fed Res keep up the charade.

Many recent articles here on the True Dollar Journal have proven the existence of the Super Depression.

Natural Gas Prices Now at 2008 Levels. Abusive EU and USA Political Classes Whine to the World.

2022-05-25T10:15:00.004-07:00

Natural Gas Situation

The folks at oilprice.com report to their readers that natural gas prices have hit 2008 levels (see: U.S. Natural Gas Prices Hit $9 For The First Time Since 2008). Natural gas forward contract first hit the $9 price range way back in 2000, at near peak GDP from the so-called Dot Com bubble , or Greenspan's 1994 to 1999 Great Inflation.

One should be little surprised that natural gas prices have reached 2008 levels, right when the US economy had past a True Dollar GDP peak. For fourteen years, prices have been incredibly low owing to the Super Depression.

UNG ETF

The UNG ETF is up 76% over six months as well as being up 141% year-to-date. Likely, what is driving this price is the foolish scheme of diverting USA based natural gas from the US to the EU, Japan and South Korea through the energy-intensive conversion to liquified natural gas (LNG).

Oil Situation

Next up, the rather abusive EU and USA political classes are begging oil nations to cut their income, so says Hellenic Shipping (EU, United States pushing for global fuel production increase – Scholz). Yet, why should oil producing countries meet such demands?

There is much oil in the USA as there is natural gas. The political class in the USA has hooped themselves with a phony man-made global warming story.

So if they greenlight production and refining in the USA, both of which no smart oil firm exec will do unless there is a sustained return on capital for years, years of their global warming story falls apart.

Yet, since USA political class has made out oil firms to be the bogeymen, the scourge of mankind, smart execs likely will ignore pleas from the USA political class.

USO ETF

The USO ETF is up 65% over the last six months and 50% year-to-date. As long as world demand grows and as long as supply relationships remain turbulent, likely, oil has further to run.

What Stocks and ETFs are Telling You in 2022 About the Ongoing Super Depression

2022-05-18T18:47:00.011-07:00

Stock Markets: The Self-Organizing Fortune Tellers

The continual buying and selling of stocks on the NASDAQ and NYSE by specialists, which is done by traders in the pursuit of profit, is done to adjust the price of capital of firms to expected revenues to be produced by firms. The action of millions of traders results in the spontaneous organization of something that we call the stock market.

While no individual typically has the skill to predict future events, the spontaneously organized stock market can. It is by this that stock markets are known as discounting mechanisms. Stock markets adjust spot prices to reflect future business conditions. If stock markets did not do so, there would be no way to profit from owning stocks that would be sufficiently high enough to keep people from doing other things.

Thus, the stock market furnishes expert opinion as to the price of securities. This summed opinion lacks basis in business conditions right now. Instead, the collective opinion is a best estimate on future business conditions not yet known by the wider public. This discounting is the expression of group judgment rather than of individual judgment.

After all, to profit, one must sell higher than what one has paid. Today's spot price lets anyone buy future results at a discount, whether buying long for what should be a rising market or buying short in what should be a falling market.

ETFs as Indicators

Likely, ETFs are superior indicators to individual stocks since ETFs tend to be constructed from a bundle of stocks or contracts often that track indexes. Some stocks, however, tend to act as canaries in coal mines. When we take a few representative stocks from each industry, we can assume that not all are poorly run simultaneously when prices run alike in the same direction.

The Future of the Consumer

Retail

Residents of the USA (are there citizens anymore?) seem to be the drivers of the U.S. economy. Between 2000 and today, consumers are responsible for two-thirds of GDP.

If we would like to speculate upon the future state of the economy, we ought to bet on the expected future state of consumers?

Retailer ETFs and retailer stocks that might be our fortune tellers to the future that are telling us about where consumers will be in the months ahead. When the personal profit horizon gets worse for consumers, they spend less on luxury and other purchases that are not needed for survival.

Keep in mind, the current dollar quotations are irrelevant. Forever ongoing inflation, i.e., bank credit whether in bank notes or as book credits known as demand deposits, will forever distort current dollar quotations. What we should focus upon in the percentage change.

Also, most everything peaked at year end 2021 owing to massive quantitative easing between 2020 and 2022, which Federal Reserve central bankers have vowed to stop in 2022.

As you will see in the following charts, the expectation of the future is a smaller one as prices are down between one-third and two-fifths, roughly, year-to-date, which is a fairly good proxy for the peaks of stocks traded in the USA as most peaks were hit between late November and December of 2021.

Both retail and online retail are down significantly. ETFs and stocks like Amazon are telling us that consumers will have much less buying power in the months ahead.

Keep in mind that not only homeowners shop at Costco for bundles of toilet paper, but also small restaurateurs shop at Costco to supply their businesses. What the revenue distribution is between the two groups I know not. Either way, the future looks like Costco will earn less revenue even on higher prices.

Target sells small appliances and clothes, more or less. The expectation is that Target will sell less while selling what it sells on higher prices.

The Home Depot is where USA residents go buy major appliances, replacement windows and doors, garden supplies, battery-powered power tools and all kinds of replacement hardware for repairs.

The Emles Home Lifestyle Index focuses upon firms that sell products and services for home activities. The future appears to be one where persons spend less on goods and services that are not needed to survive.

Gambling is a kind of entertainment for many. The future looks like one where Americans will spend far less on entertaining themselves.

When the going gets tough, people spend less on luxury goods. Rising prices that rise faster than wages make people cut spending on pleasurable things so they can buy things that help them survive.

Cars and Trucks

The wisdom of the crowd appears to tell us that consumers will buy far fewer cars and trucks in the near future.

New Houses

It would appear that the sales of new houses will be fewer in the near future. Current mortgage rates are at recent highs hovering over 5.5% and rising.

Retirement Purchases: Stocks

Many would fail to look at it this way, but when wage earners have profits, i.e., when their wages exceed their cost of living expenditures, wage earners then can buy consumer discretionary goods or they can buy stocks, bonds, and the like.

KCE and IAI focus securities brokers and dealers, asset managers, online brokers, and securities or commodities exchanges.

Federal Reserve, Or, Who is to Blame

Since 2000, Fed Res central bankers have engaged in the most egregious interference in the USA economy with their Quantitative Easing. In the early years, the Fed Res bought up less than one trillion of US bonds and notes. Yet, since 2009, Fed Res bankers, in effort to mask an ongoing depression or what I call the Super Depression, have bought nearly $9 trillion in US notes, bonds as well as mortgage-backed securities.

In short, we have been living through a Super Depression. See my works on the most important subject: True Dollar Journal Super Depression.

Wheat Prices are Scorching in 2022. Top 10 Exporters Russia, Ukraine and India are Off-Line.

2022-05-16T07:36:00.007-07:00

The other day, the government of India announced an export ban on wheat. Indian farmers were in the top 10 of wheat exporters in 2021.

Already, wheat exports from Russia and Ukraine have been taken off-line. Russia is the number one exporting country and Ukraine is number five. Combined, Russia, Ukraine, and India account for one-quarter (24.7%) of the world's export supply of wheat.

Another one-fifth (22.1%) of world wheat exports come from EU member states (France, Germany, Romania, Bulgaria, Poland, Lithuania, Hungary), which now are boycotting Russia and Belarus products fertilizer. Russia is the world's biggest exporter of fertilizer (12.6% in 2020) and Belarus is the sixth biggest exporter (5.2%).

Wheat likely will be a good bet going forward, at least until six months after hostilities in Ukraine end.

The Tide is Ebbing and Bitcoin Looks Naked in the Water

2022-05-09T09:00:00.001-07:00

Bitcoin maximalists of g/bitcoin on Gab blocked me in late April because I predicted a crash was coming for Bitcoin and it came. Already back then, I proved way back then that Bitcoin IS NOT an inflation hedge.

Bitcoin is speculative foolery, like tech stocks that promise a bright future but lack profits and often have weak sales relative to head count.

As stocks are crashing so too Bitcoin will crash that is, as long as Fed Res central bankers stop buying US Treasury instruments and thus stop their Quantitative Easing super inflation.

Earlier in another work on the TDJ, I estimated of the worth of Bitcoin in 2022 (See: Bitcoin (BTC) is Massively Over-Priced in 2022. BTC Still is Not Digital Gold. Where is the Ukraine-Russia War Premium? The Speculation Range for Bitcoin). Based on the sales of illegal activities world wide, a fair estimate for BTC is nearer to $4,367.03. The article goes through the reasoning for that price. You should read it.

Also, that work has links to my original prediction / crash article of 2021.

The long run price of BTC is far closer to $0 than it is to $100,000. If blockchain tokens are here to stay, the winner will be one atop of a smart blockchain with super fast transaction times to support transaction flow through that competes with ATM / credit cards and is based on Proof of Stake or a new consensus mechanism not yet devised.

Bitcoin has none of those features. BTC settlement is painfully slow. BTC runs atop a on-programmable blockchain and hence it is not a smart blockchain. Consensus is done by Proof of Work, a process that governments are looking to ban owing to the electricity requirements for it.

The crazy run-up in BTC price especially from 2018 until now came strictly from an inflow of institutional bettors funded by expectations of continual quantitative easing. Once those QE stimmy dollars began flowing into goods rather than speculative instruments, the reality of the future poor state of the USA economy began to sink into the minds of professional speculators.

As long as there is a market of dollars for BTC, BTC will have a price. What that long run price will be likely will look far different than what it has looked like between 2019 and 2022.

There are some lucky ones who tossed $10 in BTC back in 2010 and who sold at the top near $63,000 thus making them actual millionaires. Then again, some people became rich on speculation on Beany Babies in the 1980s.

Now, if Fed Res central bankers abandon their effort to end quantitative easing, you can expect a resumption in the rise of the price BTC along with its usual margin-driven speculation inner cycles. As always though, current dollar quotations are far different than buying power. Likely, $45,000 one year from now will buy much less than $45,000 right now.

How Many Dollars Should Exist? Do You Know? More Proof of the Super Depression!

2022-05-08T18:04:00.004-07:00

The publisher of the December 1916 issue of the Bankers Magazine published an editorial opinion titled, Our Swelling Circulation. Here are some clips from that article.

Not three years after the passage of the Federal Reserve Act were Fed Res central bankers already causing mischief in the economy.

Currency Inflation

As you can see, there has been a ridiculous swelling of currency, i.e., dollars in circulation along with demand deposits.

This first chart is a semi-log chart, which also is known as a ratio chart. It took 19 years for dollars per American / American resident to double, between 1959 and 1978. It took 16 years, between 1982 and 1998, for dollars per person to double again. Between the 1999-2000 crash to all-time peak True GDP in 2007, dollars per person rose only 15.75%.

After which, it took only seven years for dollars per person to double between 2007 and 2014. By then Fed Res central bankers began the foolish policy of quantitative easing. Fed Res CBs doubled the currency yet again in only six years.

Yet, such efforts have been folly as you will see in the next chart. The more dollars Fed Res CBs pump into the economy, the more it shrinks.

True GDP Each Dollar of Currency

And dollars of True GDP to currency has been falling. True GDP removes the effects of inflation, i.e., bank credit.

"Real" GDP versus True GDP

The US government's Bureau of Economic Analysis publishes Real GDP numbers. Those numbers are fake because the BEA minions use past inflated GDP to deflate currently inflated GDP. That, of course, is like trying to measure a growing line with an ever expanding ruler.

The USA economy has been collapsing since the crash of 2007-2008. If this were not so, there would have been no reason why Fed Res central bankers have bought over $8.5 trillion of US Treasury notes and bonds along with mortgage-backed securities of US government sponsored enterprises like Freddy Mac and Fannie Mae.

Doing so has allowed Congress to spend many trillions into the economy, in effect, swelling the currency per person especially at the wrong time, during the politicians-imposed lock downs that caused supply chain shortages for what will end up being a fake pandemic over a rather benign virus that has no known killing mechanism unlike viruses like ebola, meningitis, hepatitis and so on.

During 2020 and 2021, the Federal Reserve central bankers should have imposed strict reserve requirements and should have jacked up interest rates so that people could buy little except what was being produced, food and energy.

This at least would have froze the growth of inflation, which always means the rise of bank credit.

Fed Res central bankers should have done nothing during the 2007 - 2008 crash. In their effort to save big banks and hence the richest people in the USA from ruin, through Quantitative Easing, Fed Res central bankers have ruined the USA.

Ideally, there would be no Federal Reserve. Their bankers do not understand the system, which they attempt to micro-manage.

You better buckle up because we are going to be living in an economic depression worse than the so-called Great Depression. Already, we have been living in it since 2009. Most do not know this truth. They will come to know it in the coming year.

If you are smart, you will buy whiskey, ammo, rice, flour, anything that you can store for months into years. Your dollars will become increasingly worthless as it is. Whiskey is something you can trade. Stock up on beer too. You can trade cans of beer for other things.

Likely, the 2020s will be a decade of rising prices and falling buying power. The inflation already baked into the poisoned pie that is the economy assures of this. Keep in mind always, inflation is the cause. Rising prices are the effect. Rising prices result from inflation. Rising prices never cause inflation because nothing is causal for itself.

Super Inflation

Between 2020-2022, the Federal Reserve engaged in Super Inflation, or what used to be called hyper-inflation. We are seeing the beginning of the effects of this Super Inflation.

A fiduciary monetary system of irredeemable bank note currency has proven itself to be a disaster. A return to money, i.e., coined metal by weight and fineness, even under a system of multiples of reserves commercial banking would be prudent. This time though, rates of interest ought to be set by speculators in futures markets rather than by a round table of self-important moronic stooges who are puppets of major multi-trillion dollar NYC banks and a handful of multi-trillion dollar investment fund managers.

You are Living During the Super Depression. Did You Know It Started in 2007? It is About to Get Much Worse.

2022-05-04T21:13:00.004-07:00

Most find this truth hard to believe. It is well-known that it is far easier to lie to many than to convince many they have accepted big lies. This is so because no one believes he or she is gullible.

Yet the numbers do not lie. In True Dollars™, GDP has been in decline for a long time, since the all-time peak of GDP, which happened in Q3 2007.

After all, tent cities have sprung up over the years in the USA (see: LIST OF TENT CITIES IN AMERICA and List of tent cities in the United States). Those who study the matter are now calling these tent cities as permanent shantytowns (see: LA 'Tent Cities' Becoming Shantytowns, Expert Says).

Many will refuse to believe this truth. Yet, when asked why did the Federal Reserve need to buy any US Treasuries much less $8.5 trillion with a 't' dollars worth since 2009 (see: What Has Caused the 2021-2022 Inflation in the USA? A Shocking $8.5 trillion of US Treasuries and Mortgage-Backed Securities on the Federal Reserve Balance Sheet. Will Quantitative Tightening Ever Happen?)?

There was no recovery under either Obama or Trump though there were short advances under both presidents. Since Biden, the economy has taken a sharper turn downward.

Now, as Fed Res central bankers begin raising the Fed Funds Rate and since they began their sell-off of mortgage-backed securities, anyone should expect the collapse of the latest residential realty bubble to drag the economy downward. This time though, FRCBs will not mask the decline. Hard times will become revealed at long last.

Log Scale True GDP

Socially-Promoted Female Cathie Wood, Touted as a Stock Genius, Has Been Exposed as Bungler

2022-05-01T20:21:00.003-07:00

All kinds of financial media kept spewing a woman's name, Cathie Wood. That right there tipped me off that whomever she is and whatever she was doing, I should ignore her.

All the same, eventually I discovered that she runs ARKK, a fund that speculates in stocks that Wood believes are stocks of firms, which will become innovators. Certainly, right now, such firms are not innovators.

What is Innovation?

Innovation is something new, novel, never before in existence that changes consumer behavior permanently. At one time, electricity and telephones were innovations. The cell phone and the smart phone were not innovations. Such things have been enhancements, advances but not innovations.

ARKK vs SARK

Wood started her ETF during the era of massive Quantitative Easing done by Federal Reserve Central Bankers. Anyone could seem to be a stock genius during that era.

This genius firm introduced an inverse ETF that reverse mirrors what Wood is doing with ARKK. Personally, I would have called it SNARK.

The winning move right now is to be in SARK, not ARKK. Cathie has made some people angry.

The Federal Reserve is Killing the Residential Realty Market. Builder Stocks Likely are Overpriced by 100%!

2022-05-01T10:19:00.001-07:00

A quick look at the Fed Res balance sheet shows a $15 billion sell off for the week in mortgage-backed securities. Combined with forthcoming promised Fed Funds Rate rate hikes, the effect will be to crush residential realty.

Should Fed Res central bankers (FRCBs) liquidate fully their position, it will take them about three and half years to exit the mortgage-backed securities market. Thus, one should expect at least four years but more likely six to ten years before normal-functioning mortgage markets and house-building resume.

As well, one should expect the stocks of house builders (wrongly called "home" builders) and building supplies retailers to go down for years to come.

Obscene Stock Prices

When you look at the curves below, what you should see are obscene spikes in stock prices since 2011 when FRCBs floored the accelerator pedal on quantitative-easing with hyper-inflationary buying of US Treasury notes and mortgaged-backed securities.

Even during the Greenspan Great Inflation of 1994-2000, at least prices rose in accordance to authentic economic activity. Yet, by comparison those price rises were modest compared to the 2011-2022 Quantitative Easing Deception.

Builder stocks have been juiced twice by FRCBs and Congress, first during the No-Doc loans engineered residential realty bubble between 2001 and 2005 and then from the Great Quantitative Easing Bubble of 2009 to 2022.

Pulte (PHM)

Toll Brothers (TOL)

KB Home (KBH)

House Supplies Retailers

House materials and suppliers likely are no more than $20 to $25 stocks that are overpriced by 1200 per cent!

Home Depot (HD)

Lowes (LOW)

Good Guess of What These Stocks Will Go

Should FRCBs do the right thing and close their positions on mortgage-backed securities as well as US Treasuries, here is where the stock prices of these stocks might head.

The prices come from the lows of 2000 or 2009, normalized in True Dollars and then re-inflated to current dollars, i.e., negotiable bank credits in demand deposits or dollars in circulation.

Amazon Speculators Now Say Future Business Conditions Will Be Worse

2022-04-30T20:27:00.004-07:00

A quick look at AMZN reveals that speculators believe future business conditions can be no better than what existed on 1-June-2020 or right when the Covid-19 lock down hoax went into full swing.

The stock is down -33.4% from its all-time high hit on 8-July-2021 ($3731.41 a share). Perhaps Amazon will be the bellwether of the Super Depression. A honest price for AMZN could be closer to $37.87, a price hit on 21-November-2008, before Federal Central bankers juiced the stock markets with 14 years of quantitative easing that dumped $8.5 trillion dollars into checking accounts without anyone actually producing an increase of goods and services first.