Two Birds… One Impeachment Flamethrower?

Two Birds… One Impeachment Flamethrower?

“I looked at them and said: ‘I’m leaving in six hours. If the prosecutor is not fired, you’re not getting the money,’ ” Biden said during a 2018 speech before the Council on Foreign Relations. “Well, son of a bitch. He got fired. And they put in place someone who was solid at the time.” 

-       The gas tycoon and the vice president’s son: The story of Hunter Biden’s foray into Ukraine – Washington Post

By J.M. Hamilton (10-5-2019)

Sometimes the sun, moon, and stars align just so, and for Candidate/Senator Warren this was her week.  Let’s say, this week was a highly probable inflection point on Warren’s road to the White House.

First off, Orange Julius – already under congressional impeachment review for extorting the Ukraine into investigating candidate Biden – doubled down and publicly invited China to do same.

This man actually believes he’s bullet proof, probably because he thinks his impeachment will cause a Civil War.  When all his impeachment will really do – if in fact, the crazies do come out of their bunkers – is enable the US to identify them and throw the fascists in prison. 

Sorry, the Civil War will not be televised.  Nor is such an event likely to occur; but our prisons may soon be overflowing w/ angry white men.

Trump’s list of crimes are so numerous that his presidency is a cancer; his cabinet, a bunch of crooks; and his family defines cronyism and nepotism.  A rat - and rats - will likely continue to leave the sinking ship that is the Trump presidency.

Most noxious, Trump has betrayed the campaign pledges he ran on in 2016, excepting his plutocratic commitments.  He correctly identified the economy and government as rigged, said - he alone - was the answer, and then wins office and ramps up the swamp into an open festering sewer.  And in the process takes the Republican Party down with him, in one grand flush.  (Sorry. The analogies and metaphors are crude this week but consider the topic.)

(Trump is not entirely bad.  No man can be entirely evil.  Argue w/ his methods sure, but he’s been right on trade, and if he keeps the US out of war w/ Iran – despite his best efforts to provoke Iran – then he’ll deserve kudos for those two things.  Outside of that, there’s not a lot of positives.  Oh, and Trump has revealed to all that the ultra-wealthy are, all too often, not anything society should desire to emulate or look up to.)

From using his office for self-enrichment to sucking up to dictators and thug authoritarians and totalitarians, this man clearly has zero respect for democracy.

If Trump keeps this up, he very well maybe the first POTUS to be carried out of the White House: under cover of night; in a straitjacket; fumbling for his phone to fire off one final tweet; and w/ a rubber gag firmly imbedded in his foaming mouth.

Sadly, I’ve been prescient before, so why not this exit for the orange one?

Of course, the beauty of the Trump impeachment inquiry …  is it exposes the Dem Establishment’s poster boy: superstud – aviator shades wearing – Biden (to some of the very same fraud, misuse of office, and peccadillos Trump has committed).

Biden – like you-know-who before him (ahem, the anointed one from 2016) – appears to have engaged in some of the very same pay-to-play activities.  Like why did a highly suspect oil baron from the Ukraine suddenly hire Hunter Biden (Biden’s son) for millions of dollars, at the same time VP Biden was placed in charge of addressing Ukrainian corruption?

In some circles, this is called “whitewash.” Like when ultra-sleazy private equity firms hire from a who’s who list of the Washington establishment… I don’t know, like KKR hiring General Betrayus to help legitimize the criminal enterprise that is private equity. 

Trading on the family name and laundering the money through the Clinton Foundation or Hunter Biden, it’s the same.  It stinks to the heavens.  Biden's latest refrain is: "You're not going to destroy me."  No Joe, you've already apparently done that yourself.

Biden’s whole freaking candidacy reeks of the same insider cronyism that cost the Dems & Hillary in 2016.  The DNC is incapable of learning… it refuses to acknowledge that if you take millions and millions of dollars from commercial interests, Dems are just as compromised, and owned, as the GOP.  Equally revolting is how some members of the MSM, and political establishment, are caught up in rapture over the Bush and Obama presidencies.  And now, from the MSM/political establishment, the revisionism begins: my, how presidential both leaders were… conveniently forgetting that both presidents, Bush & Obama, were warlords; and that their, respective, gross mismanagement of the economy & government  (for the benefit of an elite few, and to the exclusion of many: the neolib/neocon agenda)… allowed you-know-who to waltz right into the White House.

But you have to give the MSM (& others) credit, they at least are acknowledging, and writing about, how the Bidens got their hands caught in the Ukrainian cookie jar.  And the optics are poor.  Read here, here, here, and here.

Which brings us full circle to a surging Warren candidacy.  If she stays healthy, and the by looks of things, she defines health, she’s going to be our next President. 

Let’s see: Warren is smarter than any other candidate; she’s prepared and has plans and more plans; Warren is not crooked; she is the correct gender, at the right place & time; she's raising a boatload of money, from grassroots supporters; Warren embodies the from poverty to tremendous success story, that is the American Dream; and both Biden & Trump are about to finally get theirs w/ a thorough impeachment sandblasting… 

In a hundred years, I thought I’d never write these words: But Goddess bless Nancy Pelosi… bring the impeachment flames, baby.  Get out the impeachment flamethrower and go to town.  Who cares if Moscow Mitch clears the POTUS?  The public expects nothing less from a GOP Senate steeped in grift & malfeasance.

And to cap off her week – and this is absolutely nothing to celebrate – comes news that probably Warren’s only legitimate rival has health issues.  Of course, I write of Senator Sanders. 

Nobody wishes this upon Bernie.  I love him; I and millions voted for him in the 2016 primary.  Progressives adore Sanders.  For me, he defines the Democratic Party's turning point.  That is to say, in the correct direction: progressivism; FDR; and away from the gross corruption of the Biden/Clinton/Obama years.  You want to cool down populist ardor - from the right and the left - implement Sanders’ and Warren’s proposals (no few in number were supported by Trump during the 2016 race, only to be abandoned upon entering the White House).

Long after Trump is committed, locked up, and becomes a footnote in history…. Senator Sanders will be remembered for honesty, integrity, and being correct (at least 95% of the time).

Many of his supporters wish Senator Sanders hadn’t been scrod over by Hillary and the DNC in 2016.  The world and the US would be in a significantly better spot if Sanders was in the White House today, but alas, he’s not.  Honestly, many wish Sanders was ten years younger, but he’s not.  Sanders base of support wishes the Senator long life and health, but what are his prospects, now that it has been revealed that he’s suffered a heart attack?

What could be better then, if, in the upcoming Dem debate, Senator Sanders announced he was quitting the race – due to health concerns – and threw his incredible & titanic support behind our next US President: Elizabeth Warren?

Together on the campaign trail, these two – Sanders & Warren - would be unstoppable. 

Either way, at the moment, Warren looks unbeatable.

Factor in a stumbling economy that could lead to recession, and it would appear that Trump is out, Warren is in. 

Copyright JM Hamilton Publishing 2019

Permanent Recession

Permanent Recession

Short-term financing costs unexpectedly jumped this week, raising questions about the health of a vital part of the economy.

-The Financial System’s Plumbing Is Clogged, Bloomberg

By J.M. Hamilton (9-22-2019)

If the definition of insanity is doing the same thing repeatedly w/ the same result, and expecting a different outcome, then central bankers around the globe should be headed for psych wards & padded cells.  Since the 2008 financial crisis, central bankers have: flooded the global economy with inexpensive liquidity; purchased bonds, securities, and even stocks; and backstopped bond markets, stock markets, & artificially inflated asset prices.  Last week, here in the US, the Fed came to the rescue of the repo market or the overnight commercial & investment lending market.  (It seems that whenever the Federal Reserve makes any move towards normalization, a tantrum ensues… did a tantrum occur in last week’s repo market?  Capital strike?  Note too: The last time the aforementioned repo market seized up, as it did last week, and on this order of magnitude, it was a bellwether for the 2008 Great Recession, when the debt/real estate bubble burst.) 

Meanwhile, current inflation remains well below the target of two percent, and the binary economy, enabled by central banks, remains in full force. 

Central banks – with their common mandate of price stability - continue to use the inflation trope, as a means to justify the continuation of ultra-accommodative monetary policies, despite all evidence that central bank policies have fueled, or have certainly been accompanied by, disinflation. If central bank policies have fueled disinflation, why do they continue to engage in the same tired accommodative policies infinitum, since 2008?  To answer that question, we must identify who or what benefits from central bank policies in force for the better part of a decade (and in the case of the BOJ decades), and who does not.  But first some interesting statistics.

Over in Euroland, the ECB has setup a negative rate regime, w/ some 17 trillion in negative yielding European debt.  In these United States, the Total Credit Market Debt (corporate, consumer, and public debt combined) is now north of 350% of GDP (that’s up significantly from 2008).  The derivatives market, as recently as 2018, was said to be worth 1.2 quadrillion… that’s far too many zeros for products often utilized to gamble.  And the BOJ, which set the template, has been engaged in monetary insanity longer than any central bank, going back to the ’92 real estate crash.

Can you say, “debt bubble?”

Obviously, someone or something is benefiting from Fed and central bank policies as they race each other to the bottom for lowest yields.  Let’s identify some of the parties who benefit.

Zombie banks and corporations – who would likely collapse under normalized monetary policies – are certainly beneficiaries.  Included in the mix are many Euroland national banks that European state leaders and the ECB are reluctant to see go under.

Private equity, the bane of the global economy, uses cheap debt to fund LBOs.  Private equity is often known for stripping otherwise healthy companies - or financially healthier than before private equity ownership arrived – of their assets and their credit lines, faster than one can say, “Chapter Seven.”  Central banks driving debt to record low yields, push investors into underpriced junk & private equity debt. And yet, investor money continues to flow into nihilism defined: private equity bonds, funds, and equities.

High net worth individuals (and many multinationals engaged in financial engineering) saw their asset values soar, via central bank intervention, post 2008 crash, and the number of newly minted millionaires and billionaires continues to climb (while gross global wealth remains relatively stable).  In short, thanks to central bank policies, the number of wealthy individuals continues to grow by taking a much larger slice of the global income & wealth pie (much of this wealth has been created out of escalating debt and speculation). Here, too, thank consolidation, financial engineering, M&A, the monopoly economy, and opportunity crushing private equity...  fueled by central bank easy money policies.

And certainly, another key beneficiary of central bank largesse are Western governments, and the US government is no exception.  As long as the Fed funds trillion-dollar deficits as far as the eye can see, and America’s $22 trillion national debt, the political duopoly doesn’t have to make tough policy decisions.  For instance, it doesn’t have to choose between blowing a trillion dollars, per annum, on the DOD/MIC and continuing entitlement spending.  Hence, the status quo Congress – w/ the sideshow of petty bickering – is conveniently maintained thanks to the Fed.  That is to say, tax cuts for the wealthy, war w/out end, and corporate welfare… all continue unabated.  But conveniently, never a dime for expanding the safety net, public sector job creation, infrastructure, financing a Green New Deal – while the planet burns, or retiring student debt (despite the obvious benefits such programs would have for citizens and the US economy).

Let’s see… so banks, hedge funds, private equity, high net worth individuals, monopolies, markets (that the majority of Americans don’t participate in), and the political class, including Trump, are the exceptional beneficiaries of central bankers’ failed policies.  It’s obvious then central bankers are being disingenuous when they say their respective goals are price stability & inflation, when the true beneficiaries of ultra-accommodative monetary policy – for a decade and more - are the financial aristocracy and government officials & politicians (who do not want to be held accountable for gross fiscal mismanagement).

And who loses in the financially engineered/monopoly economy, enabled by the Federal Reserve and central banks?  Well, that would be the four in ten Americans who can’t meet a $400 emergency payment… that would be the one in five US children who live in poverty.  This segment of the population would be the economically and politically disenfranchised.  No few in number of the bottom half, said no thanks to Obama and Hillary in 2016, and turned around and voted for Trump. 

This demographic scrapes by on multiple jobs that often do not pay a living wage, and when there weren’t jobs to be had, many became statistics in the nation’s opioid pandemic.  You see, a crisis really is a terrible thing to waste.  As long as central banks continue to flood markets w/ liquidity to prop up the house of cards that is our global economy, built upon a foundation of debt, nobody has time to ask the really tough questions, like:  What kind of society do we want to live in?  Does the US want to be ruled by Tech and Wall Street oligarchs?  What's the best way to breakup cartels and monopolies to ensure economic health?  How do we handle the economic fallout from AI, automation, globalization, the monopoly economy, private equity, and cataclysmic debt… ?  How do we fund a Green New Deal to save the Earth, and create jobs when the inevitable recession hits? 

Don’t look for the US Congress to address these issues, as long as they're enabled and saved by The Federal Reserve, as well as, owned by the donor class (which merely wants to maintain the status quo, that is the rigged system).

For these Americans – the forty to fifty percent, who have no voice or representation in Congress - there has never been an economic recovery, just a hand to mouth existence and the constant poverty grind.  

Instead, nearly half of America has faced a permanent recession, from 2008 to the present day.

In the Fed we do not trust.

The irony is, if central banks really wanted to create inflation, they could start by clearing their balance sheets of public sector debt.  That is to say, central banks could forgive US Federal, Euroland, and Japan’s public debt, which would disassemble a ticking time bomb.  This, in turn, would free up Western governments to launch fiscal spending (i.e. spend money on infrastructure, saving the planet, and creating a baseline of economic and medical support for all Western citizens).

The debt write-down could be coordinated among all central banks, or occur slowly via negative yields, as we are seeing in the Euroland today.  Problematic public debt could be cauterized and set aside, under a good central bank and a bad central bank scenario (or SPV model).  This would in turn, free up Western governments to engage in fiscal stimulus, and by the looks of our present debt bubble, it appears that the world is going to need expansionary fiscal policy, sooner rather than later.

A debt write-down or haircut would also allow central banks to pursue monetary normalization. Presently, interest rates no longer reflect the risk factor associated w/ lending… not even close.  Normalized interest rates, set by competitive markets, instead of central banks, would, likely, mean: less money allocated to private equity buyouts; possibly, less financial engineering and M&A; it would force European banks to deal w/ their nonperforming loan portfolios; and it would provide retirees and savers with incomes again. Governments, too, depending upon who we elect, would be free to reset spending priorities (read Green New Deal). More money for an aging population, more jobs created under a necessary Green New Deal… gee, that sounds like it could create real inflation and a boost to aggregate demand.

With debt written down, it’s true some of the aforementioned winners would have to adjust, but w/ proper notice many individuals and institutions could prepare in advance for the policy change. Banks should rejoice at the prospect of a public debt haircut, because the monetary policy normalization that should ensue would likely lead to rising interest rates.

If central banks claim forgiving public sector debt is not in their mandate, the correct response is: was negative yields or QE within their mandate?  Central banks have not achieved their inflation targets or stable price mandate, and basically have been making it up as they go along.  If they can conjure up QE and negative yields, and backstop markets, then surely these same central banks can forgive public sector debt, in the name of price stability and achieving inflation targets.

In the West – particularly the US – it’s time for citizens from all backgrounds to free themselves from the tyranny of a national debt that will never be repaid.  A national debt that was created to: bailout TBTF banks; finance tax cuts for the wealthy; and fund unlimited warfare (now, some $6 trillion and counting).

It’s time for greater accountability from all central bankers, and more adept coordination of fiscal and monetary policy… a coordination that benefits all, rather than a fortunate few.  It’s time to end America’s permanent recession for forty to fifty percent of the population.

Copyright JM Hamilton Publishing 2019