Category: Sexy Economics

Fight Club: A Dystopia We Can Learn From?

“Fight for us.  And regain your honor.” – The Lord of the Rings:  The Return of the King

What’s a robot’s favorite Mexican food?  Silicon carne.

When I was a kid growing up, I read 1984 by George Orwell.  This was the grim version, as opposed to the much funnier version by Mel Brooks.  It had a profound effect on my worldview, as books often do when you read them in 7th grade.  In it, a globalist group of communists fought each other continuously, while subjugating the entirety of the human race.  Hmmm, wait, that sounds familiar?

1984 was a bleak book.  I’m not sure who I talked about it with, outside of writing the chicken scrawl of a report in schoolboy block letters and handing it to my really hot 7th grade English teacher.  Since my reading scores were, well, advanced, she just let me read what I wanted to read while the rest of the class all read the same book.  It felt nice being a special pretty pony.

I followed 1984 with Aldous Huxley’s Brave New World.  I think my teacher suggested it.  Whereas 1984 was a dystopia built on the subjugation of a boot eternally stomping on a human face, Brave New World was a dystopia built on frivolity.

I fell into a vat of chemicals once.  My quick reaction nearly killed me.

Frivolity was where the masses were, more or less, endlessly drugged and entertained and so that their opinions never had a chance to develop, or impaired at birth so they could never think.  The tyranny in Brave New World was the tyranny of a vapid public who never thought beyond the most recent mindless and sexual encounter (strongly encouraged by the state) and the latest movie.

Oh, wait, that sounds familiar too.

Yet another dystopia is the movie (and book) Fight Club.  Fight Club is a 1999 movie based on a 1996 novel that (mostly) tracks the movie.  It is a creation of the 1990s, but, to quote the most excellent YouTube® movie reviewer, The Critical Drinker (LINK, some PG-13 language), it is very relevant to today’s world.  If you haven’t watched this 21-year-old movie and are interested, I suggest you watch The Critical Drinker’s review afterward – he includes spoilers.  I’ll warn you – the R rating was earned, and there are some very dark moments to the movie.

There won’t be any spoilers here – what I have to say doesn’t require me to spoil the film.

Tyler Durden told me handcrafted soap is the best.  No lye.

To really get Fight Club?  You have to watch it at least twice.  It is a thoughtful movie.  Does it have detractors on the Right?  Sure.  It’s R-rated.  Some have called it nihilistic (I disagree) and there are other complaints which I won’t go into here.  Regardless, I won’t beat myself up for going against the grain of other folks who didn’t like the movie.

Very few movies are perfect, but this one is very, very good.

I first watched Fight Club in 2012 or so.  It made over $100 million at the box office, so at least someone talked about Fight Club.  When I finally watched it (which was no fewer than three basement furniture re-arrangements ago) I was stunned.  How stunned?  It’s the only movie that has its own tag on this blog.

Vegan Club?  Everyone talks about Vegan Club.

The constant, pervasive theme of this movie is that the systems of globalism have created boxes for men that make them less than men.  Here’s Tyler Durden (one of the movie characters):

“We’re consumers. We are by-products of a lifestyle obsession. Murder, crime, poverty, these things don’t concern me. What concerns me are celebrity magazines, television with 500 channels, some guy’s name on my underwear. Rogaine, Viagra, Olestra.”

This is a simple translation.  A large proportion of the citizens of the United States define themselves by:

  • How much and what kind of furniture do they have?
  • How nice is their apartment?
  • How well can they write reports in a soul-killing job where large corporations seek to avoid liability in a cold, systematic way?  Does that kill their soul?
  • How can they avoid deviating from the norm to wear the right tie to the meeting?

These things are death to the soul.  As the character Tyler Durden explains:

“You’re not your job. You’re not how much money you have in the bank. You’re not the car you drive. You’re not the contents of your wallet. You’re not your (deleted by J.W.) khakis. You’re the all-singing, all-dancing crap of the world.”

I saw a robbery in an Apple® store once.  I was an iWitness©.

Marcus Aurelius and Seneca nod in approval.  They’d follow up:  you are your virtue.

And you, dear reader, are not your money or your clothes.  In many ways we are conditioned by society to believe that those are the things that define us.  We are not.  And if you believe that, you’re not alone.  Tyler describes the twilight of the soul brought about by a life dedicated to consumerism and status.  Live for the material world, and you’ll be swallowed by the material world.  You can never achieve enough, because someone always has more, does something better.

With that philosophy?  Money becomes the god that men seek:

“Damn it, an entire generation pumping gas, waiting tables; slaves with white collars. Advertising has us chasing cars and clothes, working jobs we hate so we can buy (stuff) we don’t need. We’re the middle children of history, man. No purpose or place. We have no Great War. No Great Depression. Our Great War is a spiritual war.  Our Great Depression is our lives. We’ve all been raised on television to believe that one day we’d all be millionaires, and movie gods, and rock stars. But we won’t. And we’re slowly learning that fact. And we’re very, very pissed off.”

I saw a meme (didn’t save it, don’t have the author but I’d love to credit them) that I (sort of) reproduce below:

Michigan is going to ban car sales based on popular Internet videos – the governor wants to stop car-owner-virus.

This meme gets me.  It’s the essence of Fight Club.  We’re a species that is, more or less, programmed to achieve.  For who?  For our group.  It’s why the NFL® is popular today.  Okay, that’s why the NFL™ was popular until they showed us that we’re really not part of their group at all.

We run races for a reason.  We play basketball.  We wrestle.  We have swim races.  Well, you guys have swim races.  I was in a 100-yard swim race in sixth grade and placed 11 out of 12.  I wasn’t dead last because some poor kid got the cramps.  My 11th place finish wasn’t close.  I think they ended up timing me with a calendar and an abacus.

Regardless, we compete.

Why?

It’s wired into us.  Competition partially defines us.  And the stakes have to be real.  There is, of course, a religious aspect as well.  A man has to serve a higher power.  It’s not just competing for today.  There is a bigger game, and there are bigger stakes.  That’s what makes it worth playing the game.  Life is more than consumption and procreation.

Q:  Why did the Libertarian cross the road?  A:  TAXATION IS THEFT!!!  

But men who can run a race fairly and lose with grace are men.  They don’t have to like losing – no man does.  But loss is a forge that makes us stronger, gives us incentives.  Thomas Sowell (I think?) once said that if he were designing a car for safety, he’d put a Bowie knife pointed at the driver in the center of the steering wheel, not an airbag.

Incentives matter.

Now?  We insulate children from the Great Game.  Lose?  That’s okay, you tried.

No, it’s really not.  I lost the swim meet because I suck at swimming and am only slightly better than a car at swimming.  Slightly.

Did I cry?  No.

Antifa protestors – never have to take time off from work.

Did I focus my energy on something where I could be as good as nearly anyone in the state?

Yes.

Swimming was pointless.  Telling me that it was okay was worse than pointless.  It was a lie.

Back to Tyler:

JACK, in voiceover:  On a long enough timeline, the survival rate for everyone drops to zero.

CLERK:  Please… don’t…

TYLER DURDEN: Give me your wallet.

Tyler pulls out the driver’s license.

TYLER:  Raymond K. Hessel. 1320 SE Benning, apartment A.  A small, cramped basement apartment.

RAYMOND:  How’d you know?

TYLER:  They give basement apartments letters instead of numbers.  Raymond, you’re going to die.  Is this a picture of Mom and Dad?

RAYMOND:  Yes.

TYLER:  Your mom and dad will have to call kindly doctor so-and-so to dig up your dental records, because there won’t be much left of your face.

RAYMOND:  Please, God, no!                            

JACK: Tyler…

TYLER:  An expired community college student ID card.  What did you used to study, Raymond K. Hessel?

RAYMOND:  S-S-Stuff.

TYLER:  “Stuff.”  Were the mid-terms hard?  I asked you what you studied.

JACK:  Tell him!

RAYMOND:  Biology, mostly.

TYLER:  Why?

RAYMOND:  I… I don’t know…

TYLER:  What did you want to be, Raymond K. Hessel?

Tyler cocks the .357 magnum Colt© Python™ pointed at Raymond’s head.

TYLER:  The question, Raymond, was “what did you want to be?”

JACK:  Answer him!

RAYMOND:  A veterinarian!

TYLER:  Animals.

RAYMOND:  Yeah … animals and s-s-s —

TYLER:  Stuff.  That means you have to get more schooling.

RAYMOND:  Too much school.

TYLER:  Would you rather be dead?

RAYMOND:  No, please, no, God, no!

Tyler uncocks the gun, lowers it.

TYLER:  I’m keeping your license.  I know where you live.  I’m going to check on you.  If you aren’t back in school and on your way to being a veterinarian in six weeks, you will be dead.  Get the hell out of here.

JACK:  I feel sick.

TYLER:  Imagine how he feels.

Tyler brings the gun to his own head, pulls the trigger — click.  It’s empty.

JACK:  I don’t care, that was horrible.

TYLER:  Tomorrow will be the most beautiful day of Raymond K. Hessell’s life.  His breakfast will taste better than any meal he has ever eaten.

How many people would love to have Tyler come into their lives and make them live their dreams?  How many people struggle through life, because they can’t take the next step?

You’re not too old.  If you’re breathing, you can make a mark on this world.  You’re not too poor.

My limiting factor is my imagination.  I realize that – it’s probably yours as well.

Regardless of the dystopias of 1984 and Brave New World, Fight Club shows a dystopia where we can win.  How do we win?

By understanding that our lives are in a precarious balance, just like Raymond K. Hessell.  And the first step to living life?  It’s letting go.  Achieving.

I learned to swim when I was very young.  My dad taught me.  I thought I’d never get out of that bag. 

And if you lose at swimming?  Try again.  Or try a new game.

At the end of Fight Club, men prove themselves to be stronger and larger than the dehumanizing systems that they serve.  It’s your choice.  How will your breakfast taste tomorrow?

Also:

Avoid the clam chowder.

 

 

Unrelated:

Steve is a blogger who is a FOW (Friend of Wilder).  Unlike me, he’s talented.  Because of the idiots who run his state, you’re lucky he has time to create something like this for you.  Do it.  No, I don’t get paid.  Steve does.  He’s Our Guy.

Do it.  Here’s the LINK.  There is just enough time for Christmas.

Houses, Money, Stocks, and Bikini Girl Graphs

“Can the stock market survive a nuclear holocaust? Yes, says our next guest, and he’ll tell us what stocks to buy and what to sell in the event of a thermonuclear exchange right after these messages.” – Head Office

BIZ

Superman® won’t take Bitcoin as payment after dark.  He avoids crypto night.

“Housing prices only go up.”  I first heard that in the 1990’s when I was buying my first house.  The realtor was quite clear that a house wasn’t just a house, it was an investment in the future.  He had no idea what my kids could do with Sharpies®, hot sauce, and matches.  And that was just the living room carpet.

“The dollar is as good as gold.”  I haven’t heard that one used about the dollar in my lifetime, because the dollar hasn’t been backed by gold since August 15, 1971.

“The stock market is the place to put your money.”  That’s still what people are saying.

One thing that I’ve found throughout my life is that, generally speaking, if everyone believes in it, it’s wrong.  The major exception to this is physics, which explains gravity well enough that almost nobody can argue with it.  I read a book on anti-gravity once – couldn’t put it down.

gravy

I always fall for gravity jokes.

This is especially true in human systems.  If the entire crowd believes it?  It’s nearly certainly wrong.

As mentioned above, a perfect example of this is housing markets.  It was really common knowledge in the 1990’s that, barring a setback in a recession, housing prices always go up.  Buy a house, wait, and sell it 10 or 20 years later, and you’ll make a bundle.

In certain times and places, that’s true.  And during the 1990’s and the early 2000’s, the idea that “housing prices always go up” became firmly fixed in the minds of, well, most everyone.  That made it true, for a while.  As the banks noticed this, they decided that mortgages weren’t a risky investment at all, unlike when I broke COVID-19 lockdown to go play board games.  That was a lot of Risk.

On top of that, banks decided to make changes to the way that they had lent in the past.  Houses were a sure thing, right?  They could make them even safer by creating mortgage-backed securities.  Some of these were really unique.  You could buy the “best” performing loans out of a group of loans.  If there were 100 houses in the group, 90 would have to default on their mortgages before your security was impacted.

This mastery of risk was amazing!  Now all you need are more people to loan money to.  But not everyone qualifies, which is a problem.  They tried offering 0% loans, but there was no interest.

Solution?  Everyone qualifies.  No income?  No job?  No problem.  These were even called NINJA (no income, no job) loans.  The pool of borrowers expanded more rapidly than Joe Biden’s memory loss.  And if we add in refinancing of home equity?

That added even more borrowers!

What could go wrong?

HOUSE

And, hey, housing prices have reached new records.  Certainly they won’t fall?

Well, gravity kicked in on housing prices.  They dropped.  And when they dropped, the entire industry built up around building houses dropped.  And then the industries that supplied lumber, and pipe, and wire, and pavement, and concrete for driveways . . . dropped.

This mathematical fiction based on a delusion created a massive recession.  But, hey, housing prices always go up.

Except when they don’t.

Just like the dollar fell from its perch.  Originally, the dollar was backed by actual, physical gold.  That’s when the phrase, “as good as gold” was first used.  Why?  Because at any moment, you could go and change your dollars into gold.  Walk into the bank with a $20 bill, and walk out with $20 in gold.

This wasn’t always the case, there were periods in the history of the country where this wasn’t so (greenbacks issued during the Civil War backed by the credit of the country), but it was generally the case.  But after Franklin Roosevelt made gold possession by Americans illegal (yes, this happened) then you couldn’t go in and get gold for your dollar.  Once that link was broken, the government was free to print money more or less at will, creating inflation even in a “gold backed” currency.

PURCH2

You can plainly see that women are shorter now that the purchasing power of the dollar has dropped.

Now?  The dollar isn’t worth but a few percent of what it was in 1940.

And other countries realize it, too.  As the multiple trillions of dollars are printed this year to prop up everything from the airlines to the banks to the stock market, the value of the dollar has dropped.  Why?  The rest of the world can count.  There is only so much printing you can do before it starts to add up.

The dollar has dropped 10% in the last three months.

DOLLAR

The dollar’s fall is fast, but not as fast as when I fell into the coffee.  It was instant.

Good as gold?

No.

Which brings us to the stock market.  Money in the stock market is always safe, over a long enough term.  It took six years to recover from the Great Recession.  In real terms (inflation adjusted) it took from 1928 to 1955 for the Dow© to recover from the Great Depression.  It took until 1994 for the Dow™ to recover from the 1964 peak.  So, if you’re good waiting thirty years to break even, the stock market is a sure thing.

BOB

Speaking of up and down – I got a free yo-yo.  No strings attached!

While the economy is still stuck in lockdown in many parts of the country, massive unemployment, and a “riot-a-day” social structure, the Dow Jones Industrial Average® is only down 3%.

I wonder, just maybe, if everyone is wrong?

Deflation, Inflation, Collapse – Now With Muppet Jokes

“Well those are whole pennies, right? I’m just talking about fractions of a penny here. But we do it from a much bigger tray and we do it a couple a million times.” – Office Space

FEDPLANE

If being in the Federal Reserve® offices give you a cold, what should you do?  Sudafed.

The Federal Reserve© is scared.  And inflation is currently not on their list of Halloween boogiemen –the monster they fear is deflation.  Well, deflation and accidentally mixing up Pride Month and Bulgarian History Month.  I think the main reason that the Fed™ is worried about deflation is that then people become like me in 2000 when I was looking to buy a computer.

Every six months I waited, the computer I could buy for the same amount of money was much faster with more memory.  Computers were really a deflationary item at the time as advances kept making them better and better on a nearly monthly basis.  It made sense to wait, because I could get a better deal later.

For computers, that was okay – there was a solid market for them at the time, and Intel® wasn’t going to go out of business because its next chip was going to be faster next year.  But if you apply that to the entire economy, then people would have been steering clear of the toilet paper aisle in February.  Live and learn.

Deflation is great for consumers – they get more stuff for less money.  Deflation also discourages debt – why borrow money when the dollar you’re borrowing will be worth less than the dollar you have to pay it back with?

But deflation in an economy slows everything down worse than a Kardashian trying to take a college entrance exam.  Most economies in the world are built on endless growth.  Part of the economic growth is required because more people enter the labor force every year.  The other part is the system is built on growing income, growing revenues, growing the bottom line – stock prices are built (mostly) not on the intrinsic value of a company here and now, but on the value of the company in the future.

STONKS

I hate stonks.  Gentlemen prefer bonds.

I’ve written about deflation before, but it’s probably a good time to mention some of the clues coming from the financial system.  But first, I have to explain that when a loan is paid back to the bank, money is actually destroyed.  I know that doesn’t make sense, but I’m a trained professional, and we’ll get there.  And by trained, I mean trained as a cook at a Chinese restaurant.  Okay, not trained – it was more of a wok-through.

Let’s start with a bank.  In this case, my bank.

If I were to deposit $100 in my account, I have $100 in my account, right?

Kinda.

The bank now thinks it’s their money.  It turns out that when you open a checking or savings account with a bank, you’re actually lending them money.  The banks in the United States are actually what’s known as “fractional reserve banks” in that they only have to keep a portion (or fraction) of the money that I deposited on hand for people who come in and want cash.

Traditionally, that fraction has been around 10%.  So, if I open an account with that $100 in it, the bank can lend $90 of that money out.  The theory is that not everyone wants to come in and get their money back all at once, so you only have to keep that 10% on hand for people who want their money back on any given day for whatever purpose.  It’s like stealing, but totally legal.

If too many people come in, the idea of the Federal Reserve™ (the Fed®) is that they’ll send the bank some cash if needed because tons of people borrow money all at once from the bank.  That way if Lady Gaga is coming to Modern Mayberry and everyone decides to fork over $1000 a seat for VIP tickets to listen to her sing about her her her Poker Face, the Fed will give us extra cash.  That’s why it’s called the Federal Reserve® – it’s a reserve for banks if they need cash because Lady Gaga is coming to town.

MUPPET

When you microwave a Muppet®, it will even countdown with the timer!

I didn’t want to go see Lady Gaga, so I still have my $100 in the bank.  Therefore, my bank has loaned out $90 to Johnny Depp who was a little short for the show after buying some killer weed.

But I still think I have $100.

But the bank lent out $90.

And Johnny Depp puts his money in his account in another bank until it’s time to pay for the ticket.  So, that bank now has Johnny Depp’s $90, and can immediately lend out $81 to someone else, who deposits it back in my bank.

Thus, my original $100 deposit now accounts for $171 in the economy.

As soon as the loans are paid back, the transaction unwinds and the actual amount of “money” in the system disappears.  There’s a theoretical limit to the amount of money that can be created with a certain reserve rate.

But I said the Fed was scared.  And I said it was scared of deflation.

My bank used to have to keep $10 in the vault in case I come back looking for my $100.  Used to.   As of March 15, 2020, that reserve that banks are required to keep is – drumroll please – zero.  Yes.  I’m not making that up.  It’s right here on the Fed’s own website (LINK).  The press release is here (LINK).

What this means is that banks have to keep enough cash around so if yokels like me want to withdraw $23.73 for a trip to buy some really nice earplugs the night of the Lady Gaga concert, the bank had to have that much actual cash.  But now, the banks are free to loan all of it out.  They could loan not $90 to Johnny Depp, but the full $100.  And when he put it in his bank, they could loan out $100 as well.

In the 10% reserve, there was at least some limit to the money that the banks could create by lending the same $100.  But at zero reserve?  The number of times that $100 could be lent is only constrained by the number of people who want to borrow it.  My original $100 could (in theory) create infinite dollars.  That’s Congress level math!

JOKER

My-my-my-Joker® face . . .

This means the Fed is worried about keeping banks lending, so they can keep the money supply up.  The Fed also wants to keep the money moving – they want me to buy my Lady Gaga earplugs and the person I bought them from to buy some PEZ® from Wal-Mart® and Wal-Mart™ to pay that money to an employee who buys ice cream sandwiches.  If people save their money, it’s nearly the same as there being less money in the economy.

That’s where the Plunge Protection Team comes in.  People with 401k investments get scared when the stock market goes down.  Stock market plunges are deflationary.  Plus, they really hurt the investment banks, so the one thing we know about both Democrat and Republican?  They both really want to make the investment bankers happy.

Wall Street crashing?  Let’s have a series of well-timed purchases of stock to turn it around.  Since you can look at the Fed’s balance sheet yourself, and compare it with the stock market, perhaps the Dow Jones Industrial Average (DJIA)® going up 500 points on a day when multiple large American cities are actively on fire.  The Plunge Protection Team, it is rumored, buys (or has groups like Goldman-Sachs™ buy) stocks on multiple markets to keep a crash from happening.

PPT

I hate it when the Plunge Protection Team kneads my back while I’m sleeping.

The idea is that by keeping the stock market from crashing, the economy is saved.  In one sense, that’s a logical conclusion.  Falling stock markets have panic as the main feature – people literally are scared to death, so they sell even solid stocks at bargain prices.  As a strategy, it’s a lot like buying a drunk guy another dozen shots of whiskey.  The problem’s gone.  At least for now.

But you can only game a system for so long.  Eventually, the game playing will come back to haunt you.  And the Fed may be scared of deflation right now, but all of the injection of money via loans and balance sheet inflation and stock market propping up?  The system failures get bigger, and bigger.  The old tools don’t work.  And the system fails.  This time for good in a spasm of deflation followed by inflation followed by currency collapse.

I know you’re worried about the investment bankers getting caught up in the deflation-inflation-collapse.  Don’t be!  Right now, they’re selling their stock after the plunge protection team bumps up the price and buying bunkers in Montana or old missile silos in Nebraska.  Yay, free market capitalism!

FEDBAL

I’m sure that it’s a coincidence.

I’m not saying that we’ve reached the point where we’ll see the financial systems fail with this cycle.  It may not be this leg down.  But like the Fed®, keep one eye open.

Deflation might be hiding under the bed.

Civil War 2.0 Weather Report: The Tsunami Begins, But You Knew That

“If we can stop him, we shall prevent the collapse of Western Civilization.  No pressure.” – Sherlock Holmes:  A Game of Shadows

CLOCK

I liked the ticking of the clock I got from the pawnshop, but in the end it was a second-hand emotion.

  1. People actively avoid being near those of opposing ideology.  Might move from communities or states just because of ideology.
  2. Common violence. Organized violence is occurring monthly.
  3. Opposing sides develop governing/war structures.  Just in case.
  4. Common violence that is generally deemed by governmental authorities as justified based on ideology.
  5. Open War.

In the first issue of the Civil War Weather Report, I put together ten steps to a new civil war.  I did not expect that on the one year anniversary of that first report we’d move from step 6 nearly to step 9.  Step 9. is, of course, two minutes to midnight.

We are very, very close.  I debated internally more than a bit whether we were at an 8. or a 9. this month.  I finally decided to stay at an 8., despite multiple jurisdictions doing everything but arming the rioting faction of the protest movement with automatic firearms and bullhorns that make them all sound like Gilbert Gottfried.  It is clear we are at least an 8., and you will see in the graphs section that our Wilder Violence Index has reached new highs.

In this issue:  Front Matter – You Knew Where This Was Going – Violence and Censorship Update – Updated Civil War 2.0 Index – Balkans or Caesar Might Be The Best Case Scenario – Links

Welcome to Issue 12 of the Civil War II Weather Report.  These posts are different than the other posts at Wilder Wealthy and Wise and consist of smaller segments covering multiple topics around the single focus of Civil War 2.0, on the first or second Monday of every month.  I’ve created a page (Link) for links to all of the past issues.

You Knew Where This Was Going

The most popular posts on this site have been about the political state of the country.  The Civil War Weather Reports aren’t my usual form of post, but have proven to be very popular.  I’m sure it’s not just for graphs featuring bikinis.  Well, at least not only because of the bikinis.

I think the reason these posts are popular is simple:  many people could sense the fragile peak that it seems all of Western Civilization is perched on.  Whether it is a conscious review of the surrounding culture or just a feeling in the pit of the stomach when confronted with an outrageous news article, something’s just not right.  Society has been changing by increments over the years, but those changes are coming faster and faster and faster.

Claire Wolfe, the groundbreaking and iconic Freedom blogger said it very well at her place last week (LINK):

Each day I think I’ve processed the latest craziness enough to blog something coherent. Useful even. But then new waves of craziness wash over the world. I don’t know what to say. I can’t write good sense against the onslaught of the crazy. I don’t know how civilization is holding together under tsunamis of crazy.

But then, of course civilization isn’t holding together — and I’m not just talking about the one-two punch of totalitarian don’tleaveyourhouseism followed without pause by riotandlootallyouwantism.

Chains of rapid-fire events and chaos like this are not generally the friend of those that love freedom.  The Russian Revolution promised:

  • Peace, through ending World War I,
  • Food, because Communists are well known to produce excess food,
  • Land, whereby peasants would get parts of land owned by the wealthy,
  • Minimum wages,
  • Maximum working hours,
  • Running factories by elected worker representatives and
  • Lots of other promises.

In the end, up to 12,000,000 people (mainly civilians) died in the civil war that followed, and the promises that were made were largely ignored.  The Bolsheviks said and promised anything to get a force of disaffected behind them.  Not sure if this sounds familiar to AOC fans?

LENIN

Hey girl, are you the French Revolution?  Because I keep imagining you sans-culottes.

I get a sense that the Left today is up to the same trick.  They’ve “created” media events and have managed them to get power – political power and power in the street.  Some of the Leftists may even be stupid enough to believe that there are magic economic levers that they can move to keep the promises they’re making.  In reality, they really don’t care:  it’s all about the power.

Lenin’s reintroduction into Russia and subsequent funding from foreign sources bring George Soros to mind.  Soros continually funds groups in the United States that are directly opposed to actual freedom.  The protesters and their associated rioters have a structure that has been funded and provisioned with everything from water and medical supplies to pre-staged bricks and gasoline.  Not saying that George is funding those directly, but . . .

More on that, below.

Violence and Censorship Update

No politician has ever captured the attention of the Left like Donald Trump.  They hated Reagan, and George W. Bush was famous for “stealing” an election.  But something about Trump drives them nearly crazy enough to try to get a job.  The media’s portrayal of Trump as the anti-ChristObama, perhaps?

The violence, of course, is plain for anyone reading any news to see.  It’s not in just the United States:  these protests have been coordinated across nearly every Western nation.  If the protests had been confined to Minnesota, I could buy the idea that they were organic.  And to the extent that they are peaceful gatherings to seek political redress?  I celebrate them.

LOOT

It’s not looting, it’s just an involuntary clearance sale.

But to flash across the world with violence and destruction?  That takes amplification and organization and is clearly the seed of revolution against the West.

The amplification of the signal comes from both mainstream and social media.  Whereas the original death that started the protests was (rightly) exposed, the subsequent deaths of protesters, rioters, and innocent civilians hasn’t been mentioned much at all.  How many dead?

I’m not sure.  This should be a fairly easy number to get to, but I’ve seen numbers between 12 and 18.  Absent media tracking, I’m not sure how you’ll count them up.  If we wait long enough, I’m sure they’ll all be counted and attributed to COVID-19.  To add to the butcher’s bill, thousands have been injured.

Regardless, I have seen, at minimum tens of millions of dollars in damage.  I would expect the number to increase to hundreds of millions, at least.  A fire is, as I write this, blazing in downtown Phoenix.  Odds that it’s related to the rest of the violence?  Nearly 100%.

Censorship is on the rise, as well.  I already spouted off on that last week (Free Speech: Endangered Species – WRSA is Down) in response to Western Rifle Shooters Association being shut down (You Can Find Him Here).  I expect to see that it will be on the increase during the next six months – the election is too important to the Left to leave it in Biden’s hands – chances are good he might wander off to try to buy a rotary phone at Montgomery Wards™.

Updated Civil War II Index

The Civil War II graphs are an attempt to measure four factors that might make Civil War II more likely, in real time.  They are broken up into Violence, Political Instability, Economic Outlook, and Illegal Alien Crossings.  As each of these is difficult to measure, I’ve created for three of the four metrics some leading indicators that lead to the index.  On illegal aliens, I’m just using government figures.

May was again a difficult month.  I had to re-scale the graph on violence as this month nearly pegged every meter.  I will assure my faithful readers that I spent extra time this month finding just the right bikini-clad girl, since I want to at least reach the journalistic integrity standards of the Washington Post®.

Violence:

VIOLF

Up is more violent.  Violence had been down because everyone was stuck in the basement.  I predicted that May would be mellow, and then we’d see the uptick in June.  I was almost right.

Political Instability:

POLF

Up is more unstable.  Instability is up only slightly, which might seem weird, but the system is still stable overall.  I may look into another graph next month to measure political change, because it sure feels like we crossed over into a regime where big political changes are more likely – and this graph was meant more about the overthrow of a sitting president, hence the peak in December.

Economic:

ECON2

Down indicates worse economic conditions, and it’s down yet again.  I did change the basis somewhat for this month.  Previously it had been a spot measurement, but this shows more a relative measurement from a baseline.  But did you come for that, or for the bikini?

Illegal Aliens:

BORDF

Down is good, in theory.  This is a statistic showing border apprehensions by the Border Patrol.  Down, probably related to WuFlu.  Until Mexico’s economy collapses. Then what?  Regardless, this is at a nearly five-year low.

Balkans or Caesar Might Be The Best Case Scenario

I’ve written both about the idea of the United States breaking up into regional governments that run either as autonomous countries, or close enough to autonomous that it doesn’t matter.  This irritates Right-thinking folks “behind the lines” in Leftist states.  They clearly don’t like the idea of being left behind in a People’s Republic of California or the New York Soviet Oblast.  I can understand that, especially since the divide is so much more rural/urban than on a state by state basis and the Right just wants to be left alone.

Being Balkanized remains a possibility, and probably guarantees border wars for decades unless we put up a big, beautiful wall around California.

I have, over time, began to think it’s much more likely that the nonsense will continue until a strongman arrives and proclaims that he’s “President for the Duration of the Continuing National Emergency.”  I certainly don’t think Trump is this person.  Biden is even less this person.  But some Cuomo or other acting as Wall Street’s puppet?  I could see that being more likely.  If we had a military hero of some stature, that would also make sense.

Maybe Elon Musk or Jeff Bezos?

BEZOS

I guess Jeff divorced his wife because she was past her Prime™?

Is having a Caesar that bad?  Absolutely.  But a strongman will try to have to have some sort of legitimacy and will at least (in theory) have some desire to keep a relatively strong country together to turn over to his children.  The old forms of government will be nodded to.  The Senate may not have power, but there will be Senators pretending to have power.

Not good, especially since that pesky Constitution will be entirely ignored, rather than mostly ignored like it is today.  But Caesar’s United States probably more peaceful than a Balkanized America.

But there is one possibility that scares me more than either of those:  Soviet America.  The riots that started nine days ago (yes, it’s only been that long) appear to be the Left making the first push into creating violence to go along with our economic issues and the lingering Coronavirus.  I brought up the Russian Revolution earlier, because that more than anything is what this latest round of violence feels like:  violence, in part funded and provoked by a foreign enemy with the aim of destabilizing America and making people welcome those who promise what they never can really provide.

Links

links

From Hank:

Sheriff Thinks 4Chan meme (Boogaloo Bois) is real.

From The Mrs.:

Soviet America?  (Great article behind WSJ paywall).

Description of Russian Leftists from the article:

“The idea was that since they knew the theory, they were morally superior and they should be in charge, and that there was something fundamentally wrong with the world when ‘practical’ people were. So what you take from your education would be the ideology that would justify this kind of activity—justify it because the wrong people have the power, and you should have it. You don’t feel like you’re the establishment.”

These are from Ricky this month:

And a few others:

Twitter® shows Mayor with at least some backbone

Saker on Unz.

Civil War 2.0 Weather Report, Issue 12: Censorship and COVID-19

“You were going to bed hungry, scrounging for scraps. Your planet was on the brink of collapse. I’m the one who stopped that. You know what’s happened since then? The children born have known nothing but full bellies and clear skies. It’s a paradise.” – Avengers: Infinity War

CLOCK

After several years of looking, I found a book on Amazon® about how clocks work.  It’s about time.

  1. People actively avoid being near those of opposing ideology.  Might move from communities or states just because of ideology.
  2. Common violence. Organized violence is occurring monthly.
  3. Opposing sides develop governing/war structures.  Just in case.
  4. Common violence that is generally deemed by governmental authorities as justified based on ideology.

The clock didn’t move this month for the third month in a row.  That’s good.  But I see pressure building up quickly.

In this issue:  Front Matter – Violence and Censorship Update – Steps On the Way to Revolt – Updated Civil War 2.0 Index – The Real Story: Economic Collapse – Links

Welcome to Issue 12 of the Civil War II Weather Report.  These posts are different than the other posts at Wilder Wealthy and Wise and consist of smaller segments covering multiple topics around the single focus of Civil War 2.0, on the first or second Monday of every month.  Here are the links to the previous issues:  Issue One (LINK), Issue Two (LINK), Issue Three (LINK), Issue Four (LINK), Issue Five (LINK), Issue Six (LINK), Issue Seven (LINK), Issue Eight (LINK), Issue Nine (LINK), Issue Ten (LINK), and Issue Eleven (LINK).

Violence and Censorship Update

April was a big month for censorship.  Like a toddler in a Toys’r’Us™, Facebook® and YouTube© decided this was the month to crack down on speech they didn’t agree with.  And that speech was from the Left.  Just kidding.  It’s never a crackdown on the Left.  Who did they go after?

Well, David Icke was shut down.  I like listening to David Icke, because I sincerely think that he believes that shape-shifting reptilian aliens run the governments of the world.  As in Queen Elizabeth II is a secret lizard lady.  That is WWE© level of conspiracy, and it sure makes 40 minutes of treadmill time go faster listening to it.  But now, he’s gone.  His sin?  Nothing to do with lizards.  Nothing to do with the Queen.  No, Mr. Icke committed the sin of breaking the party line on COVID-19.

ALIEN

When WHO makes David Icke look reasonable.

In fact, any YouTube® video that puts forward an opinion that differs from the World Health Organization (WHO) will be removed.  Do it too often?  Your channel is banned.  For life.

I must admit that I am a sinner in committing heresy against the WHO.  In May, 2019, I did a frighteningly good post (The Who, The WHO, Cavemen, Child Labor, and We Won’t Get Fooled Again) about their silliness in describing “Burnout” and “Gaming Disorder” as new plagues that were going to destroy mankind.  To quote me at the time:  “When a cell behaves like the WHO and most other government agencies do, it’s called cancer.”  Yup, that’s probably enough for the YouTube® ban hammer.

But now it seems that having an opinion different than the WHO is enough to bring the full weight of Leftist censorship down.  There were several doctors that disagreed with the WHO, and they were shut down, even though the WHO’s opinion on COVID-19 has been proven wrong again and again and again.  And that is scary.  The WHO (and the CDC, who I skewered in the post (The CDC, Raw Cookie Dough, and Sexy Theocracy)) have proven to be little more than government agencies that have lost their primary mission in a race to pander to news outlets to secure funding.

Facebook™ announced it was not only trying to get rid of COVID-19 “misinformation” by deleting posts, but also was actively censoring people trying to use it to organize “end the quarantine” events.  That was chilling.  You may or may not agree with these protests, but the idea of peacefully petitioning government is a clear right.  Libertarians and (increasingly) Leftists will make the argument that “Facebook® is a private company and can do whatever they want.  Nanner-nanner.”

But know them by their works.  They want your data.  They want to market you as a product.  A compliant product for them to sell.  And, it appears, snitch on you if you are a bad-thinker.

WATER

He only needed a sip.  Zucculents are excellent at storing water and can thrive in areas with dry climate.

Likewise, the Unz Review (LINK) got kicked off of Facebook®.  Ron Unz’s website is a hotbed of controversial thought that’s not afraid of challenging almost any opinion:  I’ve read a lot there I disagree with.  The owner of the site, Ron Unz, does not stand behind every article published – it would be impossible because many of them are 100% contradictory to each other.  But, even though I disagree with a lot I’ve seen there, I’ve learned a lot there that I never would anywhere else.  I’m surprised Unz lasted this long on Facebook™.

Where does this censorship take us?  Nowhere good, since after the first censorship, taking down the next site becomes easier and easier.  It’s for the public good, after all.  Can’t have people thinking unapproved thoughts, right?

Updated Civil War II Index

The Civil War II graphs are an attempt to measure four factors that might make Civil War II more likely, in real time.  They are broken up into Violence, Political Instability, Economic Outlook, and Illegal Alien Crossings.  As each of these is difficult to measure, I’ve created for three of the four metrics some leading indicators that lead to the index.  On illegal aliens, I’m just using government figures.

April was a difficult month for the economy, and that shows up in the graphs.  I don’t think that May will be quite as bad, but I’ve been wrong before.  I did, however, try to spend significant time on selection of the bikini pictures to accompany the graphs, since I want to at least reach the journalist integrity of the New York Times®.

Violence:

VIOF

Up is more violent.  Violence had been down because everyone is stuck in the basement.  But now the end of quarantine is near, and people will become violent if it isn’t lifted soon.  I expect big upticks in June, July and August.  I think May will be fairly mellow, and might be the last mellow month for ages.

Enjoy it.

Political Instability:

POLF

Up is more unstable.  Instability is down – having the field reduced to two likely candidates for the November election helps calm people, plus people are advised not to make sudden moves around Joe Biden, since his predator instinct could kick in and he might give you a good sniffing.  Instability will go up if Biden falters or starts drooling oatmeal during an interview.

Economic:

ECOF

Down indicates worse economic conditions.  The graph speaks for itself – I had to search through a LOT of bikini photographs to find one that fit with a plunge like we’ve seen.  I expect April to be better.  But not by a lot.  I’ll likely change the basis of this one or add an entirely new one next month – this is an instantaneous graph to measure mood, and we should start to look at cumulative numbers to measure how screwed we are.  Upside?  One more bikini graph.

Illegal Aliens:

BORF

Down is good, in theory.  This is a statistic showing border apprehensions by the Border Patrol.  Down.  Until Mexico’s economy collapses. Then what?

Economic Collapse – The Real Story

When I first started the weather report, one criticism was that we would never see Civil War 2.0 while things were good economically.  And I admitted that this is true.  As a people I can see limited acts of disobedience, but not outright insurrection while the economy is good.  Full bellies and full bank accounts don’t lead to fighting in the streets.

The economy is in free fall.  That’s not an overstatement.  There has been no month as bad in the world economy as April, 2020, at least not in my life.  Unless you’re in your 80’s or better, this is the worst economic month of your life, too.  To find such a disaster in the United States, you’d have to go back to the 1930’s, at least.

FED

The goat entrails have spoken!  The cure is yet more debt and money printing!

As I’ve mentioned before, a strong economy could take this sort of shock.  Our economy isn’t strong.  Let’s take New York City.  What does it produce?  Debt, real estate sales, insurance companies, financial irregularity, the stock market, and national “journalism” that at best is as biased as a Kennedy mother bailing her kids out of jail.  If New York City were to disappear tomorrow, the only thing from NYC the Wilder Family would miss is the television show Impractical Jokers®.

Yet New York City controls the money flows in the country.  It also controls the bets made on wheat production and pork prices.  NYC produces nothing, but acts as a tax on those that actually produce.  In 1947, the proportion of the economy devoted to Finance, Insurance, and Real Estate (F.I.R.E.) was about 10%.  In 2017, it was 20%.  And we do need a certain percentage of our economy devoted to moving money around, but the point of our economy isn’t moving money, it’s making things and feeding people.  Oh, and doing taxes.

Are we richer because of what comes from New York?  Are we more stable?  Does making another loan to a big corporation so they have enough debt on their books so a New York financier can’t buy them with their own money make us better off?  Is it better because the dollars aren’t backed by anything other than a printing press?

NYC

Hey, that might make a good movie.

In that same time period, manufacturing dropped from 25% of the economy to 11%.  Does that make us better off, when critical goods are made an ocean away?  Does that make us more stable and able to weather a crisis?

As the economy collapses, it’s collapsing because it has been hollowed out for decades.  I will say that studies show, before 1980, Democrats were strongly focused on keeping the manufacturing and construction industries strong, since the unions that dominated that sector were lock-step voters for the Democrats.  But, when a shiny new toy of being paid by the big banks plus being able to bring in a whole new class of voters (legal immigrants and illegal aliens) got too big, the Democrats dumped manufacturing and construction.

This collapse has been decades in the making.  It won’t be done quickly.  And it just might provide the pain to slingshot us into Civil War 2.0.

Links

LINKS

All are from Ricky this month . . .  enjoy!

Inflation? Sure. But not right now. (Special Edition Includes Greta Thunberg Joke)

“In 1899, my grandfather, Henry ‘by God’ Ford, was walking home from Edison Illumination after working a double shift.  He was ruminating.  That morning, he had himself an idea that changed the world.  Sixty-five years, and 47 million automobiles later, what shall be his legacy?  Getting it in the tail pipe from a Chevy Impala?” – Ford vs. Ferrari

KINGDATE

If Stephen King were at the Fed:  “All the interest rates float down here, Georgie.”

The government is getting ready to blast enough paper money into the economy that even Zoomers get the joke.  The Boy has said, on multiple occasions, “Money printer go brrrr.”  By that he means that it’s visible to anyone who is looking that government is willing to just add a zero to every piece of currency coming off the press just to toss money everywhere like Charlie Sheen on a night out with Johnny Depp when one of them is dressed like a Muppet® and the other one gets to be the hand.

But the point is, even teenagers anticipate immediate inflation.

But I can be better than Shoeless Joe:  I can say it ain’t so.

brrr

See, even the kids get it.  Not my meme, probably the work of a 12 year old Anon on 4chan.

In fact, I’ve said before and will say again, I expect that many items will not go up in price, but down.  Here’s an example:  Pugsley is a young man, at that tender age after puberty begins its hormonal onslaught, but before he has a driver’s license.  Generally, that means that the thing he thinks the second-most about is:  cars.  You can probably figure out what first is.  He says it’s the Bible, but I’m not sure he owns one, and that surely wouldn’t explain the Internet data rates I’m seeing.

He’s had me price some beautiful cars, some that do amazing things like go from zero to sixty in a short enough time that I’d worry that I’d look like Shrek® got caught under a steam roller if I put the hammer down.  One of them is the Ford Shelby GT350®.  This particular car can be purchased used, a year or two old, with less than 10,000 miles on it for about $50,000.  Just for grins, I thought I’d check out what they were going for last week.  $45,000.  That’s a 10% drop, in two weeks.

Why?

Because absolutely no one older than 18 is looking to buy one right now, and everybody under 18 has, ahem, the Internet.  Potential buyers are also anticipating further price drops.  Why buy that Shelby™ at $45,000 when you can have it for $40,000 next month?

Anticipation of cheaper cars is one factor that leads to deflation.

SHELBY

But who will be able to a-Ford® it?  I’ll admit it, I’ve even priced insurance.

There’s another powerful force pushing towards deflation:  people just don’t have money.  I’ve mentioned before that something like 80% of Americans can’t afford an emergency spend of $1,000.  Now, people are losing jobs faster than Hillary Clinton’s witness list is shrinking, and it doesn’t take long for rent, phone, and food to add up to $1000.  There won’t be inflation if nobody is buying, and you can’t buy if you don’t have money.

I was slightly concerned during the first few weeks of the COVID-19 lockdown because of empty shelves.  Not a lot, because the way the food system works ensures that there is some slack in the system:  grain isn’t grown and then immediately shipped to the pizza factory as flour.  There are silos.  There are cows in the field.  There are vats of wine fermenting, and barrels of whiskey aging, and the porthole to the alternate dimension where marshmallows come from is holding up fine.  A lot of our food is in the process of being made at any given time.

But this week the shelves were full.  In Modern Mayberry, we had full shelves of everything except toilet paper.  There was sugar, meat, eggs, milk.  Okay, there wasn’t any chicken, but isn’t chicken really just poultry Jell-O®?  But there was plenty of nearly everything else.  How much of those full shelves wasn’t because of the distribution system, but because people were out of money?

That scares me.  People need food.

Finally, there’s a third force.  People who do have money are hanging on to it.  In a very rational fashion, they’ve decided that they have no idea what’s coming next, so best to keep all the spare change in the candy dish available, so to speak.  And spare change in the candy dish doesn’t move in the economy.  It just sits there.

In part, our financial system is built around a concept called money velocity.  In simple terms, after I spend a dollar, how fast does that dollar get spent on something else?  When it moves around quickly, it can account for a lot of transactions in a short period, it seems like there is more money than there really is because it keeps being spent, again and again.  It sounds like a hot check, but it’s not.

VELOC

I actually liked economics classes in college.  It was like a nap, but with a grade at the end.

If you consider that this money came from a checking account, in general according to the statistics a dollar in a checking account bounced around over five times in 90 days at the end of 2019.  That means:

  • I got paid and,
  • I bought some toilet paper from Wal-Mart™ and,
  • Wal-Mart® paid their cashier with my dollar and,
  • The cashier bought my old bicycle and,
  • And I bought some more toilet paper from Wal-Mart©.

It’s simple.  But what if there’s no toilet paper?  Well, then the second half of the transaction never happens.  I just sit on my dollar.  It’s not moving around in the economy.  That means, even if the Fed prints trillions of these dollars, it’s not enough to offset the fact that there’s no toilet paper to buy and that no one is going out to eat for the last month.

Those transactions just never happened.

And people like me that sit on a chunk of their pay?  That drops the velocity on that stack of money to zero until I use it.  Right now, people are in general sitting on every dollar they can, unless they have a good source for bargain toilet paper, and I guess they’re sitting on that, too.

Because of those conditions, a lot of things will cost less instead of more, at least in the near-term future.  Does that apply to everything?

No.

Things that are in demand, and are in genuinely short supply, will increase in price.  Take gold and silver, for instance.  The price of silver today is $15 an ounce, according to Kitco™.  To buy a silver coin?  That’s $24 a coin.  The $9 difference?  That’s the price to get a coin by the United States Mint or from the Canadian Mint.  Silver bars, which have a generally smaller premium?  Forget it.  Kitco© doesn’t have a single one in stock.

So not everything will deflate like my ego after losing that fistfight to William Shatner at Fight Club.  Oops.  Wasn’t supposed to mention that.  Shhh.

inflate

Pugsley tried to Photoshop® something for me, but I told him that teenagers can only do minor editing, at least until they turn 18.

But houses will deflate like a bouncy castle after being jumped on by a dozen toddlers covered with hypodermic needles – but enough about New York City.  How many people are buying and selling houses now?  No one is.  How many people are moving for a new job?

No one is.

Let’s take another example, the New Zealand dollar.  The New Zealand dollar is a currency I’ve followed for several years, just for grins.  I like to imagine buying a New Zealand winery and retiring there to be a funeral director.  I just found out where New Zealanders bury lopsided people – asymmetry.  Trust, me it’s funnier if you read the last word in a New Zealand accent.

In the last 15 years, the very best the New Zealand dollar has ever done against the United States dollar was a little shy of $0.90.  Right now, you can get a New Zealand dollar for about $0.60.  If you look at history, as long as people think of the United States dollar as “safe,” you get people jumping out of currencies like the New Zealand dollar into the United States dollar whenever they get skittish.

DIVERS

Here’s hoping the sheep don’t figure out they outnumber humans in New Zealand.

The United States having a zillion nuclear warheads probably makes people think it’s safe, so they take their money from all over the world.  Instead of buying New Zealand dollars, they buy United States dollars, which makes United States dollars increase in value.

The New Zealand dollar has deflated.

I would have bet that would happen, and it has.  Imagine all the sheep and, um . . . more sheep you could buy with your new expensive United States dollars?

Can I predict what assets are going to drop in price, by how much, and for how long?

No, I can’t.

But be aware that the rules that you are used to aren’t going to apply.

Will there be inflation?

I think so, after a while, and depending upon where and when the Federal Reserve tosses all those scads of money from the printer that goes brrrr.  But if you had just lost your job, and got a check for $10,000 would you spend it on PEZ®, pantyhose, and elephant rides right now?  Of course not.  But it may be farther off into the future than you anticipate.  Houses won’t inflate until people have enough money to buy one.  Unless the Fed fills people’s pockets with money and forces them to buy a house, they won’t.  Would I buy one in San Francisco for $2 million right now?  Would you?

No.

calcutta

Hmmm, makes those Oklahoma double-wide jokes seem a little, umm, self-serving?

Those assets are frozen, harder than a two-year-old’s grubby grip on a Gummy Worm©.  And good luck borrowing money on a house for what it was “worth” yesterday.  In the last bust, I went from bankers offering me more money than I could pay back on my signature before the housing bust to having to having to find a receipt to prove I hadn’t stolen that Spice Girls™ CD I listed as one of my assets.  Banks always seem to close the barn door in a timely fashion, at least one month after the horse ran away.

Inflation?  Sure.  But before then that Shelby GT 350™ will be down another 20%, I bet.

Money printer go brrrrr.

Shelby GT   350® go Rawarrrrr?  But on a budget, right?

The Coming Recession, Explained Using Six and a Half Bikinis.

“Well, just find yourself a man with a spotless genetic makeup and a really high tolerance for being second guessed and start pumping out the little uber Scullys.” – The X-Files

FIRST

After the next recession, most people will be on their feet in no time, after the bank repossesses the cars.

This wasn’t my originally planned topic. My originally planned topic was a discussion of PEZ® seed pricing mechanisms in 1850’s Great Britain, complete with discussion on how many orphans could be traded per bushel of finished PEZ™. Alas, I’ll have to return to that exciting topic some other time, since the world financial system seems to be imploding.

Okay, imploding isn’t the right word. And it really may not be as bad as it looks.

But today? It looks bad. Maybe not implosion bad, but I heard that some bankers had been discouraged. I guess they lost interest.

How bad could it be?

If it just stays at a financial level, the worst I would expect would be a W.I.L.D.E.R.™ Level 4 (Great Depression) in the United States, though it might hit a W.I.L.D.E.R.™ Level 5 (National Collapse) in China. You can read all about the W.I.L.D.E.R.™ Levels here (The Lighter Side of the Apocalypse) in an article praised by critics as “one of the best things ever written by a man with such questionable levels of personal hygiene, fashion sense, and grooming.”

In order to understand and guess at the future, let’s take a look at the past. The most recent past economic downturn was the Great Recession. What happened then?

sp500

As you can see from this chart, the S&P 500 experienced a big downturn right around the calf and knee area. Feel free to enlarge – just explain that the study of economics is really interesting.

Several things: first, lowered interest rates and the idea that anyone could and should get a mortgage led to a massive mis-investment in housing. Part of the cause were things called stealing and looting mortgage-backed securities and collateralized debt obligations. I won’t go into technical details, but it was a way that Harvard® educated MBAs convinced themselves that a strawberry picker making $14,000 a year could afford a $720,000 mortgage (LINK). And, yes, this really happened.

Second, the world was awash in money after the Fed flooded the fields with money after the Dotcom Bubble. Where did that money go? Everywhere. Houses. And . . . oil. Oil prices skyrocketed during that time. Companies rented oil tankers and kept them full, sitting at sea, continually selling futures on the oil in the tanker. They made fortunes by pretending to sell oil. I know that sounds like I’m making an obscure joke, but no, that really happened.

The price of housing hit the financial system like a mousetrap on a cat’s tail. Or a cat with a mousetrap on its tail? Or . . . nevermind. People kept borrowing more on their houses as their houses appreciated. They spent that money on pickups and boats and child care and food and vacations. The people weren’t evil, but they thought that the value of their house could never go down, so the risk was small. Rational people, like bankers, were telling them this. Heck, some even invested in more houses so they could double or triple their magic ATM.

30year

This view of 30 year mortgage rates explains that there have been mortgage rates. Look closely, and you can see them.

Finally, one day the music stopped on the housing prices. Was there a cause in particular? Not really. But the market lost the one thing required to keep it afloat – belief. Every market rises as the beliefs of the participants overcomes the worry of loss. Wow, that sounded poetic and cool. But it’s also true.

In many ways, the stock market is a barometer not only of the actual underlying economic performance, but how people feel about the future. It keeps going up as long as people keep being optimistic and has proven to be a much better barometer of economic activity than the amount of leg hair I grow before each winter and then form into a nice, soft nest to sleep in when it gets cold.

crude

Crude oil prices had Exxon® jumping for joy in 2008!

One thing that brought the mood of people down in 2008 was the price of oil. In the midst of the recession that came from the housing bubble, the secondary oil bubble inflated. Prices increased more than double in a single year – from $70 per barrel to over $140 per barrel at the peak. Oil acts as a tax on everything to do with physical goods. To move a Tom Brady’s booty dinghy from where it’s made in by incontinent baboons in Romania to his rump mechanic in Massachusetts requires energy – energy from oil.

So that’s the “why” for 2008. How does that relate to today?

The Great Recession was brought about by an actual recession – things slowed down in the country because there were only so many houses that could be made. That’s different than today’s trouble. The stock market is tanking not because of a recession, but because the worry about Corona-Chan locking up the flow of physical goods from China. I wrote about that last week (Corona Virus, with a Slice of Recession?).

What have we seen so far?

stand

This was a pretty good miniseries documentary.

The stock market has decreased in value. In general, a stock price has two components – the first is the value of the factories and land and machinery that the company owns. This is boring, it’s like saying a Stradivarius violin worth less than a piece of firewood because the firewood weighs more – in the hands of a genius, the violin can make masterful music, though in the hands of my kids it just made me contemplate the positives of being deaf.

The second and often biggest component of value to a stock is the assumed growth of that stock. This is why older, boring stocks like Ford® are priced closer to the value of the assets they own – no one thinks that Ford™ will end up tripling in size in the next three years. There’s an ex-wife “tripling size in three years” joke, but I’m bigger than that.

But people do think that Tesla© can triple in size in three years. Therefore, people value Tesla™ more than Ford® even though it sells about six million cars a year and Tesla© sold only 370,000 cars in the last year. You’d think that Ford™ would be worth about 10 times what Tesla® is. But in reality, Ford© is valued at $28 billion, while Tesla™ is valued at $147 billion. Is Tesla™ really worth that much? That’s up to Tesla®. But give me $147 billion and I bet I could sell 380,000 cars a year, too. And they would be pretty neat ones and they wouldn’t look like they were designed by a third grader with limited imagination.

cyber

Elon took a lot of heat for the Cyber Truck design, primarily because it looks like something that no human would buy. Thankfully, Elon’s next advance will be robotic customers.

Tesla© has convinced people it is almost six times more valuable than Ford©. That’s what I call optimism. Or a con, but at least a con for a good cause (Elon Musk: The Man Who Sold Mars).

Since the stock market is based on optimism, this latest decline in February of 2020 shows that investors are shaken. The world hasn’t (yet) changed but the implications are now becoming concerning enough to cause the market to drop. Is this going to be a big drop, like in 2008, or another head fake?

I can’t be sure. But I do know that this seems like a good time to trot out what I learned the last time the economy went south.

Lesson One:

Market bubbles aren’t rational. Companies rise faster and farther in a bubble without regard to, well, anything. Uber®, which is basically “Taxi App” is worth $61 billion dollars, which is more than Elon Musk spends in a typical year on hair plugs. Uber© lost $8.5 billion dollars last year while generating tons of bad publicity because its founder is a douche and it treats drivers worse than Mongolian bull milkers. There are tons of companies just like Uber™, and all with an idea that they’ll “disrupt” segments of society. Essentially, disrupting involves an app, a smart phone, and booting someone out of a job. Some are, I assume, legitimate ideas that will be profitable in the future. Others are like GoPro™, which is (in Karl Denninger’s words) just “camera on a stick.”

I heard someone call this the Disruption Bubble, and it’s as good a name as any to describe the distortions and irrational money flows as everyone tries to find the next Amazon™, Facebook© or Google®. In a real panic, stupidly valued things like Uber® deflate, and deflate quickly. But companies that are really worth something will fall in value, too.

The best time to buy a company is when it is cheap. It will never be cheaper than when people are panicking like Godzilla® is hungry for Japanese take-out and orders Tokyo. Finding quality companies that are selling at a 90% discount is possible during a real panic.

Lesson Two:

When the market falls, investors have less money. But they still have bills. So what will they do? If this is like 2008, they’ll sell other things. What kinds of things? Cool cars will be cheap, but not everyone is in the market for a Lambo. But gold dropped, too. During 2008, gold went from $1000 per ounce to as low as $720.

gold

You can see the price of gold really drop around the shoulder area, and take off afterwards.

I can’t guarantee that gold will drop, but I’d be watching if you want to buy some – there might be a great opportunity to buy gold at a lower price than the current $1655 per ounce.

Lesson Three:

In past recessions, the interest rate that is charged for the 10 Year T-Bill generally dropped. Why? People wanted to get to a safer asset. That asset has generally been the dollar. The most likely candidates to replace the dollar were the Chinese whatever-they-call-it and the Euro. As China is now in the grip of Corona, it’s not a flight to safety. Every European country with a beach is thinking about dumping the Euro and exiting the EU so they can print wrapping paper and call it money, the Euro isn’t a great one, either. The Swiss Franc is kinda awesome, but they only make so many of those.

10year

Look closely and you can see that the Fed doesn’t have a lot of room to lower rates.

Nope. It’s the dollar. In times of economic uncertainty, the dollar will increase in value relative to other currencies. Does it make sense? Maybe? It seems that the world notices the Navy, Army, Marines, and all of those nuclear weapons and those make the banks in New York seem a bit more secure.

Expect that if this goes like 2008 for a while you can buy foreign stuff like a king. For grins I track the New Zealand dollar – it’s right now at its lowest value in five years. I bet it goes even lower soon, so sheep should be quite a bargain. Remember New Zealand’s national motto: “We’re not Australia.”

Don’t expect to find a great place to get a good yield anytime soon if Uncle Sam is paying less than a 1%, you’re not going to get even that good of a deal. Negative interest rates have already hit Europe, and there’s no reason they won’t hit the rest of the world. Investing in cash in mason jars buried in the backyard might be a good idea. Send me your map, and I’ll keep it safe.

Lesson Four:

No financial collapse looks the same. Each one of them is unique, and this one has been a long time in coming so, if it’s hitting right now, it could be really bad. Each of the above lessons might be wrong, so look for opportunities where you see them, not where an Internet humorist thinks they might be, no matter how charming and freshly showered he might be. Oh, if you have cash, it does no good if it’s in a bank that collapses. Just sayin’.

A friend of mine made the joke in 2008 that “when the tide goes out, you see who isn’t wearing a swimsuit.” There are vulnerabilities that very few people know about right now that will (in hindsight) become obvious in the days or years ahead. Just nod sagely and pretend like you expected it would happen all along. That’s what I’ll be doing.

Wildcards:

Desperate people sometimes do desperate things. As the Soviet Union collapsed, there was some small risk that an official decided he was better dead than not red, and pushed the button. That didn’t happen – in large part because by the time the Soviet Union collapsed, nobody believed in it anymore: it was as tired as Joe Biden’s campaign.

mankini

Okay, I’m sorry.

sorry

If China were to teeter near collapse, would they decide to launch a regional war to keep the people together so the nation didn’t collapse or fall into civil war? Hopefully not, but the chances of it happening are greater than zero. As you prepare for a world where there is a financial dislocation, don’t forget to prepare for a cultural dislocation as well. Buying food now when it’s cheap and easy to get doesn’t make you a hoarder – it makes you one less person who is drawing on system resources if things go bad. Preparing for bad times when times are good is a profoundly moral thing to do. But don’t forget to complain like everyone else.

Nobody likes a smug prepper.

Disclaimer:

Keep in mind, this is NOT INVESTMENT ADVICE. I make fun of Johnny Depp and PEZ® and post pictures of girls in bikinis over economic graphs and am even writing this sober. Consult someone who has those credentials and maybe drinks martinis at lunch since that seems pretty swanky. Also, I don’t own any direct positions in any of the stocks discussed, and don’t plan on taking any positions in them (maybe ever), though I do own a Ford™ truck. I’m betting that maybe some of my 401k money is investing in, well, something and might include these stocks, but I don’t know. Maybe it’s just invested in magic beans?

The Funniest Post You’ll Ever Read About Alternative Investments

“Well that’s fantastic.  A really smart decision, young man.  We can put that check in a money market mutual fund, then we’ll re-invest the earnings into foreign currency accounts with compounding interest aaaand it’s gone.” – South Park

cat

I’ll have you know there are at least three things that you can use an empty potato chip bag for.

I was reading Bison Prepper (LINK) (and you should, too) last week when Lord Bison mentioned that stocking up on things that you used regularly as consumables was a survival strategy.  It is.  Beyond that, it’s also an investment strategy.

In the world of investment, when you buy a stock thinking the price is going to go up, it’s called “going long.”  If you were to buy Apple® stock thinking that the world hadn’t had enough iPhones®, iPads©, or iCrap™, you would be “going long.”  For this strategy to pay off, when you finally decided to sell Apple©, it would have to be worth more than when you bought it.  Buy low, sell high.

Duh.

But I started this post by writing about consumables.  What’s the deal?  Those aren’t investments, right?

I recalled reading another article a few years ago about a financial writer showing up on the Tonight Show™ with Johnny Carson, so I looked for the interview and found it – a whopping 200 people had watched it, even though it had a glimpse of Susan Sarandon while she was still cute and before her eyes popped out of her head like they were trying to escape.  The writer that Johnny was interviewing was Andrew Tobias.  Johnny said in passing:  “I like how you said that if you had $1000, you should invest in tuna.”

fonzi

I was really shocked when he said, “Sit on it.”

Tobias responded:  “If you want to make 40% tax free on $1000 you can . . . if you buy tuna fish . . . and shaving cream on sale, and get a case discount.”  The audience didn’t laugh – they were living in pretty uncertain times and the advice was serious.

Andrew Tobias posted this clip on YouTube®, and was really irritated with himself – since his jacket was buttoned it looked like he was forming a human air scoop as he sat down with Johnny.

Back when this clip was filmed was in the late 1970’s, and the economy was in trouble.  The interest rate was high – a mortgage (if you had great credit) would charge you really high rates, between 10% and 14% . . . compared to a tiny 4% or so today.  Inflation for nearly everything you could buy was running around 10%.

The entire key to making this odd investment strategy work is that you have to buy things that you’ll actually use.  Sure, Wal-Mart® sells five-gallon troughs of flaming pickles soaked in Cheeze® Ballz™, but will you actually eat that?

walm

It was even worse when she flipped off people we passed.

What’s a list of things that most people buy that this would work for?

  • Tuna (and long shelf life canned food) – especially good if you need to keep your mercury intake up.
  • Shaving cream and razors – buy extra if your wife is a Kardashian or you’ll look like you’re married to a Chia Pet™.
  • Various condiments – mustard keeps forever, and can be used to slow Kardashian hair regrowth.
  • Laundry soap – I have to keep this on the list, my hands are Tide®.
  • Paper goods – I’ll make a toilet paper joke, since I’m on a roll.
  • Wheat, rice, and other grains (properly stored)
  • Honey – They’ve found 5000 year old honey that is still edible, so it probably gets the nod as the most stable food ever. Plus it’s really handy to have local honey if you’re in Russia – I hear it’s made there by cagey bees.
  • Ammunition – Don’t be like JFK and have this be the last thing on your mind.

Now, you should be smart about this – if your family won’t eat cans of clams, buying them when they’re super cheap won’t really help you because then you have cans of clams that no one will eat, until there’s a food drive, and then you give them the clams.  If this sounds oddly specific, well, we don’t have canned clams anymore.  Likewise, if you decide to grow a beard, six cases of shaving cream suddenly become worthless until you decide to shave again.

shopgirl

The Mrs. didn’t buy the line, “But she looked so lonely, like she could use a good home.”

And don’t be nutty.  If you live in a tiny house, putting several thousand cubic feet of tuna and wheat might not be the greatest idea.  Unless you like sleeping on cans of tuna.  There’s a limit.  When Tobias gave that advice, he suggested that it could be used for $1000 worth of stuff.  Today that translates into about $4,500 worth of stuff, if the inflation calculator is to be trusted.  That’s certainly a lot, and would translate into 20 or so tons of wheat, but you’d probably have to stack hide some of it under the bed.

One dangerous point:  if you buy something, like, say, wine and get a 10% case discount, it doesn’t really help your cause if you drink the wine twice as fast.  Or if when you see a Ding-Dong®, you immediately rip open the silvery plastic sleeve and try to suck out the “cream” filling until you are sitting in the corner in a sugar coma.  So you might want to reconsider stocking up on things where your self-control will turn a savings into a disaster for your liver or waistline.

catnip

9 out of 10 doctors recommend water over alcoholic beverages for health reasons.  The other doctor is from Flint, Michigan.

In the 1970’s, you could do this strategy with nearly anything since prices were going up on everything, as long as you didn’t have to borrow the money – interest rates on credit cards were 18%.  As opposed to the 18% today.  Hmmm.

Regardless, if you have high-interest debt, get rid of it.  The sooner the better.  The future is uncertain, so getting rid of debt is a certain way to be in better financial shape.

In the last decade, inflation is most prominent in two things that you can’t collect like tuna:  health care and college tuition.  Oh, sure, you could pre-injure yourself, but who has the time?  Likewise, you could avoid steep college tuition hikes by sending your three year old to college, but that would make congress unhappy.  They hate competition that’s smarter than them.

The best information that I can find is that 401k plans returned an average of 7% for the last five years.  Better than a jab in the eye with a sharpened terrier, and probably still a smart thing to do.  I have one.  The beauty of mine is that my company kicks in an instant match – and whatever match I get is an immediate return – if the company matches dollar for dollar, it’s an immediate 100% return.  If it “only” matches $0.50 on the dollar, it’s still an immediate 50% return.  I’ll pay taxes on it after you begin to pull it out, assuming that it hasn’t been confiscated by Bernie Sanders to fund his “waterslides for the poor” initiative.

But the 401k immediate return is hard to say no to.

sanders

For me?  I’ll take belt sanders over Bernie Sanders any day.

But I can easily make 30% to 40% return tax free on toilet paper, if i buy it on sale, and in bulk.  And I’ll never pay taxes on that return.  It’s just free money – again, assuming I don’t have any debt.

If I have a mortgage of $100,000 at 4%, and I pay it off, I’ll make a $4,000 return before taxes.  Not bad, but after taxes, it’s really as low as $2,000 depending on the rest of my income.  But if I get a sweet deal on non-dairy gluten-free vanilla creamer, I get all of the money I save.

There is one other advantage of putting some of your money into stuff that you’d use – you’re making yourself more resilient.  If the dollar (the United States one, not one of the phony dollars they use in places like Zimbabwe or Philadelphia) were to weaken, you have investments in things other than dollars.  I heard a story of a German boy who got a gold coin as a tip while working at a hotel.  After the hyperinflation of the Weimar Republic, that same German boy was able to buy the same hotel for that same gold coin.  Of course then it became a target for B-17 bombers, but who’s keeping score?

Oh, yeah.  Everybody.  Except the French – they’re waiting for their record to improve.

tanks

A French border guard was questioning a German.  “Occupation?”  “No,” replied the German.  “Just visiting.”

The idea that I’m trying to convince you of is that you should think of your average daily purchases as if they were investments – because they are.  It’s not only stocks, bonds, precious metals and a 401k that are investments – what you buy on a day to day basis and how much you pay for it can also be an investment.

The other thing that many people overlook when they think of investments is their time.  How are you spending yours?  You can, like me, spend your time in a PEZ®-addled haze, watching Bojack Horseman™ on an endless Netflix© loop, or you can spend it productively, making yourself better.  That’s tax free, too.

Remember, investment means more than stocks and bonds.  It’s the things you buy, the way you spend your time, and avoiding B-17 bombers by not buying German hotels.

Civil War Weather Report #7 – The War In The Right

“You mean the war betwixt the Yankees and the Americans?” – The Beverly Hillbillies

clocked.jpg

You can always tell a hungry clock, they go back four seconds.

  1. Those who have an opposing ideology are considered evil.
  2. People actively avoid being near those of opposing ideology.  Might move from communities or states just because of ideology.
  3. Common violence. Organized violence is occurring monthly.
  4. Opposing sides develop governing/war structures.  Just in case.

I’m holding at Stage 7 this month.  A more formal structure on the Right needs to be in place to get to Stage 8, as the Left has the structure of control in place.

In this issue:  Front Matter – Violence and Censorship Update – The War in the Right –– Updated Civil War II Index – Virginia and Demographics – Links

Welcome to Issue Seven of the Civil War II Weather Report.  These posts are different than the other posts at Wilder Wealthy and Wise and consist of smaller segments covering multiple topics around the single focus of Civil War II, on the first or second Monday of every month.  Issue One is here (LINK), Issue Two is here (LINK), Issue Three is here (LINK), Issue Four is here (LINK), Issue Five is here (LINK), Issue Six is here (LINK).

ISSUES LINKS

Violence and Censorship Update

Censorship strikes again.  Owen Benjamin, comedian, had dozens of YouTube® videos.  Had.  He also had several hundred thousand subscribers and had accumulated tens of millions of minutes of time spent watching his videos.  I probably accounted for about thirty minutes – YouTube© suggested him to me, and gave him a try, but he wasn’t for me.  He was hardly offensive in the time I saw him.  He was goofy, as in didn’t believe that we’d been to the Moon and was sniffing around flat Earth territory.  Reality or the contrived personality of a comedian?  Beats me, but if I’m ever in a car with him I’m keeping him away from the map.

But people spent tens of millions of minutes (this is not an exaggeration) watching him.  Now he’s gone from YouTube™.  Other channels have been demonetized:  for a channel with large numbers of subscribers, that can mean the loss of tens of thousands of dollars in revenue.  YouTube® is playing for keeps, and some content creators are going to have to try to learn to make espresso if they want a shot at that barista job at Starbucks® in Tempe.

barista.jpg

What’s the difference between coffee and a barista’s opinion?  I asked for coffee.

Even if a channel isn’t banned or demonetized, YouTube® is manipulating search results to mute content it doesn’t like.  Edgy political content it used to send to me as a matter of course in recommendations doesn’t show up in my suggestions anymore – now I get videos on science, stuff that explodes, and how to knit using yarn you spin at home out of cat fur.

The channel “Press for Truth” did an experiment (LINK) where they did a search for “What do the Rothschilds think about Brexit?”  Press for Truth had a video with exactly that title that had over half a million views.  The result?  Press for Truth’s video (when I did the search) was fourth, behind older videos that were (mostly) less popular, but were from “established” news organizations.

I’d be a bit more sympathetic of YouTube’s® actions if we hadn’t seen again and again how the mainstream news organizations will bury news stories that are damaging to the Left (Weinstein, Epstein, etc.).  These same news organizations will also misleadingly phrase stories about people they don’t like.   For example, if I mentioned that bombing Hiroshima and Nagasaki just might have had something to do with the Japanese surrender, we’d get:  “John Wilder’s unfounded claims that nuclear weapons had a part in ending World War II.”

Owen Benjamin went elsewhere to stream video, as did all of the other creators that have been banned by YouTube®.  But the new locations are far less lucrative, and have far less visibility.  It’s the electronic equivalent of setting up “free speech” zones.  Leftists make a great deal out of the fact that these are private companies making the censorship choices, but when a private company violates a principle of the Left, like making a Satanist remove a “hail Satan” shirt before getting on an airplane (this really happened)?

satan.jpg

I want nothing to do with the Devil.  I hate dealing with my ex-in-laws.

That’s a public shaming and a lawsuit, baby.

But not by the Right.  Censorship marches on.

The War in the Right

War has recently broken out in the Right.  The Zoomers (say, 1995 births to 2015 births) are now beginning to have their voices heard on the Right as well as the Left.  On the Left, they make up some portion of AntiFa, but on the Right they’re called “groypers.”  Don’t ask why they’re called that, it’s ultimately as meaningless as Madonna’s purity ring.

What the groypers are doing is rejecting the Leftist-friendly premanufactured conservatism that is being pushed at them by Conservative, Inc., as exemplified by Charlie Kirk and Turning Point USA®.  At one point, Charlie Kirk said, more or less, that a green card should be stapled to every diploma earned by a foreign student in the United States.  In November, after attacks by the groypers, Kirk relented:

“I said something a couple weeks ago that was not an opinion I still currently hold where I said something about F-1 Visas where I said that F-1 Visas should be given out basically to every single person who goes through the college education system. I was wrong when I said that.”

When asked if he would support a policy that was good for the United States, but not good for Israel, Kirk refused to answer.  Charlie Kirk wasn’t the only victim of the groypers:

crenchad.png

Unlike illegal aliens, E.T. eventually went home.

The Zoomers see that they’re a generation that sees lower job opportunities because they’re facing increased competition by lower-paid immigrants, legal and illegal.  They also don’t see a “conservative” case for making LGBTWXYZ+ a part of the platform, when there is nearly zero support for the Right from that group.

Silencing the groypers won’t make them go away, and is probably not possible – they’re bright and tech savvy in a way unlike any generation before.  Regardless, this is another sign of our nation unravelling.

Updated Civil War II Index

More graphs, with full bikini treatment.

Violence:

violkini.jpg

Up is bad.  Violence is finally starting to drop for the winter, though it’s still higher than it was in spring.  Will we have real riots in June, July, and August of 2020, or will the Left take a “wait and see” approach to see if their candidate is elected?  Oh, wait . . . Biden?  Yeah.  They’ll riot.

Political Instability:

politikini.jpg

Up is bad, and it is up (a little) this month, and you can see this graph has some very interesting curves.  It’s surprising to me how little, but I think that’s a reflection that, outside of between AOC’s ears, no one thinks that impeachment is going anywhere, and she thinks it’s a gum flavor, like spearmint or peppermint.

Economic:

econokini.jpg

Down is bad.  The economic indicators all were positive, and strongly so, in November.  This is likely due to the Coppertone® we applied back to the economy back in October.

Illegal Aliens:

borderkini.jpg

Down is good, since (in theory) ICE is catching fewer aliens because there are fewer people trying to get in.  The numbers are down this month, and as you can see if you observe around the southern border.  We could drop illegal immigration to zero if all new illegals were forced to watch MSNBC®.

Virginia and Demographics

virginia.jpg

The Virginia elections gave control of essentially all statewide institutions to the Left.  From 1952 to 2004, the only Democratic candidate for president to win Virginia was Lyndon Johnson in 1964.  Since 2008, Virginia presidential elections have gone uniformly for Democrats – and now the transformation of the state is complete.  Sure, there are still Republicans there, but from now on they will control nothing.  As I wrote a year ago (Trump: The Last President?), this demographic shift isn’t only occurring in Virginia, but in Texas as well.

vaplate2.jpg

I can see why – old people really give you something to chew over.

As long as the demographic shift of new immigrants (yes, even legal ones) to places like Texas and Virginia continues, this trend is inevitable.  The mathematics are simple – two out of three immigrants vote for Democrats.  You cannot continue to import people who vote for Leftist policies and not expect that they’ll eventually win.  The odd thing is that I’ve seen comments from folks in Texas saying, “It won’t happen here.”  I’m sure that the folks in California and now Virginia might want to have a word with you.

This demographic change will lead to a permanently politically dispossessed class – and a feeling in the Left that the Left can make any law they like.  And that will lead to a very difficult reaction.  Heck, I’d consider moving overseas, but I’m scared of the six month rabies quarantine.  I mean, would I have Internet?

Links

obilink.jpg

Please leave links either in the comments below, or feel free to send me an email if you’re shy.  If you email me, I won’t say that the link is from you unless I get permission.  JOKE HERE.

From Vote Harder at The Burning Platform:

Bad Cop One – Taser Torture

Bad Cop Two – Mom Robbed of Bail

Bad Cop Three – No Such Thing as Excessive Force

Bad Cop Four – Growing things?  That’s a raid.

Privacy?  What’s that?

Overdue books?  Jail.  (I have two books that are overdue by thirty years.)

From AC at The Burning Platform:

AntiFa Assassination Guide

Groypers.

From KaD at The Burning Platform:

Al-Cleveland

From “Mygirl…maybe” at The Burning Platform:

More Virginia.

From Hank Curmudgeon:

Where the food is.

From Ricky:

Free Range Love

Food:  Pigs in Danger

Coup?

Nearly a half billion guns in American hands.

Avoiding Civil War – Mises.org.

Robert Gore –Alternative Reality.

Trump.

The Atlantic:  How America Ends.

 

AP on The Atlantic article above.

 

Trump Impeachment/Civil War.

Sessions protests.

 

Chinese Chess Game.

Coming soon:  Weimar America.

 

10 Years (or less) To A $10 Big Mac – How To Explain Inflation To Your Friends

“You want the solution to inflation?  Hi, friends.  Marshall Lucky here for New Deal Used Cars, where we’re lowering inflation not only by fighting high prices, not only by murdering high prices, but by blowing the living s**t out of high prices.” – Used Cars

brady.jpg

Tom Brady isn’t alone – Lance Armstrong will do anything to his ball to win, too.

I drove to Burger King® for lunch for the first time in a long time.  I don’t eat lunch most days to stay in shape, and I keep reminding The Mrs. that spherical is a shape.  On the days that I do eat lunch, it’s hard to beat Chick-fil-aâ„¢ – they’re fast, they’re polite, the restaurants are clean, and they put massive amounts of heroin in the chicken – there is no other way to explain how addictive those stupid chicken sandwiches are.  I generally prefer beef to chicken, but the people at Chick-fil-a© are wizards.

jefila.jpg

I’m still waiting for them to offer a Steak-fil-a® sandwich.  Mmmm, now that’s probably worth a stoning!

Anyway, I ordered a burger, fries, and a drink.  The price for the meal?  Nearly $10.  American dollars – not that wrapping paper they use in Justin Trudeau’s country.  I remember back when a sit down lunch at a restaurant was available for a shiny nickel could be had for less than $5.  $10 for a burger, fries and an iced tea?

This was inflation in action.  Clearly you can see that the government rate of inflation – official truth – shows that inflation is low, at between 0.7% and 3% over the last decade.  But how true is that number?

The government does something interesting contortions when it measures inflation – it fudges the number.  When the government comes up with the inflation number, the government looks at things people buy – say, a computer.  Since computers have gotten roughly a zillion times faster over the last forty years, the government assumes that we’re getting a zillion times more computer for our money.  In one sense that’s true – my computer today has more memory and is far faster than any computer I’ve ever owned and is demanding a living wage, free healthcare, and a right to vote.

But in another sense, my computer isn’t a zillion times better.  I’m using it for a word processor.  Sure, the program is better today than in 1995, but it’s maybe 10% better, which is a metric smuckfest© away from a zillion percent better.

Likewise, if I were to play a game that would have been impossible to play back in 1995, it’s not 500% better.  There were great games in 1995 – Doom® would like a word with anyone who disagrees.  Sure, the richness of the games in 2019 is better, but Alia S. Wilder gave The Mrs. a copy of a video game that came out in 2002 for Christmas 2019.  The Mrs. was thrilled – the storytelling, she said, held up really well.

It’s not only computers, but other products like cars – add an air bag that I didn’t ask for?  That increases the “value” to the government guy doing the calculations even though I never asked for one and it’s never helped me even a little bit.  All in all, computers have been deflating in price according to the government.  This helps to offset some of the hugely inflationary items like healthcare and education.  But I’m not sick, and I’m done with school.  What’s a more realistic gauge of inflation?

Hamburgers.  One of the best gauges is the Big Mac® index:

inflat.jpg

If this graph is right, a Big Mac™ will cost $10 in 10 years.  Or it will be made from spare Swedish people – and if you are what you eat, we’ll all be the victims of this policy. 

Graph source, Seeking Alpha® (LINK).

Big Mac© hamburgers are made across the country and the same twoallbeefpattiesspecialsaucelettucecheesepicklesonionsonasesameseedbun has been made for decades with little variation from Portland, ME, to Portland, OR.  Indeed, they’re made across the world and are one gauge of the value of local currency used by The Economist™ to judge the relative purchasing power of local currency.

The cost increase we’ve seen in a Big Mac™ is substantially higher than inflation.  And it’s not because it’s a premier burger on the market – in almost any city you can find a better burger than a Big Mac© so it’s not like McDonalds® can increase the profit on a Big Mac© because people will not take a substitute.  Nobody goes to McDonalds® for excellent food – they go there because of self-loathing because the food is generally consistent.  Heck, your humble author even went there today for research for this article.  You can get a McChicken™ for a McDollar©, but McDonalds® doesn’t include any McHeroin™.

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So, you’re telling me that when Congress is out of money it can just write itself a check and deposit it?

Even before McDonalds®, the United States was no stranger to inflation, just like my waistline.  During the Revolutionary War the Continental Congress authorized $241,552,780 of money to be issued – I still wonder what the $780 was for – Washington’s Netflix® subscription?

There were 2.8 million Americans during that time period and let’s assume that two out of five Americans was working (women stayed home, and kids weren’t required to report to the fish gutting plant until age five) for cash that would be nearly full year’s wages FOR EVERYONE WORKING based on the sources I could find.

The Continental collapsed in value – that’s where the phrase, “not worth a Continental” (which is strangely absent from Urban Dictionary®, the must be behind the times) came from.  After the United States was finally formed, the Continentals were allowed to be redeemed – for 1/40th of their face value in United States bonds.  I’m sure this made everyone who had Continental currency thrilled that they had gotten rid of the King.  At least in Great Britain they had Universal Healthcare and free ocelots in every pot.

The currency collapse of the Continental at least had an echo in the Constitution.  It led directly to the addition of the following clause:  “No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts.”  That sounds pretty simple.

Yet.

The Constitution lists the things the government is allowed to do.  Despite reading it again and again, there is absolutely no power listed for the Federal Government to issue money.  None.  Paper money issued before 1863 was primarily issued by private banks, and the value of a paper dollar actually varied, typically dropping if the state was kinda bad at regulating banks or if the state was far away.  The value of a gold coin didn’t vary because gold is gold ().

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I think the Michigan $3 bill would have been more popular if they had put Scarlett Johansen on it, so I put her over the picture of the cow.

When writing this post I ended up writing a LOT about how the government took over the power to create money during the War of Northern Aggression Civil War and the evolution of a single national currency – United States Notes, and then decided it read more like a snarky term paper for Macroeconomics 201, which I already passed back when a Big Mac® was as cheap as my ex-wife.  So I cut it out.

TL;DR:  The story is one of increasing Federal control and centralization of both money creation and supply.  The biggest change was when Franklin Roosevelt confiscated the gold of the American people and made it illegal to own more than five ounces of bullion or coins.  The reason?  Roosevelt wanted to print more money for his alien masters so they would restore the power of walking to his withered limbs, though they betrayed him and turned him into a flightless waterfowl.  Or was that the Twilight Zone®?  Anyway, the real reason was that by law the Federal Reserve had to have 40% reserves in gold on the money it printed.  Back in 1933 apparently they pretended that laws actually applied to people in power.

But Roosevelt stole the gold.

Presto!  More gold for the Fed!  There were several high-profile cases where people were prosecuted for owning gold to keep the masses in line.  Immediately after taking the gold, Roosevelt raised its price by 40%.  He had, effectively, devalued the dollar with a stroke of a pen.  This immediately made everyone in the United States who had money poorer, which, I hear, is exactly the cure for an economic depression.

And that’s inflation:  making money worth less.  What people didn’t realize was that by taking the gold, Roosevelt took away the only constraint on printing money.  145 years after the Constitution was written, that pesky “gold and silver” clause was gone.  There’s no way that this turns out bad, right?

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Too bad they already had enough air guitarists.

Nixon took the next logical step – he removed any constraints on printing by revoking the gold standard – the dollar was now backed by nothing.  Ford, dimly realizing it didn’t matter, made gold legal to own again since after forty years it ceased to be considered money by people.  Gold was a curiosity.  Silver had been dropped from America’s coins in the 1960’s as a “cost saving measure” – so America’s money was based on a promise.  A promise made by Nixon.

We now live in an era where it’s considered virtuous to have a slight inflation of 2% or so a year.  Benjamin Franklin spotted this con over two hundred years ago when he noted that the inflation of the Continental dollar had been a tax to pay for the Revolution.  Inflation is just that, it’s a tax.  It’s a silent one.  You still have the same $100 bill you had last year.  Nobody stole $2 from you.  Except that they did, and they bought themselves something nice, like salaries for everyone at the EPA when you weren’t looking.

The government takes money through taxation.  It also takes money through inflation – and it’s been slowly stealing the savings of every American for nearly 90 years.

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The Fed ruins all the best bikininomics graphs.

Source (LINK)

It feels funny, because many of you have read this before, some of you have read this message 100 times.  Maybe, just maybe the Big Mac® can be worth something as inflation picks up speed.  Perhaps when a Big Mac® costs $10 someone might notice?

Nah.  It’ll be fine.