A Game of Chicken – Fat Tail Daily | Australian Markets

As everyone knows, the US is headed for a fiscal disaster. Like having a ‘heart attack,’ says Ray Dalio.

The one strategy to stop it’s to make dramatic coverage adjustments now — not simply to ‘improper payments’ to federal bureaucrats, but in addition severe cuts to the firepower industry.

Potential? Right here’s Barrons:

‘Trump Sends Shockwave Via Protection Shares, Says Army Spending Might Be Halved

‘“At some point, when things settle down, I’m going to meet with China and I’m going to meet with Russia, in particular those two, and I’m going to say there’s no reason for us to be spending almost $1 trillion on the military … and I’m going to say we can spend this on other things,” Trump mentioned.’

However right here’s Congress:

‘House Republicans on Tuesday revealed a budget resolution that would add $100 billion in defense funding, one-third less than the Senate blueprint which would raise defense spending by $150 billion.’

Requested in regards to the latest Senate finances proposal, Sen. Rand Paul mentioned:

‘I don’t assume the numbers are actual.’

What follows is a take a look at how unreal the feds’ world…and their numbers…actually are.

Information got here yesterday that a dozen eggs now price almost $5. US Information:

‘US eggs prices hit a record high of $4.95 and are likely to keep climbing

‘The latest monthly consumer price index showed that the average price of a dozen Grade A eggs in U.S. cities reached $4.95 in January, eclipsing the previous record of $4.82 set two years earlier and more than double the low of $2.04 that was recorded in August 2023.’

In 1925, a dozen eggs price about 25 cents. The standard working man needed to work about 30 seconds to buy a single egg. At this time — after all of the labour-saving units…computer systems, motors, artificial intelligence…and 100 years of enlightened financial management — he has to work 50 seconds.

Don’t trust our maths? We don’t both. It’s primarily based on phony numbers (there may be additionally the matter of 20 million chickens which have both died of chicken flu within the final 4 months or been culled by order of the Federal authorities). Nearly all of the statistics used to compute the consequences of federal packages — are frauds.

Let’s start with unemployment…now close to document lows. Politico experiences:

‘The prevailing [unemployment’ statistic does not account for the meagerness of any individual’s income. Thus you could be homeless on the streets, making an intermittent income and functionally incapable of keeping your family fed and the government would still count you as “employed.” If you filter the statistic to include as unemployed people who can’t find anything but part-time work or who make a poverty wage (roughly $25,000), the percentage is actually 23.7 percent. In other words, nearly one of every four workers is functionally unemployed in America today — hardly something to celebrate.’

Based on research from the Ludwig Institute for Shared Economic Prosperity we see also that the average wage has been similarly inflated. When we did our egg calculations, we used the feds’ number for earnings — around $60,000.

But when you adjust incomes to include all the marginally employed people in the statistic, the real number is closer to $52,000, which makes an average egg worth 57 seconds of human labour.

The Ludwig analysis crew additionally discovered that inflation was understated. Simply monitoring costs of the on a regular basis issues that on a regular basis people buy, they discovered:

‘In 2023 alone, the CPI indicated that inflation had driven prices up by 4.1 percent. But the true cost of living, as measured by our research, rose more than twice as much — a full 9.4 percent.’

Within the latest election, the Democrats couldn’t perceive why the voters didn’t recognize the great financial system that they had given them. This is the reason. The numbers have been faux. Actual earnings, for instance, didn’t rise, as broadly marketed; as an alternative, they fell.

However the massive kahuna of federal statistics is GDP. Whether it is going up, we’re advised that each one is effectively. Whether it is going down, one thing have to be accomplished.

Wish to increase GDP? Set up a suicide hotline. Then, when people call…you promote them a tombstone… a burial plot…and a casket, with an upsell to silk lining. Each sale will probably be included as a enhance to GDP.

Whenever you die, too, GDP will get a little bump up — perhaps your own home will probably be bought…flowers…property decision.

Or suppose 5 million immigrants immediately arrive. The competitors would possibly cut back your earnings, however the financial system — GDP — would rise.

A giant part of GDP is authorities spending. Switch funds aren’t included; the remaining totes to about 17% of GDP. So, if the feds spend one other trillion on weapons, for instance, it would add a trillion to GDP. Apart from some people within the firepower industry — its suppliers, lobbyists, assume tank shills and house owners — most people will probably be worse off.

As it’s, immediately’s GDP consists of more than $4 trillion of federal spending, principally wasted on unproductive packages, and far of its debt financed. The large query is whether or not Trump, Musk et al are reducing it back…or making it worse.

Extra to return…

Regards,

Invoice Bonner,
For Fats Tail Day by day

All advice is basic advice and has not taken under consideration your personal circumstances.

Please search impartial financial advice concerning your own state of affairs, or if unsure in regards to the suitability of an investment.