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Social Security, often referred to as the "third rail of American politics," is a fiercely protected program, especially by seniors who rely on it for their retirement benefits. According to a national poll conducted by Quinnipiac University, an overwhelming 78% of respondents oppose proposals to raise the full retirement age for Social Security benefits from 67 to 70. This opposition remains strong even when considering the possibility of longer-lasting benefits, with only 30% in favor and 62% against the idea. While Social Security is not currently facing imminent bankruptcy, the trustees overseeing the program have projected that the surplus in the trust fund, which helps fund benefit payments, will be depleted by 2034. After the surplus is exhausted, payroll taxes will still generate revenue, but it would fall approximately 20% short of the total amount needed for benefit payments. At that point, Congress would need to find alternative sources of revenue or make adjustments to benefit rules and payrol...
The Brazilian Central Bank Digital Currency (CBDC) has come under scrutiny as a blockchain developer, Pedro Magalhaes, uncovered a disconcerting feature while reverse-engineering its code. Magalhaes discovered that the government has embedded the capability to freeze funds and manipulate balances within the CBDC. Despite attempting to seek explanations, Magalhaes noted a lack of transparency and communication from the government, particularly regarding non-bankers. Vini Barbosa, a reporter from Portal Do Bitcoin, confirmed Magalhaes' findings after engaging with Brazilian authorities. The Central Bank defended the ability to freeze or arrest amounts, citing existing legislation. When Magalhaes initially raised the concern on his LinkedIn profile for educational purposes, he thought it might be limited to decentralized finance (DeFi) or centralized finance (CeFi) contexts. However, the official response clarified that the central bank holds the power to freeze funds at any time. This revelation has instill...
    The Coming Great Depression and The Two Causes
Jul 18, 2023 - 08:41:05 PDT
The status quo faces the need to unlearn and confront a Great Depression as the only pathway to a new understanding. The two approaches to analyzing a situation highlight the tendency to cherry-pick data and draw false analogies to support desired outcomes. Analysis often omits discussion of limits, constraints, costs, and worst-case outcomes. Drawing from the Great Depression of the 1920s, the credit bubble and subsequent crash resulted from overvaluation and unsustainable expansion. The refusal to accept wealth destruction hindered recovery, as seen in Japan's prolonged stagnation. The US now faces a debt super-cycle bubble and seeks to avoid losses, but unsustainable trends in total credit, the Federal Reserve balance sheet, and federal debt persist. The popping of bubbles is inevitable, yet policy tweaks fail to address the underlying issues. The crucial difference between the past and present is the depletion of easily accessible global resources, affecting energy efficiency and consumption. Hopes fo...
Treasury Secretary Janet Yellen issued a negative warning about the Chinese economy's slowdown, cautioning that it could have contagious effects. Meanwhile, the U.S. economy grapples with its own challenges, including higher interest rates, stubborn inflation, and looming recession fears. China's GDP growth of only 6.3% in the last quarter, coupled with weak consumer spending and a struggling property market, paints a bleak picture of an anemic recovery from the pandemic. Alarming data also revealed a record-high youth unemployment rate of 21.3% in China. Yellen acknowledged the potential negative spillovers to the United States, particularly for Asian economies, but expressed confidence that a recession would be avoided. However, concerns persist as inflation remains above the Federal Reserve's target, signaling a slower retreat of steep consumer prices. While the labor market has shown resilience, job creation weakened in June. The Federal Reserve's aggressive interest rate hikes aimed at curbing inflat...
You had better get ready for the world of central bank digital currencies (CBDCs) because they are coming. And they are coming fast.
According to a recent survey by the Bank for International Settlements (BIS), as many as 24 CBDCs could be in circulation by 2030.
    The War Against Inflation Still Has a Long Way To Go
Jul 18, 2023 - 06:02:56 PDT
Despite recent reports indicating a slowdown in inflation, the battle against soaring prices is far from over, painting a bleak picture for the economy. The consumer price index rose just 0.2% in June, with the annual rate at 3.1%, significantly lower than the peak of 9.1% a year ago. However, there are troubling signs that indicate the underlying challenges. Rising fuel prices and a clogged housing market continue to pose problems. Moreover, core inflation remains high, with a 0.2% increase in June and an annual rate of 4.8%, far beyond the Federal Reserve's comfort level. Housing costs, a key component, have risen by 7.8% in the past year and show no signs of significant relief. Long-term analysis reveals that the consumer price index is still up approximately 18% from three years ago, highlighting the enduring impact of inflation on households. Small businesses have been hit hard, grappling with rising costs and higher interest rates imposed by the Fed. This challenging environment dampens growth prosp...
Retail sales in June showed a lackluster growth of only 0.2%, falling short of the forecasted 0.5% increase. This indicates a shift in consumer spending patterns and highlights weaknesses in certain sectors of the U.S. economy. With Americans now allocating more of their spending towards services rather than goods, the reliability of retail sales as an economic indicator has diminished. While overall consumer spending remains relatively strong, there were notable declines in sales at home centers, department stores, and gasoline stations. However, furniture and electronics stores, as well as internet retailers, experienced significant sales growth. The rise in sales of new vehicles and auto parts contributed to the overall increase, but excluding car dealers and gas stations, retail sales only saw a mild 0.3% uptick, providing a clearer picture of consumer demand. Restaurant sales, which are closely monitored by economists, saw minimal growth in June, despite a year-on-year increase. Overall, retail sales...
With the June CPI report coming in even cooler than expected, the mainstream perspective seems to be that the Federal Reserve is winning the inflation fight. But in his podcast, Peter Schiff explains why the dollar is telling a different story.
A new study reveals a bleak financial outlook for Generation X, the "forgotten generation" comprising about 64 million Americans born between 1965 and 1980. The National Institute on Retirement Security warns that Generation X is unprepared for retirement, primarily due to the shift from pension plans to 401(k)-style accounts. The study shows that the bottom half of earners in this generation have only saved a few thousand dollars for retirement, while the typical household has a mere $40,000 in retirement savings. Shockingly, approximately 40% of Generation X has not saved anything for retirement at all. Even those participating in employer-sponsored retirement plans are falling short of savings targets, regardless of their race, gender, marital status, or income. The absence of pension plans, multiple economic crises, stagnant wages, and rising costs have created a challenging situation for Generation X, turning the American Dream of retirement into a potential nightmare for many. A separate study previ...
Bank credit becomes increasingly difficult to obtain as rejection rates reach record highs, according to a report by the New York Fed. The overall rejection rate for credit applicants has risen to its highest level since June 2018, reaching 21.8%. This trend is seen across different age groups, particularly impacting those with credit scores below 680. Auto loan rejection rates have also hit a record high, standing at 14.2%, while rejection rates for credit cards and credit limit increases have also increased. The housing sector is severely affected, with mortgage rejection rates at 13.2% and mortgage refinancing rejection rates at 20.8%. The data indicates a pullback in loan applications, with only 40.3% of respondents seeking loans in June, the lowest level since October 2020. However, respondents planning to apply for credit over the next year have seen a slight increase. These trends coincide with the Federal Reserve's aggressive interest rate hikes to combat inflation, making credit harder to obtain....
US regional banks are struggling to compete for deposits, and the situation is getting worse. Larger banks like JPMorgan Chase, Wells Fargo, and Citigroup have acknowledged the mounting pressures they are facing, which spells trouble for their smaller counterparts. Rising interest rates have forced regional banks to pay more on customer funds, while the value of their bond assets has plummeted. Some regional banks have already failed, while others are desperately trying to secure funding as depositors withdraw their cash. The prospect of further rate hikes and stricter regulations only adds to their woes. Deposits are dwindling, deposit costs are skyrocketing, and the shift away from non-interest-bearing accounts is intensifying. Additionally, regional banks are highly exposed to the struggling commercial real estate sector, which further compounds their challenges. The future looks grim for regional banks, as profitability and earnings continue to suffer.
How can the United States become "Energy Independent" if it continues to export a significant amount of its domestic shale oil production??  Good question.  Unfortunately, the amount of U.S. oil exports this year is forecasted to reach a new high, making a bad situation worse...
United States presidential candidate and Florida Governor Ron DeSantis continues to express his opposition to central bank digital currencies (CBDCs), firmly opposing the implementation of a digital dollar in the country. During the Family Leadership Summit on July 14, DeSantis vowed to ban CBDCs in the United States if elected as president. He emphasized that on his first day in office, he would put an end to the concept, stating, "Not happening in this country." DeSantis has consistently been a critic of a digital dollar. In May, he enacted a bill in Florida that prohibits the use of federal CBDCs as a form of currency. He also banned the use of foreign CBDCs, arguing that it would result in an extensive transfer of power from consumers to centralized authorities. Central bank digital currencies have been a subject of debate within the crypto community. Critics argue that they pose threats to individual privacy and may lead to excessive government control, while others see them as a means to drive adopt...
    The War on Cash and Controlling The Individual
Jul 17, 2023 - 12:43:18 PDT
The introduction of Central Bank Digital Currencies (CBDCs) is overshadowing discussions about traditional currency changes like the penny or new dollar coins. CBDCs, digital versions of a country's physical currency issued by central banks, aim to support financial services and replace much of the physical currency. The Federal Reserve's FedNow service, launching soon, will enable instant payments and operate 24/7. While it won't be a consumer-facing app, it will allow banks to move money instantly. Over 50 financial institutions, including JPMorgan Chase and Wells Fargo, are early adopters. FedNow's implementation is optional for banks, but it promises faster and easier money management for individuals. However, concerns about privacy arise as every transaction will be recorded. The war on cash and the shift toward digital currencies favor big businesses over small ones, leading to potential long-term ramifications. Skeptics of government control and high-tech advancements worry about the erosion of per...
    For Fiat, The Bell Tolls
Jul 17, 2023 - 12:32:12 PDT
Russia's announcement of a new gold-backed trade currency at the BRICS meeting in Johannesburg on August 22-24, 2023, has been largely overlooked by mainstream media. However, the significance of this development should not be underestimated. China and Russia are working to consolidate their trade partners into a formidable bloc and provide a superior alternative to the US dollar. The groundwork for the new currency has been laid, and it is more advanced than commonly believed. Both countries aim to destabilize the dollar and escalate the financial war against the US and NATO. The proposed gold-backed currency for BRICS will weaken the dollar and benefit nations like Iran. The move away from fiat currencies to gold has been evolving for some time, with a shift of bullion from the West to the East. Central banks in Asia have been accumulating gold reserves, signaling their intention to secure currency values. The deteriorating relationship between Russia and the West, along with the conflict in Ukraine, ha...
The International Monetary Fund (IMF) has acknowledged the use of the Chinese Yuan as a currency for debt repayment, signaling a potential shift away from the U.S. dollar. Argentina recently paid off a portion of its debts to the IMF, equivalent to $1.1 billion, in Chinese currency. IMF spokesperson Julie Kozack confirmed that the renminbi (RMB) is one of the five freely usable currencies accepted by the IMF for settling obligations. While negotiations regarding Argentina's $44-billion program are ongoing, Kozack denied receiving a letter from China indicating the use of a swap line with the Chinese Central Bank for IMF dues repayment. The Argentine Central Bank previously signed a deal with China to renew a swap line, increasing freely accessible funds from 35 billion yuan to 70 billion yuan. Argentina's move to incorporate the yuan as a currency accepted for deposits in savings banks and checking accounts, along with Brazil's agreement to conduct trade and investments in their own currencies, demonstrat...
    IndiaL links Up With UAE To Settle Trade in Rupees
Jul 17, 2023 - 11:36:04 PDT
During an official visit by India's Prime Minister Narendra Modi to the United Arab Emirates (UAE), the two countries have taken steps to reduce their reliance on the U.S. dollar. They have signed an agreement allowing trade settlement in Indian rupees instead of dollars, aiming to eliminate the costs associated with currency conversions. Additionally, they have agreed to establish a real-time payment link to facilitate cross-border money transfers, further promoting seamless transactions and greater economic cooperation. India, as one of the world's largest importers and consumers of oil, has traditionally paid for UAE oil in dollars. However, with this new agreement, India could potentially make its first rupee payment for UAE oil to Abu Dhabi National Oil Co (ADNOC). This move aligns with India's previous announcement to settle global trade in rupees, showcasing its efforts to reduce dependence on the dollar. The Reserve Bank of India has stated that the central banks of India and the UAE will link Ind...
    The War in Ukraine Is the War for the Dollar
Jul 17, 2023 - 09:05:51 PDT
The analysis explores the impact of the dollar wars and Western sanctions on various countries, highlighting the negative consequences for those challenging the dominance of the U.S. dollar. It emphasizes the potential role of gold as an alternative and its significance in countering the influence of the dollar. The first two dollar wars targeted Iraq and Libya, both major energy powers that threatened the petrodollar by seeking to sell oil in currencies other than the dollar. These actions led to military intervention and devastating outcomes for these countries. Gold played a role in both cases, with Saddam Hussein and Muammar Gaddafi challenging the legitimacy of the dollar and proposing alternative currencies backed by gold. Russia, as another energy powerhouse, indirectly faced a dollar war through the conflict in Ukraine. To reduce its reliance on the dollar, Russia began liquidating its holdings of U.S. Treasury bonds and pursued trade agreements using national currencies, including gold-backed agr...
For the past decade, Zoltan Poszar has arguably been the world's foremost expert in the ugly nuances and arcanery in world money-markets (and more recently, on how the financial and physical markets overlap on the geopolitical chessboard). However, his insights paint a bleak picture of the global economy. Poszar claims that we are witnessing a shift away from US dollar dominance towards a multi-polar world, ushering in the era of "Bretton Woods III." He discusses the concept of de-dollarization, the resurgence of gold as a monetary asset, and the utilization of central bank digital currencies (CBDCs) to construct an alternative financial system. Poszar highlights the growing focus in the West on reducing reliance on Chinese supply chains and striving for self-sufficiency. Conversely, countries in the East seek to extricate themselves from the Western financial system, reducing their exposure to the US dollar and Western financial institutions. He suggests that the rise of CBDCs could facilitate direct set...
Three banking giants and an additional financial institution are being hit with a mere multimillion-dollar fine, which pales in comparison to their immense net worth, for their involvement in a global billion-dollar fintech scam. The Monetary Authority of Singapore (MAS) has fined DBS, OCBC, Citibank Singapore, and Swiss Life for flagrant violations of anti-money laundering and anti-terror financing laws related to the notorious $2.1 billion Wirecard AG scam. These financial institutions, collectively managing a staggering $992 billion in assets, have been found guilty of a litany of failures. They neglected to conduct proper investigations into large transactions, failed to maintain customer due diligence, and neglected to ascertain the source of wealth for high-risk customers. This abysmal display of compliance and oversight has contributed to the perpetuation of the fraudulent scheme. Wirecard, the disgraced German payments firm, came clean in June 2020, acknowledging that the purported $2.1 billion ca...