C Thomas Printer and Austerity Jones keep on talking about decisions governments make and the effect of these decisions on economy and inflation.
“A democracy will cease to exist when you take away from those who are willing to work and give it to those who would not. “ Thomas JeffersonGood morning, I am Austerity Jones and I’m back with C Thomas Printer to discuss the economy and government. C Thomas, I hope you are in a better mood than last week. You were borderline melancholy.
C Thomas: Good morning Austerity. Borderline? I was certainly melancholy but as you know the Bible says there is a time for everything under the sun and today I am resolved to use history to find us some light.
Austerity: That’s great to hear, so where do you want to go today? Dutch Farmers, America’s own protest, the truckers in Oakland, or your old stand-by inflation?
C Thomas: Why not all three Austerity? Let’s start with the tractor-driving farmers of Holland- which I didn’t know was the second largest ag exporting nation after the United States. I found that interesting. So you have a super woke government that is agreeing to treaties that will put its constituents out of a living, they lose their homes and real estate, and eventually, the country will go broke because their greatest source of revenue from its natural borders was destroyed by a flick of a pen. After all, cows fart too much. I don’t blame them one bit for driving those tractors right up the ass of that government that is supposed to represent the people. I’d dump that tea over the side, I’d park my tractor on the road, but better yet. I’d block all the roads going into the city because people forget without trucks those cities would be out of food in a week. This is what Putin has tapped into- basic fundamental knowledge of what’s really important. Food and energy rule all. No farmers, no food. Climate change isn’t important, gender pronouns, gender equality, not even abortion matters when you are sitting in the dark- cold and hungry. This is a Maslow’s hierarchy of needs reminder. It has been a long time since the developed world has had to think about that. It shows you have far we have fallen. No farmers no food. That’s their motto, and I love it.
Since I mentioned trucks, I find it hilarious that the Socialist Republic of California has imposed new laws, meant for Uber, mind you, that are now affecting 70,000 owner-operators of their own semi-trucks. The exact kind of people that don’t want to work for someone else or join a union, but that isn’t King Gavin Newsom’s decree. The official quote from the governor’s office was “it’s time to move forward, and comply with the law” Oh, that didn’t go over well so now we have a strike at the Oakland port by the truckers. The strike has affected the longshoreman’s union which has collectively bargained that they don’t have to go to work if they don’t feel safe. They didn’t and they didn’t, so we have ships waiting to be unloaded and aren’t. To be loaded on trucks and taken away and aren’t. And now the ships are bypassing Oakland port completely. There’s stuff that’s supposed to be loaded on trucks and taken away and isn’t. Per the king’s decrees, they aren’t decrees this is the same clown governor that outlawed restaurants during covid but was caught dining without a mask. People, these politicians are slapping you in the face and you are asking for another. Remember when hair salons were closed, but Pelosi was photographed getting hers done, which state was that in again? Can you remind me, Austerity?
Austerity: California?
C Thomas: Ding-ding-ding. You win a prize, it’s the same state where shoplifting is legal as long as it’s under $900. What a country? No wonder so many immigrants are trying to come here. I should move to San Francisco and just fill up my $900 two or three times a day Austerity.
Austerity: Be serious C Thomas.
C Thomas: I will, when a politician besides Joe Manchin in this country starts acting seriously as well. So what do the 70,000 truckers do? I would leave town, and than the state and never come back Austerity. I would refuse to go to that state. If I was Exxon and Chevron, I would outlaw my oil from going to that state, because you heard what Newsom is trying to do with guns, right? He wants to sue gun manufacturers if a crime is committed with a gun there as a response to Texas’ abortion laws. What if your gas is in a car accident that kills somebody, is he going to allow lawsuits against oil companies next? This is what happens when governments run amok. Just when you think a law is laughable, too crazy to be believed, like owning and operating your own truck, the government is making that illegal. I think you and I should move to Texas and build more homes in Texas, Austerity because the only people that will be left in California are gonna be the Hollywood crowd, the junkies, and the shoplifters. Fight for your rights Truckers, show that King who is boss.
But alas let’s talk inflation Austerity Jones.
Austerity: Shall we? In what country?
C Thomas: Wow, great question. We could talk about the UK, which has the highest since our favorite Iron Lady helped defeat it 40 years ago, or Canada whose central bank raised their interest rate by 100 basis points, 1 full percentage point. The largest hike since 1998. But no I want to stay at home. America, the beautiful and the land of the decree. Joe Biden went over to Saudi Arabia to get them to pump more oil and lower our biggest source of price escalation. He got bupkis. That’s the word of the day.
Bupkis- a Yiddish word meaning nothing.
Biden got bupkis. Worst of all, people noticed. The Saudis who aren’t exactly known for being the Albert Brooks of comedy countries made fun of him. The Australians made fun of him. I’m not talking can’t read a teleprompter memes or fall off a bike video either. They were mocking how incompetent we are that the Saudis could blow us off like that. Us as in the US – the United States of America. To make matters worse, Russia’s Gazprom inks a $40 billion energy deal with Iran as soon as Biden gets home. Remember a few months ago when we were dragging ourselves over to Iran and Venezuela asking for their help to produce more energy? Well one of them has been chosen. This deal reeks of Sergei Lavrov. Who is he? He is one of the most shrewd and sophisticated diplomats in the world today and their current foreign minister. He is smart and tough and creates true working relationships. Combine that with their head central banker Elvira Nabuillina, who has won best central banker in Europe not once but twice. When Biden seized the Russian forex reserves- The ruble tanked leading Biden to call it rubble. Well, Elvira raised interest rates to 20% from 9.5%, in comparison to Jerome Powell sitting here with 9% inflation and trying to decide if we should go to 2.25% or 2.50%. Now Elvira has lowered interest rates from 20 to 14 to 11, and back to 9.5% while the Ruble has been the best performing currency in the world and has strengthened significantly against the dollar which has done well against every other currency practically. The only rubble is Joe Biden, Barney Rubble, or maybe Fred Flintstone. I don’t know about Putin’s effectiveness but his minions seem well qualified, at least compared to Pothole Pete and our gang of incompetents. So you are probably wondering what this has to do with inflation huh Austerity?
Austerity: I have enjoyed the Russian book report C Thomas but where are going with this?
C Thomas: Energy, Austerity, energy, and balance sheet. The Russians have it and we don’t. Our government would rather beg our enemies for oil than allow American companies to drill for it. What kind of green example would that be for Bernie Sanders and the Prius crowd? And balance sheet? We don’t have that either. We have debt, lots of it, and we have deficits (I heard that the house and Senate are finalizing an $800 billion defense package) how are we going to pay for that? We were already running a deficit? How? The treasury sells more bonds. But wait? Who is buying these bonds? The central bank has been buying half of them and they are quantitative tightening so not them. The Chinese? No, they own less than a trillion dollars in bonds for the first time in 12 years. So who and more importantly at what rate? Who wants a 3% 10-year rate with 9% inflation? How about a 3% one year? That is almost locking in a guaranteed loss in purchasing power. So whom? Keep in mind that for every 1% rise in the interest rate paid by the US government that is $310 billion more in interest. Pensions? Haha! They had the worst quarter in what 75 years in a 60/40 portfolio and haven’t broken the bad news yet that 8% returns are really hard to achieve when the government isn’t acting like a drunken sailor. Which is what most people expect them to do soon. They don’t have any good option without buying bonds and inflating the heck out of this economy. They are going to default (this option is so unlikely) or they will inflate away the debt and harm some really big money managers, pensions, hedge funds, etc. So we need to begin preparing for that.
Next week we will review the top performing inflation plays for individual investors and things to monitor. We will get actionable since we have no other option. Since our government can’t be disciplined, we must be in their stead.
“Most bad government results from too much government. That government is best which governs the least because its people discipline themselves.” Thomas Jefferson
Sincerely yours,
C Thomas Printer
Also born on this date:
J.K. Rowling,
our beloved Milton Friedman,
Curt Gowdy,
and Captain William Quantrill.