Month: July 2024

Authored by Eric Lundrum via American Greatness,

A new report claims that the Biden Administration has deliberately been flying illegal aliens into the United States after they had already been deported during the Trump Administration.

According to the Washington Free Beacon, internal memos and interviews with staff at Immigration and Customs Enforcement (ICE) suggest that the Biden Administration has been running a secret program to fly previously-deported Cameroonians back into the country, after their asylum claims were previously denied.

The Cameroonian program was initiated in response to a report by Human Rights Watch in February of 2022, complaining about roughly 80 to 90 Cameroonians who had been deported between 2019 and 2021, when Donald Trump was President.

Despite their asylum claims all being rejected as invalid, many of them have since been transported back into the country in an unprecedented effort to purposefully bring more illegals onto American soil.

“Gutting deportations isn’t enough for the Biden administration, so now they’re apparently bringing back previously deported illegal aliens,” said Jon Feere, a former ICE official and director of investigations at the Center for Immigration Studies.

“These are people who have already had their cases closed, one way or another, and they’ve been returned home.”

The agency memos reveal that ICE officials have been working with nonprofit organizations to locate the deported Cameroonians so they can be brought back to the U.S. One example includes an email correspondence from Fatma Marouf, director of the Immigrant Rights Clinic at Texas A&M University, who informed ICE officials of the impending arrival of one such illegal, who flew into Dulles Airport in Virginia, near Washington D.C

“These individuals were deported by the order of a court after they were afforded all due process rights,” said Tom Blank, former chief of staff for ICE.

“For DHS to arbitrarily reverse court orders to satisfy complaints from an activist group makes a joke out of the entire legal immigration process. It looks like outside activist groups now run the DHS immigration process instead of the courts.”

These revelations further prove the extent to which the Biden Administration is willing to go in order to completely reverse the immigration policies of the Trump Administration. From his first day in office, Biden rescinded numerous immigration policies that secured the border, including a halt to construction of the border wall and ending Title 42 and the “Remain in Mexico” policy. Biden pledged on the campaign trail in 2020 that he would open the border and give free, taxpayer-funded benefits to illegals, including health care, housing, and education. New concerns have arisen over illegals being registered to vote shortly after arriving, which will most likely lead to an increase in voter fraud in key swing states in the upcoming presidential election.

Last week saw the second anniversary of the U.S. Supreme Court’s decision to overturn Roe v. Wade, ending the constitutional right to abortion that had been established by the original ruling in 1973.

Having always been a controversial topic, the reversal of Roe v. Wade has reignited and intensified the debate around abortion in the United States, as it shifted the battleground to the state level, highlighting stark contrasts in public opinion across different regions.

As Statista’s Katharina Buchholz shows in the map below, the abortion access map has been dramatically redrawn since the landmark decision was announced on June 24, 2022, creating a patchwork of different rules across the United States.

You will find more infographics at Statista

While many view abortion as a fundamental issue of women’s rights and bodily autonomy, others consider it moral issue concerning the sanctity of life.

This clash of seemingly irreconcilable values has made abortion a contentious and polarizing issue for decades but even more so in today’s political landscape.

Statista’s Felix Richter highlights this division in the chart below, based on a June 2024 survey conducted by YouGov on behalf of The Economist.

You will find more infographics at Statista

While 59 percent of respondents think that abortion should be legal, either with or without restrictions on gestational age, 31 percent of respondents think it should only be legal in special circumstances, for example when the life of the mother is in danger.

Another 10 percent even oppose such exceptions, saying that abortions should never be allowed.

Authored by Mike Maharrey via Money Metals,

A colleague recently discovered a website called “WTF Happened in 1971?”

The entire main page is filled with charts and graphs. All of them show some kind of significant shift beginning in 1971. There are over 75 of them!

Here are just a few examples:

Here is some more data from graphs on the website:

• African-American incomes virtually stopped catching up to white incomes in 1971.
• Median male income has flatlined compared to real GDP per capita since 1971.
• The number of 2-income families has surged since 1971.
• Price inflation has surged since 1971.
• A can of Campbell’s tomato soup has undergone significant shrinkflation since 1971. 
• Housing prices have skyrocketed since 1971.

What in the World Happened in 1971?

Clearly, something significant happened in 1971 causing a tremendous economic shift. 

What was it?

President Richard Nixon severed the dollar’s last connection with the gold standard, making it a purely free-floating fiat currency.

Nixon ordered Treasury Secretary John Connally to uncouple gold from its fixed $35 price and suspended the ability of foreign banks to directly exchange dollars for gold. During a national television address, Nixon promised the action would be temporary to “defend the dollar against the speculators.”

Nixon’s order was the end of a path off the gold standard that started during President Franklin D. Roosevelt’s administration. June 5, 1933, marked the beginning of a slow death of the dollar when Congress enacted a joint resolution erasing the right of private creditors in the United States to demand payment in gold. The move was the culmination of other actions taken by Roosevelt that year, including his infamous “gold confiscation” order.

While American citizens were legally prohibited from redeeming dollars for gold after Roosevelt’s policy changes, foreign governments maintained that privilege. In the 1960s, the Federal Reserve initiated an inflationary monetary policy to help monetize massive government spending for the Vietnam War and Pres. Lyndon Johnson’s “Great Society.” With the dollar losing value due to these inflationary policies, foreign governments began to redeem dollars for gold.

This is exactly how a gold standard is supposed to work. It puts limits on the amount the money supply can grow and constrains the government’s ability to spend. If the government “prints” too much money, other countries will begin to redeem the devaluing currency for gold. This is what was happening in the 1960s. As gold flowed out of the U.S. Treasury, concern grew that the country’s gold holdings could be completely depleted.

Instead of insisting on fiscal and monetary discipline, Nixon simply severed the dollar from its last ties to gold, allowing the central bank to inflate the money supply without restraint.

When he announced the closing of the gold window, Nixon said, “Let me lay to rest the bugaboo of what is called devaluation,” and promised, “Your dollar will be worth just as much as it is today.”

This was clearly a lie. That’s what all the charts on WTF Happened in 1971 reveal. 

According to the Consumer Price Index data released by the Bureau Labor of Statistics, the dollar has lost well over 80 percent of its value since Nixon’s fateful decision. Meanwhile, the dollar value of gold has gone from $35 an ounce to about $2,300.

And it decimated the middle class, creating significant socio-economic shifts.

You’ll only find one blurb of text on the WTF Happened in 1971 website. It’s a quote by economist F.A. Hayek.

“I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop.”

Check out the work of the Sound Money Defense League to see what’s happening at the state level to do just that.

Oil prices fell back from new two-month highs early on as (supply) fears over the impact of Hurricane Beryl eased, but (demand) expectations for heavy travel around the Fourth of July holiday in the U.S. on Thursday, however, helped to limit losses for oil.

However, Phil Flynn, senior market analyst at the Price Futures Group, told MarketWatch:

“Even without the storm, the markets are starting to price in a global oil supply deficit as the spreads are suggesting that the markets are already starting to tighten significantly.”

And after last week’s surprise crude and gasoline build, all eyes are back on the API data for a sneak peek…

API

• Crude -9.16mm – biggest draw since mid-Jan 2024

• Cushing +404k

• Gasoline +2.47mm

• Distillates -740k

After last week’s surprise crude build, API reports a huge draw in crude inventories last week (possibly in preparation for ‘Beryl’), but another sizable gasoline build…

Source: Bloomberg

WTI was trading around $83 ahead of the API print and spiked higher (to unchanged on the day) after the surprising large draw…

Even if crude prices ease a little, pump-prices are set to rise further…

Source: Bloomberg

Pouring more salt in President Biden’s polling wounds.

Authored by Petr Svab via The Epoch Times,

The banking industry has benefited from the Federal Reserve’s measures to control inflation.

Over the past two years, the U.S. central bank paid out more than $400 billion to banks and money market funds in interest payments and other transactions meant to curb lending to fight inflation, based on data published by the Fed as of July 1.

After a rate hike spree in 2022 and 2023, the central bank now pays 5.4 percent annual interest on “reserves” – any money a bank leaves parked at the Fed overnight.

The banks, on the other hand, haven’t necessarily passed on the windfall to its customers, as deposit rates remain very low compared to the rates banks receive from the Fed.

Customers would often have to utilize less convenient tools, such as Certificates of Deposit (CD), to access rates comparable to what the Fed currently pays.

The Fed has been authorized by Congress to pay interest on reserves and has done so since 2008.

For many years, the interest was only about 0.1 percent as the Fed was keeping rates near zero. In 2022, however, inflation spiked to 9 percent annual rate, prompting the Fed to rapidly raise the rates.

Interest on reserves creates a strong incentive for banks to only lend at rates higher than what the Fed offers since leaving deposits in their Fed accounts requires virtually no work and no risk.

The Fed is using this mechanism to tighten credit, depress demand, and thus ease price inflation pressure. Constraining lending also reduces the amount of dollars in circulation because banks de facto create new money as they issue loans. The new money then leaves circulation when the loans are repaid.

Another mechanism is called “reverse repurchase agreement” or reverse repo, where the Fed sells treasuries with an agreement to buy them the next day for a slightly higher price. The price difference is expressed by the Fed as an annual rate and is affected by Fed’s rate hikes too, currently standing at 5.3 percent.

That’s less than the interest on the reserves, but it provides better cash flow for it pays every day, while the interest on reserves is paid every two weeks. Also, reverse repos are open not just to banks, but also to money market funds.

Reverse repos have dropped from a peak of over $2.5 trillion on Dec. 30, 2022, to some $660 billion on June 28.

Interest on reserves and reverse repos have cost the Fed about $3.5 billion a week, based on the weekly averages of reserve balances at the Fed and daily reverse repo volumes.

It’s technically not a problem for the Fed to pay hundreds of billions in interest since it can create new money electronically. New dollars, however, increase inflation pressure.

Since its peak in mid-2022, price inflation dropped significantly, based on data from the Bureau of Labor Statistics. Over the past year, however, it has remained above 3 percent—above the Fed’s 2 percent target rate. An alternative measure of price inflation published by the Bureau of Economic Analysis has posted somewhat lower figures—2.6 percent for May—which is still above Fed’s target.

Markets are expecting the Fed to start lowering the rates later this year, perhaps in September, though the cuts are expected to be gradual, perhaps a quarter of a percentage point every six weeks.

Americans may have noticed the high interest rates in mortgages and car loans, but also in interest offered by banks on deposits.

Some smaller banks now offer high-yield savings accounts with interest above 5 percent.

Of the four largest banks – JPMorgan Chase, Bank of America, Citi Bank, and Wells Fargo – only one appears to currently offer a similar type of high-yield account.

We wrote in early June that the White House is planning to announce new Ukraine arms and funding packages about every two or three weeks, drawing from Biden’s $60 billion in recently approved total funding. In mid-May there was a package unveiled at $275 million, followed in the first week of June with another $225 million package.

It is not only consistency of these rollouts that is set to increase, but apparently the size of each, given that Defense Secretary Lloyd Austin on Tuesday said that the US will soon announce a whopping more than $2.3 billion in new military aid for Ukraine.

“This package under presidential drawdown authority will provide new air defense interceptors, anti-tank weapons, and other critical munitions from US inventories,” Austin explained in a meeting with Ukrainian Defense Minister Rustem Umerov as they met at the Pentagon.

“It will also enable the United States to procure more Patriot and NASAMs air defense interceptors, which will be provided on an accelerated timeline by the resequencing of deliveries for some foreign military sales,” he added.

A chunk of this is also expected to utilize the Ukraine Security Assistance Initiative (USAI), which authorizes the US government to purchase from the US defense sector.

Tuesday’s announcement appears in response to Ukraine officials renewing their calls for NATO and Western partners to impose a no-fly zone over Ukraine, given that unrelenting Russian airstrikes continue to decimate the electricity grid, resulting in nationwide blackouts.

Ukrainian parliament member Oleksiy Goncharenko told AFP at the start of this week, “I don’t understand why NATO doesn’t deploy Patriot systems along the Polish border.”

“After all, Russian missiles have already entered Polish and Romanian airspace. This would protect the borders of Poland and Romania, and this would create a safe zone in the west and south of Ukraine,” he added.

But Washington has already taken significant steps toward prioritizing getting Kiev the anti-air defenses it needs, having days ago confirmed that all Patriot missile supplies which were destined for other countries will now be re-routed for Ukraine. The Biden administration says that US partners have shown patience and understanding after this move.

The US has also lately signed a decade-long commitment to train Ukraine’s armed forces as well as engage in intelligence-sharing. The Biden administration further declared it will work on building a “bridge” toward Ukraine’s eventual entry into NATO.

BREAKING: Donald Trump says he will put an end to the United States funding Ukraine’s war against Russia.

“I think Zelensky is maybe the greatest salesman of any politician that’s ever lived.

Every time he comes to our country, he walks away with $60 billion.” pic.twitter.com/hC9mDS1kXK

— The General (@GeneralMCNews) June 16, 2024

NATO’s escalation has come piecemeal, even as there has been little serious effort toward getting the two warring sides to the negotiating table. Only in the last several weeks have there been murmurings out of Kiev that it’s time for some kind of negotiations, given how poorly Ukraine forces are fairing on the front lines. But the most dangerous recent escalation has been the US giving a greenlight for US weapons to be used in cross-border attacks inside Russian territory.

Authored by Tho Bishop via The Mises Institute,

Following last week’s decisions, which represented a significant blow to the American administrative state, yesterday, the Supreme Court did what was widely expected: rule in favor of Donald Trump in a case related to federal prosecution over January 6. In a 6-3 decision, the court ruled that presidents have “presumptive immunity” for “official acts” while in office.

The decision does not necessarily kill the potential for federal prosecution, kicking the question to a lower district court about whether or not Trump’s actions constitute an “official act.”

In practice, however, it effectively delays any future decision until after the November election.

The unexceptional outcome has been met with predictable hysteria from critics of the former president, with rabid online fans suggesting that the Biden Administration would now have a green light to take extraordinary actions against a political opponent.

Of course, on this same day, a prominent Trump ally, Steve Bannon, has been ordered to turn himself into federal custody for failing to comply with a politicized Congressional probe illustrates the degree to which extraordinary action has already become commonplace in Washington.

Inane hysterics have not been limited to progressive keyboard warriors, however. Take, for example, a dissent opinion written by Justice Sonia Sotomayor.

She concludes with the following:

Never in the history of our Republic has a President had reason to believe that he would be immune from criminal prosecution if he used the trappings of his office to violate the criminal law. Moving forward, however, all former Presidents will be cloaked in such immunity. If the occupant of that office misuses official power for personal gain, the criminal law that the rest of us must abide will not provide a backstop.”

“With fear for our democracy, I dissent.

Those who desire a society with equal protection under the law would likely agree that no president should be “above the law.”

The problem, of course, is that what Sotomayor is describing is not a modern abomination foisted by an out-of-control, partisan court determined to protect a political patron. Instead, presidential immunity from misconduct has been the operating status quo in this country for decades.

It is the current objection to its application here that it is driven by petty partisan animus, not an idealistic concern for the sacred nature of American democracy. 

As has been well documented at sites like Mises.org for quite some time, the executive branch’s tradition of criminal behavior has become ingrained in the office itself. Modern obvious examples include unilateral declaring war without the authorization of Congress, often with the deliberate use of bad intelligence. It includes ordering the death of American citizens abroad under the guise of these military adventures. President Biden has ignored concerns from the Supreme Court itself regarding action on student loans. 

If one reassesses the presidency further, one could find numerous other examples, such as Franklin Delano Roosevelt’s secretive use of the loan-lease program to actively subsidize the Soviet Union before American involvement in World War II. Or the general erosion of the Bill of Rights by the gradual expansion of federal power dating back well over a century.

Still, reflexive defenders of the institution of the presidency may suggest that these official breaks of the rule of law should be considered separately from the more vulgar nature of what federal prosecutors are claiming Trump is guilty of: the exercise of the power of the presidency to serve his narrow self-interest. In the words of Sotomayor, “misuses [of] official power for personal gain.”

This, too, falls flat. After all, Bill Clinton was among those most effective at monetizing the office for him and his family. As he was on his way to the door, pardons were going for a few hundred thousand dollars. 

Once again, the regime’s critics of Donald Trump ring entirely hollow because his own actions, at their most condemnable, are all behaviors that they themselves have been comfortable enabling for those they consider their own.

The pearl-clutching of those who delude themselves as self-grandiose defenders of democracy has sowed the seeds for the growing disillusionment of American institutions. Though they are intellectually incapable of appreciating it, this absurd behavior has been their greatest contribution to American society. 

Despite the near-perfect track record of downward revisions over the last 17 months, the market seemed buoyed today by a better than expected JOLTS print – which was juiced almost entirely by government jobs

Source: Bloomberg

And that was enough to send rate-cut expectations (dovishly) higher

Source: Bloomberg

Which pulled stocks and bonds higher in price…

Source: Bloomberg

In equity land, Nasdaq was the biggest gainer while Small Caps lagged

…as the energy-tech/AI pair continued to flip-flop (today’s winner was tech over energy)…

Source: Bloomberg

TSLA had a big day, up almost 10% after beating expectations for deliveries (getting back towards unchanged for the year)…

Which helped lift the Mag7 to fresh record-er highs…

Source: Bloomberg

Treasury yields were lower across the curve with the belly outperforming (7Y -4bp[s, 2Y & 30Y -2bps)…

Source: Bloomberg

The dollar dived on the dovishness….

Source: Bloomberg

Gold traded sideways once again (despite the dollar weakness)…

Source: Bloomberg

Oil prices touched a new two-month highs before legging back down for the day with WTI holding around $83 into tonight’s API data…

Source: Bloomberg

Having rallied back up to the scene of the Mt.Gox headline crime, Bitcoin slipped back lower today…

Source: Bloomberg

…despite 5 straight days of ETF inflows leading into this…

Source: Bloomberg

Finally, for the first time on over a year, macro-economic surprises have turned negative across every major region in the world…

Source: Bloomberg

Tim for The Fed to save the world (from Tyrannical Trump… with Simple Joe?)

Several years ago we calculated that the cost to implement the “Green new deal”, and to fund the liberal crusade against “climate change” would cost no less than $150 trillion over 30 years, or about $5 trillion per year, a staggering amount, and one which would require constant QE by central banks in the trillions each and every year to have any chance of ever getting funded, a process which just incidentally would spark double (if not triple) digit inflation.

Which of course was the whole point: the bullshit “green” narrative was spewed by the top echelons of power not because these private jetsetters give a rat’s ass about the environment – if that was the case the CO2 footprint of the top 1% would not be greater than the bottom 90% – but because they always needed a palatable and “virtuous” justification to spend like drunken sailors, be it to destroy ideological enemy X in noble war Y (where the deep state is the biggest beneficiary of the flood in defense spending), or to destroy evil climate change.

Now, it is well-known that the framework for this gargantuan spending spree took place “before covid”, a world which was largely devoid of inflation and where there were tens of trillions in negative-yielding bonds – hardly the stuff that allows debt to be inflated away, in fact quite the opposite – and since the goal was precisely that, namely to inflate away the world’s hundreds of trillions in excess debt, the “unexpected but welcome arrival” of the covid crash and the runaway inflation that the resulting fiscal spendgasm unleashed, effectively obviated the green new deal. No longer would the world need to justify spending $150 trillion to “fix climate” in order to spark the runaway inflation that would inflate the world’s record debt.

But the presence of inflation eliminating the core need for the “climate change” crusade, also meant that suddenly there was a gaping hole for what the “next big thing” would be that would require trillions in (preferably taxpayer-funded, i.e. QE) spending, that would then by quietly transferred into the pockets of middlemen who took it upon themselves to “effectively” allocate said capital.

Enter the AI narrative.

Yes, just like Blu Rays, 3D TVs, 3D printers, the 5G revolution, and so many other gimmicks over the recent years, the true purpose of AI – which is nothing more than a glorified yet prone to catastrophic error and hallucination chatbot – is to force management teams (and taxpayers) to spend capex like drunken sailors, in the process creating a new order of ultra rich entrepreneurs, who return the favor and allocate purchase orders to the same management teams, while making the insurmountable moat separating the tech giants from the rest of the market even wider. In short: all AI does is create the illusion of some huge, unmet market (some idiots have even mentioned quadrillions in Total Addressable Market size) while in realty what it really does is allocate capital to a handful of soon to be super wealthy scam artists, while leaving the population – and gullible creditors – holding the bag when this latest ivory tower comes crashing down. But don’t take our word: here is Goldman expressing skepticism about the next big thing (full note available to pro subs in the usual place).

And while much of the equity has already been distributed to the lucky few, with Nvidia and OpenAI by far the biggest winners and with the “Next AI trade” – namely the energy infrastructure needed to keep all those thousands of electricity-guzzling data centers up and running – waiting in the wings for its day in the sun and your brokerage account, where the real bonanza will be is not equity at all but rather debt.

We touched upon this two weeks ago when we reported that according to Morgan Stanley, “The AI Revolution Will Unleash An Explosion In New Debt Issuance“.

Quoting the bank’s head of quantitative research, Vishwanath Tirupattur, we said that “It goes without saying that AI infrastructure will need substantial capex. Early on, much of the AI capex has been funded by a combination of venture capital and retained earnings from cash-rich technology companies, i.e., equity capital. As the focus shifts from early innovators and enablers to AI adopters, these needs are bound to grow significantly and will require more efficient forms of capital. We think that credit markets in various forms – unsecured, secured, securitized and asset-backed – will have a major role to play.“

In addition, we noted, “as the capex cycle broadens out from enablers to adopters, we note that most sectors are not as cash-rich as tech. While the median cash-to-debt ratio for the tech sector is over 50%, it stands at close to 15% for the remaining sectors. As capital needs driven by the AI infrastructure build-out increase, we expect reliance on credit markets to grow.”

Financing for AI infrastructure, particularly data centers, will not come from corporate credit markets alone. Data centers can be owned by the companies using them or by a data center operator that leases space to them. The data centers themselves and/or the tenant lease payments can be treated as the underlying collateral to access securitization markets. This is already happening. The first data center ABS was issued in 2018, and the market has now grown to over US$20 billion and is poised for rapid growth.”

The bottom line, we said, is that “as AI-driven technology diffusion takes center stage, credit markets, broadly defined, will likely play a growing role. As always, there will be winners and losers, but AI as a theme for credit investors is here to stay.“

This may have been an understatement, because fast-forwarding to today, Blackstone Credit and Insurance’s global chief investment officer, Michael Zawadzki, said on Bloomberg Television that the $1.7 trillion private-lending industry is still “in batting practice” before it swells to a $25 trillion market.

And what will drive this expansion? Take a wild guess: according to Zawadzki, the funding needs will be to finance the energy transition (he didn’t get the memo yet that the “Green” narrative is dead) and – of course – data centers (this is the narrative that is now stepping in to justify the coming debt tsunami, now that the “green new deal” is dead).

“You’re financing the real economy — you’re not waiting for M&A transactions to happen,” Zawadzki said. “You’re financing consumers, you’re financing data centers, you’re financing energy transition. Huge growth capital expenditures, that’s what’s really driving the growth.”

And that’s how, when you repeat the lie enough times, a hallucinating chatbot becomes “the real economy.”

Higher base rates, the shift from banks to private lenders and the proliferation of strategies to access private credit allow the market to grow larger, Zawadzki said. The private investment grade strategies like asset-backed finance and infrastructure credit are “really compelling” in today’s market, he said. The size of the asset-based finance market is about $5 trillion to $10 trillion, he said.

Naturally, having become the largest commercial and residential landlord in the US, Blackstone is now seeking to monopolize the next big thing: data centers in general, and the private debt to fund them in particular. Not surprisingly the private equity giant has been active in the asset-based finance markets, leading debt packages for cloud computing firm CoreWeave tied to assets including microchips. And as is well known, CoreWeave has been one of the first and biggest drivers of growth at Nvidia (and we aren’t even going into the conspiracy theories). So, if one is so inclined, one can directly trace the flow of money: from Blackstone debt to CoreWeave purchase orders, to Nvidia AI chip backlogs, to trillions in market cap gained for a handful of firms, to the S&P and Nasdaq at daily all time highs.

Talk about leverage, and that is just the start.

Of course, it’s not just AI: Zawadzki said that spreads in public markets have become “awfully tight” due to investors flowing into the asset class. So Blackstone has encouraged clients to enter private credit due to excess spread and the illiquidity premium it offers. But credit is nothing without the demand for it, and right now, nothing screams demand more than AI and the need to fund the tens of trillions in infrastructure growth over the next few years.

Just don’t call it the “Green Next Deal.”

More: “The AI Revolution Will Unleash An Explosion In New Debt Issuance.”

Submitted by QTR’s Fringe Finance

I had the wonderful pleasure of interviewing my friend Chris Martenson from Peak Prosperity this week. Martenson, PhD (Duke), MBA (Cornell) is an economic researcher and futurist specializing in energy and resource depletion, and founder of PeakProsperity.com.

He is one of a small list of favorites of mine that I am constantly reading and following on Twitter and on his site. He was also one of the first to sound the alarm about Covid in the U.S. while the mainstream media (and the rest of the nation) hadn’t figured out the obvious yet.

In our 75 minute audio interview, we discussed a wide range of topics, including the potential for World War 3, the immigration crisis, the state of the economy in the U.S., our nation’s response to Covid and looking back on the events of 9/11 more than 20 years later.

Chris told me right off the bat that he has significant concerns about the Russia/Ukraine war escalating due to the U.S. war machine making unilateral decisions: “So here’s the event that bothers me the most right now. A month ago, we hear that Ukraine has used some of their first long-range capabilities to attack Russia’s over-the-horizon nuclear early detection radar system. One of them, right?”

“A couple of weeks later, a second one. All right. Do you think anybody listening to this really believes that we voted for somebody who made that decision to target those things?”

He continued: “They didn’t consult any congressmen or senators. There’s like no presidential input involved. Somebody somewhere in the deep state said, you know what, let’s blind Russia right now for nuclear attacks and hope for the best. Or what? I don’t know what their plan is, but we can all feel it—that we have an out-of-control machine that makes decisions that have nothing to do with what’s best for you or me or anybody else.”

The conversation then look a hard turn into discussing the deep state, the U.S. war machine and the events of 9/11. Chris and I both shared our concerns with the details we were given about the events of September 11, 2001, specifically regarding Building 7.

Chris told me: “My PhD from Duke University is in a life science. But to get there, I took physics, I took chemistry, organic chemistry, all kinds of things, right? So I’m a big believer in chemistry. Physics and chemistry, okay? So with that said, there’s some laws out there. There are natural laws, like the law of gravity. You can not believe in it. You can decide that you can cross your legs, float, but nobody does it, right? It just doesn’t happen. It’s this thing. It’s like death. I’m gonna evade death. No, you’re not, right?”

He continued: “Second, there’s this law of the conservation of momentum, right? So if you’re standing on a pond that’s frozen over and I’m standing on a pond and you push on me, we’re both going in opposite directions, right? It’s just how it is. So when we look at Building Seven, if you were standing on the corner, any one of the four corners, it fell symmetrically like an imploding building, but leave that aside, that observation. If you were standing on the corner at the moment it let go, NIST itself had to finally admit that for two and a quarter seconds, that building fell at free fall.”

Chris explained why this is so concerning: “Meaning if you dropped a bowling ball into the air off the corner of the building at the same time that let go, it would track at the same pace. Like if you jumped off a bridge that was 88 feet high. Yes. If you jumped off that building, you and the corner of that building would be eye to eye staring at each other as it went down.”

“That building had 80,000 tons of structural steel in it. It doesn’t just go away. It can’t, but it did. For two and a quarter seconds, there was no resistance to downward momentum. That’s not… you can’t crumple that. There’s no possible way to begin progressively collapsing this thing. You can’t do that. So we have to then come up with an explanation for how 80,000 tons of structural steel stepped aside and provided no resistance for two and a quarter seconds.”

After hashing out our thoughts on 9/11, our conversation turned to the forthcoming election. Martenson expressed to me that the election either could “already be in the bag” or “not be happening”, two ideas I couldn’t help but be skeptical of.

Chris told me: “So what is the media not talking about? What’s not happening that really ought to be happening? And on that front, you know what’s really unnerving to me? Biden and Harris aren’t really campaigning. You know, they just sort of weakly started lately. I was starting to see a few ads here and there, but it’s lame. It’s like they don’t even care. And so how is it that you wouldn’t even campaign? Well, one of two reasons. You’re not worried about the election because it’s already in the bag, right? Or there’s not going to be one.”

Turing our attention to the problems the nation faces, we talked about the U.S. debt crisis and the nation’s immigration crisis.

“We clearly have a runaway monetary fiscal train at this point in time, and it’s just headed towards what I call the nuclear reactor critical mass runaway moment,” Chris told me. “Higher interest payments beget more borrowing, which begets higher interest rates, which begets higher interest payments. And you’re on that spiral. That’s the death spiral, which happens to companies, but it can happen to countries too.”

He continued: “We could have probably kicked the can another cycle or two, but now you have the rest of the world backing away, if not trotting away from the U.S. dollar, and people don’t get it yet. China’s negatively hoarding their treasuries, they’re dis-hoarding right now. So China’s selling. Japan’s in a world of hurt. I don’t know if you see, but the yen’s here banging around at the 160 level again. So they’re selling, and their big bank has to probably sell some treasuries. Russia, obviously not buying any of our crap—they kicked that habit in 2018. But Saudi Arabia now not buying treasuries, dis-hoarding.”

And he raised questions about where, exactly, treasury demand is coming from, telling me: “So who’s buying? Well, you go to the Treasury International Capital Report. You find out, oh good, the Cayman Islands stepped in. Dude, we need an audit of the Fed right away. I don’t think it’s always suspicious to see it, no, because every time we need the Cayman Islands and the UK to step up and buy just hand over fist treasuries, somehow they do.”

Finally, Chris — like most of us watching flawed policy unfold — says we’re definitely going back to QE: “But listen, here’s a prediction. It’s very easy to make for me. The Fed’s going to have to go back to QE. It’s not just lowering interest rates—that’s going to do dick all for us at this point. They’re going to go back to QE because we can’t risk a treasury failure. We have $9 trillion of debt, new and existing, rolling through the auction market this next calendar year. And so the Fed’s going to have to step in and start buying that stuff. Full stop. That’s inflation.”

Last, we discussed some alarming facts about the ongoing immigration crisis in the U.S., namely the idea that there are tons of military aged men coming from countries like China and entering the country.

Chris thinks its part of a larger plan: “Well, they’re letting in the teams that are going to attack us and dismantle us from within when the war starts. I mean, that sounds conspiratorial, but God damn, if I can’t help but think that. You know, military. It’s the data. You can’t exclude it out of hand. You just can’t. Maybe not all of them. Let’s say we had 20 million people come in over the last five, six years or whatever the number is now, right?”

“What if just 10% of them are nefarious? They’re MS-13 gang members who got disordered from a Nicaraguan jail, or they’re actual SEAL team equivalents coming from China, Afghanistan, wherever, right? That’s just 10%. Okay, well, there’s 2 million people inside our country now who are poised to cause damage if called upon, right? And no one knows where they are and they don’t have social security numbers. Nobody can track them. You know, it’s just, you’re a racist if you do.”

You can listen to the full 75 minute long audio discussion at this link. 

QTR’s Disclaimer: Please read my full legal disclaimer on my About page here. This post represents my opinions only. In addition, please understand I am an idiot and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning. Contributor posts and aggregated posts have been hand selected by me, have not been fact checked and are the opinions of their authors. They are either submitted to QTR by their author, reprinted under a Creative Commons license with my best effort to uphold what the license asks, or with the permission of the author. This is not a recommendation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. These positions can change immediately as soon as I publish this, with or without notice. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. I edit after my posts are published because I’m impatient and lazy, so if you see a typo, check back in a half hour. Also, I just straight up get shit wrong a lot. I mention it twice because it’s that important.