The Republicans this weekend did what they always do. They caved in. They reached a deal for our nation’s debt that allows them to campaign as conservative while actually doing nothing of substance.
The deal allows the government to spend until January 1, 2025 without any limits at all.
It’s what Republicans do best- feather their own nests. That’s why Trump vs. DeSantis is a meaningless debate.
China has signed agreements for half a trillion dollars a year in non-dollar trades. This is a naked attempt to attack the US economy. It’s an act of war, but since our President is bought and paid for by China, he ignores this.
From CNBC comes the report that 57% of US residents paid no income taxes in 2021.
What we have here is a country where more than half of the nation votes for a living. They vote to get largesse from the public treasury without the education or intelligence to see the cost. They also vote to punish the remaining 43% of the country through confiscatory taxation.
You will note that I did not say that they vote to make the 43% pay for it, because that 43% doesn’t pay for it. They can’t. The government took in $5.0 trillion through taxation in 2022, but spent $6.5 trillion. For every dollar collected in taxes, the government spent $1.30.
Now tell me how this is fixable. How are you going to get the 57% to vote for a decrease in payments? Hint: You aren’t.
There is a difference between price increases and inflation. With a price increase, the commodity that you want to purchase becomes more expensive. This is usually due to supply and demand forces that change the market price for that commodity. With inflation, all commodities cost more in the currency that has been inflated. This is also caused by supply and demand forces, but in this case those forces are acting upon the currency. The supply of currency is up, so it becomes worth less. At a certain point, this causes demand for that currency to drop, further exacerbating the inflation.
This is important when we discuss what commenter elrod had to say about ammo prices:
As for ammo, especially War Shots, we’ll never see pre-Covid prices again (I need a time machine….)
He’s right. Ammo prices have been rising. Small arms ammunition prices shot up 157% from 2000 to 2022, a period in which price increases caused by inflation climbed by 170%, meaning that in terms of other goods and services, ammo is cheaper now than it was in 2000. To illustrate the impact of rising prices, a box of 20 .223 caliber rifle rounds cost about $12 in the year 2000. Today, the same ammunition costs more than $30.
My very first handgun that I bought was a Smith and Wesson Model 59. (I’m still sorry I sold that gun) Since 9mm was not yet a popular cartridge in 1987, the ammo for it wasn’t as cheap as other calibers. I remember paying $7.50 for a box of 9mm ball. Two years later, I bought a S&W 4506 when they first came out, and was paying $8 per box of UMC .45 ball.
The price increases of ammo that were brought about by COVID were due to a supply issue created by the closing of ports, factories, and shipping facilities as a part of governments shutting down portions of the economy, and were exacerbated by a huge increase in demand that was brought about by panic buying of ammo in light of the George Floyd/Antifa/BLM civil disturbances. The double whammy of supply reduction and demand increase conspired to cause a shortage, which drove up ammo and firearms prices.
That issue has largely been corrected, and the supply issue has largely returned to normal for the mainstream cartridges. There are still shortages of off track ammo like revolver ammo, 10mm, and other calibers that are now short in supply because manufacturers are concentrating on the mainstream ammo supply. As that continues to stabilize, the sidestream ammo market prices will come down a bit.
However, I don’t think that ammo prices will ever return to where they were in January of 2020, when I was buying 9mm for $7 per box (less than I was paying in the 1980s!).
That is why I do not think the elevated ammo prices that we are seeing now have anything to do with the COVID shutdown. The prices we see now are the new floor. Thanks to the inflationary pressures of Trump and Biden (and the uniparty) running the government printing presses, the dollar is worth less. That means that the prices of everything that is sold for dollars will be higher in terms of dollar cost. That is, the new prices for ammo are caused by inflation.
In February of 2019, there were 15.45 trillion dollars in existence in the entire world. By July of 2022, there were 21.73 trillion dollars in existence- a whopping 40% increase in supply in only 2.3 years.
We know that there were less goods and services available, but there were 40 percent more dollars chasing that reduced amount of goods and services. That caused inflation. The United States is in the midst of a period of historic inflation. The average price of goods and services was up a multi-decade high of 9.1% year over year in June 2022.
Since that peak in July of 2022, the Fed has taken steps to reduce the money supply, and we now have somewhere around $20.6 trillion in circulation. We are never going to get back to $16 trillion. It isn’t possible without collapsing this house of cards our economy is built upon.
So for that reason, we are never going to see prices like February of 2020 again. Those days are gone. Enjoy your time paying $10 per 50 round box of 9mm. It will cost more as we print more money. There will come a time when we look back wistfully at $10 ammo boxes.
China receives first shipment of LNG from the UAE that was paid for in Yuan and not dollars. This is the beginning of the end of the US Dollar as a reserve currency.
Perhaps it’s because I am newly unemployed, or maybe not. However, today is a bit of a black pill day for me.
Reader BobF is angry that his money is gone. They took money from him for decades, and now there won’t be any left to pay the Social Security and the Pension that he was promised. I agree, it’s perfectly acceptable to be angry about that. Heck, when I first was told (by someone commenting on this very blog) that my pension was simply a way for public employees to screw the employers that had to pay them, I was pissed. I spent decades, working for less money than I could have gotten elsewhere, risking my life to EARN that pension.
The money is gone. They spent it. Like a dad who is angry because when you sent your kid off to college, you gave him your credit cards to use in the event of an emergency, and he maxed them all out on unnecessary bullshit, it’s our fault for giving them essentially unmonitored access to the credit cards. Yep, I said it- it is our fault for not watching what they were spending the money on. So now we have $200,000 in maxed out credit cards, and nothing to show for it. Except in this case, it’s $35 trillion worth of useless treasury notes, and a bunch of promises.
So yeah, everyone is getting screwed. Take a moment to let that sink in. Now feel the anger? You pissed off? Well, so was I, when I first began to realize just how fucked we are.
The time to complain about that was when the Congress spent DECADES throwing money around like a Frat boy with his dad’s credit cards. And yes, it was spent on bullshit.
Decades of wasteful project after wasteful project, adding up to hundreds of trillions of dollars in spending. Every single President since Eisenhower has been a part of it. Who is blame? We are. We let them do it. Let the anger soak through you, then take a deep breath. Let it out. I agree with you. It sucks.
The money is gone. There is no way that it will ever be paid back. We owe more money than physically exists. That right- add up all of the money in the world: Dollars, Euros, Yen, Yuan, all of it. Now send it all in. That doesn’t even pay what the US owes, much less the debt of all of the other nations in the world. Now you begin to see just how fucked we all are. Yes, I am using the word “fucked” even though profanity is not used here very often. Why? Because no other word really begins to describe just how bad things really are.
There is no way out of this. The bill is going to come due, and we are the ones who will be stuck with it. That pension you are owed? Gone. The Social Security fund that took from you a third of every dollar that you earned for your entire working life? It’s been spent. I’ve been warning you about this since I figured it out, back in 2007.
Again, the time for us to have fixed this passed some time ago. I became an adult during the Reagan administration. It was probably already too late at that point. My generation inherited the problem, but we certainly didn’t even try to fix it. So yeah, I blame the Boomers (and my own parents, who were part of the silent generation) for creating the problem, but the generations since then certainly didn’t try to fix anything. That makes all of us responsible.
Lacta alea est. It’s too late to cry over spilt milk. You can be mad, but that is like the old man yelling at clouds: it doesn’t change anything.
All we can do now is try and save what we can, and in my opinion, all we can do is try and save our local area. Be ready, band together with as many like minded neighbors as you can, and try to weather the storm. Sauve qui peut.
Get skills. Stockpile tools, gear, food. Learn to garden. Plan. Make friends with neighbors who have complimentary skills. Stockpile stuff that you can trade to people with skills who may compliment your own. For example, extra guns for neighbors who may not have one. They can use it to stand watch while you sleep, or cover your backside.
It’s coming. We don’t know when, but at this point, it’s undeniable.
The owner anti-communist business who allows customers to pay what they want, when they can, is blaming the “lack of generational wealth and seed capital” for the closure of his business.
Translation: I ran out of other people’s money.
Where does he think that generational wealth comes from?
I swear, leftists don’t understand math, business, economics, or, well, anything.
Fuck the rich. Fuck the police. Fuck the state. Fuck the colonial death camp we call “Canada”,” Gabriel wrote.
This is what the Socialist leader of Canada has to say:
I normally don’t post things from other countries, but many of our own political figures support stupid stuff like this. Let’s do the math:
If a mother wants to work an 8 hour job, she gets 30 minutes for lunch, plus time to get to and from work, so let’s call it 9 hours of child care per day. That also means the kid will have to be fed lunch, call it a cost of $5 for lunch. That leaves nine hours of child care for $5.
Then there is insurance, utilities, health insurance, and all other expenses, not to mention the cost of paying the childcare worker. Let’s assume that we are going to pay our childcare worker an average of $18 an hour. All expenses considered, this fictional daycare center will need to assign 65 children to each childcare worker in order for this to be feasible.
Math, it’s a thing.
This is to the people who commented on my post of last week, and that includes Aesop. Let me address a few of the points here.
To Aesop: Yes, I believe that a collapse of this country is mathematically certain. There is no other possible outcome at this point. We are more than $31 trillion in actual debt, with another $50 trillion in mandated spending just in Social Security payments over the next decade. What do you think will happen to the first Congresscritter that proposes cutting those checks? His career will be measured in days. No politician is going near that third rail of politics. Top that off with another $4 trillion in interest payments on the debt we already have. In case you haven’t been paying attention, we are borrowing $1.2 trillion a year, and there is no motivation from either party to slow down the spending spree.
So even if you were to overthrow the powers that be, who do you put in charge? What will they do to fix it? Who in the American public will accept the fact that Uncle Sam has put away the checkbook? Will the 69 million people currently on Social Security accept the fact that the checks have stopped? How about the additional 10 million people who are due to begin collecting within the next 7 years? Will they accept the fact that there is no more money? How about the 93 million people on Medicaid? The 41 million on food stamps? 65 million on Welfare? Now I know that there is a good bit of overlap, but my best guess is that just about half of the country is receiving some form of government handout. What will they do when you, having overthrown the current powers that be, announce that there is no money?
One in 20 US adults is collecting disability. I personally know five people who are, and they seem to have no problems riding roller coasters, running marathons, and going out partying. There are lawyers out there that make a living on disability payments for “back injuries” and “fibromyalgia.” I warned my readers about this a decade ago. Then in 2016, I warned all of you that we were monetizing the debt, and it would eventually cause inflation.
Nope. Every path forward ends in one place: we stop spending more than we have.
There is no path to victory that results in a return to the good old days, whatever you consider those to be. It’s a fact. No matter who is in charge, we are broke. Republicans, Democrats, Whigs, Libertarians, it won’t matter. Once the rest of the world figures it out, there is going to be an end to the dollar as a reserve currency. Then when the general population realizes this, there will be plenty of unrest and riots for everyone to participate.
You can’t shoot your way out of this. You can’t protest it away. Mathematics and economics are cold-hearted, inescapable bitches. There aren’t any sides to join. You can’t cross over and join the side of math. Once the money is gone, it’s gone. Like a Terminator, economic reality can’t be bargained with, it can’t be reasoned with, and it will not stop until you are dead.
At the end of World War 2, this nation inherited a world where we were the most dominant manufacturing, farming, and economic nation in the world, mostly because the rest of the developed world had seen its farms and factories destroyed by warfare. This created a golden age for the US. Instead of continuing to work and maintain that standard of living, the Baby Boomers partied and spent it all on baubles and bullshit. Once that was gone, they began to borrow from future generations. It became a never ending spree of parties and excess. That’s why they won’t give up power today. They would rather be wheeled in to office looking like a moving corpse than give up power.
What’s unfortunate is that we, the Gen X people inherited the world that they created, and many of us tried to continue the party, but the money must eventually run out. So Generation X, the Millennials, and the Snowflake generation are going to inherit what is left: a dying society and a pile of unpaid bills.
When all of this comes to a head, we are going to get a new nation. My guess is that we will see one of two outcomes:
If you want to see where we are headed, look no further than this post from 2010.
It’s gonna be shitty for awhile. So my position still stands. I will, of course, entertain anyone who sees another path forward. Tell me how I am wrong, or tell me how we avoid an economic collapse, and don’t tell me how you are going to get half the nation to accept the money hose getting shut off without tearing the nation apart. Heck, half of the people who read this blog will argue about how the DESERVE their social security checks, because they paid into the system for their entire working life. People just aren’t ready to admit that their money is gone- it’s been spent already. The boomers in charge have spent it all. There is no trust fund- it’s just a file cabinet full of IOUs.
The Democrats want to continue spending the US dollar into worthlessness. The Republicans are trying to get some budget cuts in exchange, but Biden is saying his way, or default. He is laying the blame on Republicans because he is refusing to budge. The solution, some on the left are saying, is to mint a $1 trillion coin, and deposit it with the Fed.
The idea is to mint a worthless coin that has face value of $1 trillion. That way, the coin has one trillion dollars of seigniorage, i.e. profit for government, and the coin could be deposited to Federal Reserve treasury instead of issuing debt. In other words, they would be issuing new money by debasing the dollar, without generating debt in their balance sheet. It’s like issuing one trillion worth of cash, which is backed with just one worthless platinum coin. It’s not really different from just issuing debt that isn’t paid back, but this way they don’t have to raise the debt limit. This would instantly insert an additional trillion into circulation, creating a massive amount of inflation. Shenanigans like this will completely erode the trust in the value of dollar and make the dollar worth much less nearly overnight. It’s like writing a worthless check to pay your monthly mortgage payment.
This will allow Biden to continue spending money like the dollar is going out of style, which of course it is. God forbid we should actually learn to live within our means.