Mary, I have never said what you are implying here. And I ask that you take this post down. What I have said repeatedly is that in person protests are only a piece of what needs to happen and I am not comfortable following or promoting an organization whose leaders have remained anonymous. I have shared photos of the protests here repeatedly, attended them myself and have shared Bernie and AOC"s rallies. In today's post I start with the self-report of someone who went to a protest yesterday, and have even encouraged Hopium members to be the lead organizers of protests and rallies in their communities. Please take this insulting post down and repost so the information is correct.
Simon, I am very sorry that I misunderstood your focus. I did not want to post an action step without mentioning that I understood if others felt that other actions were more powerful. I have advocated to volunteers in Arlington VA repeatedly to keep calling our Virginia U.S. Senator (Kaine and Warner), and now it's mostly thanking them for stepping up and/or voting as we wish them to.
I have been a supporter of your Hopium Chronicles since spring 2023 and pushed others here to follow and support you -- and to invite you to be a speaker at our Arlington Dems annual Blue Victory Dinner fundraiser two years ago.
Please do not be angry with me. I'm upset that I upset you to the point of receiving a rather harsh comment from you.
I have always advocated calling our elected officials and writing emails to them. This is the first time that I've moved in a direction (advocating resistance movements). I did not post anything about the April 19 ones although I learned about them because I could not confirm with confidence the sponsors -- especially not of the Washington Mall-to-White House march on behalf of Abrego Garcia, and I did not really think that rallying in front of the Naval Observatory/J.D. Vance's home was all that good an idea. So I let April 19 pass. However, May 1 and the two events I mentioned (and am attending the 5pm one, inviting others in my area to join me) I can cite with confidence.
I am very sorry to have provoked such a strong reaction from you. I truly apologize. Will probably not venture into this chat/posting space again. -Mary
How could Alito and Thomas possibly dissent on this morning’s Supreme Court decision to block the deportation of more people to CECOT? Due process is one of our country’s most fundamental rights. Do they support our Constitution at all?
Should it ever come before the Supreme Court, I strongly suspect that "Justice" Samuel Alito and "Justice" Clarence Thomas would declare the US Constitution itself ... unconstitutional.
I'm old enough to remember the Republican refrain decrying 'activist judges'. This applies of course only to rulings favoring the shoe on the left foot.
A Case for a Gold Standard Democrats Need to Step Up
The US is in the biggest credit/debt bubble($35T debt and in risk to be $40T+) in global history and at the top of a credit cycle(equity market highs) the Orange Cheeto has decided to inflict the world with a tariff war Shades of the market crash in 1929 coupled with the Smoot Hawley tariffs which led the country into a long term depression bailed out by the way by WWII spending not as Keynesian economists argue that it was JM Keynes
Inflation is not going down and consumers are suffering And the dollar is tanking(dropping below 100 for the first time in 4y and moving into low 10y territory) and foreign investors are nervous about the chaotic activity in government and losing confidence in investing in the US as a country This means that foreign as well as domestic investors are slowly moving away from buying bonds(in order to attract investors in bonds the bond yield has to increase to attract investors to buy our bonds since they taking on risk)
This now sets the stage for a classic debt trap The Fed cannot lower interest rates to deal with inflation….its typical tool to lower the inflation rate….and if the interest rates stay or go higher the government cannot afford the interest rate on the debt particularly if investors are reducing their purchase of bonds
Reintroduction of a gold standard will fix this debt trap that the country faces The reason that gold is going up to higher and higher is because the cost of credit/debt is going higher and the purchasing power of the dollar is going down hence inflation staying the same or going up
Democrats need to make the radical change and work toward re-establishing a gold standard that Nixon took the economy off in 1971 creating 50y period of fiat money, quantitative easing, and excessive government spending without scrutiny And they would find bipartisan support if they campaigned on the issue
Dr. Dean, looking forward to one day seeing you 1) engage the material I post 2) self report the actions you are taking to strengthen our opposition. Using this platform to advance your views without participating in our discussions or our work is not in keeping with the kind of spirit we are working towards here. Try to do better, thank you - S
As you know we all carry biases that color our view of reality The challenge for all of us is not to allow nonfactual biases to color our reality because we all do that from time to time Sometimes paid media becomes knee jerk to the immediate happenings rather than stepping back to see greater issues That's why the MSM have editorial pages with opinions allowed The reason for my postings particularly this one on gold is to open up people's eyes to an important issue that most people don't take time to delve into The Democratic party would well do themselves a favor by having a different approach to the inflation picture without losing sight of their committed mission
This is a tangential topic, but I have always found the desire to return to the Gold Standard to be curious and even misguided. Other than certain industrial uses, e.g. aerospace components, medical devices and specific electronics, Gold has no inherent value.
We'll see how your establishment messaging goes when it becomes necessary to go back on a gold standard The days of fiat currency are diminishing by the day Educate yourself Simon besides asking your Keynesian friends what their macroeconomic view is Reminds me of the old bias issue without facts Now this is turning out to be an interesting discussion There is another side to the story if you care to for reading https://bit.ly/442Vit0 or any of Turk's books
The word *salary" comes from salt – which was once a currency that did have high intrinsic value. Before the invention of modern-day refrigeration, salt was essential for preserving many foods.
Here is more, the first a brief article in Time Magazine, the second a fascinating book by Mark Kurlansky – Salt: A World History.
Gold has a long history of supporting a trading currency dating back to 450BC when the Romans first mentioned it as a form of currency https://bit.ly/4cJACIT
Not true The Romans in the earliest recordings of an existing banking system in 450BC saw gold as a stabilizing monetary metal If you care to cut through your uneducated bias you'll find some surprising information
With all due respect, you ought to be a bit more cautious about whom you call uneducated or accuse of bias. (Imho, you display the same arrogance in your reply to Simon, and I do feel it is a tad uncalled for.)
I am well aware that gold has a long history of use as currency, by the Romans as well as in other cultures. But this is *conferred* value. If you re-read my post, I referred to *inherent* value.
I apologize if you feel I'm being arrogant I'm trying to simply point out that gold is a standard by which all currencies can be based The support of any currency needs to be linked to some form of standard or otherwise over time governments will overspend or promote QE which since 2008 has been excessive enough to accelerate the diminishing purchasing power of the dollar Again sorry for the misinterpretation
Yesterday Duke advised all students and non-citizen staff with visas not to travel abroad unless it is absolutely necessary. Terrifying stuff. My neighbor is planning to open her house to stranded students this summer. So the focus of my calls to NC's GOP senators this morning was twofold: 1) The firing of so many National Weather Service employees that our weather forecasts are already being degraded (which will kill North Carolinians, a state that is still recovering from Hurricane Helene); and 2) the story of my dear colleague, who has stage 4 cancer. She is a green-card holder and has plans to travel abroad to see family this summer but who is terrified she won't be allowed back into the country because she got a speeding ticket 20 years ago and because she signed an online petition in support of Palestinians. What kind of a country have we become?!
I think that just as we need daily press briefings, a Letter to America, etc; we also need these personal stories, to which people can relate in a different way than to ideas or words. The 34 year old son (a citizen!) of a dear friend works for HHS, showed up for work, waited in line for 2 hours, was taken aside and told that he was being let go, with no chance to retrieve his computer, papers, or anything. No reason given, although he had stellar evaluations. No idea if he can get unemployment. This is happening to thousands and thousands!! Their stories MUST be told.
It's just one story of many, and the effects are just beginning. A friend of mine in Washington D.C. who is an award-winning cancer researcher for the CDC did keep her job---but her entire department was terminated. Our health, food, climate, privacy safety--and so much more!-- is going up in smoke, and these stories TELL the story and why it should matter to all Americans.
The challenge facing Democrats is how to play hardball while avoiding the harmful/immoral tactics used by MAGA. Here is a proposal that takes a principled approach by reintroducing shame and redemption to today's political discourse https://tinyurl.com/4s6n7ay2 .
I encourage everyone to read Heather Cox Richardson’s post from yesterday. It speaks to the moment we’re facing where ordinary citizens make a difference in changing history.
Made me cry, too! Can't decide whether it's horrifying or amazing that we are out on the streets again, protesting a tyrant, 250 years TO THE DAY that the first battle of the American Revolution was fought.
SO powerful! Richardson is a treasure, linking history and the present, using her great writing skills. I posted an excerpt on my FB post, and quoted from our Jewish prayerbook: "What happened once upon a time, happens all the time."
America 250/ CT250 commemorates the 250th anniversary of the Revolutionary War and the Founding of our country. Last night, per the ask of CT 250, placed two candles in my window to honor the ride of Paul Revere and the other riders who warned Concord and Lexington, and this morning went with a group of community members went to a cemetery to clean the cemetery stones, stand one back upright, cut away brambles rake and cut down a dead tree. I, as an historian, was able to tell those working on the stones the biographies of some of the soldiers who were killed in the Civil War. This was to honor those who fought in Concord and Lexington in the Revolutionary War.This was our public service. I went home to change then went to participate in a protest in Torrington, CT along the busy main thoroughfare in the downtown section. There were about 300 of us. I would say about 3/4 of the passing vehicles blew their horns and waved in solidarity. I am exhausted. Will start my calls again on Monday - blessings to all of you.
Thursday - I spontaneously joined a pedestrian bridge protest on Highway 101 in Menlo Park during rush hour (I was passing by on my bike ride tot he Baylands), waved an American flag and elicited many honks from the ~100 vehicles/minute passing by.
Friday - Palo Alto climate rally, briefly met Rep. Sam Liccardo and told him how I appreciated his comments about General Milley at his town hall Thursday night (could not attend, I heard about it here on Hopium). They had a fun band that played for more than an hour after that took requests from their set list. I asked for Grateful Dead (here in their birthplace!), and they did Friend of the Devil and Fire on the Mountain (appropriate for climate rally). Several Deadheads stopped in their tracks….. Come from the rally, stay for the band and dancing. Shades of Emma Goldman…..
Today - headed to Redwood City for Indivisible organized rally, going to buy an American flag - great idea Simon, don’t let those bastards monopolize our national symbols! Might fly it upside down in distress.
On Friday, a round of emails to elected (Liccardo, Schiff, and Padilla), and a round of phone calls to them later regarding cuts to NOAA and NWS (people are going to die without good weather and climate information!), stimulated by a call to action from American Meteorological Society.
I say fly the flag upright! The distressed ones ought to be the MAGA folks who will have to explain to future generations why they voted for a sociopath who fleeced the public.
Rick Wison urges sending CERTIFIED letters which a staff person must sign for, creating a paper trail. Maybe thousands of such letters to scotus? Wouldn't that be interesting? Meantime, calling my gop rep but he's going to get a certified letter next week!
That's a great idea, and recalls an earlier time - during Watergate -- when we had a technology that left a paper trail for everyone to see. It was called the "telegram." Members of Congress were getting inundated with them each and every day. Tens of thousands of them. It was this tangible evidence of the "voice of the people" that really carried the day IMO, though it rarely gets mentioned. It certainly influenced those Republicans in the Senate who went in and told Nixon he was toast in an impeachment trial.
Back in the day when the telegram was in its prime, they were very inexpensive and charged by the letter. I do not advocate for them today.
But the main point is that "we the people" will need some type of system that provides visible, tangible indicators beyond anecdotes... (The phones are ringing off the hook or "we're getting x1000 voicemails a day" -- only go so far.) IMO, they are too easily dismissed in a way those telegrams back during Watergate could NOT be.
We HAVE the technology to make something like this available -- at far less cost and time than certified mail. We only need the will to design and implement it, after the recognition of how powerful a game-changer this could be.
That's info that should be made known to his constituents. " He/She doesn't care about you. You will only hear from him when he wants your money or your vote."
I’m genuinely curious: Has the Trump Regime presented any evidence whatsoever that even a single deportee is a member of a violent criminal gang, e.g. MS-13 or Tren de Aragua?
Here is what US Attorney General Pam Bondi presented about Mr. Abrego Garcia. "Officials" claim they had no idea he was a legal resident or that he was protected by a court order, and quite a few questionable assumptions were made. https://www.justice.gov/ag/media/1396906/dl?inline
I had heard that only a minority had criminal records.But who knows? I sure don't trust a word from Pam Bondi's mouth. If she wants a criminal, I know one who has been convicted of 34 counts!
I'd check the bathroom at Mar-a-Lago, where all the good stuff is stored, including missing top-secret documents and the beautiful concepts of a healthcare plan that's gonna replace the ACA (like, any week now).
Highly technical, rather terrifying, discussion between Krugman and Nathan Tankus. If you get past the first 6 minutes, where I would say Tankus rambles a bit, you will learn some things. It is rather terrifying. Highly technical, and probably a lot I don't fully understand or can't quantify.
Thanks, Patrick. That was fascinating. I'll try to boil all that down.
The Trump tariffs are bad. But the unpredictability of Trump's tariffs is even worse in that it causes dangerous volatility in the financial system and is a threat to liquidity itself. It doesn't help that hedge funds now play a key role in ensuring liquidity of, for example, treasury bills because they can pull back when things get too risky. The Fed, as buyer of last resort, can deal with short-term Trump volatility but it cannot stop Trump volatility.
One very cool thing I hadn't heard about, but which makes sense, is the market in currency exchange derivatives. Well, of course, someone had to invent that. So large exchanges in, say, yen and euros are actually conducted by first exchanging yen into dollars and then dollars into euros. Thus, a destabilization of the dollar affects currency exchanges of other currencies.
And then there is the claim that we came very close to a Lehman Brothers type of meltdown this month because of the effect of Trump volatility on the financial system.
I also like how he characterized market traders not as information processors but conventional wisdom processors.
Near the end Tankus goes back to the Trump-Musk risks to the payment system and Social Security. It wasn't comforting when Paul Krugman said, "I need a drink."
So, Patrick, do I have that about right? Correct me where I'm wrong or left out important stuff.
That is a comprehensive and accurate summary. To me the discussion involved so many difficult to quantify things that it is hard to assess the severity. To me it is a giant Jenga puzzle no one understands, with Trump pulling out random pieces, with no one knowing what might cause a collapse.
Yes, I agree that it was hard to assess without his level of knowledge of the different markets--stock, bond, currency. After reading the conversation, it seemed to me that Tankus was laying out the worst possible worst-case scenario, but it sounded plausible enough to be frightening.
Here's the way my AI looked at it; much as discussed but more detail.
"The statement "FX liquidity ‘worse than Covid’ amid tariff volatility" implies a significant deterioration in the ease and efficiency of trading currencies, exceeding the difficulties experienced during the peak of the COVID-19 pandemic. This situation is occurring within an environment of heightened volatility stemming from the implementation or threat of tariffs.
Here's a breakdown of the implications:
1. Reduced Market Depth and Order Book Sizes:
Less Willingness to Trade: Market makers and participants may become more risk-averse and less willing to provide quotes or hold large positions due to the uncertainty created by tariff volatility. This leads to thinner order books with fewer bids and offers at each price level.
Wider Bid-Ask Spreads: With less liquidity, the difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask) widens. This increases the transaction costs for those needing to exchange currencies.
2. Increased Volatility:
Exaggerated Price Swings: Lower liquidity means that even moderate-sized trades can cause larger price movements than usual. This amplifies the volatility already present due to tariff-related news and policy shifts.
Flash Crashes: In extreme cases of illiquidity, sudden large orders can trigger rapid and significant price drops or spikes, followed by a quick recovery.
3. Difficulties in Executing Large Trades:
Slower Execution: It may take longer to fill large currency orders without significantly impacting the market price.
Higher Slippage: Traders might have to accept prices less favorable than initially quoted when executing large trades due to the lack of available liquidity at their desired price.
4. Impact on Businesses and Investors:
Increased Hedging Costs: Companies engaged in international trade or investments face higher costs to hedge their currency exposures due to wider spreads and potential difficulties in executing large hedges.
Reduced Investment and Trade: The increased uncertainty and transaction costs can discourage cross-border investment and trade activities. Businesses might delay or scale back international ventures due to currency risks.
Challenges for Central Banks: Central banks might find it more challenging to manage exchange rates or implement monetary policy effectively in a low-liquidity and high-volatility environment. Interventions in the FX market could have a more significant (and potentially destabilizing) impact.
5. Systemic Risks:
Contagion: Illiquidity in one part of the FX market could potentially spread to other currency pairs or asset classes, especially if leveraged positions need to be unwound quickly.
Market Functioning: Persistently low liquidity can impair the overall functioning of the foreign exchange market, which is crucial for global finance and commerce.
Why "worse than Covid"?
During the initial phase of the COVID-19 pandemic, there was indeed a significant liquidity crunch in many financial markets, including FX, driven by panic, a "dash for cash," and uncertainty about the economic outlook. However, central banks around the world, particularly the US Federal Reserve, injected massive amounts of liquidity into the financial system through various measures like swap lines and asset purchase programs. These interventions eventually helped to stabilize markets and restore some semblance of liquidity.
The current situation being described as "worse than Covid" suggests that the combination of tariff-induced uncertainty and potentially other factors is creating a more persistent and severe lack of liquidity in the FX market. This could be because:
Unpredictability of Tariffs: Tariff policies can change rapidly and unexpectedly, creating ongoing uncertainty that market participants struggle to price and hedge against.
Impact on Global Trade Flows: Tariffs directly affect international trade, which is the fundamental driver of FX transactions. Disruptions to trade can lead to a more structural decline in FX market activity.
Geopolitical Tensions: Tariffs are often a symptom of broader geopolitical tensions, which can further dampen market sentiment and reduce risk appetite.
Lack of Coordinated Response: Unlike the coordinated central bank actions during the COVID-19 crisis, the response to tariff volatility might be more fragmented or less effective in boosting FX liquidity.
In conclusion, the implication of FX liquidity being "worse than Covid" amid tariff volatility is a concerning sign for global financial markets and the real economy. It suggests a high degree of uncertainty and risk aversion, leading to increased transaction costs, greater volatility, and potential disruptions to international trade and investment flows."
So the next question is: has this Jenga situation been simulated and what were the outcomes?
"Yes, the effects of tariffs enacted during the administration before the current one, as well as the uncertainty surrounding trade policy, have been extensively simulated to project potential economic outcomes. Various economic models and institutions have conducted these simulations, often producing a range of results depending on the specific assumptions and scenarios considered.
Here's a summary of the simulated outcomes based on recent reports:
Reduced GDP and Economic Growth: Multiple simulations, including those by the Penn Wharton Budget Model and the Tax Foundation, project that broad tariffs would lead to a reduction in the United States' Gross Domestic Product (GDP) over the short and long term. The Tax Foundation estimates a 0.8% reduction in GDP under currently imposed tariffs, potentially increasing to 1.0% with announced foreign retaliation. The Penn Wharton Budget Model's projections from April 2025 suggest even more significant long-run GDP reductions, possibly exceeding 6% under certain scenarios of widespread tariffs.
Decline in Wages and Household Income: Simulations indicate that wages are likely to decrease due to the tariffs. The Penn Wharton Budget Model projects long-run wage declines of around 5%. The Tax Foundation estimates that tariffs could reduce average after-tax income per U.S. household by over $1,200 annually.
Job Losses: The imposition of tariffs is projected to lead to job losses in the U.S. economy. The Tax Foundation's simulations suggest a reduction of hundreds of thousands of full-time equivalent jobs.
Increased Consumer Prices: Many simulations point to an increase in consumer prices as a result of tariffs, as the cost of imported goods rises. The Yale Budget Lab estimates that illustrative "reciprocal" tariffs could lead to a 1.7% to 2.1% increase in the price level, equating to an average consumer loss per household of $2,700 to $3,400 annually.
Impact on Trade Flows: Simulations consistently show that tariffs would lead to a significant decrease in both imports into the U.S. and exports from the U.S., potentially disrupting global supply chains.
Retaliation and Trade Wars: Models often consider the impact of retaliatory tariffs imposed by other countries. These scenarios typically show a more significant negative impact on the U.S. economy compared to unilateral tariffs. For example, the Kiel Institute's simulations indicate that U.S. tariffs on goods from Mexico and Canada would harm all three economies, with more substantial negative effects if the EU and China retaliate.
Uncertainty and Reduced Investment: The economic uncertainty generated by tariff policies is also simulated to have negative consequences, such as reduced business investment. The Penn Wharton Budget Model estimates that the rise in economic uncertainty in early 2025 could reduce investment by over 4%.
It's important to note that the exact magnitudes of these effects can vary across different models due to their underlying assumptions about consumer and firm behavior, the extent of global trade linkages, and the responses of other countries.
However, a general consensus across many simulations is that broad tariffs and the associated uncertainty pose a significant risk to economic growth, employment, and household welfare.
Some analyses, like those cited by the White House, argue that targeted tariffs can be effective in specific sectors, such as steel, by increasing domestic production and investment. However, the broader economic simulations tend to focus on the aggregate effects of more widespread tariff policies.
Sources and related content
The Economic Effects of President Trump's Tariffs - Penn Wharton Budget Model
Self Report: I called Senator Van Hollen and Congressman Raskin to thank them for being bold. I called Senator Alsobrooks and asked her to become bolder. Writing postcards for the upcoming Virginia race.
I think we're beginning to see Trump's fear. The letter to Harvard was a "mistake," he isn't involved with the kidnap to El Salvador, he's flat out lying about egg prices, etc. I believe he told El Salvador to let Van Hollen meet after the court orders making clear they're going to hold him in contempt. We can never forget that he's weak and a bully. Putin's saboteur is weak.
Just left a 50501 Rally at Brittlebank Park in Charleston, SC. Estimated crowd was 1,000. Beautiful day, beautiful people defending our beautiful democracy. Here's an attempt to post the video ... IMG_0809.mov
Is everyone headed to a demonstration this morning? We are all over the country.
In New York. Bryant Park, Noon.
Sponsors:
Sponsored by: Climate DefendersAdditional Sponsors: New York Communities for Change (NYCC), Planet Over Profit, Stop The Money Pipeline, GreenFaith, Food & Water Watch, 350 NYC, Fridays For Future New York City, New York Progressive Action Network, Rise and Resist, Sane Energy, NYC-DSA Immigrant Justice Working Group, Presente.org, Youth Climate Finance Alliance, Debt for Climate US, Third Act NYC, XR NYC, 350 Brooklyn, Climate Defiance, The Tipping Point, The People's Forum, ALIGN: Alliance for a Greater New York
Mary, I have never said what you are implying here. And I ask that you take this post down. What I have said repeatedly is that in person protests are only a piece of what needs to happen and I am not comfortable following or promoting an organization whose leaders have remained anonymous. I have shared photos of the protests here repeatedly, attended them myself and have shared Bernie and AOC"s rallies. In today's post I start with the self-report of someone who went to a protest yesterday, and have even encouraged Hopium members to be the lead organizers of protests and rallies in their communities. Please take this insulting post down and repost so the information is correct.
Simon, I am very sorry that I misunderstood your focus. I did not want to post an action step without mentioning that I understood if others felt that other actions were more powerful. I have advocated to volunteers in Arlington VA repeatedly to keep calling our Virginia U.S. Senator (Kaine and Warner), and now it's mostly thanking them for stepping up and/or voting as we wish them to.
I have been a supporter of your Hopium Chronicles since spring 2023 and pushed others here to follow and support you -- and to invite you to be a speaker at our Arlington Dems annual Blue Victory Dinner fundraiser two years ago.
Please do not be angry with me. I'm upset that I upset you to the point of receiving a rather harsh comment from you.
I have always advocated calling our elected officials and writing emails to them. This is the first time that I've moved in a direction (advocating resistance movements). I did not post anything about the April 19 ones although I learned about them because I could not confirm with confidence the sponsors -- especially not of the Washington Mall-to-White House march on behalf of Abrego Garcia, and I did not really think that rallying in front of the Naval Observatory/J.D. Vance's home was all that good an idea. So I let April 19 pass. However, May 1 and the two events I mentioned (and am attending the 5pm one, inviting others in my area to join me) I can cite with confidence.
I am very sorry to have provoked such a strong reaction from you. I truly apologize. Will probably not venture into this chat/posting space again. -Mary
Made a donation to the ACLU
Me too. Just to let them know how much we appreciate them.
I set up a monthly donation today.
How could Alito and Thomas possibly dissent on this morning’s Supreme Court decision to block the deportation of more people to CECOT? Due process is one of our country’s most fundamental rights. Do they support our Constitution at all?
Should it ever come before the Supreme Court, I strongly suspect that "Justice" Samuel Alito and "Justice" Clarence Thomas would declare the US Constitution itself ... unconstitutional.
Well said.
But there's more. Read this harrowing tale of Bukele below:
https://davidsalzillo.substack.com/p/notes-from-underground-7
Who paid ‘em? Which of their corporate sponsors is in business with the jailers?
I'm old enough to remember the Republican refrain decrying 'activist judges'. This applies of course only to rulings favoring the shoe on the left foot.
A Case for a Gold Standard Democrats Need to Step Up
The US is in the biggest credit/debt bubble($35T debt and in risk to be $40T+) in global history and at the top of a credit cycle(equity market highs) the Orange Cheeto has decided to inflict the world with a tariff war Shades of the market crash in 1929 coupled with the Smoot Hawley tariffs which led the country into a long term depression bailed out by the way by WWII spending not as Keynesian economists argue that it was JM Keynes
Inflation is not going down and consumers are suffering And the dollar is tanking(dropping below 100 for the first time in 4y and moving into low 10y territory) and foreign investors are nervous about the chaotic activity in government and losing confidence in investing in the US as a country This means that foreign as well as domestic investors are slowly moving away from buying bonds(in order to attract investors in bonds the bond yield has to increase to attract investors to buy our bonds since they taking on risk)
This now sets the stage for a classic debt trap The Fed cannot lower interest rates to deal with inflation….its typical tool to lower the inflation rate….and if the interest rates stay or go higher the government cannot afford the interest rate on the debt particularly if investors are reducing their purchase of bonds
Reintroduction of a gold standard will fix this debt trap that the country faces The reason that gold is going up to higher and higher is because the cost of credit/debt is going higher and the purchasing power of the dollar is going down hence inflation staying the same or going up
Democrats need to make the radical change and work toward re-establishing a gold standard that Nixon took the economy off in 1971 creating 50y period of fiat money, quantitative easing, and excessive government spending without scrutiny And they would find bipartisan support if they campaigned on the issue
Dr. Dean, looking forward to one day seeing you 1) engage the material I post 2) self report the actions you are taking to strengthen our opposition. Using this platform to advance your views without participating in our discussions or our work is not in keeping with the kind of spirit we are working towards here. Try to do better, thank you - S
As you know we all carry biases that color our view of reality The challenge for all of us is not to allow nonfactual biases to color our reality because we all do that from time to time Sometimes paid media becomes knee jerk to the immediate happenings rather than stepping back to see greater issues That's why the MSM have editorial pages with opinions allowed The reason for my postings particularly this one on gold is to open up people's eyes to an important issue that most people don't take time to delve into The Democratic party would well do themselves a favor by having a different approach to the inflation picture without losing sight of their committed mission
This is a tangential topic, but I have always found the desire to return to the Gold Standard to be curious and even misguided. Other than certain industrial uses, e.g. aerospace components, medical devices and specific electronics, Gold has no inherent value.
Its fucking bonkers actually.
eloquently said, thank you.
We'll see how your establishment messaging goes when it becomes necessary to go back on a gold standard The days of fiat currency are diminishing by the day Educate yourself Simon besides asking your Keynesian friends what their macroeconomic view is Reminds me of the old bias issue without facts Now this is turning out to be an interesting discussion There is another side to the story if you care to for reading https://bit.ly/442Vit0 or any of Turk's books
for listening https://bit.ly/4cJACIT interview with Macleod who is on Substack
No currency has inherent value. The problem with gold is there isn't enough of it for the size of the global economy
The word *salary" comes from salt – which was once a currency that did have high intrinsic value. Before the invention of modern-day refrigeration, salt was essential for preserving many foods.
Here is more, the first a brief article in Time Magazine, the second a fascinating book by Mark Kurlansky – Salt: A World History.
https://time.com/3957460/a-brief-history-of-salt/
https://www.amazon.com/Salt-World-History-Mark-Kurlansky/dp/0142001619/
Thank you. You know I love learning this stuff
For more for reading https://bit.ly/442Vit0 or any of Turk's books
for listening https://bit.ly/4cJACIT interview with Macleod who is on Substack
Gold has a long history of supporting a trading currency dating back to 450BC when the Romans first mentioned it as a form of currency https://bit.ly/4cJACIT
Not true Any country with any amount of gold can put themselves back on a proper gold standard https://bit.ly/4cJACIT for more information
Not true The Romans in the earliest recordings of an existing banking system in 450BC saw gold as a stabilizing monetary metal If you care to cut through your uneducated bias you'll find some surprising information
for reading https://bit.ly/442Vit0 or any of Turk's books
for listening https://bit.ly/4cJACIT interview with Macleod who is on Substack
With all due respect, you ought to be a bit more cautious about whom you call uneducated or accuse of bias. (Imho, you display the same arrogance in your reply to Simon, and I do feel it is a tad uncalled for.)
I am well aware that gold has a long history of use as currency, by the Romans as well as in other cultures. But this is *conferred* value. If you re-read my post, I referred to *inherent* value.
I apologize if you feel I'm being arrogant I'm trying to simply point out that gold is a standard by which all currencies can be based The support of any currency needs to be linked to some form of standard or otherwise over time governments will overspend or promote QE which since 2008 has been excessive enough to accelerate the diminishing purchasing power of the dollar Again sorry for the misinterpretation
Yesterday Duke advised all students and non-citizen staff with visas not to travel abroad unless it is absolutely necessary. Terrifying stuff. My neighbor is planning to open her house to stranded students this summer. So the focus of my calls to NC's GOP senators this morning was twofold: 1) The firing of so many National Weather Service employees that our weather forecasts are already being degraded (which will kill North Carolinians, a state that is still recovering from Hurricane Helene); and 2) the story of my dear colleague, who has stage 4 cancer. She is a green-card holder and has plans to travel abroad to see family this summer but who is terrified she won't be allowed back into the country because she got a speeding ticket 20 years ago and because she signed an online petition in support of Palestinians. What kind of a country have we become?!
I think that just as we need daily press briefings, a Letter to America, etc; we also need these personal stories, to which people can relate in a different way than to ideas or words. The 34 year old son (a citizen!) of a dear friend works for HHS, showed up for work, waited in line for 2 hours, was taken aside and told that he was being let go, with no chance to retrieve his computer, papers, or anything. No reason given, although he had stellar evaluations. No idea if he can get unemployment. This is happening to thousands and thousands!! Their stories MUST be told.
That's appalling.
It's just one story of many, and the effects are just beginning. A friend of mine in Washington D.C. who is an award-winning cancer researcher for the CDC did keep her job---but her entire department was terminated. Our health, food, climate, privacy safety--and so much more!-- is going up in smoke, and these stories TELL the story and why it should matter to all Americans.
So I prtant to tell personal stories. Thank you, and for reminding us of their value now
The challenge facing Democrats is how to play hardball while avoiding the harmful/immoral tactics used by MAGA. Here is a proposal that takes a principled approach by reintroducing shame and redemption to today's political discourse https://tinyurl.com/4s6n7ay2 .
I encourage everyone to read Heather Cox Richardson’s post from yesterday. It speaks to the moment we’re facing where ordinary citizens make a difference in changing history.
Link?
Heather Cox Richardson on Paul Revere: https://substack.com/home/post/p-161656172
It made me cry! Brilliant, as always.
Made me cry, too! Can't decide whether it's horrifying or amazing that we are out on the streets again, protesting a tyrant, 250 years TO THE DAY that the first battle of the American Revolution was fought.
Beautiful writing. Thanks for sharing
SO powerful! Richardson is a treasure, linking history and the present, using her great writing skills. I posted an excerpt on my FB post, and quoted from our Jewish prayerbook: "What happened once upon a time, happens all the time."
Do you mean her speech about Paul Revere? That was masterful.
Yes, it was both educational and inspiring. One of her best, and that's some stiff competition.
America 250/ CT250 commemorates the 250th anniversary of the Revolutionary War and the Founding of our country. Last night, per the ask of CT 250, placed two candles in my window to honor the ride of Paul Revere and the other riders who warned Concord and Lexington, and this morning went with a group of community members went to a cemetery to clean the cemetery stones, stand one back upright, cut away brambles rake and cut down a dead tree. I, as an historian, was able to tell those working on the stones the biographies of some of the soldiers who were killed in the Civil War. This was to honor those who fought in Concord and Lexington in the Revolutionary War.This was our public service. I went home to change then went to participate in a protest in Torrington, CT along the busy main thoroughfare in the downtown section. There were about 300 of us. I would say about 3/4 of the passing vehicles blew their horns and waved in solidarity. I am exhausted. Will start my calls again on Monday - blessings to all of you.
Self-report: Three days, three protests!
Thursday - I spontaneously joined a pedestrian bridge protest on Highway 101 in Menlo Park during rush hour (I was passing by on my bike ride tot he Baylands), waved an American flag and elicited many honks from the ~100 vehicles/minute passing by.
Friday - Palo Alto climate rally, briefly met Rep. Sam Liccardo and told him how I appreciated his comments about General Milley at his town hall Thursday night (could not attend, I heard about it here on Hopium). They had a fun band that played for more than an hour after that took requests from their set list. I asked for Grateful Dead (here in their birthplace!), and they did Friend of the Devil and Fire on the Mountain (appropriate for climate rally). Several Deadheads stopped in their tracks….. Come from the rally, stay for the band and dancing. Shades of Emma Goldman…..
Today - headed to Redwood City for Indivisible organized rally, going to buy an American flag - great idea Simon, don’t let those bastards monopolize our national symbols! Might fly it upside down in distress.
On Friday, a round of emails to elected (Liccardo, Schiff, and Padilla), and a round of phone calls to them later regarding cuts to NOAA and NWS (people are going to die without good weather and climate information!), stimulated by a call to action from American Meteorological Society.
I say fly the flag upright! The distressed ones ought to be the MAGA folks who will have to explain to future generations why they voted for a sociopath who fleeced the public.
Thank you, I’ve been wavering on it. But I do feel distressed!
Same! Distressed, panicked, depressed, and flat out frightened! But with flashes of hope and courage.
Agreed!!! We are Patriots !
Right on, let's project strength! Belly up - at least in nature - is a sign of submission... and death.
I love this
Nice work Stu. Your activism is inspiring.
Rick Wison urges sending CERTIFIED letters which a staff person must sign for, creating a paper trail. Maybe thousands of such letters to scotus? Wouldn't that be interesting? Meantime, calling my gop rep but he's going to get a certified letter next week!
grt idea!
That's a great idea, and recalls an earlier time - during Watergate -- when we had a technology that left a paper trail for everyone to see. It was called the "telegram." Members of Congress were getting inundated with them each and every day. Tens of thousands of them. It was this tangible evidence of the "voice of the people" that really carried the day IMO, though it rarely gets mentioned. It certainly influenced those Republicans in the Senate who went in and told Nixon he was toast in an impeachment trial.
Share the idea widely. Telegrams would be even better and faster. Wonder if Indivisible and Move on etc would help organize such an action?
PS: cheaper to send certified mail...1st class postage + 4.85 according to info online. Almost $20 for a 100 word telegram delivered on paper.
Back in the day when the telegram was in its prime, they were very inexpensive and charged by the letter. I do not advocate for them today.
But the main point is that "we the people" will need some type of system that provides visible, tangible indicators beyond anecdotes... (The phones are ringing off the hook or "we're getting x1000 voicemails a day" -- only go so far.) IMO, they are too easily dismissed in a way those telegrams back during Watergate could NOT be.
We HAVE the technology to make something like this available -- at far less cost and time than certified mail. We only need the will to design and implement it, after the recognition of how powerful a game-changer this could be.
Whatever action happens it has to be made visible. My gop rep has in essence turned off his phones !
That's info that should be made known to his constituents. " He/She doesn't care about you. You will only hear from him when he wants your money or your vote."
I’m genuinely curious: Has the Trump Regime presented any evidence whatsoever that even a single deportee is a member of a violent criminal gang, e.g. MS-13 or Tren de Aragua?
If the DOD has done so, I have yet to see it.
Here is what US Attorney General Pam Bondi presented about Mr. Abrego Garcia. "Officials" claim they had no idea he was a legal resident or that he was protected by a court order, and quite a few questionable assumptions were made. https://www.justice.gov/ag/media/1396906/dl?inline
Here is another lame explanation from dhs. https://www.dhs.gov/news/2025/04/16/kilmar-abrego-garcia-ms-13-gang-member-history-violence A bad cop was involved in the "documentation."
I'd say the SCOTUS was not impressed with this document when providing their April 10th ruling No. 24A949.
and hot news "How a defunct gang registry helped deliver Kilmar Abrego García to a Salvadoran prison" including bad cop Ivan Mendez
https://wapo.st/42k418V
Evidence would be presented to a court, with attorneys present. The regime does not honor this, so "No."
I had heard that only a minority had criminal records.But who knows? I sure don't trust a word from Pam Bondi's mouth. If she wants a criminal, I know one who has been convicted of 34 counts!
I'd check the bathroom at Mar-a-Lago, where all the good stuff is stored, including missing top-secret documents and the beautiful concepts of a healthcare plan that's gonna replace the ACA (like, any week now).
Aaand ... this is Infrastructure Week!
HCR LINK:
https://open.substack.com/pub/heathercoxrichardson/p/april-18-2025?utm_source=share&utm_medium=android&r=3ywxg
Highly technical, rather terrifying, discussion between Krugman and Nathan Tankus. If you get past the first 6 minutes, where I would say Tankus rambles a bit, you will learn some things. It is rather terrifying. Highly technical, and probably a lot I don't fully understand or can't quantify.
https://paulkrugman.substack.com/p/nathan-tankus-part-ii
Thanks, Patrick. That was fascinating. I'll try to boil all that down.
The Trump tariffs are bad. But the unpredictability of Trump's tariffs is even worse in that it causes dangerous volatility in the financial system and is a threat to liquidity itself. It doesn't help that hedge funds now play a key role in ensuring liquidity of, for example, treasury bills because they can pull back when things get too risky. The Fed, as buyer of last resort, can deal with short-term Trump volatility but it cannot stop Trump volatility.
One very cool thing I hadn't heard about, but which makes sense, is the market in currency exchange derivatives. Well, of course, someone had to invent that. So large exchanges in, say, yen and euros are actually conducted by first exchanging yen into dollars and then dollars into euros. Thus, a destabilization of the dollar affects currency exchanges of other currencies.
And then there is the claim that we came very close to a Lehman Brothers type of meltdown this month because of the effect of Trump volatility on the financial system.
I also like how he characterized market traders not as information processors but conventional wisdom processors.
Near the end Tankus goes back to the Trump-Musk risks to the payment system and Social Security. It wasn't comforting when Paul Krugman said, "I need a drink."
So, Patrick, do I have that about right? Correct me where I'm wrong or left out important stuff.
That is a comprehensive and accurate summary. To me the discussion involved so many difficult to quantify things that it is hard to assess the severity. To me it is a giant Jenga puzzle no one understands, with Trump pulling out random pieces, with no one knowing what might cause a collapse.
Yes, I agree that it was hard to assess without his level of knowledge of the different markets--stock, bond, currency. After reading the conversation, it seemed to me that Tankus was laying out the worst possible worst-case scenario, but it sounded plausible enough to be frightening.
Here's the way my AI looked at it; much as discussed but more detail.
"The statement "FX liquidity ‘worse than Covid’ amid tariff volatility" implies a significant deterioration in the ease and efficiency of trading currencies, exceeding the difficulties experienced during the peak of the COVID-19 pandemic. This situation is occurring within an environment of heightened volatility stemming from the implementation or threat of tariffs.
Here's a breakdown of the implications:
1. Reduced Market Depth and Order Book Sizes:
Less Willingness to Trade: Market makers and participants may become more risk-averse and less willing to provide quotes or hold large positions due to the uncertainty created by tariff volatility. This leads to thinner order books with fewer bids and offers at each price level.
Wider Bid-Ask Spreads: With less liquidity, the difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask) widens. This increases the transaction costs for those needing to exchange currencies.
2. Increased Volatility:
Exaggerated Price Swings: Lower liquidity means that even moderate-sized trades can cause larger price movements than usual. This amplifies the volatility already present due to tariff-related news and policy shifts.
Flash Crashes: In extreme cases of illiquidity, sudden large orders can trigger rapid and significant price drops or spikes, followed by a quick recovery.
3. Difficulties in Executing Large Trades:
Slower Execution: It may take longer to fill large currency orders without significantly impacting the market price.
Higher Slippage: Traders might have to accept prices less favorable than initially quoted when executing large trades due to the lack of available liquidity at their desired price.
4. Impact on Businesses and Investors:
Increased Hedging Costs: Companies engaged in international trade or investments face higher costs to hedge their currency exposures due to wider spreads and potential difficulties in executing large hedges.
Reduced Investment and Trade: The increased uncertainty and transaction costs can discourage cross-border investment and trade activities. Businesses might delay or scale back international ventures due to currency risks.
Challenges for Central Banks: Central banks might find it more challenging to manage exchange rates or implement monetary policy effectively in a low-liquidity and high-volatility environment. Interventions in the FX market could have a more significant (and potentially destabilizing) impact.
5. Systemic Risks:
Contagion: Illiquidity in one part of the FX market could potentially spread to other currency pairs or asset classes, especially if leveraged positions need to be unwound quickly.
Market Functioning: Persistently low liquidity can impair the overall functioning of the foreign exchange market, which is crucial for global finance and commerce.
Why "worse than Covid"?
During the initial phase of the COVID-19 pandemic, there was indeed a significant liquidity crunch in many financial markets, including FX, driven by panic, a "dash for cash," and uncertainty about the economic outlook. However, central banks around the world, particularly the US Federal Reserve, injected massive amounts of liquidity into the financial system through various measures like swap lines and asset purchase programs. These interventions eventually helped to stabilize markets and restore some semblance of liquidity.
The current situation being described as "worse than Covid" suggests that the combination of tariff-induced uncertainty and potentially other factors is creating a more persistent and severe lack of liquidity in the FX market. This could be because:
Unpredictability of Tariffs: Tariff policies can change rapidly and unexpectedly, creating ongoing uncertainty that market participants struggle to price and hedge against.
Impact on Global Trade Flows: Tariffs directly affect international trade, which is the fundamental driver of FX transactions. Disruptions to trade can lead to a more structural decline in FX market activity.
Geopolitical Tensions: Tariffs are often a symptom of broader geopolitical tensions, which can further dampen market sentiment and reduce risk appetite.
Lack of Coordinated Response: Unlike the coordinated central bank actions during the COVID-19 crisis, the response to tariff volatility might be more fragmented or less effective in boosting FX liquidity.
In conclusion, the implication of FX liquidity being "worse than Covid" amid tariff volatility is a concerning sign for global financial markets and the real economy. It suggests a high degree of uncertainty and risk aversion, leading to increased transaction costs, greater volatility, and potential disruptions to international trade and investment flows."
So the next question is: has this Jenga situation been simulated and what were the outcomes?
"Yes, the effects of tariffs enacted during the administration before the current one, as well as the uncertainty surrounding trade policy, have been extensively simulated to project potential economic outcomes. Various economic models and institutions have conducted these simulations, often producing a range of results depending on the specific assumptions and scenarios considered.
Here's a summary of the simulated outcomes based on recent reports:
Reduced GDP and Economic Growth: Multiple simulations, including those by the Penn Wharton Budget Model and the Tax Foundation, project that broad tariffs would lead to a reduction in the United States' Gross Domestic Product (GDP) over the short and long term. The Tax Foundation estimates a 0.8% reduction in GDP under currently imposed tariffs, potentially increasing to 1.0% with announced foreign retaliation. The Penn Wharton Budget Model's projections from April 2025 suggest even more significant long-run GDP reductions, possibly exceeding 6% under certain scenarios of widespread tariffs.
Decline in Wages and Household Income: Simulations indicate that wages are likely to decrease due to the tariffs. The Penn Wharton Budget Model projects long-run wage declines of around 5%. The Tax Foundation estimates that tariffs could reduce average after-tax income per U.S. household by over $1,200 annually.
Job Losses: The imposition of tariffs is projected to lead to job losses in the U.S. economy. The Tax Foundation's simulations suggest a reduction of hundreds of thousands of full-time equivalent jobs.
Increased Consumer Prices: Many simulations point to an increase in consumer prices as a result of tariffs, as the cost of imported goods rises. The Yale Budget Lab estimates that illustrative "reciprocal" tariffs could lead to a 1.7% to 2.1% increase in the price level, equating to an average consumer loss per household of $2,700 to $3,400 annually.
Impact on Trade Flows: Simulations consistently show that tariffs would lead to a significant decrease in both imports into the U.S. and exports from the U.S., potentially disrupting global supply chains.
Retaliation and Trade Wars: Models often consider the impact of retaliatory tariffs imposed by other countries. These scenarios typically show a more significant negative impact on the U.S. economy compared to unilateral tariffs. For example, the Kiel Institute's simulations indicate that U.S. tariffs on goods from Mexico and Canada would harm all three economies, with more substantial negative effects if the EU and China retaliate.
Uncertainty and Reduced Investment: The economic uncertainty generated by tariff policies is also simulated to have negative consequences, such as reduced business investment. The Penn Wharton Budget Model estimates that the rise in economic uncertainty in early 2025 could reduce investment by over 4%.
It's important to note that the exact magnitudes of these effects can vary across different models due to their underlying assumptions about consumer and firm behavior, the extent of global trade linkages, and the responses of other countries.
However, a general consensus across many simulations is that broad tariffs and the associated uncertainty pose a significant risk to economic growth, employment, and household welfare.
Some analyses, like those cited by the White House, argue that targeted tariffs can be effective in specific sectors, such as steel, by increasing domestic production and investment. However, the broader economic simulations tend to focus on the aggregate effects of more widespread tariff policies.
Sources and related content
The Economic Effects of President Trump's Tariffs - Penn Wharton Budget Model
budgetmodel.wharton.upenn.edu"
Only 3 months on the job and Mr Fixit, and the Republicans in Congress who enable him, have already threatened the world with massive economic risks.
Pretty damn impressive.
Simon in Marin County California we have a Townhall scheduled on Tuesday with Jared Huffman and Jamie Raskin. The free tickets sold out within a day.
Self Report: I called Senator Van Hollen and Congressman Raskin to thank them for being bold. I called Senator Alsobrooks and asked her to become bolder. Writing postcards for the upcoming Virginia race.
I think we're beginning to see Trump's fear. The letter to Harvard was a "mistake," he isn't involved with the kidnap to El Salvador, he's flat out lying about egg prices, etc. I believe he told El Salvador to let Van Hollen meet after the court orders making clear they're going to hold him in contempt. We can never forget that he's weak and a bully. Putin's saboteur is weak.
The 'bitcoin' never stops HERE.
Just left a 50501 Rally at Brittlebank Park in Charleston, SC. Estimated crowd was 1,000. Beautiful day, beautiful people defending our beautiful democracy. Here's an attempt to post the video ... IMG_0809.mov
Rats ... it didn't work. But it sure was fun!
Is everyone headed to a demonstration this morning? We are all over the country.
In New York. Bryant Park, Noon.
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