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As Germany grapples with the consequences of its environmental policies, fresh data reveals a startling trend: the nation's industrial production has declined for the seventh consecutive month, reaching levels not seen since 2006. This alarming downturn, which takes Germany's industrial capacity back 18 years, teeters on the brink of reverting to the era of the Berlin Wall's collapse in the 1990s.

Source: mishtalk.com

Mish Shedlock, an economic analyst, starkly proclaimed that "Germany's Industrial superpower days are over." However, this is not a crisis contained within German borders; it is a symptom of a broader European malaise. Driven by powerful environmental lobbyists in Brussels, the continent's deindustrialization efforts seem to be accelerating, risking the surrender of Europe's economic sovereignty to the burgeoning BRICS bloc led by China and Russia.

According to Bloomberg, the cessation of cheap Russian natural gas has been a final, crippling blow to the German industrial machine. This energy crisis has particularly devastated energy-intensive sectors, which have transitioned from fossil fuels to renewable energy sources at a high financial and operational cost.

Germany's latest output data showcased a 1.6% decline from the previous month, a stark contrast to the 0.3% growth economists had anticipated. This signals an almost 20% annualized drop, underscoring the disconnect between the expectations of Europe's mainstream economists and the on-ground industrial reality.

The most significant hits were taken by construction, which fell 3.4%, and the chemical industry, plunging 7.6% to levels last seen in 1995. The energy sector witnessed a 15% drop in a single month, coinciding with the shutdown of Germany's last nuclear reactor—a move that further exacerbates the nation's energy woes.

Bloomberg highlighted the closure of a Dusseldorf steel plant that had been operational for 124 years, a testament to the painful industrial retreat that is forcing entire facilities to shutter and lay off their workforce. The situation could have been direr if not for a temporary rebound in the automotive sector and an uptick in orders for Europe's Airbus, due in part to Boeing's recent struggles.

Source: mishtalk.com

The root cause of this industrial backslide points to energy—or the lack thereof. As the European Union commits to environmental reforms, Germany has seen its energy prices skyrocket by nearly 150% in three years. The twin pressures of phasing out local energy sources and the sanctions against Russia have left renewable energy solutions scrambling to fill the void.

Even industries like solar panel manufacturing, supposedly beneficiaries of the green transition, are facing shutdowns due to high energy costs and fierce competition from China's heavily subsidized solar sector.

The broader picture reveals a Europe in the process of dismantling its industrial framework and exporting it abroad, with global players like BASF investing billions in Chinese manufacturing complexes. This strategic shift underscores a troubling relinquishment of control over vital sectors, from energy and agriculture to manufacturing.

In the shadow of these developments, the global political elite appear complacent, if not supportive, of the ongoing deindustrialization, raising questions about the future of domestic industries that have long underpinned Western prosperity.

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In the midst of a seemingly robust economic landscape painted by official statistics, American sentiment towards the nation's fiscal health remains overwhelmingly negative. Despite President Joe Biden's statisticians reporting strong economic indicators, such as a brisk pace of consumer spending, a decrease in inflation from its peak during the Biden administration, and a solid 3.1% GDP growth for the year, the public's outlook is decidedly grim.

A recent 3,000-word essay by the Wall Street Journal, a publication often seen as a staunch supporter of Biden's economic policies, delves into this paradox. It highlights the fact that official unemployment rates have been below 4% for 24 consecutive months, marking the longest stretch of such low levels since the 1960s—a period that could be heralded as "morning in America." Despite these figures, a mere one in seven Americans believe they are better off since Biden took office, and the President faces historically low approval ratings for a commander in chief in their third year.

The Journal proposes several reasons for this disparity, pointing to a college degree's diminished guarantee of middle-class status, the toll of continuous military conflicts, and what is perceived as uninspiring leadership from a government deemed dysfunctional. These factors are exemplified by the ongoing border crisis and the deterioration of urban centers across the country.

However, the article suggests that perhaps a more significant issue is the inherent disconnect between the statistical data and the reality faced by many Americans. For example, the low unemployment rate does not account for those who have stopped seeking employment, including the millions who have left the labor force since the onset of COVID-19. If these individuals were considered, the unemployment rate would be notably higher, resembling the precursory conditions to the 2008 financial crisis.

Similarly, the strong GDP numbers are attributed to federal deficits and increased social spending—factors that contribute to growth but also foreshadow potential bankruptcy, rather than signaling genuine wealth creation. Consumer spending, buoyed by rising personal debt and default rates, is not necessarily a sign of optimism but rather a struggle to stay afloat.

Inflation, while showing some signs of abating due to supply chain improvements and energy costs, continues to rise concerning underlying rates. This persistent inflation undermines the narrative of economic recovery and contributes to the public's apprehension.

The essay implies that the "everything is fine" narrative may be a façade, supported by statistics designed more to obscure than to inform. It raises the question: Are Americans being misled by a regime more focused on maintaining power than serving its people?

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The latest data from the Bureau of Labor Statistics showcases a worrying trend. According to the freshly released Consumer Price Index (CPI) numbers, the annualized inflation rate surged to 3.7% last month—an alarming increase from the 2.8% of the preceding month, the 1.9% before that, and a stark contrast to the sub-1% levels witnessed during the halcyon days of October. The core inflation rate, which the Federal Reserve considers more indicative of long-term trends as it excludes volatile food and energy prices, presented an even grimmer picture at an annualized 4.8%, a jump from 3.4%.

Source: Bloomberg

Source: Bloomberg

The persistence of inflationary pressures is underscored by this being the 34th consecutive month with annual inflation remaining stubbornly above 3%. This persistent rise has quashed any remaining beliefs in its transitory nature. In response, prediction markets have adjusted their outlook significantly. Expectations of impending rate cuts have been slashed, with only four anticipated by year-end, down from seven forecasted a month ago. This recalibration indicates a projected year-end rate of around four and a quarter percent, just a percent below current levels, which could translate to mortgage rates hovering around 6.5%. A month prior, markets were predicting a more optimistic 3.5%.

This rate environment maintains pressure on the banking sector, particularly regional banks, which find themselves submerged in commercial real estate debt. A stark illustration of the issue is the recent sale of a prime office building in Ohio, a former FedEx complex, for a paltry $9 per square foot—a price that would equate to roughly $18,000 for a typical house. At this valuation, it is evident that the construction costs far exceeded the selling price, leading to considerable losses. This is not an isolated incident, with regional banks holding an estimated $300 billion in commercial real estate debt, which constitutes a third of their loan portfolios.

Federal Reserve Chairman Jerome Powell recently appeared on "60 Minutes," providing assurances that banking risks are manageable despite the recent bailout of New York Community Bank. However, Powell conceded that regional banks might fail but would likely be acquired by larger institutions. With high interest rates set to continue, this consolidation could accelerate.

The video also touches on the haunting prospect of a double peak in inflation, akin to the scenario of the 1970s when unchecked federal spending and a stop-and-start monetary policy led to a protracted period of high inflation. The presenter suggests that current federal spending has led the Fed to be subservient to government whims, and with the Fed cutting rates amidst rising inflation, it signals a potential severe recession ahead. This situation mirrors the stagflation of the 1970s, a combination of stagnant economic growth and inflation, which could be prolonged given the current state of affairs in Washington.

In conclusion, the economic outlook appears fraught with challenges, from persistent inflation and banking sector vulnerabilities to the specter of stagflation. With these factors in play, the Fed's current policies and the government's fiscal behavior will be critical in shaping the economic landscape ahead.

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In a recent Super Bowl ad, President Joe Biden voiced his frustration with the ongoing issue of shrinkflation, a phenomenon where companies reduce the size of their products while maintaining the same price point. The ad, which did not shy away from showcasing brands like Doritos, Gatorade, and Breyers ice cream, accused such companies of treating American consumers as "suckers" in the face of soaring inflation rates, which the President has been widely criticized for exacerbating.

Amidst the worst inflation in half a century, with grocery costs up by 25% and household paper products by 35%, according to official numbers, consumers are bearing the brunt of the economic strain. While the President's ad suggests corporate subterfuge, the reality is that groceries operate on razor-thin margins, averaging a mere 2.2%. These businesses are caught between a rock and a hard place as they navigate the dual pressures of rising costs and consumer affordability.

The government's response to the inflation crisis has, at times, pointed fingers at consumers themselves. An article from The Atlantic brazenly titled "Inflation Is Your Fault" exemplifies this trend, implying that consumer spending habits are to blame for the high prices. However, the surge in money supply, courtesy of the Federal Reserve's $7 trillion injection, leaves grocers with limited options—either raise prices or shrink product sizes.

This economic environment has provided fertile ground for lawmakers to propose additional regulations and controls over the food industry. Reports from politicians like Democrat Bob Casey aim to "hold companies accountable" for price increases, a Washington euphemism for increased government intervention. Senator Elizabeth Warren has also been vocal in her desire to reform the food industry, drawing parallels to her efforts in the banking sector.

The American public remains skeptical of the administration's ability to effectively address these issues. A recent ABC poll indicates that nearly 90% of Americans question President Biden's fitness to serve, signaling a lack of confidence in the current leadership's handling of the economy.

As the White House and Congress continue to grapple with the fallout of inflation and its impact on the food industry, many Americans are hoping for a change in management before the situation worsens.

Google Metadata Description: President Biden's Super Bowl ad calls out shrinkflation as inflation continues to burden American consumers, but questions arise over whether this is merely a scapegoat for deeper economic issues.

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In a candid interview on "60 Minutes," Federal Reserve Chairman Jerome Powell delivered a stark admission that has caught the attention of policymakers and the public alike. Powell acknowledged the perilous financial trajectory of the United States, stating, "the federal government is on an unsustainable fiscal path." This revelation from the head of the central bank is particularly unsettling given the recent influx of $6 trillion in new currency—a move Powell himself oversaw—which exacerbated the most severe inflation crisis since the 1970s.

Powell's rare critique of federal spending habits underscores a long-standing concern: while trillion-dollar deficits continue to burgeon, the productive economy correspondingly shrinks. Yet, Fed chairs historically abstain from such criticisms, recognizing their appointive ties to the presidential office and congressional confirmation, rather than a direct accountability to voters.

However, any hopes that Powell's critique might signal a forthcoming era of transparency and accountability within the Federal Reserve were quickly dashed. The Fed Chair proceeded to deflect responsibility for the inflationary spike, attributing it to the unforeseen consequences of the COVID-19 pandemic rather than monetary policy missteps.

Further probing during the interview brought to light the Federal Reserve's recent oversight failures, particularly in relation to Silicon Valley Bank—a financial institution that counted a Federal Reserve official among its board members. Powell conceded that the oversight was lacking but reassured viewers that the banking sector's troubles were "manageable," suggesting that failing regional banks would simply be absorbed by larger entities.

Despite these admissions, there was a noticeable absence of discussion on the Federal Reserve's role in recurrent banking crises, such as the near-crash in New York last week, and the volatile interest rate policies that contribute to financial instability. Powell's promises of improved diligence in the future were tempered by the memory of past assurances, including the Fed's prior acknowledgement of misjudging the transitory nature of inflation.

This interview has reignited debates surrounding the existence and efficacy of the Federal Reserve. Critics are questioning the value of a central bank that not only destabilizes the economy but also perpetuates a cycle of deception and mismanagement, all while supporting Wall Street and a federal government accused of siphoning trillions from American citizens.

While "60 Minutes" did not delve into the more profound inquiries about the Federal Reserve's legitimacy and continued operation, the dialogue has sparked a conversation that may eventually lead to more rigorous scrutiny of the institution's purpose and performance.

Google Metadata Description: Federal Reserve Chairman Jerome Powell admits the U.S. is on an unsustainable fiscal path and acknowledges oversight failures in the banking sector on "60 Minutes." Explore the implications of Powell's rare critique and the ongoing debate about the Fed's role in the economy.

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In a time when immigration policy and labor shortages are at the forefront of political discourse, the idea that illegal immigrants are the solution to workforce deficits continues to be a divisive topic. Recent arguments from the left suggest that importing millions of unskilled migrants into the United States and Europe is necessary to avert an impending demographic crisis and address labor shortages, which they claim could also help curb inflation by preventing wage increases.

However, a closer examination reveals that this argument may not hold up under scrutiny. An analysis of the dynamics of immigration and labor markets suggests that illegal immigrants do not inherently resolve labor shortages, as they bring with them their own demand for services. For instance, they require dental care, automotive repairs, and consume various other services, effectively creating additional demand for labor in their new communities.

The argument posits that if a country like France, with a population of 65 million, were to be annexed by another nation, it would not result in a surplus of idle workers. Instead, French citizens, who are already engaged in various occupations within their economy, would carry their existing labor demands with them.

This concept extends to the composition and skill levels of immigrants. Admitting a large number of unskilled workers may lead to an oversupply in certain sectors, driving down wages for domestic unskilled labor while exacerbating shortages in skilled professions. Conversely, the targeted immigration of skilled professionals, such as dentists, doctors, and engineers, could alleviate specific skill shortages.

Corporations have been known to advocate for increased immigration to benefit from lower wages, but this does not necessarily address the broader issue of labor shortages across different sectors of the economy. The call for more skilled immigration has found support across the political spectrum, including from figures like Donald Trump, who have advocated for an emphasis on skilled over unskilled labor.

Public opinion, particularly in countries experiencing a surge in immigration like France, appears to be increasingly skeptical of the labor shortage argument. Polling data reveals that a majority of French citizens, especially women and blue-collar workers, do not buy into the claim that unskilled immigrants are the solution to their economic challenges.

While globalists and certain government factions may continue to promote large-scale unskilled immigration, it is important for the electorate to remain informed about the realities of labor market dynamics. Understanding these intricacies is crucial in shaping a balanced and effective immigration policy that serves the interests of the workforce and the economy at large.

Google Metadata Description: Explore the truth behind claims that illegal immigrants solve labor shortages. Uncover the impact on the economy and workforce dynamics in our in-depth analysis.

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In a recent examination of the U.S. jobs report, Peter St. Onge dissects the seemingly robust jobs report released by the Bureau of Labor Statistics (BLS). The report, which has been labeled "the most ridiculous jobs report in recent history" by Zero Hedge, showcased a surprise surge in employment, with 353,000 jobs reportedly added. Contrary to expectations, average hourly earnings allegedly climbed by a substantial 4.5 percent. However, upon closer scrutiny, experts are questioning the validity of these numbers.

The report's illusion of job growth is attributed to a reduction in the average workweek to 34.1 hours, a low not witnessed since the 2008 financial crisis, unless one considers the COVID lockdown periods. This statistical maneuver presents an increase in hourly pay, not due to actual wage growth, but rather the assumption of a shorter workweek. Critics argue that this raises two possibilities: either the economy is in a state akin to the 2008 downturn, or there is an intentional skewing of data to secure additional budgetary concessions from the White House.

Further investigation reveals that the nature of the job growth is also under scrutiny. The U.S. Census Household survey, which inquires directly about employment status, indicates that nearly half of the jobs reported by the BLS may not exist. The survey suggests that instead of the celebrated job creation, there was a loss of 31,000 jobs. Additionally, data on part-time work implies that the economy did not generate any new full-time positions last year; the jobs that did materialize were mostly in the gig economy or as a second source of income for those struggling to make ends meet.

via Zero Hedge

The Wall Street Journal's findings further reinforce this narrative, revealing that the few full-time jobs created were predominantly in government and social assistance sectors, funded by taxpayer dollars. This suggests a contraction in the private sector—the actual wealth-creating segment of the economy.

via WSJ

In a striking revelation, new data indicates that since 2018, all job growth in the U.S. has been among foreign-born workers, with no net increase for native-born employees. This divergence is largely attributed to the BLS's "seasonal adjustment" practices. While seasonal adjustments are standard for accounting for employment fluctuations, the staggering 3 million job difference between raw data and adjusted figures raises concerns over the potential for manipulation to favor certain political narratives.

via Zero Hedge

As the Biden administration continues to navigate the delicate economic landscape, key statistics such as jobs and inflation are becoming increasingly contentious. With public opinion polls reflecting a harsher economic reality than official reports suggest, the apparent disconnect between government data and on-the-ground experiences remains a topic of heated debate.

We will continue to monitor and report on these developments as more information becomes available.

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In a move that has set tongues wagging across the political spectrum, a new border deal has been forged in Washington that critics claim epitomizes the prioritization of foreign engagements over domestic welfare. The deal, as reported, appears to strike a balance—or imbalance, depending on one's perspective—between allocating funds overseas and addressing immigration policies at home.

Under the terms of the reported arrangement, a staggering $118 billion will be earmarked to support various international and domestic initiatives. A significant portion of this, approximately $60 billion, is allegedly designated to aid Ukraine amidst its ongoing conflict, perpetuating what some see as a questionable involvement in the nation's "lost cause."

Israel is another beneficiary in this deal, slated to receive $14 billion, while $5 billion is purportedly allocated for regions tied to Hamas or Gaza. The deal appears to demonstrate the United States' intricate role in global conflicts, highlighted by the $2.3 billion proposed for the Red Sea region—a strategic maritime route predominantly used by European and Chinese vessels.

On the home front, the agreement reportedly paves the way for the legalization of 1.5 million undocumented immigrants annually, stirring acute debate over the potential political ramifications. The proposal also seems to ensure a green card windfall that could extend through 2030.

The domestic implications are further compounded by the deal's alleged allocation of $2.3 billion to non-governmental organizations (NGOs) involved in resettling immigrants throughout the United States. These NGOs, some argue, are instrumental in the Democratic Party's strategy to reshape the electoral landscape.

Critics also highlight the bipartisan nature of the deal, suggesting that it serves as a vehicle for both Republican and Democratic interests. Republicans are accused of securing funds for military and defense ventures, including preparations for a potential conflict with China, while Democrats are charged with pursuing demographic shifts through immigration policies.

The backlash among Republican constituents centers on a perceived betrayal by party leaders who are accused of capitulating to corporate interests seeking inexpensive labor at the expense of American voters.

In response to the outcry, some suggest that President Joe Biden could address immigration concerns by reinstating former President Donald Trump's policies, such as the "Remain in Mexico" directive for asylum seekers.

As the nation watches the unfolding political madness, many wonder if the deal will pass or if it will merely serve as another chapter in the ongoing debate over immigration and foreign policy. The broader implications for the upcoming elections are also a subject of intense speculation.

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In a recent development that underscores the changing landscape of media, tens of thousands of corporate journalists are facing layoffs in what is being characterized as an "extinction event" for the industry. The wave of job cuts has been sweeping through some of America's most notable news organizations, including the Los Angeles Times, which has recently laid off 20% of its staff, amounting to 115 journalists, and has completely shuttered its Washington D.C. bureau—an alarming move in an election year.

The layoffs extend beyond traditional newspapers, with Buzzfeed closing its once $1.3 billion-valued news division, now down 98%, and Sports Illustrated ceasing operations altogether. Other venerable publications such as Time magazine, The Atlantic, The Washington Post, NPR, Bloomberg, and Condé Nast, publisher of The New Yorker and Vanity Fair, have also faced significant staff reductions. The New York Times has not been immune to the trend, cutting 240 jobs after losing tens of millions last year.

According to Axial's report, 2023 saw a staggering 20,000 media jobs cut—a sixfold increase from the preceding year. This trend appears to be accelerating in 2024.

At the core of this industry upheaval is a profound loss of trust among readers, which has led to a decline in subscriptions and advertising revenue. Surveys indicate that American trust in the media has hit a record low, with only one in three citizens expressing any confidence in media outlets. An astonishing 40% of Americans profess zero trust at all. Trust is particularly low among independent voters and Republicans, who together constitute over two-thirds of the American population. Even among Democrats, trust has dropped 18 points since the onset of COVID-19, especially among younger party affiliates who are increasingly skeptical of journalistic integrity.

500+ layoffs in the crony media in January!

A bad month for the establishment "news" media companies... Which means January was a good month for real Americans.

Meanwhile, @TexasScorecard is hiring. https://t.co/yl69WrIXQg

— Michael Quinn Sullivan 🇺🇸 (@MQSullivan) February 2, 2024

The erosion of trust has been linked to a perceived abandonment of objectivity in journalism, which escalated in 2018 with the media's treatment of figures such as Donald Trump, Alex Jones, and Milo Yiannopoulos. Critics argue that this has led to mainstream journalism becoming a mouthpiece for certain ideological stances rather than a neutral reporting body, further alienating readers.

As the traditional corporate media struggles to reinvent itself and regain public trust, grassroots news sources are gaining traction, often presenting themselves as more knowledgeable and honest alternatives. A new era is on the horizon, with platforms like Elon Musk's Twitter offering a level field for alternative media to compete.

For those seeking more information about the media revolution and its implications, a new episode of the Weekly Roundup podcast is available at petersanon.com, which promises to offer fresh perspectives on the ongoing transformation of the news industry.

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Will we ever get durable deflation again? Or will grandma keep getting sucker punched at the check-out lane. Forever.

Last week I joined Kevin Paffrath -- MeetKevin on Youtube -- for a wide-ranging interview about the economy and freedom.

During our chat, he asked about an ongoing beef between George Gammon and Cathie Wood about whether massive deflation is on the horizon.

The short answer is no: We will never again see durable deflation. Not until either the dollar dies or the Fed dies -- whichever comes first.

The Tech-Led Deflation Debate

Now, if you don't know George and Cathie, he makes financial videos on Youtube, and she's the CEO of Ark Invest, which manages roughly $7 billion and focuses on disruptive high-tech plays like AI, robots, and biotech.

A couple months ago Cathie gave a talk saying that investors were worried about the wrong thing. That we should actually be preparing for massive deflation.

Her reasoning is that technology is inherent deflationary, and we're about to have an epic tech boom.

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So is she right? Are we about to see plunging prices thanks to AI?

In short, no. Not because her reasoning is off -- she's 100% right that tech is deflationary because it lower prices.

But the missing part is the central bank -- the Federal Reserve. It soaks it all up.

To lay out the process, let's say you make hand-made mugs -- 10 a day. And you sell them for $20 to make ends meet. Now you install a machine and you can make 100 a day. Pay for the machine and you can charge, say, $10 and still turn a profit. Presto, a dollar buys more mugs.

Do that across an entire economy and you get generalized deflation -- dollars buys more.

Indeed, before central banking this was the normal state of a healthy economy -- technology advanced, capital -- machines -- were installed, and we got more stuff for the dollar.

The problem, of course, is that central banks are founded specifically to soak up all that deflationary goodness. In fact, they steal it and then some, turning deflation into inflation.

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"Bad” Deflation — the Kind the Fed Makes

Now, there is a special type of deflation which is bad, which is when the dollar is getting stronger not because we make more stuff, but because a bunch of dollars suddenly disappeared. More specifically, they got pulled out of circulation and stored somewhere.

Why would that happen? It could happen because there's World War 3 and everybody panicked. Or, more often, because the Fed crashed the banking system, a bunch of debt evaporated -- it defaulted and got written off.

At which point everybody's scrambling to save dollars to plug their balance sheets. They're not spending the dollars, they're storing them away. As if they buried them in the ground.

Meaning those non-circulating dollars are, at least temporarily, out of the inflation game.

That's exactly what happened in 2008, it's what happened in 1929, it's what happens every financial panic.

In fact, that special case is precisely the excuse the Fed uses to steal the normal, good deflation. It's pretty cute, really -- using the special bank panic deflation the Fed itself causes to steal tens of trillions of healthy deflation year in, year out.

Conclusion

In short, there is zero change we'll have durable deflation. Because the Fed will soak it up and then some. In fact, China's doing this as we speak, printing hand over fist to soak up its over-capacity-driven deflation.

That means whatever deflation windfall one expects from AI, robots, nanoassembly or cold fusion will end up, like so much else, in the pockets of Congress. We will never again see durable deflation.

I'll be speaking at the Restore Freedom Rally, February 2 to 5 in beautiful Orlando, on the coming Tidal Wave of Taxes: What's driving it. Who they'll go after first. And why they won't quit.

There’ll be great speakers every single day, and you can get tickets at Restore Freedom Rally. Use promo code PJ10 to get 10% off.

I hope to see you there!

Sign up for my free newsletter to get weekly articles on the economy and freedom.

Also check out the weekly podcast rounding up all the week’s videos in a single 20 minute podcast.

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As Europe grapples with widespread protests by farmers, a new form of 'peasant war' has taken root, challenging the environmental and economic policies of the European elite. In a dramatic display of discontent, French farmers have resorted to dumping cow manure on government buildings, while their German counterparts create blockades with tractors, snarling city traffic. In Belgium, farmers are slowing down the capital to a crawl, reminiscent of the recent Canadian trucker protests.

The turmoil began with the Dutch farmer revolt over a year ago, which saw the pro-farmer right populist Party of Freedom secure the most seats in parliament. Although they have been kept from power by the Netherlands' center-left coalition, the shockwaves have been felt across Europe's political landscape.

The movement against the ruling class has since spread to France, Germany, Italy, Poland, and Belgium. Despite the European media's attempt to minimize the protests' impact, farmers' voices are increasingly difficult to ignore. The situation escalated in France, where the government deployed armored vehicles to prevent farmers from blockading Paris' main food market.

Supermarket shelves in France and Belgium are starting to be empty. No farmers, no food. pic.twitter.com/9w5nUHGMGM

— RadioGenoa (@RadioGenoa) February 1, 2024

At the heart of the unrest are environmental regulations perceived to impoverish farmers, coupled with soaring fuel and energy prices—partially the result of EU sanctions on Russia. These economic pressures are pushing many farmers toward bankruptcy.

In response to these protests, which enjoy considerable public support (a French poll indicates 89% voter agreement with the farmers), governments are beginning to make concessions. France's newly appointed prime minister has prioritized agriculture, including the scrapping of a new diesel tax. However, farmers are demanding more significant changes, particularly the abandonment of the EU's 'farm to fork' strategy that enforces climate change and biodiversity rules across their supply chains.

The question remains: how will this conflict end? European elites may attempt to placate farmers with subsidies, but with the EU facing a €600 billion deficit, financial resources are limited. The future of these protests and Europe's ability to balance environmental policies with the economic welfare of its farmers will signal the continent's trajectory in the global environmental and financial narrative.

As the situation unfolds, the world watches to see whether Europe can navigate its way through this modern 'peasant war' without succumbing to the fiscal and societal pressures that threaten to unravel the unity and stability of the EU.

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In a recent development that has sparked widespread concern, members of Congress are reportedly attempting to push through a controversial piece of legislation that has been dubbed Orwellian by critics. The proposed bill, known as the Tax Relief for American Families and Workers Act, is a bipartisan effort that combines increased welfare benefits for illegal immigrants with a series of corporate tax cuts, a move that many see as a deliberate ploy to win over certain voting blocs while providing financial advantages to corporate entities.

Journalists Richard Stern and Preston Brashers have brought attention to the potential financial ramifications of the bill, which is projected to cost American taxpayers an eye-watering $155 billion annually. Despite the bill's title suggesting relief for American families and workers, the reality appears to be a strategic amalgamation of policies designed to favor illegal immigrants and corporate interests.

The proposed legislation includes a myriad of lobbyist-backed tax breaks, such as retroactive depreciation and modifications to business amortization under section 163. Additionally, it outlines an unusual reduction in the royalties tax for residents of Taiwan, slashing it from 30% to 10%, an example of the intricate and often opaque nature of lobbyist influence in Washington.

The bill emerges at a time when the United States is grappling with a staggering $2.7 trillion deficit, with projections estimating the national debt to soar to $145 trillion by 2053. In an attempt to justify the fiscal impact of the new bill, proponents have employed what has been described as "Washington-level accounting fraud." They have proposed the elimination of the Covid-era Employee Retention Credit, which has been riddled with fraudulent payouts, totalling $230 billion. By framing the discontinuation of this troubled program as a budgetary saving of $78 billion, lawmakers are attempting to divert funds towards the contentious objectives of the bill.

Critics argue that this financial maneuvering is emblematic of the dysfunction within the nation's capital, where a coalition of illegal immigrants and corporate lobbyists appear to wield significant influence.

Despite the concerns raised, there is hope among some circles that the bill can be defeated, thanks in part to the efforts of various individuals and organizations who have raised awareness through platforms like Twitter and the Heritage Foundation.

As the country enters primary season, there is a growing call for voters to support anti-establishment candidates who genuinely seek to represent the interests of the people, rather than the entrenched cronies of the major political parties. The upcoming elections present an opportunity for the electorate to hold their representatives accountable and to vote out those who have failed to serve their constituents.

For continued coverage on this and other issues shaping our nation, stay tuned to our reports.

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In an era of economic uncertainty, a new trend has emerged among tens of millions of Americans, according to a recent study by Intuit reported on by CNBC. Termed 'doom spending,' this phenomenon signifies the practice of expending beyond one's financial means as a coping mechanism for stress, particularly stress related to the economy. The alarming data underscores a bleak picture: a nation grappling with financial insecurity and a diminishing hope for the future.

Intuit's study reveals a staggering 96% of Americans harbor concerns about the current economic climate. Over half believe that economic conditions have deteriorated over the past six months. With 56% living paycheck to paycheck and less than $2,000 in savings, nearly one-fourth of Americans have no savings at all, painting a dire picture of financial preparedness.

[

Forget doom scrolling, Americans now doom spend to cope with stress

Nearly every American is concerned about the current state of the economy (96%) – and it’s stressing them out about their finances. According to a study conducted by Qualtrics on behalf of Intuit Credit Karma, the top economic concerns among Americans who are concerned about the economy include inflation (56%), the cost of living increases […]

Intuit Credit Karma

](https://www.creditkarma.com/about/commentary/forget-doom-scrolling-americans-now-doom-spend-to-cope-with-stress?ref=tftc.io)

The concept of 'doom spending' is not a marginal one; it affects approximately 27% of American households—that's around 35 million households or 90 million individuals—falling deeper into financial distress. The drivers of this trend are twofold: the relentless rise of inflation and the growing inaccessibility of housing, leaving nearly half of the population struggling to afford basic necessities such as food, clothing, and shelter.

The predicament is particularly acute among younger generations. A quarter of Generation Z report difficulties in locating well-paying jobs, and an overwhelming majority of both Gen Z and Millennials experience financial anxiety. In terms of 'doom spending,' young adults are at the forefront, with 35% of Gen Z and 43% of Millennials admitting to spending beyond their means to manage stress.

Additionally, the younger demographic reports the most significant increases in spending, indicating a shift away from long-term financial planning towards immediate gratification. This shift is attributed to a growing sense of hopelessness about the economy's prospects, with only a fraction of optimists believing in the leveling out of inflation or improvement in the job market.

The socioeconomic impact is evident as a quarter of Gen Z and Millennials are moving back with their parents, a stark departure from previous generations' milestones of starting a family and homeownership. The Intuit study points out that the age once prime for family formation is now marked by retreat and indulgence in ephemeral experiences, such as vacations, over long-term investments.

“When houses are a million dollar plus and an older couple will likely outbid us anyway, we’re gonna relinquish any lingering delusions about homeownership”

Gen Z doom spending is a *rational* coping mechanism pic.twitter.com/YWG5gp2yg4

— Amy Nixon (@texasrunnerDFW) December 22, 2023

The roots of this economic dilemma can be traced back to the year 2000 when the economy began its shift towards a Federal Reserve-dominated system characterized by high expenditure and sluggish growth. This shift has resulted in a disproportionate increase in living costs compared to income growth. For instance, rents have climbed by 135% since 1999, outpacing the 77% rise in incomes. The median house price has skyrocketed to 274% of its 1999 value, according to the Census Bureau, leaving incomes lagging far behind despite many Americans taking on multiple jobs.

As the economic landscape continues to challenge the younger generations, there is a theoretical hope that this demographic might pivot towards advocating for smaller government, reduced regulation, and increased entrepreneurial activity. However, the study suggests that a significant shift in sentiment may require further hardship before such a transition occurs.

The Intuit study paints a concerning portrait of an American populace increasingly resorting to 'doom spending' in response to economic pressures. With the youth at the forefront of this trend, the long-term implications for the economy and society at large remain to be seen.

We need to fix the money.

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In an unexpected turn of public opinion, immigration has vaulted to the forefront of American voter concerns, surpassing the persistent issue of inflation, according to a recent Harvard Harris poll. As the nation edges closer to the 2024 presidential election, the rising anxiety around immigration policy harkens back to the issue that first propelled Donald Trump to the White House. Despite this, the Biden administration seems to maintain its course, favoring the interests of globalist advocates over the electorate's growing disquiet.

The poll indicates a notable shift in priority, with 35% of voters citing immigration as their primary concern, edging out inflation at 32%, followed by the economy and jobs at 25%. Other issues such as crime and drugs, the national deficit, national security, corruption, and the environment trailed in voter concern.

This change in public sentiment is particularly poignant considering inflation's direct impact on voters' personal lives. However, the influx of undocumented immigrants into communities across the United States is poised to reshape the landscape of voter priorities. The Harvard Harris survey underscores a broad consensus that the current situation at the U.S. border is deteriorating, a sentiment shared by 81% of Republican voters, 68% of independents, and even a plurality of Democrats.

The poll also reveals a significant desire for stricter immigration policies, with 68% of Americans favoring more stringent entry requirements into the country. This includes a commanding 85% of Republicans, a strong 71% of independents, and a divided Democratic base, split evenly on the issue.

Despite this clear message from the electorate, the Biden administration continues to push for policies that would effectively grant legal status to millions of undocumented immigrants already in the country. This proposed legislation is coupled with additional funding for border facilities, while concurrently dismantling physical barriers erected by the State of Texas—a move currently contested in the courts.

The undercurrents of this debate point to powerful special interests that seemingly hold sway over the administration's immigration stance. These range from the progressive factions that seek to reshape the electorate to the bipartisan lobby of businesses, particularly in agriculture, that rely on inexpensive labor. The costs, however, are often offloaded onto taxpayers to cover healthcare, education, and social services.

In sum, as the 2024 election draws near, immigration is shaping up to be a defining issue, setting the stage for a clash between the will of the people and the agendas of lobbyists and activists. With an overwhelming consensus among voters for change, the coming months will be critical in determining whether political leaders will heed the democratic call or continue to navigate the tumultuous waters of immigration policy under the influence of special interests.

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Fresh GDP numbers came in and it was a blowout. The kind of blowout that only a $2.7 trillion government deficit can buy while the private economy crumbles around it.

Another couple blowout GDP reports like this and Americans will be living under an overpass.

Biden’s GDP Miracle

First the numbers. The Bureau of Economic Analaysis reported GDP for the fourth quarter came in at 3.3% annualized. Which blew away estimates of 2.0%.

And it brought growth for all of last year to 2.5%.

Which is very healthy.

On paper.

Note the numbers are preliminary, so they're subject to revision.

Still, the regime media rolled out their finest adjectives: CNN called it "shocking" -- in a good way. The New York Times called it "stunning and spectacular."

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So what's the problem? Debt.

Your grand-kids bought it all. And then some.

To see why, in the past 12 months the federal deficit increased by $1.3 trillion. Yet we only got half that in GDP -- about $600 billion.

In other words, everything else shrank.

It's even worse for that brave and stunning Q4 -- there we got just $300 billion in extra GDP for -- wait for it -- $834 billion of new federal debt.

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GDP vs Wealth

Remember that GDP isn't measuring wealth, it's measuring spending -- production which is sold.

As Megan McArdle put it, GDP “counts the dollar value of our output, but not the actual improvement in our lives, or even in our economic condition."

For example, if you dig holes and fill them, it’s GDP. In fact, you could build a missile, blow up the Golden Gate bridge and every house within 5 miles of it, and it shows up as GDP. The missile cost money after all, and the government paid for it.

Of course, mainstream media -- indeed, mainstream economics -- pretends that GDP is identical to wealth. Pumping out articles celebrating GDP as prosperity.

That's close enough when it's private firms or individuals producing more to sell more — in that case, rising GDP means the country is getting richer. Because more stuff is being produced.

But it's actually the opposite when it's government spending. Because government's job is taking wealth and lighting it on fire. That means when GDP is growing from government spending it's not measuring wealth.

It's measuring dissipation of wealth at best, destruction of wealth at worst.

Essentially, the pace at which we're going Soviet, replacing private wealth with government waste.

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So translating that brave and stunning GDP into the real world, we're destroying wealth at rates not seen since 2008.

This actually lines up with what we've seen in jobs -- in a recent video I mentioned that over half the jobs last year were actually government and government related social service jobs.

In some states it was literally more than all the jobs created -- in other words, the private sector is shrinking.

All these government jobs, of course, are unproductive -- they're not making us more prosperous as a society.

On the contrary, they're taking wealth earned from productive activities and squandering them on vote-buying or worse -- think of the wealth-destruction contained in a single EPA bureaucrat.

What’s Next

The lapdog media will keep playing alone with the government statisticians and the gaslighting academics.

They'll keep trashing regular Americans for posting their grocery bills and mortgage payments, praying they can maintain the illusion long enough for the next election.

Fortunately, there's millions of us who can see the emperor is buck nekkid.

I'll be speaking at the Restore Freedom Rally, February 2 to 5 in beautiful Orlando, on the coming Tidal Wave of Taxes: What's driving it. Who they'll go after first. And why they won't quit.

There’ll be great speakers every single day, and you can get tickets at Restore Freedom Rally. Use promo code PJ10 to get 10% off.

I hope to see you there!

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Originally published in profstonge.com

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In a stark revelation recently reported in the Wall Street Journal, millions of American homeowners and drivers are confronting a looming insurance crisis. With insurance costs surging and leading companies withdrawing from high-risk areas to avoid financial ruin, the security of owning insurance is transforming into a precarious situation that many are struggling to navigate.

As the Wall Street Journal describes, securing car and home insurance has shifted from a habitual expense to a critical challenge. This precarious scenario is largely a byproduct of government policies that have inadvertently incentivized construction in hazard-prone regions while simultaneously increasing the risk in those very areas.

The insurance industry is grappling with a complex web of issues. On one hand, environmental policies have unintentionally led to the accumulation of dangerous underbrush, effectively setting the stage for potential mega fires across the United States. On the other hand, subsidized insurance for flood-prone areas has encouraged residential development in locations that should have been deemed unsuitable for such growth.

These factors have cornered insurance companies into making difficult decisions: either extend coverage to all and distribute the staggering costs of disaster claims across the board – which has led to premium hikes of up to 40% – or cut off coverage to the riskiest homes. The latter is becoming increasingly common, as evidenced by State Farm's $13 billion loss in underwriting last year, prompting them to retreat from markets like California.

The repercussions are dire. With major insurers like State Farm and Allstate withdrawing from the Californian market, an estimated 18 million Americans are currently without home insurance. This phenomenon, colloquially referred to as "going naked" within the industry, disproportionately affects low-income households for whom a loss could mean financial ruin.

The crisis isn't confined to home insurance. The car insurance sector is also struggling, with rates soaring by notable percentages across states like New York, New Jersey, and California. Nationally, car insurance costs have risen sixfold compared to inflation over the past year. This sharp increase is attributed to a combination of factors, including government emissions mandates and a spillover from the housing insurance debacle, as reinsurers – those insuring the insurance companies – pass on their losses.

The situation has reached a point where some consumers face exorbitant insurance costs, as highlighted by one woman's $18,000 yearly quote to insure her two homes and a 2011 minivan. The industry is witnessing the emergence of "insurance deserts," regions where providers are either pulling out or reducing their visibility and accessibility to avoid public relations fallout.

In states like Florida, the government-run insurer of last resort has become the top insurer, a testament to the severity of the crisis. Solutions to the issue would require sweeping reforms, but given the vested interests of lobbyists and activists, the likelihood of such change remains slim.

As the insurance landscape continues to deteriorate, consumers are left in a precarious position, with the situation predicted to worsen before any improvement is seen. The nation watches, waiting for a remedy to a crisis that underscores the interconnectedness of environmental policies, market economics, and the well-being of millions of Americans.

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In an alarming financial downturn, China's stock market is experiencing a significant collapse, causing widespread concern within Beijing's political echelons. The Shanghai index, China’s benchmark index, plummeted by 5% last week, leading to a staggering loss of $500 billion in Chinese corporate equity. This precipitous fall has contributed to a 25% drop over the past two years, starkly contrasting with the global financial landscape where U.S. stocks rose by 10%, British stocks remained stable, and Japanese stocks saw an increase of nearly a third.

The performance of Chinese stocks is a troubling outlier on the world stage. Since 2007, Chinese stocks have failed to show any growth, marking 17 years of stagnation—a period that coincides with President Xi Jinping's tenure and his government's handling of the economy. Under Xi's leadership, the Chinese economy has suffered from government mismanagement, politicized subsidies, and authoritarian interventions, casting doubt on the nation's economic stability.

The recent nosedive has sent shockwaves through Beijing, with officials acutely aware of the potentially catastrophic impact on Chinese households and the country's deeply indebted financial system. China's debt crisis looms large, with debts surpassing 300% of its GDP—an equivalent of nearly $80 trillion by U.S. standards. A deflationary spiral, driven by overcapacity in sectors like manufacturing and housing, exacerbates the problem by effectively increasing the real burden of debt.

In response to the crisis, China's State Council has initiated an all-hands-on-deck approach to stave off further market collapse. Measures have included tax tweaks, bans on short sales, and infusions of capital into state-linked firms. Reports suggest a potential 2 trillion yuan ($300 billion) rescue package, reminiscent of the 2015 bailout. However, skepticism abounds regarding the effectiveness of these interventions due to the underlying weaknesses in China's growth model, which has been propped up by government spending, state-supported exporters, and a faltering housing market.

This economic turmoil has prompted a shift toward a nationalized stock market, mirroring the broader trend of an increasingly state-controlled economy. As growth stagnates and President Xi's authoritarian policies deter investors, capital is flowing out of China to emerging markets like Indonesia, Vietnam, and even Mexico, while the U.S. struggles to attract foreign investment due to its own domestic challenges.

The unfolding situation in China could present an opportunity for the United States, particularly if there is a shift in domestic policy following the 2024 presidential election. With potential changes in the political landscape, America could capitalize on China's economic distress—if it manages to address its internal manufacturing and policy constraints.

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In a recent exposé of the widening chasm between the global elite and the general populace, a poll conducted by the Committee to Unleash Prosperity in collaboration with Rasmussen Reports has provided a stark depiction of the ideological rift that is shaping political landscapes across the West. The survey, focusing exclusively on America's 1%—characterized as individuals with postgraduate degrees and incomes exceeding $150,000—unearthed some unsettling sentiments harbored by the elite concerning freedom, governance, and environmental policy.

The survey's findings, as reported by a well-respected newspaper, reveal an overwhelming consensus among the elite that the public possesses too much freedom, with 70% of elites who expressed an opinion supporting this view. In stark contrast, the non-elite overwhelming majority—80%—believes that the people have too little freedom, signaling a deep disconnect between the two groups.

via the Committee to Unleash Properity

In matters of education, the elite showed a strong preference for teachers to dictate educational content over parents, with a 70% majority in favor. Trust in government to act benevolently also scored high among elites, with nearly 80% endorsing stringent state intervention on ecological matters such as the strict rationing of gas, meat, and electricity to combat climate change. Notably, this figure rose to 90% among Ivy League graduates, suggesting a correlation between educational pedigree and acceptance of authoritative environmental measures.

via the Committee to Unleash Properity

The elite's appetite for regulation extends to outright bans on gas stoves and gas-powered vehicles—particularly SUVs and pickups—with 70% and 81% support, respectively. Additionally, majorities within this demographic are in favor of prohibiting air conditioning and non-essential air travel, albeit with an implicit exemption for private jets and luxury compounds, which typically cater to the wealthy.

The poll also provided insights into the elite's perception of the current administration, with nearly 90% of the 1% expressing approval of President Joe Biden and reporting financial well-being. This is in stark contrast to the sentiments of average Americans, who are seemingly disconnected from the so-called "Biden magic."

The authors of the poll have distilled the essence of these findings into a poignant commentary, suggesting that those who consider themselves the stewards of American society are ensconced within self-constructed ideological bubbles, profoundly out of touch with the lived realities of the majority.

As the world eyes the impending election season—whereby an unprecedented 75% of countries with free or partially free elections will go to the polls—the question arises: will the electorate favor the globalist perspective, or will the populist movement continue to gain ground? The data suggests that the latter may be the case, with the general public increasingly at odds with the policies and perceptions of the globalist 1%.

For readers keen on delving deeper into this growing ideological divide, the full video analysis concludes with an invitation to stay tuned for further developments as electoral events unfold across more than 50 countries.

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The holidays are done and inflation is back.

After months of mainstream victory laps – including Paul Krugman's famous "inflation is over. We won at at very little cost" – it turns out inflation's not dead after all. It's not even resting.

As my colleague EJ Antoni put it, inflation ripped the stake out of its chest and loosened a blood-chilling scream.

So first the numbers. The Bureau of Labor Statistics, who lovingly hand-craft our alleged inflation numbers, put out fresh data for December. Saying headline CPI went up at an annualized pace of 3.7%.

That's a problem because it's almost 3 times higher than the previous month -- the month that Paul Krugman was celebrating.

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Worse, the CPI is currently running double the pace of last December -- a year ago.

So transitory is looking a lot longer than it used it.

It's even worse on so-called "core" CPI -- which strips out food and energy. That came in at an annualized 3.8. About a half point higher than the previous month.

Finally, so-called "SuperCore" inflation -- not a joke. Which the Fed pulled out of its hat to strip out housing costs. That one's doing even worse, hitting almost 5% annualized.

That feeling when your fake statistics don't work out.

The problem is none of this should be happening since we've just gone through the most savage Fed-induced credit strangle since the 1970's. In fact, in terms of money supply -- how much confetti is in existence -- it's been the worst Fed-induced credit strangle since the 1930's.

So we've got the creeping recession to show for it -- as everybody, including the Fed, expected. And yet inflation isn't just undead, it's positively rocking the graveyard.

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Why Inflation’s Back

So what happened? Two things.

First, the Federal govt never actually cut spending.

Second, there was so much bank and hedge fund money parked at the Fed that as it drained out -- especially the reverse repo -- that meant there was plenty of money sloshing around Wall Street. It was only tight for the unwashed voters trying to, say, buy a house. Or pay down their credit card.

The federal spending, in particular, has been eye-watering. In fact, just hours after the BLS inflation report, Janet Yellen rolled up with her bag of goodies, reporting the federal deficit for December soared to one hundred and thirty billion dollars. in a single month.

For perspective, the typical budget deficit during the Trump years was on the order of $20 billion. Under Biden it was 80 billion last year, and now it's 130.

And there's still another year to go -- maybe more if the dead vote swings blue again.

Inflation Going Worldwide

Later in the week, we got further confirmation from British inflation numbers, which showed the first rise in almost a year. It's worth noting Reuter's economist survey had expected inflation to go down. Not up.

Throw in rising inflation rates in Canadian and the Eurozone, and inflation is now rising pretty much across the West.

Now, the UK had been a canary in the coalmine since it had gone up so bad these past few years -- even worse than the US. In fact, early last year official food prices in the UK were running 20% inflation.

At this point British food's still running 8%, but the big surprise was evertyhing else: services, transport, recreation, stuff you drop on your foot and stuff you do not.

Air fares were up 60% on the month. Clothes went up when they normally collapse post-Christmas. Live music, holidays, theater — it’s all up.

In fact services rose to 6.4% annual inflation. Which is a problem since they make up the majority of what the British buy.

This mirrors what's been happening across the West. Indeed, that same FT article notes what I've been saying in videos: there's been essentially zero progress on inflation outside energy, which is driven by looming recession and the winding down of Mr Putin's war.

Why hasn’t inflation gone anywhere? For the simple reason that obscene government spending has continued also across the West.

Essentially taking the money they grabbed for Covid lockdowns and recycling it into everything from diversity to global warming to millions of random migrants.

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What’s Next

Interestingly enough, surging inflation hasn't really changed market expectations of rate cuts. That's weird, since normally you'd expect central banks to not cut rates if inflation is rampant.

There are a number of hypotheses why: perhaps, as I've argued, the Fed is so afraid of recession that it'll just let inflation rip to knock down those coming unemployment headlines.

Of course, there's a much darker possibility: perhaps the Fed isn't actually looking at inflation or the economy. Because what they're afraid of is the stability of the financial system itself.

As in, the Fed and its minion central banks are desperate to cut rates even in the face of inflation because the alternative is a financial collapse too big to bail out.

After all, high rates were what crashed all those banks back in March, and they never really fixed it, they just papered it over.

Indeed, the Wall Street Journal notes that most cases when central banks slash rates to the degree markets currently expect are driven precisely by "some form of financial panic."

Central banks across the West – really across the world – have painted themselves into the mother of corners, potentially facing durable global stagflation for the first time in 50 years, this time paired with a financial crisis that would make it a combination not seen since the 1930's.

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Originally published on [_profstonge.com_](After months of mainstream victory laps – including Paul Krugman's famous "inflation is over. We won at at very little cost" – it turns out inflation's not dead after all. It's not even resting.)

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In a move that is stirring both concern and controversy, California's legislature is considering implementing a wealth tax targeting the state's most affluent residents. According to the proposed legislation, individuals with assets over $50 million would be taxed at an annual rate of 1%, while billionaires would face a 1.5% tax. The tax for billionaires could take effect as early as next year, while millionaires would have a one-year reprieve.

This unconventional tax strategy extends beyond California’s borders, as it includes a provision to tax part-time residents pro rata for the days spent within the state. Moreover, California plans to pursue those who leave the state, seeking to collect taxes on wealth generated during their residency.

The proposed wealth tax also enlists private attorneys to pursue affluent Californians for underreporting assets, with financial incentives in the form of a share of the recovered taxes. This raises the specter of legal battles over asset valuation, including mundane matters like the cost basis of home renovations.

Behind this legislative push lies California's daunting $68 billion budget deficit, further exacerbated by generous social welfare programs, such as the recent introduction of free healthcare for all illegal migrants—a policy that includes coverage for gender reassignment surgeries.

Critics argue that the proposed tax, though seemingly modest as a percentage, would have a significant impact on the wealthy, potentially confiscating nearly a third of their annual returns. With California's existing top income tax rate of 14%, the wealth tax could see the affluent contributing a substantial portion of their earnings to state coffers.

The wealth tax is not yet a certainty; it must still pass legislative hurdles and would likely face legal challenges. However, given California's history of taxing property through property taxes, proponents believe it could withstand scrutiny.

The broader implication of this tax could be a mass exodus of wealthy Californians to more tax-friendly states such as Florida or Texas, potentially eroding California's tax base. Additionally, there is concern that this policy could set a precedent for other progressive states.

California's wealth tax proposal is a critical development that could reshape the state's fiscal landscape and influence tax policy nationwide. As the story unfolds, we will provide updates on this potentially disastrous legislation.