Starting early last month the director of the US Agency for International Development (USAID) Samantha Power informed US lawmakers in Congress for the first time that the population in parts of northern Gaza have begun facing famine. This testimony served to hasten international efforts to more efficiently get aid into the Strip, such as the Pentagon’s Gaza pier project, though it didn’t put a halt of the Western weapons flowing to Tel Aviv.

Now, a top UN official has warned the crisis is worse than previously assessed. The head of the United Nations World Food Programme (WFP) Cindy McCain is now warning that northern Gaza is in the midst of a “full-blown famine”.

She further said that famine is “moving its way south” in a new NBC News interview set to air Sunday. She described that this is base on the humanitarian office’s assessment on the ground.

“It’s horror. It’s so hard to look at and it’s so hard to hear,” McCain told Meet the Press. “What we are asking for and what we continually ask for is a ceasefire and the ability to have unfettered access, to get in safe through the various ports and gate crossings.”

But a ceasefire is unlikely to come for at least a week, given that is how long Israel has just given Hamas to respond in a a fresh ultimatum. “Israel has informed Egyptian mediators that Hamas has one week to agree to a hostage deal or Tel Aviv will begin the invasion of Rafah,” AntiWar.com writes. “The Israeli proposal does not offer a permanent ceasefire, and Prime Minister Benjamin Netanyahu has declared the attack on the city will occur with or without the release of hostages.”

Conditions for the civilian population are expected to compound in the south if Israel’s military goes through with its planned ground offensive against Rafah.

“The idea that we will halt the war before achieving all of its goals is out of the question,” Prime Minister Benjamin Netanyhu told representatives of hostage families this past Tuesday. “We will enter Rafah and we will eliminate the Hamas battalions there – with or without a deal, in order to achieve the total victory.”

The southern city is packed with some 1.5 million people at this point – with most of these being internally displaced refugees. But Israel says that some final key Hamas battalions and commanders are hiding out in the city, embedded within the civilian population, and that there will be no way to root them out except to send in the IDF infantry.

In her early April testimony, USAID’s Power warned that “Food has not flowed in sufficient quantities to avoid this imminent famine in the south, and these conditions that are giving rise already to child deaths in the north.”

“There’s been significant damage during the war; bullet holes, walls missing, roofs not intact” @UNWateridge

Critical @UNRWA & @WFP mission to expand food distribution in north #Gaza. Agencies working closely to avert famine through meaningful supply despite massive destruction. pic.twitter.com/khMHxOU7qH

— UNRWA (@UNRWA) May 2, 2024

Aid officials have warned that in addition to the likelihood of mass deaths, famine would grow in the south of the Strip as well in the wake of a major Rafah assault. The population is so concentrated there that people would have few or no safe places to which to flee for safety. The US has been leaning on Israel to establish a credible civilian evacuation plan, but it’s unclear the degree to which this is being realized.

Authored by Sophie Li via The Epoch Times,

California lawmakers are considering a bill that would give preference to African American applicants seeking occupational licenses, for such professions as teaching, nursing, counseling, electrical work and others, especially those who are descendants of slaves.

Assemblyman Mike Gipson, author of AB 2862, said the state’s licensing process poses barriers for African Americans seeking employment, particularly in terms of wage disparities and access to leadership or managerial positions.

“There has been historical longstanding deficiencies and internal barriers … [for] African Americans seeking professional work, and by prioritizing their applications, we are bridging the gap of professional inequities of under representation and under compensation,” Mr. Gipson said in a bill analysis.

Under current law, only veterans are eligible for such prioritization.

Mr. Gipson argued in the analysis that if such priority can be granted to veterans, similar standards should be applicable to African-American applicants.

“If expediting licensure for veterans does not discriminate, then perhaps prioritizing African American applicants also is not discriminatory,” his statement reads.

“Nor would a preference for African American applicants violate the equal protection clause of the California Constitution any more than the existing preference for veterans.”

Supporters of the bill, including the Greater Sacramento Urban League and the California African American Chamber of Commerce, said the legislation addresses historical injustices and “promotes equity and provides opportunities for economic advancement within our community.”

However, opponents say it is “unconstitutional” and lacks legal backing.

The Pacific Legal Foundation, a public interest law firm, argues in a statement that both the U.S. and California Constitutions guarantee citizens equal protection under the law, prohibiting the government from treating citizens differently based on race, ancestry, or other protected categories.

The law firm suggested if the bill were to become law, it would probably not hold up against legal challenges, referencing the Supreme Court’s ruling in Students for Fair Admissions v. Harvard last summer. The court deemed the consideration of an applicant’s race as a factor in admissions decisions unconstitutional.

They argued that while the constitution allows the government to use race to remedy instances of past discrimination, the bill doesn’t cite any specific California laws that exclude African Americans or that were drafted with the intention of excluding workers needing redress.

Additionally, they said that introducing race as a factor in the licensing process would exacerbate barriers for many Californians seeking to enter the workforce, particularly low-income workers, who already face numerous challenges.

The law firm also pointed out that the representation of minority groups within industries often varies, suggesting that prioritizing one group over others would fail to address the root of the problem.

They argued that if the state were to do so, it should reduce barriers to licensure for all Californians.

The bill, which will now be heard in the Assembly’s Appropriations Committee, passed the Assembly’s Business and Professions Committee on a 13–2 vote last week.

If ultimately passed, it would go into effect on Jan. 1, 2029.

Eight tons of ground beef, processed at a Cargill Meat Solutions plant in Pennsylvania and distributed to Walmart stores nationwide, have been recalled due to potential E. coli contamination. 

On Wednesday, the US Department of Agriculture’s Food Safety and Inspection Service announced that 16,243 pounds of raw ground beef products may be contaminated with E. 

In recent days, Cargill shipped the raw ground beef to Walmart stores in a wide range of states, including Connecticut, Maryland, Massachusetts, New Hampshire, New York, North Carolina, Ohio, Pennsylvania, Vermont, Virginia, Washington, DC, and West Virginia. 

The recalled beef from Cargill includes:

• All Natural Lean Ground Beef with lot code 117 (2.25 pounds)

• Prime Rib Beef Steak Burgers Patties with lot code 118 (1.33 pounds)

• Fat All Natural Angus Premium Ground Beef with lot code 117 (2.25 pounds)

• Fat All Natural Ground Beef Chuck with lot code 118 (2.25 pounds)

• Fat All Natural Ground Beef Chuck Patties with lot code 118 (1.33 pounds)

• Fat All Natural Good Beef Sirloin Patties with lot code 118 (1.33 pounds)

This comes about one month after walnuts sold at Whole Foods were recalled for potential  E. coli contamination. 

Last month, Trader Joe’s recalled fresh basil sold in 29 states and Washington, DC, due to dozens of cases of salmonella. 

The recent spate of food recalls, including the current ground beef recall, highlights the need for Americans to understand better the sourcing of their food. 

Here’s what X users said about the recall: 

It was eggs last week, peanut butter the week before that, granola bars before that, who tf is letting this all threw.

— Godhasreturned (@Godhasreturned_) May 2, 2024

I wouldn’t eat any meat sold at Walmart regardless

— Mang (@Manglonian) May 2, 2024

I can’t believe that many people buy meat there.

— Mrs.America (@NeoAndTrinity_) May 2, 2024

That’s what you get for buying meat at Walmart

— Bobby (@0gbobbyEth) May 2, 2024

This calls for reevaluating food sources, moving away from big companies, and shifting towards more localized and transparent farming practices. 

Authored by David Stockman via InternationalMan.com,

These people have to be stopped!

We are talking about the nation’s unhinged monetary politburo domiciled in the Eccles Building, of course. It is bad enough that their relentless inflation of financial assets has showered the 1% with untold trillions of windfall gains, but their ultimate crime is that they lured the nation’s elected politician into a veritable fiscal trance. Consequently, future generations will be lugging the service costs on insuperable public debts for years to come.

For more than two decades these foolish PhDs and monetary apparatchiks drove the entire Treasury yield curve to rock bottom, even as public debt erupted skyward. In this context, the single biggest chunk of the Treasury debt lies in the 90-day T-bill sector, but between December 2007 and June 2023 the inflation-adjusted yield on this workhorse debt security was negative 95% of the time.

That’s right. During that 187-month span, the interest rate exceeded the running (LTM) inflation rate during only nine months, as depicted by the purple area picking above the zero bound in the chart, and even then by just a tad. All the rest of the time, Uncle Sam was happily taxing the inflationary rise in nominal incomes, even as his debt service payments were dramatically lagging the 78% rise of CPI during that period.

Inflation-Adjusted Yield On 90-Day T-bills, 2007 to 2022

The above was the fiscal equivalent of Novocain. It enabled the elected politicians to merrily jig up and down Pennsylvania Avenue and stroll the K-Street corridors dispensing bountiful goodies left and right, while experiencing nary a moment of pain from the massive debt burden they were piling on the main street economy.

Accordingly, during the quarter-century between Q4 1997 and Q1 2022 the public debt soared from $5.5 trillion to $30.4 trillion or by 453%. In any rational world a commensurate rise in Federal interest expense would have surely awakened at least some of the revilers.

But not in Fed World. As it happened, Uncle Sam’s interest expense only increased by 73%, rising from $368 billion to $635 billion per year during the same period.  By contrast, had interest rates remained at the not unreasonable levels posted in late 1997, the interest expense level by Q1 2022, when the Fed finally awakened to the inflationary monster it had fostered, would have been $2.03 trillion per annum.

In short, the Fed reckless and relentless repression of interest rates during that quarter century fostered an elephant in the room that was one for the ages. Annualized Federal interest expense was fully $1.3 trillion lower than would have been the case at the yield curve in place in Q4 1997.

Alas, the missing interest expense amounted to the equivalent of the entire social security budget!

So, we’d guess the politicians might have been aroused from their slumber had interest expense reflected market rates. Instead, they were actually getting dreadfully wrong price signals and the present fiscal catastrophe is the consequence.

Index Of Public Debt Versus Federal Interest Expense, Q4 1997-Q1 2022

Needless to say, the US economy was not wallowing in failure or under-performance at the rates which prevailed in 1997. In fact, during that year real GDP growth was +4.5%, inflation posted at just 1.7%, real median family income rose by 3.2%, job growth was 2.8% and the real interest rates on the 10-year UST was +4.0%.

In short, 1997 generated one of the strongest macroeconomic performances in recent decades—even with inflation-adjusted yields on the 10-year UST of +4.0%. So there was no compelling reason for a massive compression of interest rates, but that is exactly what the Fed engineered over the next two decades. As shown in the graph below, rates were systematically pushed lower by 300 to 500 basis points across the curve by the bottom in 2020-2021.

Current yields are higher by 300 to 400 basis points from this recent bottom, but here’s the thing: They are only back to nominal levels prevalent at the beginning of the period in 1997, even as inflation is running at 3-4% Y/Y increases, or double the levels of 1997.

US Treasury Yields, 1997 to 2024

Unfortunately, even as the Fed has tepidly moved toward normalization of yields as shown in the graph above, Wall Street is bringing unrelenting pressure for a new round of rates cuts, which would result in yet another spree of the deep interest rate repression and distortion that has fueled Washington’s fiscal binge since the turn of the century.

As it is, the public debt is already growing at an accelerating clip, even before the US economy succumbs to the recession that is now gathering force. And we do mean accelerating. The public debt has recently been increasing by $1 trillion every 100 days. That’s $10 billion per day, $416 million per hour.

In fact, Uncle Sam’s debt has risen by $470 billion in the first two months of this year to $34.5 trillion and is on pace to surpass $35 trillion in a little over a month, $37 trillion well before year’s end, and $40 trillion some time in 2025. That’s about two years ahead of the current CBO (Congressional Budget Office) forecast.

On the current path, moreover, the public debt will reach $60 trillion by the end of the 10-year budget window. But even that depends upon the CBO’s latest iteration of Rosy Scenario, which envisions no recession ever again, just 2% inflation as far as the eye can see and real interest rates of barely 1%. And that’s to say nothing of the trillions in phony spending cuts and out-year tax increases that are built into the CBO baseline but which Congress will never actually allow to materialize.

What is worse, even with partial normalization of rates, a veritable tsunami of Federal interest expense is now gathering steam. That is because the ultra-low yields of 2007 to 2022 are now rolling over into the current market rates shown above—at the same time that the amount of public debt outstanding is heading skyward. As a result, the annualized run rate of Federal interest expense hit $1.1 trillion in February and is heading for $1.6 trillion by the end of the current fiscal year in September.

Finally, even as the run-rate of interest expense has been soaring, the bureaucrats at the US Treasury have been drastically shortening the maturity of the outstanding debt, as it rolls over. Accordingly, more than $21 trillion of Treasury paper has been refinanced in the under one-year T-bill market, thereby lowering the weighted-average maturity of the public debt to less than five- years.

The apparent bet is that the Fed will be cutting rates soon. As is becoming more apparent by the day, however, that’s just not in the cards: No matter how you slice it, the running level of inflation has remained exceedingly sticky and shows no signs of dropping below its current 3-4% range any time soon.

What is also becoming more apparent by the day is that the money-printers at the Fed have led Washington into a massive fiscal calamity. It is only a matter of time, therefore, until the brown stuff hits the fan like never before.

*  *  *

The truth is, we’re on the cusp of an economic crisis that could eclipse anything we’ve seen before. And most people won’t be prepared for what’s coming. That’s exactly why bestselling author Doug Casey and his team just released a free report with all the details on how to survive an economic collapse. Click here to download the PDF now.

Since the beginning of the digital age, most of the world’s internet data has flowed through massive data centers in Northern Virginia. The area is known as “Data Center Alley” because it’s home to the world’s largest concentration of data centers. Some call the area ‘spy country’ because of the number of data centers used by the Central Intelligence Agency and other intelligence agencies. 

Given the exponential proliferation of smartphones, streaming services, smart devices, and now generative artificial intelligence, the power demanded by data centers in Northern Virginia will need nuclear reactors worth of power, if not much more, according to utility Dominion Energy.

On Thursday, Chief Executive Officer Bob Blue told investors on a company earnings call that “economic growth, electrification, and accelerating data center expansion” is boosting power demand across the area. 

Blue said, “The data center industry has grown substantially in northern Virginia in recent years,” noting, “We’ve connected 94 data centers with over 4 gigawatts of capacity over the last approximately five years.” 

Blue expects his utility company to connect another 15 data centers to the local power grid this year. 

He said, “This growth has accelerated in orders of magnitude, driven by one, the number of data centers requesting to be connected to our system, two, the size of each facility, and three, the acceleration of each facility’s ramp scheduled to reach full capacity.” 

He provided some context about rising power demand, pointing out:

“A single data center typically had a demand of 30 megawatts or greater. However, we’re now receiving individual requests for demand of 60 to 90 megawatts or greater, and it hasn’t stopped there. We get regular requests to support larger data center campuses that include multiple buildings and require total capacity ranging from 300 megawatts to as many as several gigawatts.” 

Blue told analysts that Loudoun County is home to the “largest data center market in the world, and we have had an opportunity to work with our data center customers for 15 or more years.”

He said the electrification of the economy, in combination with data centers, will only mean “substantial load growth driven by electrification in data centers for the foreseeable future.” 

With substantial load growth coming down the pipe, the local media outlet The Frederick News-Post reported earlier this year that billions of dollars in “regional power grid upgrades” are being proposed to “increase data center power demands in Northern Virginia.” 

Recently, media outlet LoudounNow reported that “hunger for energy continues to grow, especially in the data center industry with new large-scale projects adding hundreds of megawatts of demand.” The paper said that this has led government officials to propose “small modular reactors.”

Putting this all together plays into our latest investing theme, ‘powering up America’ and the upgrade of the nation’s grid for AI data centers, electrification of the economy, and reshoring of manufacturing. We titled the notes “The Next AI Trade” and “Everyone Is Piling Into The Next AI Trade.” Nuclear will be a big part of power generation as it’s the only clean and reliable source for data centers, as Blackrock’s Larry Fink pointed out last week. 

Via The Cradle

US officials have told Qatar to expel Hamas’ political leadership if the Palestinian militant group rejects the latest proposal for a ceasefire with Israel, The Washington Post reports Saturday. A US official speaking on the condition of anonymity with The Post said that US Secretary of State Antony Blinken delivered the message to Qatari Prime Minister Mohammed bin Abdulrahman Al-Thani in April.

Three diplomats familiar with the matter said Qatari officials have expected the request for months, as ceasefire talks mediated by Qatari and Egyptian officials have repeatedly failed. Qatari officials have advised Hamas officials to prepare to depart for another country should they be forced to leave, one of the diplomats told The Post. Some have speculated that Turkiye may be a possible future host of the group.

Doha has hosted Hamas’ political leadership, including Ismail Haniyeh, at the US’ request since 2012 and provided billions in cash to the Hamas authorities governing Gaza in recent years with the approval of the US and Israel. 

However, Qatar has come under criticism from US and Israeli officials since Hamas launched Operation Al-Aqsa Flood on 7 October. During the operation, Hamas attacked Israeli military bases and settlements to break the 17-year siege on Gaza. Some 1,200 Israeli civilians and soldiers were killed, including some by Hamas and others by Israeli forces, which used attack helicopters, tanks, and drones in their own settlements (kibbutzim) to respond to the operation.

Hamas also took some 240 Israelis captive, of which roughly 100 remain alive in Gaza, to exchange for some of the thousands of Palestinians held captive in Israeli jails. 

The White House has sought to use the threat of expelling Hamas from Qatar as leverage in ceasefire negotiations. Israeli Prime Minister Benjamin Netanyahu wants the return of the Israeli captives without offering a permanent end to the war in return. 

Netanyahu has long insisted that Israel only agree to a temporary ceasefire in exchange for the return of the Israeli captives, after which the army would be allowed to resume the war on Gaza, which he claims is meant to eliminate Hamas. Hamas has rejected the idea of a temporary ceasefire in hopes of ending the war permanently and winning the return of displaced Palestinians from northern Gaza to their homes, though many have been destroyed by Israeli bombing.

After seven months of war, the Israeli army has succeeded in killing a reported over 34,000 Palestinians, including over 14,000 children according to Gaza Health Ministry casualties, and has laid waste to large swathes of Gaza’s cities and farmland. However, the army has not defeated Hamas, whose fighters continue to carry out operations against occupying Israeli troops. 

Netanyahu has also used the threat of an all-out invasion of Rafah, the city on the Egypt border where over 1 million displaced Palestinians are sheltering, as leverage to force Hamas to agree to a ceasefire and prisoner exchange on Israel’s terms. 

Blinken returned to Israel this week in hopes of pressuring Hamas to agree to the latest Israeli proposal. “We are determined to get a ceasefire that brings the hostages home and to get it now, and the only reason that wouldn’t be achieved is because of Hamas,” Blinken said Wednesday in Tel Aviv. “There is a proposal on the table, and as we’ve said: no delays, no excuses. The time is now.” A Hamas delegation is expected to visit Cairo this weekend, potentially to respond in writing to Israel’s latest proposal, Reuters reported Friday.

Major Israeli strike have continued to rock Gaza this week:

BREAKING: MAJOR ISRAELI AIRSTRIKES ON NORTHERN GAZA RIGHT NOW pic.twitter.com/pxoc2eFhqb

— Sulaiman Ahmed (@ShaykhSulaiman) May 3, 2024

As negotiations have dragged on, US officials and lawmakers have blamed Qatar for its failure to force Hamas to agree to a deal. Some US lawmakers have called on the White House to force Qatar to not only expel the Hamas leadership but to cut ties with the group entirely.

However, some analysts say expelling Hamas from Qatar will not assist Israel. “Applying pressure to Hamas in Doha is ineffective pressure,” an official briefed on the talks said. “The problem is the guys making the decisions are in Gaza, and they don’t care where the political office is located,” this person said.

Patrick Theros, a former US ambassador to Qatar, told The Post that kicking Hamas out of Qatar would simply sabotage the current talks further. “We’d be cutting off our nose to spite our face,” he said.

Qatari officials have expressed frustration for the criticism they are receiving, simply for doing what the US had requested of them. “We did not enter into a relationship with Hamas because we wanted to. We were asked by the U.S.,” Majed al-Ansari, adviser to the Qatari prime minister and spokesperson for Qatar’s Foreign Ministry, stated last week to Israeli media.

“Qatar is being used as a political punching bag for those who are looking either to safeguard their political futures or to find more votes in the next elections,” he said in response to US and Israeli criticism.

For the first time since spot bitcoin ETFs were launched, Grayscale’s Bitcoin Trust ETF (GBTC) saw a daily net inflow on Friday (of $63 million)…

Source: Bloomberg

GBTC has dominated the outflows since inception (adding up to around $17.5 billion) since the 11 spot ETFs were launched on Jan 11. The inflow coincided with a sudden surge in aggregate net inflows to ETFs overall of $378 million on Friday (which came two days after a record net outflow of $563 million)…

Source: Bloomberg

CoinTelegraph’s Ciaran Lyons reports that pseudonymous crypto investor DivXman told his followers that the GBTC was the “primary source” of sell pressure across all spot Bitcoin ETFs, but “the tides” could be turning.

“That effectively means a significant decrease in sell pressure and additional increase in demand while ETFs collectively are buying more BTC than miners can create,” he explained to his 20,800 X followers in a May 3 post.

Crypto trader Jelle predicted to his 80,300 X followers on the same day that Bitcoin’s new all-time high is on the horizon.

“60 million dollars worth of inflows for Grayscale’s ETF. The halving chop will come to an end, and 6-figure Bitcoin will follow shortly after.”

Bitcoin’s price responded to this sudden inflow surprise and rallied back above $64,000, erasing the outflow-driven plunge from last week…

Source: Bloomberg

This price rise corresponded to a big short liquidation in the past 24 hours…

Source: CoinGlass

Additionally, CoinTelegraph reports that bitcoin whale entity nicknamed “Mr. 100” has bought the Bitcoin dip for the first time since the Bitcoin halving.

Meanwhile, multiple market analysts suggest that the local Bitcoin bottom may be in as the price bounces from $56,000 lows.

The Mr. 100 whale wallet has added over 4,100 BTC worth over $242 million, around the $58,000 mark, according to on-chain data from Bitinfocharts, as noticed by X user HODL15Capital.

This represents the wallet’s first Bitcoin purchases since April 19, the day before the 2024 Bitcoin halving.

The wallet has been adding at least 100 BTC nearly every day since Feb. 14, except for the post-halving period.

Mr. 100 is currently the 12th-largest Bitcoin holder, with over 65,155 BTC, according to Bitinfocharts data.

Finally, another even-larger ‘whale’ is Michael Saylor at MicroStrategy, delivered a masterclass on corporate finance and the power of bitcoin to supercharge corporate balance sheets. Saylor made a point to emphasize Bitcoin as the single solution for capital appreciation in an inflationary environment.

The MicroStrategy Executive Chairman noted key differences between Bitcoin and alternative cryptocurrencies like Ethereum, expressing the importance and necessity of proof-of-work-based consensus in creating a digital commodity.

“You could see the writing on the wall when the spot ETF of Bitcoin was approved in January. By the end of May, you’ll know that Ethereum is not going to be approved. And when Ethereum is not going to be approved, sometime this summer it’ll be very clear to everyone that Ethereum is deemed a crypto asset security, not a commodity. After that, you’re going to see that [for] Ethereum, BNB, Solana, Ripple, Cardano – everything down the stack.”

Saylor’s conviction and use of physics-based metaphors were present as ever as he spoke on Bitcoin’s price appreciation and continued monetization.

“It’s never declining. The chart’s not ever decreasing. It only goes one way. Bitcoin is a capital ratchet. It’s a one-way ratchet. Archimedes said, give me a lever long enough and a place to stand and I can move the world. Bitcoin is the place to stand.”

“There’s no more powerful idea than the digital transformation of capital… No force on earth can stop an idea whose time has come. This is an idea. Its time has come. It’s unstoppable. And so I’m going to end with the observation that Bitcoin is the best. The best what? The best.”

Saylor is an outspoken proponent of BTC and a leading force behind MicroStrategy acquiring the cryptocurrency as a reserve asset. As of April 30, the firm held 214,400 BTC – worth more than $13 billion at the time of publication.

Authored by Daniel Lacalle,

The Fed’s preferred inflation measure rose 2.8% in March from a year ago. This is the core personal consumption expenditures price index, excluding food and energy, which should be less volatile than the consumer price index and a better indicator of the real process of disinflation.

This figure is not only concerning, considering the propaganda that repeats that the fight against inflation is nearing its conclusion, but it becomes even more so when we observe the upward trend over the last three and six months. Inflation has accelerated on a quarterly and half-year basis.

As E.J. Anthony, PhD economist, points out, “there was never any indication we were heading to the 2.0% inflation target, let alone the pre-pandemic 1.8% average; we’ve arrived at 3%+ with no indication we’re going significantly lower anytime soon, not with the current levels of Treasury borrowing and Fed allowing money supply growth.”

We need to understand why inflation is not falling as promised and announced.

There is no such thing as cost-push inflation

Fiscal policy has been reckless, and enormous deficit spending is fueling inflationary pressures through unnecessary government consumption of newly created currency.

Government spending is printing new units of currency and inflation is caused by issuing more than what the private sector demands, thus making the purchasing power of money decline.

There is no such thing as cost-push inflation, greedflation, or commodity inflation.

None of those factors can make aggregate prices rise, consolidate, and continue increasing on an annualized level.

Furthermore, if cost-push or supply chain disruptions were the cause of inflation, we would have deflation today, not rising aggregate prices every month.

Governments created the inflation burst of 2021 and have not only ignored fiscal responsibility but, in the case of the United States, maintained a completely unhealthy and unrequired budget deficit

Governments are destroying the purchasing power of money and perpetuating inflation. They created the inflation burst of 2021 and have not only ignored fiscal responsibility but, in the case of the United States, maintained a completely unhealthy and unrequired budget deficit.

“An upsurge in money growth preceded the inflation flare-up, and countries with stronger money growth saw markedly higher inflation,” concluded Claudio Borio in a scholar paper in 2023 (“Does money growth help explain the recent inflation surge?”, BIS Bulletin No. 67, January 26, 2023).

Doctors Juan Castañeda and Tim Congdon already warned as early as June 2020 that “the policy reaction to the COVID-19 pandemic will increase budget deficits massively in the world’s leading countries. The deficits will largely be monetized, with heavy state borrowing from both national central banks and commercial banks. The monetization of budget deficits, combined with official support for emergency bank lending to cash-strained corporates, is leading to extremely high growth rates of the quantity of money,” and these “will instigate an inflationary boom” (Inflation: The Next Threat? Institute of Economic Affairs, Briefing 7, June 2020).

Inflation is a policy

Inflation is not a coincidence or a fatality; it is a policy. Governments tend to announce large-scale spending programs to combat inflation.

These policies accelerate money velocity in a recovery, particularly after a shutdown like the one of 2020, as well as the quantity of money in the system.

Thus, inflation rises rapidly. The only way to contain the inflation burst is to cut spending and reduce the quantity and growth of money. However, although central banks have announced so-called restrictive policies, reality has shown the opposite.

The quantity of money in the system has not been reduced. Money supply measured as M2 has declined, and the balance sheet of the Federal Reserve has diminished, but these forces have been entirely offset by net liquidity and money market funds.

As government spending and deficit have not fallen at all, but rather the opposite, the economy has been flooded with the post-waves of the first money growth impact (2020), its market and net liquidity effect, and rising public expenditure with annual deficits close to $2 trillion.

The quantity of money has not been reduced

The Federal Reserve has increased rates, but that only helps moderate the growth of money, not eliminate inflationary pressures.

Furthermore, as markets immediately discounted large rate cuts in 2024, the real effect on money growth has been just to postpone the inevitable future monetization of such enormous deficits. It has become a Call option on a forthcoming new quantitative easing program.

We cannot forget that the quantity of money has not been reduced due to another relevant factor.

The Federal Reserve has multiplied its support for the troubled banking sector via the discount window, which offsets the modest reduction in the Fed balance sheet.

Instead of attacking inflation, the so-called “Inflation Reduction Act” has perpetuated the destruction of the value of the currency issued

By purchasing the sovereign bonds in the banks’ balance sheets at par despite the collapse in price, the Fed was inadvertently printing new money and sabotaging its own restrictive measures.

The misguided Keynesian policies implemented by the US government have cancelled out the Federal Reserve’s balance sheet reduction and rate hike efforts.

The Treasury injected more than $2 trillion per annum in liquidity, creating new money, counteracting the net $1.6 trillion that the Fed retired in three years from its balance sheet.

Therefore, the impact on the purchasing power of the currency through inflation has been negative. Instead of attacking inflation, the so-called “Inflation Reduction Act” has perpetuated the destruction of the value of the currency issued.

The impact on markets

The impact on markets has been phenomenal. The yen, once a stable currency perceived as a haven for investors, has fallen to a 35-year low versus the US dollar.

The Bloomberg index of globally expanded major currencies and the emerging markets indicator have both fallen.

The result of the 2020–2024 “free money” wave was a very expensive destruction of real wages and deposit savings.

Furthermore, bonds have been obliterated and the latest data shows that the aggregate US and euro area bond indices have not recovered from the past years’ slump, and even going back to 2020, the indices are showing negative returns.

Only the high yield index has shown a positive performance in the past four years, albeit a meager 4.5%.

Governments are destroying the currency that they issue in all possible ways. Through persistent inflation, making wage earners and middle-class deposit savers poorer, with rising taxes to try to reduce a budget deficit that was bloated by unnecessary spending in a recovery, and through the destruction of the safest asset, bonds, that have become a bad investment for the most conservative investors, pension funds.

The only way in which inflation will be reduced will be if the Federal Reserve abandons its decision to cut rates and starts to take measures that drain net liquidity.

Without the support of the Treasury, this is impossible because it floods the market with new money even if monetary policy is restrictive and investors simply discounts that all those newly issued currency units will be monetized somehow in the future.

It does not matter if Powell promises restraint when Yellen pushes excess. The most conservative bondholders will only start to see positive returns when the Treasury stops destroying the currency’s value. It does not seem likely anytime soon.

This week has seen statements and reports indicating the US military constructed humanitarian pier on Gaza’s coast is expected to be complete by some point this weekend. 

But the $320 million project has hit another snag, as the Pentagon has said its soldiers and engineers were forced to “temporarily pause” the offshore assembly of the floating pier due to bad sea conditions in the eastern Mediterranean. So a finish date by this weekend appears unrealistic at this point, based on the Friday announcement.

“The partially built pier and military vessels involved in its construction have moved to the Port of Ashdod, where assembly will continue, and will be completed prior to the emplacement of the pier in its intended location when sea states subside,” CENTCOM said in a statement. 

So now the US personnel constructing it have moved to Israel. Presumably once the floating pier is completed it will be moved by sea back to the northern Gaza coast in preparation for maritime aid deliveries. 

The pier is expected to allow “the delivery of large quantities of humanitarian aid from ship to shore by truck, with vehicles driving directly off ships and across the temporary pier to a marshaling yard ashore,” per the US military statement.

According to more details of what could prove to be cause of more continued pauses and delays:

Defense officials previously hoped that the JLOTS system would be fully built by Friday. But officials told CNN that sea state conditions have been extremely challenging off the coast of Gaza over the last week, impeding the work of the personnel involved in building the pier. One of the key tasks, for example, involves military divers working underneath the pier to ensure all the parts are secured and stable — a difficult and dangerous task when the seas are rough.

The operation of the pier and causeway, which will also require US military personnel to be stationed at sea, will also depend on weather conditions, officials say. 

Meanwhile famine has hit parts of the Gaza Strip, USAID said starting last month. There are also still lingering fears that once complete the pier and personnel working it could come under attack by Palestinian militants.

On Tuesday Secretary of Defense Lloyd Austin made a surprise admission for the first time. It came during a hearing of the House Armed Services committee, and specifically when Rep. Matt Gaetz of Florida grilled him on whether US servicemen will be placed in harm’s way during the construction of the project in Gaza.

Update on the Construction of the Joint Logistics Over-the-Shore capability in Mediterranean Sea

Yesterday, U.S. Central Command (CENTCOM) temporarily paused offshore assembly of the floating pier in the vicinity of Gaza due to sea state considerations. Forecasted high winds and… pic.twitter.com/cIY2TUn7NX

— U.S. Central Command (@CENTCOM) May 3, 2024

Austin answered in the affirmative, and further said that troops erecting the pier will be armed and that they will be authorized to fire back if fired upon. It must be recalled that just last week a visiting delegation of UN officials came under mortar fire from Palestinian militants. Hamas has further warned that any foreign military presence on Gaza soil will come under attack. 

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Below is more from the tense Congressional exchange: 

Gaetz: This is a very telling moment, Mr. Secretary, because you’ve said something that’s quite possible, that could happen, right? Shots from Gaza on our service members, and then the response our armed service members shooting live fire into Gaza. That is a possible outcome here so that we can become the Port Authority and run this pier. Right?

Austin: That’s correct. And I expect that we will always have the ability to protect themselves.

Gaetz: Don’t you think that counts as boots on the ground? President Biden told the country that we weren’t going to have boots on the ground in Gaza.

Austin: And we won’t

Gaetz: Okay, but you guys parse the distinction between… Like when Americans think boots on the ground, they think Americans in harm’s way or engaged actively in a conflict. You guys seem to be sort of saying that boots on a pier, connected to the ground, connected to service members shooting into Gaza doesn’t count as boots on the ground?

Austin: It does not.

Gaetz: I think you’re gonna find the the American people have a different perspective on that. And if we’re gonna have people shooting into Gaza, we probably should have a vote on that, pursuant to our war powers.

Authored by Steve Watson via Modernity.news,

Despite the fact that the world is teetering on the edge of global conflict, US college campuses being trashed by radical occupiers, and criminal illegals are still overwhelming the border, Joe Biden spent Friday afternoon awarding other Democrats medals.

Biden, who was incapable of saying ‘Presidential Medal of Freedom,’ awarded one each to Nancy Pelosi, John Kerry, Al Gore, Michael Bloomberg, and Rep. Jim Clyburn.

Crooked Joe’s brain is friedhttps://t.co/8TGrYdQFd0

— RNC Research (@RNCResearch) May 3, 2024

It was just a big back-patting session for Democrats.

Old Joe Biden is so confused he thought he was supposed to nominate the most financially successful politicians. Or something. Hard to believe some of these folks deserve a medal of any kind. Al Gore, Climate Grifter, John Kerry, Climate Grifter, Nancy Pelosi, Stock Market… https://t.co/mhz8CAIA81

— Brother Eric (@01IOTA) May 3, 2024

Al Gore and John Kerry were seemingly given medals for losing elections, with Biden stating that Gore “accepted the outcome of a disputed presidential election for the sake of our unity.”

These Democrats like standing behind each other.

— Jungle Ball (@JungleBall_) May 3, 2024

While Pelosi was given a medal for her actions on January 6th, which amounted to locking herself in a room, threatening to punch Donald Trump, and calling it an insurrection.

Freedom to make over $150,000,000.00 in insider trading while in congress.

— Nick Koutrakos (@NickKoutrakos) May 3, 2024

Is that Medal for facilitating the setup for January 6th or assisting the in Committee in disposing of evidence? pic.twitter.com/5EsUUci2Pb

— Bennetta Elliott (@belliott123) May 4, 2024

Bloomberg and Clyburn got medals for…something or other, but being pivotal in Biden’s election campaign was just pure coincidence.

BOUGHT AND PAID FOR. pic.twitter.com/uA1LUPuy0d

— The Pink Elephant in the Room (@PEITRblog) May 4, 2024

I want to congratulate one of our own, Mike Bloomberg, on receiving the Presidential Medal of Freedom!

Although he wasn’t as great a mayor as DeBlasio and Adams, he was fiercely opposed to guns and sugary drinks.

Thank you President Biden. We in New York are celebrating today. pic.twitter.com/BXstjq4NkK

— Kathy Hochul Press Release (Parody) (@NY_Gov_PR) May 3, 2024

Hahaha of course you woke joke snowflakes think only democrats should get participation trophies 🏆 😆

— Doug Osborne (@DougOsb70438101) May 4, 2024

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