I’ll start by reposting this tweet by Will Schryver: No reserve currency in history has been able to retain that status indefinitely, for various reasons. That status tends to militate against a healthy economy, and that in turn militates reserve currency status. So King Dollar was never going to remain King indefinitely, although the US—like other countries in a similar position—has been willing to go to great, and probably unwise, lengths to stay on top.
Also, Mark note that Blackrock is losing investments from high profile clients, i.e. red state pension funds, for a couple of reasons:
1) They aren't down with the Commintern for local political reasons
2) They don't want to be sitting on major losses in these going forward, creating a gaping hole in their future liabilities, i.e. defined benefit payouts.
In Florida, FYI, a lot of state employees are not on a defined-benefit system. We were given the option of a private account, owned by us, 20 years ago by the state. So, those people will be dealing with potentially lower payouts in retirement, but it doesn't translate to the State's balance sheet.
Little dynamics to think about in relation to this issue.
Thanks for the input, Tom. I was generally aware of red states divesting from Blackrock, but hadn't taken that the further step to how it would affect defined benefit pension systems still in place in some of those states. I'm in the federal system and was able to remain in a defined benefit plan due to time in. I more or less assumed--without much thought--that most states had followed the federal lead in revising their pension systems away from defined benefit plans.
Mark, if you haven't read it yet, I recommend a book I finished this past week. It's "The Storm Before the Calm" by George Friedman (formerly of Stratfor). It has a slight similarity to "The Fourth Turning" in that he traces the eighty-year cycle of major events since 1780 in the US. But instead of going into the weeds of "generations" as Strauss and Howe did, he labels the eighty-year cycle as the "insitutional" cycle, and then adds another one--a fifty-year "socio-economic" cycle. He traces both of them over the years since 1780. But what he points out as an oddity is, we are now at a point where both are coming together in the same decade. The Institutional cycles peaked in 1860, 1940, and now; the Socio-economic cycles changed in 1830, 1880, 1930, 1980, and likely by 2030. One of his observations was that the change of each socio-economic cycle was marked by an incompetent president who expected things to go on as they were, and could not deal with change--John Quincy Adams in the 1820s, Grant in the 1870s, Hoover in the 1920s, Carter in the 1970s--and now we have Biden! He thinks we'll be in good shape once we get through both. I am not sure I am as optimistic as Friedman is, but I hope he is right.
"The Zhou regime is already demanding unlimited debt." That says it all. Unlimited debt doesn't exist in the real world, You try it. The eventual collision with reality will be infinitely worse than if they let Powell handle this.
The Bidenites never have a problem. They will blame the debacle on Trump, Powell and maybe Putin for good measure, and they can count on the media, and maybe a few show trials, to 'fortify' their lack of responsibility for whatever happens. Meanwhile it seems nobody remembers we were better off under President Trump.
"White House says Congress will have to raise U.S. debt limit without conditions."
This is why I do not understand people who look at the Speaker fight as a failure or futile. Note that just one concession McCarthy (the RINOs) made was "Budget that stops an increase in the debt ceiling."
That is not only a concession it is a promise and a commitment. To the extent that such promises and commitments are not met it will mean not only the negation of McCarthy's legitimacy as Speaker but also the destruction of the credibility of the Republican Party. And yet people bitch that nothing was accomplished? Like everything in life, good things only come with effort and time - and now the ground has been prepared.
In an earlier post I think you said that one measure of this all working was the continuing decline of the euro. Is that still the simplest metric to follow as the New year begins?
Yep. Things are different when you are running a company and the investments you make are not secured by the government or collateralized by cheap loans. All of a sudden YOU are the one on the hook. I have always thought that when it comes down to it, for most business types, greed and self preservation will always trump virtue signaling.
Unfortunately, much of our economy is now 'secured by the government or collateralized by cheap loans' This and the trillions of debt will lead to the Greatest Depression ever, and the idiots in charge will make things worse by regulating everything.
Also, Mark note that Blackrock is losing investments from high profile clients, i.e. red state pension funds, for a couple of reasons:
1) They aren't down with the Commintern for local political reasons
2) They don't want to be sitting on major losses in these going forward, creating a gaping hole in their future liabilities, i.e. defined benefit payouts.
In Florida, FYI, a lot of state employees are not on a defined-benefit system. We were given the option of a private account, owned by us, 20 years ago by the state. So, those people will be dealing with potentially lower payouts in retirement, but it doesn't translate to the State's balance sheet.
Little dynamics to think about in relation to this issue.
Good Post.
Thanks for the input, Tom. I was generally aware of red states divesting from Blackrock, but hadn't taken that the further step to how it would affect defined benefit pension systems still in place in some of those states. I'm in the federal system and was able to remain in a defined benefit plan due to time in. I more or less assumed--without much thought--that most states had followed the federal lead in revising their pension systems away from defined benefit plans.
Mark, if you haven't read it yet, I recommend a book I finished this past week. It's "The Storm Before the Calm" by George Friedman (formerly of Stratfor). It has a slight similarity to "The Fourth Turning" in that he traces the eighty-year cycle of major events since 1780 in the US. But instead of going into the weeds of "generations" as Strauss and Howe did, he labels the eighty-year cycle as the "insitutional" cycle, and then adds another one--a fifty-year "socio-economic" cycle. He traces both of them over the years since 1780. But what he points out as an oddity is, we are now at a point where both are coming together in the same decade. The Institutional cycles peaked in 1860, 1940, and now; the Socio-economic cycles changed in 1830, 1880, 1930, 1980, and likely by 2030. One of his observations was that the change of each socio-economic cycle was marked by an incompetent president who expected things to go on as they were, and could not deal with change--John Quincy Adams in the 1820s, Grant in the 1870s, Hoover in the 1920s, Carter in the 1970s--and now we have Biden! He thinks we'll be in good shape once we get through both. I am not sure I am as optimistic as Friedman is, but I hope he is right.
"The Zhou regime is already demanding unlimited debt." That says it all. Unlimited debt doesn't exist in the real world, You try it. The eventual collision with reality will be infinitely worse than if they let Powell handle this.
...and still and yet, unfortunately, I don't think the Bidenites have a problem with unlimited debt, at all.
The Bidenites never have a problem. They will blame the debacle on Trump, Powell and maybe Putin for good measure, and they can count on the media, and maybe a few show trials, to 'fortify' their lack of responsibility for whatever happens. Meanwhile it seems nobody remembers we were better off under President Trump.
"White House says Congress will have to raise U.S. debt limit without conditions."
This is why I do not understand people who look at the Speaker fight as a failure or futile. Note that just one concession McCarthy (the RINOs) made was "Budget that stops an increase in the debt ceiling."
https://twitter.com/RepScottPerry/status/1611713571053780994
That is not only a concession it is a promise and a commitment. To the extent that such promises and commitments are not met it will mean not only the negation of McCarthy's legitimacy as Speaker but also the destruction of the credibility of the Republican Party. And yet people bitch that nothing was accomplished? Like everything in life, good things only come with effort and time - and now the ground has been prepared.
"Credibility of the Republican party"... yeah, that's a good one.
In an earlier post I think you said that one measure of this all working was the continuing decline of the euro. Is that still the simplest metric to follow as the New year begins?
It's certainly a sign, yes.
Yep. Things are different when you are running a company and the investments you make are not secured by the government or collateralized by cheap loans. All of a sudden YOU are the one on the hook. I have always thought that when it comes down to it, for most business types, greed and self preservation will always trump virtue signaling.
Unfortunately, much of our economy is now 'secured by the government or collateralized by cheap loans' This and the trillions of debt will lead to the Greatest Depression ever, and the idiots in charge will make things worse by regulating everything.