Month: March 2024

Millions of AT&T Inc. users received bad news from the third-largest US retail wireless carrier this Easter holiday weekend: Their personal data has been leaked onto the dark web. 

In a press release on Saturday, the telecommunications giant said it has “determined that AT&T data-specific fields were contained in a data set released on the dark web approximately two weeks ago” and contains “personal information such as social security numbers.” 

“It is not yet known whether the data … originated from AT&T or one of its vendors,” the company said, adding, “Currently, AT&T does not have evidence of unauthorized access to its systems resulting in exfiltration of the data set.”

The statement continued: “Based on our preliminary analysis, the data set appears to be from 2019 or earlier, impacting approximately 7.6 million current AT&T account holders and approximately 65.4 million former account holders.” 

According to Bloomberg data, AT&T is the third-largest US retail wireless carrier, behind Verizon Communications Inc. and T-Mobile US Inc. It’s also the largest telecom company that has disclosed the theft of its customers’ personal information. 

In 2022, T-Mobile paid $350 million to settle a class-action lawsuit over leaked data from over 50 million customers. Then, in 2023, the cellphone carrier revealed another major breach of “basic customer information” on 37 million customers. 

Of, course, in the PR world, save the bad news for a holiday weekend… 

Authored by James Gorrie via The Epoch Times,

“Go woke, go broke.”

This catchphrase has become more than a clever play on words. Like all clichés that make their way into common social expression, it’s a cliché because it’s generally true, at least in its sentiment.

It was just a few years ago that the corporate giants of America took it upon themselves to champion the woke environmental, social, and governance (ESG) “standards” of politically correct attitudes and behaviors, and apply them to their business models.

What could possibly go wrong?

Well, as we’re now seeing, quite a lot can and will.

Companies Take on the Woke Yoke

Many companies that took the ESG woke ideology to heart, that is, to their business, have seen less than ideal outcomes. Ask the good folks at Bud Light about losing money with their foray into the “S” “social” aspect of the ESG movement.

The Disney brand is another woke company that has lost billions in a series of box office flops from films that push the ESG woke ideology, especially the LBGTQ+ social messaging, not to mention the billions lost in market value as share prices have fallen.

Going Woke Isn’t Fatal to Big Business, but It Hurts

The reality is that in most cases, boycotts of woke businesses won’t destroy global companies such as Anheuser-Busch or Disney, at least not in the short term. International conglomerates have multiple revenue sources, which often include long-term government contracts and other long-term business relationships that will keep them in business and likely profitable for the foreseeable future. In other cases, there simply isn’t an alternative choice.

But there are other consequences to orienting a business model to the ESG agenda, particularly with the environment part of ESG. Seeking to force companies to continually reduce emissions even if they’re meeting current regulatory standards is a part of the ESG agenda and can also cut into profitability.

The Woke Pushback Is Here

But CEOs who remember what their job is are pushing back.

No one knows this better than Exxon CEO Darren Woods. Under Mr. Woods, Exxon is suing investors who are trying to force the company to further reduce carbon emissions, presumably under the mythical belief that carbon dioxide, which comprises 0.04 percent of the atmosphere, is bad for the planet. Mr. Woods is also pushing back against the idea of achieving net-zero carbon emissions by 2050 as not possible.

In fact, many companies, large and small, are now touting themselves as “woke-free” or having “traditional values” as a way of appealing to customers who don’t want to be told what to think by corporate America. Firms such as Exxon, Wendy’s, and Tesla are now well-known as non-woke companies.

Elon Musk’s X Factor

Without question, one of the biggest factors countering the woke trend was and remains Elon Musk’s acquisition of X (formerly known as Twitter). This is simply due to the fact that the ESG and woke agendas, which also include the forced diversity, equity, and inclusion (DEI) hiring practices, rely on the censorship of free speech as a means of enforcing societal compliance and adoption of those radical leftist agendas.

The free and open discussions that X has enabled have had a huge impact on Americans’ ability to speak their minds without being canceled (another ESG/woke tactic and value), and has helped people learn more about who they’re doing business with and what companies really stand for and what they don’t.

The ESG movement has nothing to do with business. Business is all about meeting the needs of society as expressed in the marketplace with the best products and services each business or organization can muster. That’s called competition. Competition breeds excellence, which results in sales. People will generally buy the best that they can afford, which compels most firms to streamline operating costs while providing the best they can to their target market.

In short, people want to not just boycott brands that hate them, but also put their money where their heart is. Most don’t want to be dictated to and told that their traditional values are not important, or worse, immoral. To at least some extent, those companies that wish to do so will find their market share shrinking, if not their market value.

By Dhaval Joshi, Chief Strategist at BCA Research

Summary

• The US economy is highly unusually ‘inverted’. The constraint on the economy is not labor demand, it is labor supply.

• Hence, the US economy has highly unusually entered a labor demand recession without entering a GDP recession.

• Nevertheless, for the stock market, a labour demand recession implies a profits headwind, because it is only when profits come under pressure that labour demand goes into recession.

• Against this, wage disinflation would allow long-duration bond yields to fall, which would provide a countervailing valuation tailwind.

The pandemic might seem like a distant memory, but for the US economy the pandemic’s legacy is still the big story. For the first time in at least fifty years, US labor supply is running well below labor demand. The big story is that the US economy is ‘inverted.’

Therefore, we must analyze the post-pandemic inverted economy very differently to the pre-pandemic economy. Normally, labor demand – being less than labor supply – is the constraint on economic output and thereby drives the cycle. But in an inverted economy, labor supply – being less than labor demand – is the constraint on output and thereby drives the cycle.

Before the pandemic, all downswings caused labor demand to fall well below labour supply. In the subsequent upswings, labor demand gradually caught up with supply…until the next downswing caused a fresh slump in labor demand. And the cycle repeated. Importantly though, all pre-pandemic cycles were driven by the demand side.

Then came the pandemic, and the longstanding pattern inverted. Labor supply suffered the more protracted slump, from which it has gradually caught up with labor demand. Meaning that in the last couple of years, the cycle is being driven not by what is happening to labor demand,  but by what is happening to labor supply.

Interest rate hikes work by choking demand, which is exactly what has happened recently. US labor demand is tipping into recession. Jobs plus job openings today are less than they were a year ago. Whenever this happened pre-pandemic, the economy tipped into recession too. But for the first time in at least fifty years, the economy is entering a labor demand recession without entering a GDP recession.

This is because in an inverted economy the constraint on the economy is not labor demand, it is labor supply. Despite weaking
labor demand, labor supply has played catch up to demand and thereby driven economic growth.

As labor supply has caught up with labor demand, it has narrowed the gap between demand and supply. This has created the perfect macro backdrop of robust economic growth with wage disinflation, a Goldilocks setup for financial assets. The pressing question for the coming 6-12 months is, what happens next to labor supply, labor demand, and their interplay?

Why The US Economy Inverted

But first, let’s tackle the obvious question. Why is US labor supply running well below labor demand?

There are two reasons: after the pandemic, prime aged (25-54) workers left the labor force; and older aged (55+) workers retired early, generating millions of so-called ‘excess retirements.’

The economically inactive make no contribution to labor supply. Yet they still consume the goods and services that generate labor demand. This they do by using savings or, in the case of early retirees, by tapping into their retirement assets and income early. Thereby, the plunge in prime-aged labor participation combined with excess retirements caused labor supply to fall well below labor demand.

Subsequently, the plunge in prime-aged labour participation has fully reversed, causing labor supply to recover strongly. But the excess retirements have not reversed and are unlikely to reverse

This means that the strong recovery in labor supply is now exhausted, with labor supply still several million people below labor demand. The economy is still inverted.

US Labour Demand Is Already In Recession, But GDP May Dodge The Bullet

To repeat, US labor demand has already tipped into recession. But in the inverted economy – where labor supply is the constraint on output – labor supply is driving the GDP cycle.

It follows that a GDP recession would require one of two things:

• Labor supply must outright contract. However, with the recent surge in illegal migration – most of which does eventually get counted in the survey-calculated labor supply – a sustained contraction in labor supply seems unlikely. Of course, this could change under a new Trump administration, or…

• Labor demand must contract so sharply – by about 3.5 million jobs – that the economy would ‘un-invert’. Once un-inverted, contracting labor demand would once again drive GDP into recession, as in all pre-pandemic cycles.

But if labor demand contracts more gently – as now – then the US economy could experience a sustained labor demand recession without a GDP recession, making it difficult for the National Bureau of Economic Research (NBER) to designate it an official recession.

This ‘halfway house’ in which GDP is not in recession, but labor demand is in recession and gently ‘catching down’ with labor supply is a distinct possibility – because it is the least painful way for the Federal Reserve to steer wage inflation back down to the 3 percent rate that is needed for price inflation to stabilise at 2 percent (Chart 5 and Chart 6).

Yet though the economy could dodge the ‘NBER official recession’ bullet, a labor demand recession combined with stagnant per capita real incomes would very much feel like a recession.

For the stock market, a labor demand recession implies lower profits because it is only when profits come under pressure that labor demand goes into recession. Against this, wage disinflation would allow long-duration bond yields to fall, which would provide some countervailing support to stock valuations. In combination this would imply the stock market was rangebound while high-quality bonds rallied.

But there is another factor to consider. The euphoric pricing of anything AI-related is a separate and independent risk to the stock market. Absent this risk the macro backdrop would imply a neutral allocation to stocks versus cash. But this additional risk ratchets down my 6-12-month allocation to mildly underweight.

For those who can time this, go underweight stocks when the ‘Joshi rule’ is triggered. Or, when the rally reaches a  collapsed complexity that presages an imminent reversal.

More in the full note available to pro subscribers.

Authored by Steve Watson via Modernity.news,

During an episode of his podcast, Joe Rogan slammed New York Times writers, calling them leftist activists pretending to be reporters.

Rogan played a clip of two New York Times ‘journalists’ claiming that anything Donald Trump says now has to be considered in the context of the January 6th Capitol incident, and made fun of how they feel the need to make Instagram videos explaining their ‘reporting’.

“They don’t understand what they’re doing,” Rogan stated, adding “This is exactly who we thought was writing these things. It’s like this very effeminate guy and this woman…these ultra-liberal out-of-touch people.”

Rogan continued, “One of the guys was talking about Donald Trump’s words being taken out of context that it would be a ‘bloodbath’ because he was talking about the auto industry and the economy.”

Rogan further noted that the New York Times used to be populated by “hard-nosed reporters with a cup of coffee that are like f***ing chasing down leads and they’re pulling their hair out and they’re meeting people in back alleyways.”

Now “they’re, they’re essentially like ultra hard-Left activists that are masquerading as journalists and everything has their opinion on it,” Rogan urged.

Watch:

Rogan: NY Times writers are “ultra-liberal out-of-touch, ultra hard-Left activists that are masquerading as journalists and everything has their opinion on it.” Report here: https://t.co/lUZb3Kbkzv pic.twitter.com/ctzt24tI2l

— m o d e r n i t y (@ModernityNews) March 28, 2024

As we highlighted earlier this week, The Washington Post published a report claiming that women choosing to get off hormonal birth control are doing so because of a “misinformation explosion,” and admitted to pressuring social media platforms to remove the opinions and accounts of women who have been on the pill.

It also made a cringe TikTok video doubling down on the gaslighting.

The Washington Post doubled down on their gaslighting “Birth Control Misinformation” piece with this cringe TikTok they just posted. pic.twitter.com/PDLx99IdMF

— Brittany Martinez (@BritMartinez) March 25, 2024

Rogan is right, these people are far left activists using major newspapers as their platforms.

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Elon Musk has once again urged negotiated settlement to end the Ukraine war while warning Ukraine that seeking to keep up and expand the fight will inevitably lead to the loss of Odessa and thus Kiev’s access to the Black Sea.

The Tesla and SpaceX CEO underscored that Ukraine’s position continues to weaken even as its leadership refuses negotiations while pressing the West for more weapons. “Whether Ukraine loses all access to the Black Sea or not is, in my view, the real remaining question,” he stressed in his commentary posted on X.

Musk was responding in agreement with David Sacks who heavily criticized prominent pundit John Spencer of the Modern War Institute at West Point. Sacks blasted Spencer for his analysis based in “neocon fairy tales about Russian weakness, and puffed up Ukraine’s chances.” Sacks also noted Spencer was “a cheerleader for the disastrous summer counteroffensive.”

Musk reflected of the failed counteroffensive in the thread, “It was a tragic waste of life for Ukraine to attack a larger army that had defense in depth, minefields and stronger artillery when Ukraine lacked armor or air superiority! Any fool could have predicted that.”

Musk continued: “My recommendation a year ago was for Ukraine to entrench and apply all resources to defense. Even then, it is tough to hold land that doesn’t have strong natural barriers.”

“There is no chance of Russia taking all of Ukraine, as the local resistance would be extreme in the west, but Russia will certainly gain more land than they have today.”

“The longer the war goes on, the more territory Russia will gain until they hit the Dnepr, which is tough to overcome. However, if the war lasts long enough, Odessa will fall too,” Musk wrote.

And that’s when he concluded, “Whether Ukraine loses all access to the Black Sea or not is, in my view, the real remaining question. I recommend a negotiated settlement before that happens.”

Musk has been no stranger to controversy and catching flak from the mainstream media over his Ukraine-related commentary. Kiev officials themselves have at times accused the South African-born entrepreneur and billionaire of supposed ‘sympathies’ with the Kremlin; however, Musk is among those commentators who take a fiercely independent and realist approach to examining the Russia-Ukraine crisis.

Musk has frequently defended his record – for example in February lashing out at critics during a Twitter Spaces discussion with Sen. Ron Johnson (R-WI): “My companies have probably done more to undermine Russia than anyone. Space X has taken away two-thirds of the Russian launch business. Starlink has overwhelmingly helped Ukraine,” he said at the time.

Johnson had during the debate underscored that “We all have to understand that Vladimir Putin will not lose this war… Losing to Vladimir Putin is existential to Vladimir Putin. Russia has four times the population and a much larger industrial base.”

Authored by Douglas French via The Mises Institute,

Yeah, the other night I laid sleeping

 And I woke from a terrible dream

 So I caught up my pal Jack Daniel’s

 And his partner Jimmy Beam

 And we drank alone, yeah

 With nobody else

 Yeah, you know when I drink alone

 I prefer to be by myself 

~George Thorogood

I poured hundreds of “Jack and Cokes” when I tended bar from the late 70’s to mid 80’s. It was beyond me how anyone could tell the difference between Jack Daniels Old No. 7 and anything else when mixed with coke or whatever carbonated cola was coming out of the gun. 

Turns out Dr. Fauci and the Center for Disease Control did Brown-Forman, the makers of Jack, a solid by shutting down America and cooping everyone up. More than some whiled away the hours with their old pal Jack Daniels. People may have had to work from home, but without the boss breathing down their necks plenty figured “why not have snoot-full and have fun.” It’ll make the day go by faster. Besides, no customers would be banging on the door. No one will know the difference.

“The phenomenal sales growth we saw during the pandemic was unprecedented and unpredictable but also unsustainable, and now, the spirits market is recalibrating,” Chris Swonger, the president of the Distilled Spirits Council of the United States, said last month. Those stimulus checks could buy a lot of Jack Daniels, or cause the more frugal drinker to pay more for Jack, instead of cheaper brands. 

Jennifer Maloney writes for the Wall Street Journal, “Some drinkers of Jack Daniel’s Old No. 7 – often used to make the cocktail Jack and Coke – are trading down to cheaper alternatives while others are trading up.”

Price inflation affects consumers differently. For those drinking their whiskey with Coke, just about any will probably do, but for those imbibing theirs neat or on the rocks may spend a few more cheaper bucks for smoothness. 

Even Jack and Coke drinker Brian Moran, a tile-setter who lives in the Chicago suburbs, told the WSJ that a client paid him to tile a kitchen backsplash with five pricier bottles of bourbon, including Stagg, Eagle Rare and E.H. Taylor. “From his first sips, Moran was enthralled,” writes Maloney.

“I don’t know anyone who even drinks it anymore,” he said of Jack Daniel’s Old No. 7, which has a national average price of about $22. “You spend an extra $10 and you get something that’s so much better.”

Brown-Forman reported dismal sales over the winter holiday season and the hangover has lasted into 2024. “Christmas stunk,” Chief Executive Lawson Whiting said on a call with analysts in early March. 

Brown-Forman is trying to entice younger legal-age drinkers to Jack Daniel’s Old No. 7 with a TV commercial set to the AC/DC song “Back in Black.” However, that song was a hit more than 40 years ago. Also the company is selling Jack and Coke in a can, attempting to appeal to young drinkers and females. The canned cocktail contains about 5% alcohol depending on the market. Reportedly there is a no sugar version. Which hardly seems possible. 

Chairman Campbell Brown, a great-great-grandson of founder George Garvin Brown, told investors that the company has weathered Prohibition and the Great Depression, steadily building the Jack Daniel’s brand since acquiring it nearly 70 years ago. 

It was not reported whether he has thanked Dr. Fauci. 

The Biden White House has approved of sending billions of dollars worth of new military equipment and ammo to Israel, The Washington Post has revealed, even amid public criticism from US officials over Prime Minister Netanyahu’s intent to soon send ground troops into Rafah, which is expected to result in humanitarian disaster in the refugee-packed southern city.

This package is to include 25 F-35 fighter jets, sources told the Post, and additionally the highly controversial 2,000-pound bombs which have been known to kill indiscriminately in Gaza when deployed by the Israeli air force.

“The new arms packages include more than 1,800 MK84 2,000-pound bombs and 500 MK82 500-pound bombs, according to Pentagon and State Department officials familiar with the matter,” the report indicates.

“The 2,000-pound bombs have been linked to previous mass-casualty events throughout Israel’s military campaign in Gaza,” WaPo continues. “These officials, like some others, spoke to The Washington Post on the condition of anonymity because recent authorizations have not been disclosed publicly.”

The 2,000 pound bombs have been flagged by human rights monitors as behind much of the soaring Palestinian casualties, given they can demolish entire city blocks and produce craters over 40 feet wide.

The weaponry was approved as part of a prior authorization, but it highlights that for all the current US-Israel tensions due to the soaring civilian death toll in the Gaza campaign, Biden is certainly no closer to attaching ‘conditions’ on Israel when it comes to deployment of US-supplied weapons.

A State Department official has explained that “fulfilling an authorization from one notification to Congress can result in dozens of individual Foreign Military Sales cases across the decades-long life-cycle of the congressional notification.”

“As a matter of practicality, major procurements, like Israel’s F-35 program for example, are often broken out into several cases over many years,” the official added.

A New York Times investigation in December concluded that Israel has been using 2,000 pound bombs supplied by the US on Gaza neighborhoods on a routine basis. The Pentagon has said it almost never uses these types of weapons in densely populated urban areas anymore because of the likelihood of large-scale civilian casualties.

The Times report further said that 2,000 pound bombs had been dropped on Gaza and even inside declared ‘safe zones’ in the south, some hundreds of times.

Authored by Mike Shedlock via MishTalk.com,

Inquiring minds might be interested in a discussion of government transfer payments as a percentage of real income. I can help, but prepare to be disgusted.

Data from BEA’s personal Income and outlays report. Real means inflation adjusted. Chart by Mish.

What Are Transfer Receipts?

Transfer receipts are government payments for which no services were performed.

Transfer receipts include food stamps, subsidized housing, Social Security, Medicare, Medicaid, child tax credits, and other government assistance.

Three rounds of massive fiscal stimulus during the Covid pandemic set off a huge wave of inflation that the Fed never saw coming.

The numbers are worse than they look above as the following chart shows.

Transfer Receipts as Percentage of Real Personal Income

With every recession, transfer receipts as a percentage of real personal income declines.

The three massive rounds of fiscal stimulus is unprecedented. A friend asked me today why the Fed could not see this coming.

I explained: These guys are not wizards; they have never called a recession in real time. Bernanke denied there was a recession even after it started. He denied there was a housing bubble. They all believe in models that don’t work. And history suggests they always err on the side of being too loose. They will make the same mistakes over and over.

The Fed never saw the uptick in inflation because their models said otherwise. Their models now say inflation will return to normal.

I can see things models don’t: Global wage arbitrage is over. Just in time manufacturing is over. Both Trump and Biden will increase tariffs. The energy needed for AI will soar. The energy needed for EVs will grow even if transition slows. Demographic changes are huge.

Four Reasons Transfer Receipts Poised to Surge

1. Influx of illegal immigrants

2. Republicans just agreed to expand Child Tax Credits

3. Medicaid Expansion

4. Boomer Retirements

Influx of Immigrants

Please note: Denver Health at “Critical Point” as 8,000 Migrants Make 20,000 Emergency Visits

Much of that you will pay for directly with higher premiums. But the Federal government will pick up some of it via Medicaid Expansion.

Child Tax Credits

We have a new number on the deal the House Republicans agreed to. It’s $1.5 trillion over ten years.

For discussion, please see How Much Will That GOP Deal on Child Tax Credits Really Cost?

The reported numbers do not include an Affordable Housing giveaway, or aid to Ukraine and Israel, or expanded defense spending. More money and bigger deficits means more inflation.

The tax credits add directly to transfer payments.

Medicaid Expansion

On March 9, I noted Medicaid Expansion Was Supposed to Pay for Itself, Instead Hospitals Are Closing

10 states did not fall for the Medicaid expansion trap under Obamacare. The rest are suffering. Private payers (you, one way or another) make up the loss.

Boomer Retirements

Due to age demographics, I expect employment in age groups 60 and over to decline by about 12.5 million.

Population stats are from the BLS. Expected Employment Loss is a Mish calculation based on the Employment Population Ratio (the percentage of people working in each age group).

In terms of expanding transfer payments this is the biggest of the four by far.

Boomers health care need and retirements will have a huge impact expanded Social Security payments and Medicare payments.

And there is a shortage of 6 million workers to replace retiring boomers. This is another set of things the Fed has not properly modeled.

As a result of demographics, transfer receipts as a percentage of real personal income will surge. And due to a replacement worker shortage, wages will likely rise and productivity decline.

For discussion, please see In the Next 5 years, Employment in Age Groups 60+ Will Drop by ~12.5 Million

I go over the demographic math, point-by-point. Click on the link for details.

Conclusion: The decline in the rate of inflation is transitory. The Fed does not see this coming.

Authored by Charles Hugh Smith via OfTWoMinds blog,

Lest you weep for those whose phantom wealth will be drained away, recall that few win when a reserve currency dies. Labor can start earning the day after the reset, but the capital lost is gone for good.

Outside the “everything’s always fine” echo-chamber, the consensus is that easily created fiat currencies will all evaporate as the temptation to continue printing/borrowing money into existence is irresistible: the only way to keep the system from imploding is to devalue the soaring debt and interest payments with inflation, and the dial controlling inflation is money-printing / central banks buying debt and all the related tricks.

The problem is that once the dial is turned to 11, inflationary expectations start feeding back into real-world inflation and inflation then escapes the control of central bankers and government treasuries: creating more money to devalue the currency and service the debt ends up destroying the currency via hyper-inflation.

History offers many examples of this temptation and dynamic. The pain of debts being written off, governments defaulting on bonds and assets crashing is too great, and so we have to print more money / borrow more money into existence to stave off the painful reckoning of debt dependence and central bank hubris.

To stave off the pain of debt saturation / over-indebtedness, monetary authorities collapse the currency and the economy it supported, unleashing maximum pain on everyone who used the currency or owned assets denominated in the currency.

A new dollar is then introduced at a ratio of 1 new unit to 100, or 1,000, or 100,000 of the old dollars. Everyone’s financial wealth is wiped out. Tools, skills, precious metals, buildings, mines, farms, etc., still retain their intrinsic / productive value, but the monetary reset means everyone whose phantom wealth was a form of debt is wiped out.

This dynamic makes perfect sense, and it’s a well-worn pathway for nation-states. Empires, however, might choose differently. The difference between a nation-state and an empire is generally under-appreciated. A nation-state can destroy its currency and bankrupt everyone holding its bonds / debt and start over, but an empire cannot be quite so cavalier, for the “reserve currency” of the empire is its foundation of power.

Yes, the hard power of military power projection is a core strength, along with trade, alliances, cultural and diplomatic soft power, but if the currency evaporates, so does the Imperial Project, and those tasked with maintaining the Imperial Project are forced to calibrate pain by a different standard than politicians and central bankers.

Inflation and the evaporation of the currency is not a solution for the Imperial Project, it is the surrender of all that is great and good. The only viable solution for the Imperial Project is deflation, the forced liquidation of unpayable debts and thus the forced liquidation of all the phantom wealth generated by ever-expanding debt.

Just as inflation has many sources, so too does deflation. Technology can be a source of deflation, as a new technology can dramatically increase supply and durability while dramatically lowering costs. Substitution can be deflationary, as enterprises and consumers swap a cheaper, more abundant substitute for whatever was becoming scarce and costly.

If the sum of “money” circulating in the economy contracts as credit tightens, it becomes harder to borrow more money into existence. Every dollar of debt that’s written down to zero reduces the quantity of money floating around, i.e. the money supply.

If the money that is being created is immediately hoarded by the wealthy, it doesn’t circulate in the economy and therefore it’s the equivalent of debt being extinguished: the supply of money doesn’t expand because the new money has been hoarded, in effect buried in the backyard.

To preserve the Empire, it becomes necessary to wipe out the debt and the phantom wealth it created, 90% of which is held by the hyper-wealthy, super-wealthy and merely wealthy. This is the class that has concentrated wealth and power to the point of destabilizing the social, financial and political orders, and so those tasked with preserving the Empire (the State within the State) will have to strip this powerful class of its phantom wealth indirectly, as the class is too politically powerful to be taken down head-on.

Recall that deflation–the decline in the price of assets, goods and services–is beneficial to wage-earners, as their earnings go farther as prices fall. Profits become harder to come by, and those lending and speculating on ever-higher asset valuations are wiped out.

From the Imperial point of view, this is all good: given that the only goal is to preserve the currency from evaporation, then the takedown of the hyper-wealthy class that threatens to destabilize the Imperial order is equally essential.

Just as inflation is a hidden tax on labor, deflation is a hidden tax on capital. If commercial real estate, stocks and corporate bonds all lose value for a decade, the bottom 90% will only be affected indirectly. If whatever money is being created is funneled into spending at the bottom of the economy–those buying essentials–then the deflation of private debt and assets won’t strip the real economy of money in circulation, it will only strip the wealthy of the capital they were hoarding and speculating with under the guise of “investing.”

Fire, then ice: as inflation (fire) threatens the Imperial currency, the Empire must choose deflation (ice) to preserve its foundation. Currency in active circulation is lumped in with the phantom wealth of debt-based assets, but they are two different things, as Aristotle observed (oikonoma and chrematistics). Just as inflation works slowly to erode the value of labor, deflation works best if it too is gradual, slowly extinguishing phantom wealth over time.

I have endeavored over the years to explain that the concentrated wealth and power of the hyper-wealthy pose an existential threat to the Imperial Project, and the showdown between debt-created phantom wealth and the bedrock of the Imperial Project, its currency, will play out in the next 6 to 8 years.

The “everything’s always fine” echo-chamber holds that inflation to preserve all the debt-created phantom wealth is necessary, but they are focused on serving private wealth, not the Imperial Project. What’s truly essential is to preserve the Imperial currency, and to accomplish that, both the phantom wealth and the power of the hyper-wealthy who own the vast majority of it must be extinguished. Slowly, slowly, but extinguished nonetheless.

Lest you weep for those whose phantom wealth will be drained away, recall that few win when a reserve currency dies. Labor can start earning the day after the reset, but the capital lost is gone for good.

There is much more to discuss here, but let’s take it one step at a time.

*  *  *

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In case you needed one more reason to despise legacy-media journalists, Politico reports that White House correspondents have been routinely looting Air Force One — to the point that they were just collectively asked to keep their sticky fingers off the taxpayers’ property.   

After the latest discovery of missing property, White House Correspondents’ Association president and NBC reporter Kelly O’Donnell emailed members to inform them that stealing is not allowed, and that doing so harms the press corps’ reputation, such as it is.   

Looting Air Force One is entrenched in the press corps culture, to the extent that rookies are told to do it. As a current White House reporter told Politico: 

“On my first flight, the person next to me was like, ‘You should take that glass.’ They were like: ‘Everyone does it.’” 

That’s not the most disgraceful anecdote…

“Several colleagues of one former White House correspondent for a major newspaper described them hosting a dinner party where all the food was served on gold-rimmed Air Force One plates, evidently taken bit by bit over the course of some time.”

Others described how, when reporters disembark Air Force One, the sound of clinking glass and porcelain accompanies their descent down the rear stairway.  

While it’s apparently been a long-simmering phenomenon, the reporters’ kleptomania on an extended West coast trip in February sufficiently irked the Air Force crew that they complained to the White House travel office. The director of press advance, in turn, told the press office that a USAF inventory found several items missing from the press cabin.

The press office sent a gentle email to all the journalists who’d been on that particular trip, with someone familiar with the matter telling Politico, “It was like, ‘Hey, if you inadvertently wound up taking something off the plane by mistake, we can help facilitate a quiet return.’”

The response was predictably pathetic: Exactly one of the thieving journalists demonstrated a semblance of morality. The guilty individual arranged a rendezvous next to the Andrew Jackson statue in Lafayette Square — across from the White House — and relinquished a stolen embroidered pillow. 

The latest Gallup poll found that, when it comes to reporting the news accurately and fairly, a record 39% of Americans said they have no confidence in mass media whatsoever, and another 29% said they have “not very much.”

Forget reporting...next time, Gallup should ask about the extent to which establishment journalists can be trusted not to steal your f***ing silverware.