Looking Backwards …
LB #1
It has been one hell of a first month with the wee orange man in charge. It has been a scary time. Jason Lange, Andy Sullivan, and Brad Heath report this for Reuters, “The U.S. government spent more during President Donald Trump’s first month in office than it did during the same period a year ago, in a sign his cost-slashing effort has yet to reduce the nation’s heavy fiscal obligations, a Reuters analysis of federal data shows. Trump has frozen billions of dollars in foreign aid and fired more than 20,000 federal workers since he returned to power last month. His budget-cutting point person, tech billionaire Elon Musk, claims to have saved tens of billions of dollars.
But any savings have been outweighed so far by higher spending on health and retirement programs and rising interest payments, Treasury Department spending records show. Overall, the government spent about $710 billion between Jan. 21 and Feb. 20, Treasury daily spending data shows, up from the roughly $630 billion during a comparable period last year. Independent budget experts said the figures illustrate the relentless pressures incurred by an aging population and a ballooning debt load.”
I am officially terrified. How? On what? What if they hadn’t been cutting. Oh my goodness. This is insane, but in the article there was also this little nugget.
“Trump can do little to reduce debt service payments, which accounted for 13% of the budget last year, without risking a default that would rattle the global financial system.
The government paid about $94 billion in interest payments during Trump’s first month, compared to around $80 billion in the comparable period last year, Treasury data shows.”
That’s where the authors are wrong. Have you seen the 10 year bond rally meaning yields are falling. They went from 4.80% to 4.25% in 6 weeks. I have been saying the recession is the train barreling toward us and the bond market is agreeing. That will cheapen the interest debt expense, when the Treasury Secretary can start lowering and extending the US debt structure. This is not nearly as fun to talk about as making Canada the 51st state.
Now Trump might be wanting to lower the deficit, but so far it isn’t happening. Sahil Kapur from NBC explores why, “President Donald Trump and his billionaire adviser Elon Musk have sent shock waves through the federal government by attempting to take a hatchet to certain agencies in the name of reducing the federal deficit.
“BALANCED BUDGET!!!” Trump posted this month on Truth Social. Musk added on X, “Balanced budget is going to happen.”
But the reality is less simple. Budget experts say that even if Trump succeeds at slashing the spending that his Musk-led Department of Government Efficiency is targeting — like the U.S. Agency for International Development and diversity, equity and inclusion initiatives governmentwide — his policies would still substantially add to the deficit if they come to fruition…Trump has called for a series of steep tax cuts — from extending his expiring 2017 tax law to eliminating taxes on tips, overtime pay and Social Security benefits — that would add at least $5 trillion to the 10-year deficit compared to the red ink if no changes are made to current federal law, according to the nonpartisan Committee for a Responsible Federal Budget. That figure could rise to $11 trillion depending on how his so-far-ambiguous proposals are structured.
“It’s rhetoric versus reality,” said Marc Goldwein, senior policy director at CRFB, which calls for reducing red ink. “And it’s always popular to say, ‘I’m reducing the deficit.’ And it’s also popular to distribute a bunch of goodies, and this president is well known for that. So I don’t think their rhetoric matches reality.”
“USAID, DEI grants, and education administration are more culture war targets than centerpieces of a true deficit reduction agenda,” said Jessica Riedl, a budget expert and senior fellow at the center-right Manhattan Institute. “Serious deficit reduction requires addressing the 75% of spending going to Social Security, Medicare, Medicaid, defense, veterans, and interest on the debt. Yet Trump has taken nearly all of those deficit drivers off the table for savings.”
As Senate Republicans voted Tuesday night to begin advancing their budget resolution, one member of the caucus voted no: Sen. Rand Paul, of Kentucky, who warned that its “unstated purpose is to increase spending by $342 billion.”
I think Jessica and Rand nailed it. The administration is and always have been trying to spend. I’m still holding out hope, but the proof will be in the pudding. That’s scary.
LB #2
I felt that I had to share the most enjoyable thing I read all week because it was written by a conservative for conservatives. Matt Lewis writes for the Hill, “Conservatism is the revered philosophy of the rule of law, limited government, personal responsibility, moral clarity, fiscal responsibility and family values.
Until your guy gets elected, that is. Then all bets are off. What else explains the political rise of Donald Trump, who by sheer force of ego managed to rebrand the Republican Party from the “party of ideas” to the party of whatever dumb thing he just posted?
Case in point: Trump recently quoted Napoleon to justify lawlessness. He declared on social media, “He who saves his Country does not violate any Law.” This is a dubious paraphrase at best, and one that reveals just how far the “law-and-order right” has drifted.
Today, Napoleon is no longer a cautionary tale — he is a conservative role model. And to his followers, Trump isn’t a reckless narcissist eroding constitutional norms. He is a misunderstood genius and a persecuted hero in the mold of Napoleon, albeit with more spray tan and fewer military victories.
This isn’t just intellectual laziness. It’s ideological bankruptcy. The same people who once decried progressive efforts to reinterpret the Constitution (i.e., a belief in a “living Constitution”) now embrace the idea that laws are merely suggestions — so long as the right person is breaking them.
Apparently, coercion is only a problem when someone else wields the stick.
And then there’s foreign policy — another arena where conservative principles have been tossed aside like one of Trump’s failed casinos. You would think a great negotiator would know better than to give away the store before the negotiation begins. But Trump’s approach to Russian leader Vladimir Putin is indistinguishable from that of a desperate salesman trying to cut a deal before the repo man shows up.
And the best part is that his supporters eat it up. The same people who used to binge watch “Red Dawn” and dress up in tricorne hats and rant about government tyranny now worship a guy who cosplays as Napoleon and kisses up to Putin.
Think I’m exaggerating? A congresswoman from New York just introduced a bill that would make Trump’s birthday a national holiday. Meanwhile, in West Virginia (where I live), they’re considering renaming the state’s highest point, Spruce Knob, as “Trump Mountain.” Because nothing celebrates Appalachian heritage like slapping a New York casino owner’s name on a recreation area.
This fawning devotion is starting to spread beyond Trump. Enter Elon Musk: the billionaire tech mogul-turned-conservative folk hero, who seems to be co-president (in between fathering children at an alarming rate).
Remember when conservatives fretted over the moral decline of society? They warned that the wealthy elite could afford to have illegitimate children, snort experimental drugs and generally behave like the Roman Senate before the empire collapsed — but the rest of us, not so much. These erstwhile conservatives insisted that society needed moral exemplars, not libertines with baby registries longer than a CVS receipt.
That argument evaporated the moment Musk started “owning the libs” and writing big checks supporting Trump’s presidential campaign.
At this point, conservatism — at least as practiced by the current Republican Party — isn’t about principles. It is about personalities.”
That’s why I consider myself a triangle. I am equidistant between the two parties but at an angle watching what both of them do and I shake my head and mutter this is ridiculous.
LB #3
Parmy Olson put out an article on Bloomberg this week on a topic I have been suspecting for awhile. “Microsoft Corp. plans to spend $80 billion on artificial intelligence this year, reinforcing its position as a leading vendor. So why did it recently publish a research paper showing an erosion of critical-thinking skills among workers using generative AI tools such as ChatGPT? The study, carried out in conjunction with researchers at Carnegie Mellon University, surveyed 319 knowledge workers about how they used AI, including a teacher generating images for a presentation about hand-washing to her students using DALL-E 2 and a commodities trader generating strategies using ChatGPT.
The researchers found a striking pattern: The more participants trusted AI for certain tasks, the less they practiced those skills themselves, such as writing, analysis and critical evaluations. As a result, they self-reported an atrophying of skills in those areas. Several respondents said they started to doubt their abilities to perform tasks such as verifying grammar in text or compoA fascinating finding in Microsoft’s study was that the more people were confident in the abilities of their AI tool, the less likely they were to doublecheck its ouput . Given that AI still has a tendency to hallucinate, that raises the risk of poor-quality work. What happens when employers start noticing a decline in performance? They might blame it on the worker — but they might also blame it on the AI, which would be bad for Microsoft.sing legal letters, which led them to automatically accept whatever generative AI gave them…Perhaps, for instance, ChatGPT and its ilk can prod its users to come up with their own original thoughts once in a while. If they don’t, businesses could end up with workforces that can do more with less, but also can’t spot when their newfound efficiency is sending them in the wrong directions.”
Just when I thought we couldn’t get any dumber we go and totally redeem ourselves. Wait, this is regurgitation not critical thinking. The widespread acceptance of that makes me want to regurgitate and stop critical thinking. Like I always say, someone has to know the difference between right and wrong, correct and incorrect. If you are that person, you will be a diamond. Much like the diamond market which has been flooded by lab-grown impostors, the real things still shine and will always be in demand. Be a diamond.
Looking Forwards…
LF#1
This is what we have to look forward to according to Matthew Piepenburg at VonGreyerz.gold via ZeroHedge, “we should all be concerned if we are collectively sinking on a global debt ship with not enough lifeboats to save our fiat current’s absolute purchasing power.
And when it comes to the water over-filling the air-tight compartments of the U.S. debt Titanic, we need to look soberly at what the Trump America is facing. Toward this end, let’s be blunt. Can’t We All Agree that America is Broke? Public debt – $37T, unfunded liabilities at $190T. A debt/GDP ratio above 120%, etc.
The USA is in an unprecedented debt trap/spiral, the math, details, history and consequences of which we have been tracking for years. And history (ignored) tells us an even darker yet simpler truth: debt destroys nations. Every time and without exception.”
I read this after I wrote the Bygone Relics where I practically wrote the same thing. I am however a big fan of Piepenburg. He’s right in that we are facing a problem, but very few can recognize it. Like in February 2020, no one was an expert on face masks but by April everyone was an expert because it had to be experienced. That is what is going to have to happen to the US population regarding currency debasement. Ask an Argentine they know all about it.
Here is what is being talked about seemingly everywhere as Elon Musk is asking for an audit to the gold at Fort Knox which Trump says we will do. Meanwhile gold by the tons are being shipped from London back into the USA suddenly. I wonder if they need to fill up Fort Knox. The reason why gold is such a topic of discussion is how much it could be a helper to the deficit reduction. Piepenburg explains, “Revaluing Gold?
Finally, and perhaps most importantly, the topic of gold revaluation is also ripping through the precious metal pundit circles at a galvanic pace, and for good reason. Based upon “reported” U.S. gold holdings, if gold were politically re-priced to just $4000 per ounce, that would create an additional $1.2T of instant liquidity (i.e. inflationary M2), which the Treasury Department could then direct deposit into an ever-drying TGA. (This direct deposit is made legal under Section 2.10 of the Financial Accounting Manual for Federal Reserve Banks.)
Such a gold revaluation policy would take a lot of pressure off Bessent’s Treasury Department and buy the U.S. more time and money for the aforementioned Trump policies to “Make America Great Again.” But could a potential series of gold revaluations to inject new money into the TGA piggy bank truly make America, well… great?
Or would it just save the U.S. economy from crumbling to the ground? n the 1970s, Kissinger was very concerned when Europe, which collectively owned more gold than the U.S., wanted to revalue their gold to similarly cover their own debt disasters at home.
This would mean the U.S. would have to do the same, thereby playing its last Trump card (pun intended) of desperation (reverting to its gold vaults) in 1974.
And why was Kissinger so terrified of having to resort to the ultimate “red button” act of desperation in the form of revaluing its last real form of sound money/wealth?
Because Kissinger knew then what many of us know. That is, if the USA shows its hand and starts revaluing gold to higher and higher levels to pay down higher and higher levels of debt (to keep politicians in power and the masses free of pitchforks), this would mean the end of American supremacy, hegemony and/or the Pax Americana.
Why? Because he who has the most gold wins. Trump, Bessent, and the USA itself thus face a debt trap and, hence, a sovereign dilemma of historical import.
Yes, certainly, the U.S. can and may revalue its gold holdings to dig itself partially out of debt and hence spur more growth. But once/if the U.S. revalues, the rest of the world will naturally follow, and that will make the US just one more economically average nation among many, but certainly not the strongest anymore.
Kissinger knew this. Do Bessent and Trump?”
That reminds me of the story of Paul Volcker watching the price of gold like a hawk when he was raising interest rates or FDR checking the price daily while he was debasing the currency with his own shenanigans. Gold is money. The rest can be manipulated.
LF#2
If you haven’t seen the footage of the Southwest plane landing and then reaccelerating up into the air to miss a passenger plane traversing its runway then I encourage you to do so. There is a link at our website. It is crazy that this is a) happening so often or b) it has always happened and it just hasn’t been in the news. I don’t know which is more concerning.
LF#3
Do you remember the days around lunch at the school cafeteria when the rumor mill would get going, usually in the fall, there is going to be a fight. It was always low on details at first, some guy from shop versus that wrestler with he short hair. Oh yeah your group would say. I know that kid. I don’t know where you grew up but all the wrestlers had short hair and all the people that were in shop, were guys. That doesn’t mean it wasn’t about to happen as sure enough there would be a group of people moving in one direction and another group would be over here and pretty soon the entire mass of people had encircled the two groups and sure enough the two kids would emerge and be all puffed up and then away they would go swinging and wailing and usually it would end up on the ground for a few seconds which felt like forever and then a couple people would swoop in and break it up. Everyone would share in the testosterone for the rest of the day. Welcome to the puffed up stage.
This from ZeroHedge, “China is furious after a State Department fact sheet on Taiwan has been updated. The new updated version has dropped a line which previously stated “we do not support Taiwan independence.” The fact sheet still displays a US commitment to ‘One China’ – but still the Chinese Foreign Ministry has on Monday called on the Trump administration to “immediately correct its mistakes” over the removal of the line.”
China takes its one policy of Taiwan very seriously. It noticed the removal of one line. What was much easily noticed was the unexpected show of force of both China and the US in the last week. This from US Strategic Command, “A joint team of Air Force Global Strike Command Airmen launched an unarmed Minuteman III intercontinental ballistic missile equipped with a single telemetered joint test assembly re-entry vehicle Feb. 19 at 1 a.m. Pacific Time from Vandenberg Space Force Base, California…“This test launch is demonstrative of our nation’s ICBM readiness and reliability,” he said. “Because of the skill sets and expertise of our maintenance personnel and our missile crews, our freedoms and the homeland remain secure.”
The missile traveled well across the Pacific Ocean to its target in the Marshall Islands. Also in the Pacific this week was a live fire exercise by China. This from Elizabeta Ranxburgaj from the US Sun, “The unusual appearance of Chinese naval ships in the Tasman Sea sparked fears that live-fire exercises were launched, putting the area on high alert. Airlines flying over the sea were warned by the Chinese military to change their flight path over an allegedly secret exercise.
China’s potential live-fire drills were a shock to Australian authorities who reportedly only learned about these exercises from surprised commercial pilots, Defense Minister Richard Marles revealed on Friday. Marles said: “To be clear, we weren’t notified by China.
“What China did was put out a notification that it was intending to engage in live firing. “By that, I mean a broadcast that was picked up by airlines or literally … commercial planes that were flying across the Tasman.”
The minister explained this was unprecedented because authorities typically give a 12 to 24-hour notice of live-fire drills.
Three Chinese warships were reportedly running these exercises just 150 nautical miles east of Sydney.”
The teams are warming up and the band is playing….No introductions needed.
Sincerely Yours,
C Thomas Printer
The Dow Jones finished trading …at 43,840.
The 10-year Treasury bond is at …4.20%
The price of Brent Crude is … at $72.81 per barrel.
The price of gold is … at $2,867/oz.
The price of silver is … at $31.70/oz.
I leave you with this from the information superhighway, Did you know you can actually listen to the blood in your veins? You just have to listen varicosely.
Thank you for listening today and you can find all of our articles and more on our website cthomasprinter.com.