Month: September 2024

Authored by Juan Carlos Porras via RealClearFlorida,

For many Floridians, living within a Homeowners Association (HOA) can feel like navigating a complex web of rules and regulations that often seem more restrictive than beneficial or sometimes even predatory. A recent survey conducted by the Florida Homeowners Association Reform Coalition reveals just how pervasive this sentiment is. The poll found that a staggering 72% of respondents are dissatisfied with their HOA experiences, with a notable 65% pointing to a lack of transparency and fairness and 58% criticizing the arbitrary enforcement of rules. These figures highlight the widespread frustration felt by homeowners and the undeniable need for substantive reform.

The statute governing HOAs was untouched for twenty years and even the existing statute did almost nothing to govern HOAs beyond establishing their existence. Since my election in 2022, I have championed HOA reform starting with House Bill 919, the Homeowners’ Bill of Rights, and the most recent House Bill 1203. This latest bill seeks to enhance transparency, improve financial reporting, and establish clearer procedures for resolving disputes. It also aims to increase homeowners’ involvement in decision-making processes, aiming to empower homeowners when it comes to their community’s management.

However, while the passage of House Bill 1203 is a promising development, it’s essential to understand that far more is needed to finally resolve the HOA issue and the solution is not exclusively legislative. Even polling data suggests that while there is optimism for change, skepticism remains high. Specifically, 63% of homeowners believe that legislative reforms alone will not be sufficient to rectify the issues without robust enforcement and oversight.

One major concern is the balance of power between HOAs and homeowners. Many residents feel that HOAs wield excessive authority, often enforcing rules in ways that seem punitive rather than constructive or even selectively enforcing particular rules. The bill’s focus on procedural clarity is a positive step, but it must be reinforced by measures that enforce the desired reassessment of power dynamics within HOA governance. For example, rules governing property appearance and maintenance, while intended to maintain community standards, can sometimes lead to unnecessary conflicts, stress, and financial hardship for homeowners. Without future measures that more clearly review how power is distributed and exercised, the reforms risk being undermined by unwavering HOA Boards.

The proposed legislation includes important measures such as more detailed financial reporting requirements for HOAs. This is a crucial step, as financial transparency is often cited as a major concern among residents. Many HOAs operate with little oversight, leading to questions about how fees are utilized and whether they are justified. Improved reporting could help ensure that homeowners have a clearer understanding of how their money is being spent and provide a basis for holding HOAs accountable for mismanagement. It is critical to remember that the funds held by an HOA are made up of the monthly required dues from the residents and the Board is a steward, but not the owner, of those funds.

Another significant aspect of House Bill 1203 is its focus on dispute resolution. Clearer procedures for resolving conflicts between HOAs and homeowners are essential for reducing friction and ensuring that grievances are addressed fairly. This aligns with the poll’s finding that 59% of respondents believe better enforcement and oversight are critical for the success of any reform efforts. Effective dispute resolution mechanisms can help mitigate conflicts before they escalate, fostering a more harmonious community environment and easing tensions between the Board and the residents.

Education and advocacy also play crucial roles in the reform process. Many homeowners are unaware of their rights or lack the knowledge to effectively challenge an HOA’s decisions. By increasing educational initiatives and providing resources to help residents navigate disputes, we can empower homeowners to advocate for themselves and contribute to a more balanced HOA experience. This proactive approach can complement legislative efforts, ensuring that Florida’s homeowners are aware of their rights and powers as members of an HOA.

Despite the promising aspects of House Bill 1203, the real challenge lies in its implementation. For the reforms to have a meaningful impact, they must be supported by effective oversight and enforcement mechanisms. Policymakers and community leaders need to ensure that these new regulations are not merely symbolic but are applied consistently and fairly across all HOA-managed communities. This will require ongoing vigilance and a commitment to addressing any issues that arise as the reforms are put into practice.

Furthermore, the success of these reforms will depend on the active engagement of both homeowners and HOA boards. Homeowners must remain informed and involved in their communities, while HOA boards need to embrace the spirit of reform and work collaboratively with residents. The best way to achieve this goal is through homeowner participation which can shift Board elections, decisions, and community management as a whole. Only through a concerted effort can we hope to achieve a more equitable and functional HOA system.

In conclusion, while House Bill 1203 represents a significant step towards addressing the challenges associated with HOAs in Florida, it is only one piece of the puzzle. Greater reform will require a combination of legislative changes, effective enforcement, and community engagement. The recent polling data underscores the widespread demand for these improvements and highlights the need for a comprehensive approach to overhauling HOA governance.

As Florida moves forward, it is crucial for policymakers, community leaders, and residents to work together to ensure that these reforms result in a more balanced and fair HOA system. The goal should be to create a framework where HOAs genuinely enhance community living rather than create additional layers of frustration and bureaucracy. There are enough problems facing Florida’s homeowners during this tumultuous time. With sustained effort and collaboration, I am committed to resolving HOAs as one of those problems so that we can move closer to peace and harmony in Florida’s beautiful communities.

State Representative Juan Carlos Porras is the youngest member of the Florida House of Representatives and he is the first Gen Z member of the Florida House of Representatives. He is the proud son of Cuban exiles and is grateful for his parents’ sacrifices that allowed him to become his family’s first college graduate. He graduated from Florida International University with a Bachelors in Political Science and also runs a food distribution company specializing in trading produce from Latin America. During his first two years as a member of the Florida House of Representatives he has championed HOA reform, matters of commerce, and has passed extensive healthcare measures. 

Authored by Star Parker via The Epoch Times,

A newspaper story several years ago reported about an elementary school teacher who held elections in his class.

The students picked their candidates—one little boy competing against one little girl.

The little boy stood up before the class and shared his ideas for changes that would improve their lives. The little girl stood up and promised that everyone who voted for her would get ice cream.

The little girl won, hands down.

Maybe it’s a cute story about 10-year-olds.

But it’s far less cute if we consider that the political reality in our country today is not much different.

Two-thirds of federal spending, which now takes almost one-fourth of our GDP, are transfer payments.

As opposed to federal spending that involves direct payments to individuals or firms—like salaries or purchases made by the Department of Defense—transfer payments are payments that are automatically transferred to one set of citizens out of the federal budget, as well as funds that the federal government transfers to the states.

We’re talking about programs such as Social Security, Medicare, food stamps, refundable tax credits, Medicaid, housing, welfare, and transit.

These are automatic, mandatory transfers, which, as a percent of federal spending, have increased by about a factor of 5 since 1950.

Per the House Budget Committee, the percentage of the U.S. population enrolled in Medicaid has increased from 9.3 percent in 1975 to 24.3 percent in 2022, getting food stamps from 7.9 percent in 1975 to 12.4 percent in 2022, and the earned income tax credit from 2.9 percent in 1975 to 9.3 percent in 2021.

The oldest and largest of these programs is Social Security. Whenever I convey that Social Security comes under the heading of federal entitlements, I get irate letters from those getting Social Security telling me they worked to get their benefits.

But that isn’t the point. The point is most Americans have no choice to be or not be in the program, and once in, everything is automatic—when and how much is paid (although there is some latitude when to start receiving the benefit)—and the benefits received are from taxes paid by others.

It is important to appreciate, which most don’t, that these types of transfers were once considered unconstitutional. It was Social Security that changed the game.

Taking from Peter to pay Paul was never understood to be a constitutional authority of the federal government.

But after President Franklin D. Roosevelt signed Social Security into law in 1935, its constitutionality was challenged in the case known as Helvering v. Davis.

The court, in that case, found Social Security constitutional in a major expansion of understanding of the “general welfare” clause of the U.S. Constitution—“The Congress shall have Power To lay and collect Taxes … and provide for the common Defense and general welfare.” As result of this ruling, a new understanding of “general welfare” gave Congress vast and wide new authority to tax and finance programs, even though those areas are not clearly enumerated in the Constitution as authority of the federal government.

Thus, the modern American welfare state was born, and the door was opened for politicians to promise ice cream in exchange for votes and power.

It is the main source of the explosion of federal spending, and now federal borrowing.

Change is possible. I began my career working on welfare reform.

With reform of AFDC, Aid to Families with Dependent Children, and of TANF, Temporary Assistance for Needy Families, the percentage of the population on welfare dropped from 5.2 percent in 1975 to 0.9 percent in 2019.

The founders envisioned a free nation under God in which the role of government is to protect life and property.

Our real challenge is to restore this mission and vision. It will make us all better off.

*  *  *

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Amid all the volatility of the last few weeks in stocks, money markets have seen a constant inflow of funds (six straight weeks) with the last week adding $23.4BN to total MM fund AUM to a new record high of $6.324TN…

Source: Bloomberg

That is $188BN of inflow in six weeks – the biggest since the turn of the year seasonal flows.

At the same time, US banks saw almost $53BN of deposit inflows in the week-ending 09/04, pushing total (seasonally-adjusted) deposits to their highest since before the SVB collapse…

Source: Bloomberg

On a non-seasonally-adjusted basis, US bank deposits soared $118BN last week – also back to its highest sine SVB…

Source: Bloomberg

Excluding foreign deposits, domestic bank deposits soared on both an SA (+$60BN) and NSA (+$137BN) basis…

Source: Bloomberg

…back above pre-SVB crisis levels…

Source: Bloomberg

After last week’s crash, domestic bank loan volumes rebounded modestly….

Source: Bloomberg

Finally, while US bank reserves at The fed have been trending lower, US equity market cap has stalled (at record highs)…

Source: Bloomberg

Which is more likely? A collapse back to reality for stocks (hard landing) or a huge sudden surge in reserves at The Fed?

Authored by James Howard Kunstler’s substack,

“One debate doesn’t change the issues Americans are facing every day.”

– James Rickards

By now, you’ve probably heard enough debate about The Debate, so I’ll spotlight only a few points everybody else left out. You might know this, but Hollywood plays a larger role in the Kamala campaign than just stuffing the endorsements of celebs such as George Clooney, Taylor Swift, and John Legend into the corporate media tank. In fact, much bigger playas, Jeffrey Katzenberg and Steven Spielberg, are producing and directing things backstage at Kamala Central, so what gets in the Kamala news plays as a Spielberg movie like The Color Purple. Just so you know. . . .

Ms. Harris had the advantage Tuesday night of being able to speak in declarative sentences, while her opponent, Mr. Trump, is given, shall we say, to a more choppy, telegraphic speech delivery. It lent Ms. Harris the appearance of being intelligent. The catch was, everything she said was disingenuous or an outright lie.

One whopper — more significant than you might realize — was her stating that she was in the US Capitol building when the J-6 riot happened. You’d think she’d want to be on-hand there, seeing as a joint session of Congress was about to certify her as the first female veep in US history — a chance to be joyful and shine! But, in fact, at 11:15a.m. on 1/6/21 — hours before protesters breeched the Capitol — Kamala Harris was spirited away a few blocks to 430 South Capitol Street, the headquarters building of the Democratic National Committee, where a pipe bomb (or facsimile of one) had been planted hours before by some DC law enforcement person (Capitol police? FBI? DC Metro Police? A paid “contractor” to the preceding outfits?). The exact identity of the culprit has never been released by the FBI, though they have all perp’s cell phone data and closed circuit TV footage.

The plan, you see, was to disrupt the election certification process underway at mid-day in the House chamber by creating a furor over the discovery of the pipe bomb planted to assassinate veep-elect Kamala Harris — a joint blob / Democratic Party operation.

The pipe bomb ruse, it turned out, was never needed because the FBI-instigated riot at the Capitol created a big disruption just in time to send the politicians scurrying for safety and cancel scrutiny of various state’s electors’ reports.

After that scare, the Senators and Congressmen did, in fact, drop the certification challenge and returned to hurriedly finish the certification process later that night of 1/6/21. The pipe bomb story barely made the news, and the scant news about it was expeditiously memory-holed thereafter. After nearly four years, as averred to above, the FBI has come up with. . . nothing. It is important that you understand just how nefarious your federal agencies are, and how corrupt the news is.

Now, as for the Harris-Trump debate, otherwise, and given the rigged features of the exercise, it’s obvious that Mr. Trump muffed several major scoring opportunities. When Ms. Harris dredged up the notorious hoax about “very fine people on both sides” in Charlottesville, Mr. Trump could have addressed the moderators, David Muir and Linsey Davis and asked them why they did not “fact-check” the utterance, which had been thoroughly debunked by the Left-wing site Snopes.com, advertising itself as “the definitive Internet reference source for researching urban legends, folklore, myths, rumors, and misinformation.” Nor did they fact check the likewise debunked “suckers and losers” hoax about US soldiers supposedly uttered by Mr. Trump at the Normandy D-Day cemetery.

Actually, Muir and Davis “fact-checked” Mr. Trump over thirty times and Ms. Harris hardly at all.

In any case, Mr. Trump blew many other chances to pin Ms. Harris with her own lies and hypocrisies — like, failing to state plainly that in nearly four years she never actually visited the Mexican border (whatever her designated title was: “Border Czar,”  “Root Causes Detective”) . . . failing to clarify that the president has been removed from the abortion debate altogether and has no role in telling women what to do with their own bodies under current law. . . that Ms. Harris’s voteless selection as nominee was a paradigmatic affront to “our democracy” that even her own fellow party members ought to recognize . . . that the War in Ukraine was actually started in early 2014 by Barack Obama, Victoria Nuland, and the CIA, not by Mr. Putin . . . and omitting to state that all — every last one — of the 2020 election lawsuits across the nation were dismissed on procedural grounds and not on the merits of their arguments, which were never heard in court. That’s just a short list. It is also rumored that Ms. Harris got the debate questions beforehand, since her husband, Hollywood lawyer Doug Emhoff, is a close friend of Dana Walden, Co-chair of the Disney Corporation board of directors (Disney owns ABC-News.)

Anyway, that much-awaited event is over now and we are into the homestretch of this election. Kamala Harris has still shown no disposition to meet the press, to answer any questions impromptu and unscripted. The voting public seems to be losing patience with that. Her poll numbers are sinking, despite her admirable ability to speak in declarative sentences and lead joyful laugh-fests.

What remains for our sore-beset country beyond that vortex of nefarious blobbery and balloting lawfare is the interesting development that our government is now pressing to commence World War Three before the election can happen. “Joe Biden,” of course, is lately as absent from the public consciousness as Rutherford B. Hayes, but whoever acts in the president’s name these days just gave permission for Ukraine to strike targets inside Russia with long-range missiles. So, far, the UK and the Netherlands have officially jumped in on that decision.

Note that the Ukrainians have no ability to actually do the targeting of said missile themselves, which involves satellite technology, meaning whatever missiles happen to get fired into Russia will be done by NATO personnel. Mr. Putin has made it clear that such action will have consequences. We might infer that means Russia will strike back at some NATO targets. I must imagine his primary target will be NATO headquarters in Brussels. Other targets would probably follow, perhaps even in the USA.

Prepare to duck-and-cover, or possibly to put your head between your legs and kiss your ass goodbye.

An event-full week (US CPI, US PPI, Presidential debate, ECB rate decision, and WSJ Fed whispers) left stocks, bonds, gold, crypto, and crude all higher in price, while the dollar was clubbed like a baby seal.

Soft survey data continues to rebound higher (full of hope) while hard data – most notably labor market-related – has been significantly lagging expectations…

Source: Bloomberg

…which, along with comments from The Wall Street Journal’s Fed-Whisperer (NikiLeaks) on discussions about a 50bps cut next week, sent rate-cut expectations higher on the week (despite plenty of chop around the hotter-than-expected core CPI print)…

Source: Bloomberg

…and shifted the market’s expectations for a 50bps cut next week above 50%…

Source: Bloomberg

Treasury yields were all lower on the week, led by the short-end…

Source: Bloomberg

…but despite bonds being bid, US stocks snapped aggressively higher midweek (after NVDA CEO Jensen Huang said “demand was incredible” and the algos went wild) and extended that sudden squeeze into Friday (with Small Caps and Nasdaq leading). Nasdaq was up just under 6% this week – its best week since the Powell Pivot at the start of Nov 2023…

Small Caps soared 2.5% today as desk chatter was that we saw corporates scrambling to execute permitted buybacks before the blackout period begins (55% of SPX will be in a closed window by Monday)…

…as “Most Shorted” stocks soared all week…

Source: Bloomberg

…and Mag7 stocks were up 5 days in a row (soaring to their best week since March 2023)…

Source: Bloomberg

This week was not just AI stocks but the second-derivatives trades (like powering AI). Goldman’s Power-Up-America basket soared to its best week in the last two years…

Source: Bloomberg

Stocks notably decoupled from bonds this week…

Source: Bloomberg

…as the Treasury curve (2s10s) steepened back into dis-inversion and its steepest since June 2022…

Source: Bloomberg

The dollar was slammed lower after the WSJ comments yesterday (its sixth down week in the last seven weeks), but remains in a relatively narrow band for the last four weeks…

Source: Bloomberg

The dollar’s weakness helped lift gold, which surged to a new record high with its best week in five months…

Source: Bloomberg

Oil prices ended the week higher (despite today’s pullback) but WTI remains below $70…

Source: Bloomberg

Which, along with the broad commodity space, is the only aspect of the markets that comes close to pricing in the 230bps of cuts priced into FF futures (a hard landing!!!)…

Source: Bloomberg

Finally, bitcoin surged to its best week in two months, testing back up to $60,000 today…

Source: Bloomberg

…as perhaps the lagged impact of the surge in global liquidity (money supply) is about to send it to the moon…

Source: Bloomberg

Gold and stocks are already there… and don’t forget – after Nasdaq’s  best week since the Powell Pivot, we are entering the market’s worst two-week period of the year…

Will Powell let the market down?

Four years ago, former President Trump warned suburban Americans that radical leftists within the Biden-Harris administration were pushing policies that could eventually “abolish the suburbs.” At the time, far-left corporate media outlets mocked Trump, dismissing his warnings as ‘outlandish.’

Here’s Trump back in 2020:

Q: What do you mean by invasion into suburbs if Joe Biden is elected?

Trump: “They’re going to be opening up areas of your neighborhood. For many reasons they’re going to in my opinion destroy suburbia. So you understand, 30%+ of the people living in suburbia are minorities.” pic.twitter.com/ZgFZwPcO6I

— Pod Save America (@PodSaveAmerica) August 12, 2020

Fast forward to today, and over ten million unvetted illegal aliens have had the red carpet rolled out to them by far-left Democrats, with some bussed to rural areas and suburban neighborhoods, has sparked violent crime, chaos, and exacerbated a housing crisis in places like Aurora, Colorado, Springfield, Ohio, and Charleroi, Pennsylvania. 

The extent of the reality that Trump warned is beginning to materialize in suburbia and small towns being overwhelmed by illegal aliens.  

• “Living In Third World”: Armed Venezuelan Gang Members Roam Colorado Apartment Building

• Aurora Spillover? Masked Criminals With AR-Style Rifle & Pistol Ransack Home In Denver Suburb

• “Can’t Take It Anymore”: Residents Of Springfield Ohio Beg For Help After 20,000 Haitians Overwhelm City, Eat Local Wildlife

• Ohio Sending Troopers, Funding To Springfield Over Haitian Influx

• Migrant Population In Charleroi, Pennsylvania Explodes 2,000% As Crisis Unfolds

And then there’s this:

• South American Gangs Target Mansions In Baltimore As Biden’s Border Crisis Spreads Chaos

What remains a mystery is why the Biden-Harris team is precision dumping illegal aliens in suburbia and or rural communities.

Well, the publication ‘Midwest Socialist,’ supported by Chicago Democratic Socialists of America, bluntly explained in 2021: “Abolish The Suburbs.” 

Circling back to Trump, on Thursday, he continued to call out the Marxist crusade against suburbs that VP Harris would most likely continue: 

“Finally, I will save America’s suburbs by protecting single-family zoning. The Radical Left wants to abolish the suburbs by forcing apartment complexes and low-income housing into the suburbs – right next to your beautiful house.”

“I will end this Marxist crusade…”

President Trump vows to save America’s suburbs:

“The Radical Left wants to abolish the suburbs by forcing apartment complexes and low-income housing into suburbs nationwide. I will end this Marxist crusade.” pic.twitter.com/xooKYIXbdt

— Charlie Kirk (@charliekirk11) September 12, 2024

Trump appears to be back in delivering a dire message to the suburban housewives… 

At a separate campaign event last month, Trump said: 

“When I return to the White House, we will stop the plunder, rape, slaughter, and destruction of our American Suburbs, Cities, and Towns.” 

He noted: 

“We will shut down deadly Sanctuary Cities. I will shift massive portions of federal law enforcement to immigration enforcement. On Day One, we will begin the largest domestic deportation operation in the history of our country.”

PRESIDENT TRUMP: “When I return to the White House, we will stop the plunder, rape, slaughter, and destruction of our American Suburbs, Cities, and Towns.”

“We will shut down deadly Sanctuary Cities.”

“I will shift massive portions of federal law enforcement to immigration… pic.twitter.com/FsplMwauWp

— Trump War Room (@TrumpWarRoom) August 20, 2024

Let’s not forget that former President Barack Obama, in his efforts to push for a socialist reconstruction of the US, pushed regulations in 2013 aimed at forcing neighborhoods with zero history of housing discrimination to construct low-income apartment housing for ethnic and racial minorities. Perhaps now, Biden-Harris dumping of illegals in small towns and suburbia makes a little more sense.

It’s pretty evident that Marxist Democrats dislike not just landowners but also the family unit. It’s stated very clearly in their far-left activist group BLM about their goals to dismantle the “Western nuclear family.” Essentially, there’s a multi-front assault on America by Marxists.

We have to seriously consider whether foreign adversaries, like Communist China, could be supporting far-left Democrats’ efforts to undermine the nation. And why not? Beijing doesn’t have to fire a shot while open borders overwhelm local towns and drain resources; plus, a fentanyl crisis (stoked by China) wipes out 100,000 Americans per year, many of which are military-age men and women, through a drug death overdose catastrophe.

This question arises because there’s something not right here: “Walz Under Fire: Appointee To State Board Has Deep Connections With CCP-Linked Group.”

Authored by Michael Wilkerson via The Epoch Times,

With equity markets, real estate, and other financial asset values at or near all-time highs, that small minority of citizens who primarily benefit from the Wall Street economy have never been more well-off in financial terms, at least on paper.

On the other hand, the vast majority of Americans in the Main Street economy, i.e., those who rely on real-world jobs with salaries, hourly wages, and other earnings from their labor, continue to fall further and further behind in both real income and household wealth. For Main Street, personal indebtedness is at record highs (more than $17 trillion in the United States), and savings rates are near all-time lows. Average real (after inflation) income has fallen since 2019. The financial stress on American households is increasing with each passing month.

A crisis is brewing.

The value and “dollar” retail stores serve as a good proxy for the financial health of the middle class and low-end household. The American consumer is increasingly closing his or her shrinking wallet to anything other than the most essential of items, such as food and fuel. Facing weak sales trends and profits pressured by everything from rising costs to forced discounting and increased theft, shares of Dollar General and Dollar Tree have each fallen approximately one-third since the beginning of August. Target had negative comparable store sales for over a year before finally turning slightly positive this quarter. The big box retailers, such as Home Depot, Lowe’s, and Best Buy, that sell more expensive, discretionary items, have had negative comparable store sales for six to ten consecutive quarters. Popular restaurants and specialty retailers alike are seeing fewer consumers place smaller-value orders.

Compare this dismal performance to the fortunes of the luxury goods sector, which caters to the wealthiest of affluent customers around the world. LVMH, which owns well-known global luxury brands such as Louis Vuitton, Moët, and Tiffany’s, reported 2 percent organic revenue growth for the first half of 2024, along with operating profit margins “significantly exceeding pre-Covid levels,” despite “a geopolitical and economic environment that remained uncertain.” Ferrari, another proxy brand for high-end consumer spending, announced revenues were up 16.2 percent, with shipments up almost 3 percent, in the second quarter compared to last year. Going from strength to strength, Ferrari’s shares are up more than 58 percent in the past year.

Comparing the “Dollar General versus Ferrari” economies reveals stark differences between the two worlds. Wall Street continues to prosper in the face of inflation, slowing GDP growth, and corporate layoffs, while Main Street is clearly in a practical, if not technical, recession, as good-paying jobs grow scarce. For most Americans, things are getting worse, and they know it.

According to data from the Federal Reserve, the top 1 percent of Americans now hold more than 30 percent of total net worth, while the bottom 50 percent hold a mere 2.5 percent. This wealth gap between the richest and everyone else is growing, both here in the United States and around the world. The trend of increasing wealth concentration is not new. It has been going on for some time, with accelerations after both the global financial crisis (GFC) of 2008-9 and the lockdowns of 2020. But what is new, and increasingly urgent, is the level of financial stress that the American working and middle classes now face.

While there are many contributing factors to the widening wealth gap, prominently, if not foremost among them, has been the easy money policies of central banks in the West over the past few decades. These institutions, by artificially suppressing interest rates over many years, have facilitated a massive asset bubble and a heavy tipping of the tables toward the rentier class, whose wealth comprises stocks, bonds, and real estate. The distortion of near-zero interest rates, combined with globalist-oriented U.S. trade policies that favored offshoring, led to the decimation of the American manufacturing base and the jobs it supported.

While it was the Trump administration that first confronted this imbalance with a stronger trade regime, and in particular the use of corrective tariffs against China and other countries that were abusing the free trade system, the Biden administration recognized the benefits of tariffs and other measures, and left many of the Trump-era trade policies in place. Nonetheless, it will take much more than what has been done to date to reverse course.

Previous crises, again referencing the GFC and the COVID-19 pandemic, were met with massive deficit spending, financial stimulus, and monetary expansion, which inevitably led to persistent inflation, and to an unsustainable level of government debt. That old trick will not work this time around. The storehouse has been emptied.

A strong nation requires a vibrant middle class, and an economy that is based on the production of real things. The United States can once again make the goods it consumes. This is the only way to build and retain national wealth. This difficult transformation will, at a minimum, require a stronger trade policy that protects American economic, financial, and national security interests. Onshoring must be encouraged, and value-add retained domestically wherever possible. Intellectual property must be safeguarded.

We need an unencumbering of America’s bountiful domestic energy and other natural resources, the production of which has in recent years been held back by relentless regulatory pressure and suffocating bureaucracy. The United States must develop a coordinated technology policy framework that encourages American leadership and innovation in different areas. We need a substantial upgrading of a broken educational system that no longer concerns itself with science, engineering, and related practical skills.

If the Federal Reserve lowers interest rates later this month, as is widely expected, the warp of benefits toward Wall Street will continue, while doing little to benefit Main Street. Marginally lower mortgage rates do little to help families when houses are priced out of the reach of Americans who don’t have stable, well-paying jobs to afford them anyhow. True recovery will come from the real, not the financial, economy, and a new administration will have ample opportunity to set the policy framework to attain it.

History warns us that if this crisis is ignored, and the distortions are allowed to continue, the nation risks serious social disruption and upheaval, which will benefit no one, including those who today aren’t yet feeling the pain.

Since the Russia-Ukraine war began in February 2022, there have been periodic tit-for-tat waves of punitive actions unleashed on diplomats on either side of the conflict between Moscow and the West.

This has often centered on accusations of spying and espionage. It’s no secret that nations often use embassies and consulates to place deep cover intelligence operatives, often posing as diplomats. That’s exactly what Russia is newly alleging in expelling six British diplomats on Friday.

Russia’s Federal Security Service (FSB) has announced it has revoked the accreditation of six British officials, alleging they were in the country for espionage and were “threatening Russia’s security.”

“As a measure of reprisals to the multiple unfriendly acts of London, the Russian Foreign Ministry… has withdrawn the accreditation of six employees from the political department of the British Embassy in Moscow,” the FSB said.

The diplomats stand accused of “subversive activities and intelligence” gathering, and the Russian agency further claims it possesses evidence of “coordination of an escalation in the international political and military situation.”

This new action comes just after Britain’s top diplomat, Foreign Secretary David Lammy, confirmed that his country is mulling giving Kiev Storm Shadow missiles with an authorization to mount long-range attacks on Russian territory.

This is being discussed in coordination with the US (and likely the rest of NATO), but it is an authorization which technically hasn’t come yet.

Russian Foreign Ministry spokeswoman Maria Zakharova in a Friday press briefing alleged that “the British embassy has largely flouted the limits set by the Vienna Convention.” She said it is conspiring to inflict a “strategic defeat” on Russia.

Her comments strongly suggest that Moscow’s action against the diplomats is politically-motivated punishment for Britain’s recent escalations in providing Ukraine with more money and arms.

London has called these allegations “completely basis” and has chalked it up to revenge for London previously expelling Russian diplomats and nefarious Moscow-linked entities.

The war has reached an extremely dangerous moment given that President Putin on Thursday warned that if the US and UK greenlight long-range strikes on Russian soil, this means NATO and Russia will be in an official state of war. Putin still has not ordered a full military mobilization of the country, which is a card he still holds.

Authored by Jane Johnson via The Mises Institute,m

Does Any Daylight Exist Between Monetary and Fiscal Policy?

Conventional wisdom has it that the Federal Reserve system (the “Fed”) and the US Treasury Department are two separate entities. Congress created the Fed in 1913 as a legally and financially independent federal agency, privately owned by its member banks, with no funding from the federal budget. The US Treasury, on the other hand, is an Executive-branch cabinet-level department reporting directly to the President, with funding appropriated in the federal budget.

Conventional wisdom also tells us that the Fed’s monetary policy (managing the money supply and interest rates, directed by the Fed’s Chair and Board of Governors) is separate from Treasury’s fiscal policy (collecting taxes and implementing federal spending) at the behest of Congress and the Executive branch).

The modern-day separation of the Treasury and the Fed dates from the 1951 Treasury-Federal Reserve Accord, which established the Fed’s independence from the Treasury. During World War II, the Fed agreed to peg interest rates on short-term Treasury bills at 3/8 of 1%. The Accord clarified the separation between Fed monetary policy and Treasury’s debt-management powers, freeing the Fed to fulfill its dual mandates of price stability and maximum employment.

Confusion Between Monetary Policy and Fiscal Policy

Yet as I discovered teaching senior citizens in the Osher Lifelong Learning Institute, many Americans remain unclear about the Fed’s and Treasury’s respective responsibilities, and how the two entities coordinate when the Fed supplies fresh bank credit to support Treasury’s need for spendable funds.

The Treasury sells bonds to both foreign and domestic investors when federal tax revenues fall short of its spending needs. Once bonds are in the open market, the Fed can then buy them for its own portfolio, creating new bank credit—spendable funds—literally out of “thin air,” sometimes referred to as “monetizing the debt.”

Such Fed credit creation occurred in massive amounts during the 2020-22 Covid era, when the federal government spent $5.2 trillion for congressionally-authorized programs such as enhanced unemployment benefits, employee retention credits, and consumer “stimulus” payments. To accomplish this spending, the Fed cooperatively expanded its balance sheet holdings of securities from $4 trillion to about $9 trillion, using its immense power to create spendable funds. Such massive credit creation arguably caused or exacerbated inflation to over 9% in mid-2022

This Isn’t Your Grandfather’s Monetary and Fiscal Policy

This coordinated Fed-Treasury credit expansion reflects a novel approach to monetary and fiscal policies, as new strategies were developed to satisfy one-off federal spending needs. It began when Ben Bernanke, Fed Chair 2006-14, created Quantitative Easing (QE) during the 2008-09 financial crisis, purportedly to avoid another Great Depression. QE involves massive open-market purchases of Treasury debt—as well as mortgage-backed securities for the first time in the Fed’s history—to flood financial markets with newly-created bank credit in order to support the economy in what was then called the Great Recession.

But There’s More to the Story: “Helicopter Money”

QE might be considered traditional monetary policy on steroids. But another new policy tool might be considered a hybrid of monetary and fiscal policy. Milton Friedman in 1969 first proposed “helicopter money,” a colorful phrase describing a type of stimulus that injects cash into an economy as if it were thrown from a helicopter. Future Fed Chair Bernanke (“Helicopter Ben”) in 2002 referenced helicopter money as a strategy that could be used to avoid price deflation.

A variant of helicopter money was employed during the financial crisis of 2008-09 and again in 2020 during the early months of the Covid pandemic. After Congress authorized consumer “stimulus” payments in the Economic Stimulus Act of 2008, the IRS deposited prescribed amounts into the bank accounts of qualifying taxpayers. Thus, instead of having to scoop up paper currency dropped from helicopters, taxpayers effortlessly received the funds in their bank accounts. In 2008, the IRS deposited payments ranging from $600 per tax filer plus $300 for each qualifying child, for a total of $152 billion.

In 2020 and 2021, Congress authorized three tranches of pandemic stimulus payments, called “economic impact payments”: The CARES Act in March 2020 authorized $1200 per tax filer plus $500 per child; the Consolidated Appropriations Act in December 2020 authorized $600 per filer plus $600 per child; and the American Rescue Plan in March 2021 authorized $1400 per filer plus $1400 per child. All told, these three tranches distributed $814 billion in 476 million separate payments. Although about 40% of the stimulus payments were spent on consumption, 60% of Americans saved the funds or paid down personal debt.

Are QE and Helicopter Money Different?

QE involves an “asset swap” between the Fed and another economic entity. The Fed purchases Treasury bonds or other financial assets from private parties, adding them to its balance sheet and creating new bank credit. With new bank reserves, depository institutions can then increase their own lending activity to businesses and consumers, the intended result being new economic activity boosting GDP. This asset swap is reversible—as Quantitative Tightening (QT)—if the Fed sells financial assets to reduce the amount of credit outstanding.

But helicopter money is different from QE, and economists don’t all agree whether helicopter drops qualify as monetary policy or fiscal policy. Helicopter drops, unlike QE, do not involve an asset swap, since the Fed simply gives away the money created without increasing assets on its balance sheet.

Some Views on QE and Helicopter Money

John Cochrane of Stanford University’s Hoover Institution, considering the Fed to be a vital part of fiscal theory, refers to pandemic spending as “….a one-time $5 trillion fiscal blowout…”, adding that “….the Fed is still important in fiscal theory….[buying] about $3 trillion of the new debt and [converting] it to [bank] reserves.”

Stephen Miran of the Manhattan Institute warns that the Fed has allowed QE to remain in place far too long, engaging in large-scale asset purchases in eleven of the sixteen years since the 2008-09 financial crisis. And recent Fed policy of “run off”—allowing maturing Treasury bonds to leave its balance sheet, as a form of (QT), without replacement by new purchases of like duration—implies that the Fed is intervening in public debt maturity profile decisions that are traditionally left to fiscal authorities. He also describes how the Treasury can interfere in monetary policy, potentially forcing the Fed to sell at large mark-to-market losses on its securities portfolio, rendering QT moot as a monetary policy tool. He opines that, “Allowing Treasury to set monetary policy is extremely dangerous.”

Modern Monetary Theory (MMT)—a fringe movement within economics—claims that instead of creating credit to buy Treasury bonds, the Fed should create money to directly fund public expenditures or tax cuts. Further, MMT’s advocates consider helicopter drops a form of fiscal policy, not monetary policy. The Fed creates the helicopter money, but does not acquire any assets such as Treasury securities in exchange for creating new bank reserves. The Fed simply gives away the created funds, and the Fed’s capital declines. It appears that MMT fans might more accurately brand their cause Modern Fiscal Theory (MFT) rather than MMT. Note that the majority of economists do not accept MMT’s views.

What Lies Ahead for Fed and Treasury?

The distinction today between monetary and fiscal policies is muddled. Some may view this as the Fed’s and Treasury’s interfering in each others’ traditional responsibilities, amidst the advent of new strategies and tools such as QE and helicopter money. Others may view this as overly-zealous cooperation between Fed and Treasury to flood credit markets with too much liquidity that can later result in price inflation and/or the inability to reverse the credit creation process as economic conditions change.

Perhaps it is time for a latter-day Treasury-Fed Accord to clarify the respective responsibilities and limits of the Fed and Treasury. Or, more aptly, it is time for Congress to step up its oversight of both the Fed – the independent agency that Congress created in 1913 – and the US Treasury Department, which dates from the earliest days of our Republic.

Authored by Brayden Lindrea via CoinTelegraph.com,

OpenAI has released several new artificial intelligence models under a revised naming scheme — starting with its latest OpenAI o1 model it says can “think before it answers.”

“For complex reasoning tasks, this is a significant advancement and represents a new level of AI capability,” OpenAI said in a Sept. 12 blog post.

“Given this, we are resetting the counter back to one and naming this series OpenAI o1.”

The new models can take their time to think and use “chain-of-thought” reasoning to solve complex tasks — particularly in STEM (science, technology, engineering and math) and coding-related tasks, OpenAI said.

Source: OpenAI

The AI firm shared videos of OpenAI o1 coding a video game from a prompt and solving a complex logical puzzle, among other things.

The OpenAI o1 “preview” and “mini” models were made available to ChatGPT Plus subscribers with the firm planning to release improved versions in the coming months.

OpenAI shared data suggesting OpenAI o1 defeats GPT-4o in several benchmarks, including PhD-level science topics in Biology, Chemistry and Physics and some United States high school exams.

OpenAI o1 improvement model compared with GPT-4o on several benchmarks. Source: OpenAI

OpenAI o1 mini’s focus on STEM reasoning capabilities means it isn’t as knowledgeable in other areas outside of its narrow focus, OpenAI said.

“[Its] factual knowledge on non-STEM topics such as dates, biographies, and trivia is comparable to small LLMs such as GPT-4o mini.”

“We will improve these limitations in future versions, as well as experiment with extending the model to other modalities and specialties outside of STEM,” it added.

Industry pundits anticipated OpenAI would release a reasoning-focused AI model in September under the codename Strawberry.

However, OpenAI doesn’t disclose distinctions between different models under development.