GM Nostr. Bitcoin is freedom tech.

THE GOLDILOCKS ENIGMA "The Goldilocks Enigma is the idea that everything in the universe is just right for life, like the porridge in the fairy tale." -- Paul Davies Imagine that you're speeding down a winding highway. On one side is a cliff that descends into a rocky river bed. But buffeting the other side is an icy lake. As your car hits the black ice and begins to fishtail out of control, the steering wheel spins in your hands. Your instinct is to hit the brakes. But what if it was better to hit the gas? That's the dilemma our central bankers are in right now. Because the U.S. Federal Debt is speeding towards $36 trillion. With annual interest expense set to exceed $1.2 trillion this year. More than is spent on national defense. What's more, there are now $219 trillion in unfunded liabilities. Those come in the form of social security and medicare. Promises made, but with no money set aside to pay for them. Folks, raising rates is like applying brakes on the economy. Because it increases the cost of servicing the existing and growing debt. But hitting the brakes too hard could send the bond market into a deflationary fishtail. And result in a debt driven collapse. Over the cliff. But leaving your foot on the gas too long causes the cost of money to go down. Things get more expensive as more money chases the same, or fewer goods and services. Which runs the risk of inflation, or even hyperinflation. The icy lake. So what will they do? We already know the answer. Central bankers will choose the gas pedal every time. Damn the torpedos. Sacrifice the savers and the poor. Let the next guy deal with it. And it's the same dilemma for central banks all over the world. To wit, CIBC's chief economist thinks that the BOC is on the verge of a "Jumbo Rate Cut". “It is time to declare victory in the battle against inflation and get the economy moving again.” Avery Shenfeld, said. “There’s no reason not to speed up the process of getting interest rates down.” That was Batman. Then Robin chimed in with this dovish ditty: "Markets are underestimating how much the BoC is going to cut rates" said Benjamin Tal. Benny is CIBC's deputy chief practitioner of the dismal science. He thinks that our Money Printer in Chief could drop the policy rate by as much as 50 beeps at the next meeting on Oct 23rd. (That's banker speak for half a point). He thinks the policy rate could hit 2.25% by the end of 2025. That's a lot of gas. You see, there's something called the neutral rate. Not too hot, not too cold. Above the neutral rate, interest rates are restrictive. Below it, rates are accommodative. And according to Benny, we're still well above that Goldilocks rate. What do our central banksters think? Tiff & Co. estimate the neutral rate to be between 2.25% and 3.25%. Think of it this way. You're approaching a curve in the road where the speed limit goes from 100 down to 60. As you enter the curve with your foot on the brakes, you decelerate. But before you know it, you're doing 45. The propellerheads think it's time to remove the brakes and hit the gas. Because it's in everybody's interest to cut rates. Right? Not so fast. Dropping interest rates alleviates the immediate problem of debt service. It inflates asset prices. But it adds to the long term debt problem. It doesn't solve anything. It just kicks the can down the road. Plus, unintended consequences exist in the real world. Too much gas and you get higher food, energy and housing costs. And you rob savers of their purchasing power. It's the next generation that pays the brunt of the costs. In the form of higher house prices, reduced benefits and delayed retirement. In real life, it's like the three bears eat the three little pigs and then join up with the big bad wolf. Then come back and eat Goldilocks and Little Red Riding Hood. Pick your parable. And your poison. Either way, there’s no such thing as a fairy tail ending. #BTC

BTC is property. Everything else is credit. SC Gallatoshi

“It's dangerous to be right when the government is wrong." — Voltaire It took the United States 205 years to get to $1 trillion dollars in debt. Now they add that every three months. How so you say? The US Federal Government spends at a pace of $1 trillion every 100 days. And as bad as that sounds, it's about to get worse. You see, the compounding effect works with debt too. Interest rates are up eightfold in under four years. Because of the compounding effect, 20% of the entire debt has piled up since the beer virus. With total debt set to reach $35 trillion in the next 8 weeks. That's $106,000 for every American man woman and child. Whether you're a MAGA Trumpster, a Sanders socialist or a Neiman Marxist. You owe. And the problem isn't going away. Because we're addicted to debt. And debt is like the opioid crisis. One reason that debt is so addictive is the same for opioids. Because it works so well. The high is immediate. Spend today and pay tomorrow. A dollar today is worth more than one in the future. But what happens if we keep going like this? Banks used to keep the debt structure buoyant. They'd buy US Treasury bonds to fund government spending. And keep the bonds on their balance sheet as reserves, so they can lend out at higher rates. That worked until 10-year Treasuries collapsed 46% from March 2020 until October 2023. Those losses were comparable to the stock market crashes of the Dot-com era and the '08-'09 GFC. But this time it happened in so called "safe-haven" assets that are the linchpin of the financial world. That prompted the government to take on even more debt. They had to inject trillions into the system through swap lines and bank bailouts like the BTFP. We passed the hot potato to the Central Banks. The problem? There's nowhere left for the CBs to pass it. And the only steam valve left is the currency. There's a famous experiment called Rat Park. By a psychologist named Dr. Bruce Alexander. In it, researchers offer rats two water bottles. One filled with water, and the other with heroin or cocaine. If caged alone, the rats would drink from the drug-laced bottles until they overdosed and died. But if they were among others, free to roam, play and have sex, they preferred the plain water. "Even when they did drink from the drug-filled bottle, they did so intermittently, not obsessively. And never overdosed. A social community beat the power of drugs" said Dr. Alexander. Folks, we need to get back to drinking plain water. Not the drug laced debt water we've become addicted to. In other words, we need to return to a focus on families, social communities, human contact and support. Like the rats that survived. We need to force fiscal responsibility onto government. And let the parasitic politicians die out. How? By getting rid of the contaminated water. Stop letting them borrow to buy votes. Let the pendulum swing away from where we are, and return to founding principles. That'll attract global talent. Which allows technological improvements that unlock abundant energy, clean water, and medical advances. Then we can export that abundance to the rest of the world. Conflict over resources ends. Prices fall, purchasing power rises, humanity thrives. With fresh water and a new pristine reserve asset of the economy. The alternative? We persist in pressing a pleasure lever until our bodies and brains are overcome. Living in Rat Park.

“A soft landing covers a multitude of sins.” — Katherine Starbird They wear tailored suits, drive Tesla's to Wall Street, eat at Daniel and have Ph.D.'s in the dismal science. Some went to Harvard. When they speak, people listen. Like E.F. Hutton. So what are they saying for '24? That rates will go down. Unemployment will peak. Inflation will keep falling. And that jobs will stay robust and the economy will expand. In other words, a soft landing. A perfect end to a calamitous few years when rates went up 11 times and 1,900%. Which they had to. To kill off inflation. But now rates, like Zarathustra, will descend down the mountain. The chief propeller-heads are calling for a 3.50% target policy rate by the end of '24, and 2.50% by '25. Half the current level. And the return of cheap cash couldn't come at a better time. To save the Rover Driving Realtors and Rolex hucksters from extinction. And the billions in mortgages that are set to roll this year and next. What about the economy? American jobs excited on the upside. The economy grew at 4.9% in the last quarter. Wages are growing faster than inflation (5.7% vs. 3.1%). The Fed says a soft landing is in the cards. Good news for Biden. But does anybody else care? Or are they distracted by Tik-Tok, and whether Travis Kelce marries America's pop-sweetheart? The scaremongers were wrong. No crash. No more rate hikes. Real estate bottomed a year ago and J-Pow righted the ship. The CB'ers meet again in less than two weeks. Rates will stay on pause. The cycle is over. Yes, even if the orange man becomes President again. Or Putin takes Kiev. Logic will prevail. Nobody wants a hard landing, so it won't happen. Because policy makers need public debt costs to go down (see below). As Larry Lepard said "The blue line produces the income to pay the interest on the red line. See the problem?" No folks, the central banksters will cave and they will print. Over, and over again. Because they've painted themselves into a corner. With no way out. So hang on to that corn. Because they are going to print 'til their eyes bleed. They must. To cover their multitude of sins.

My default zap size is set to 144 because....well you know. Plus my bday is 12 12.

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