The Deeper Dive: Economic Predictions and Election Predilections - So MUCH Chaos!

The war around the Red Sea has already broadened and is already causing significant chaos in shipping as covered in a number of my recent articles. That has brought much higher shipping costs that will add to inflation soon. It may also result in resurgent energy costs, which is the area where inflation got a lot of reprieve during part of 2023. Inflation is already nudging upward, forcing the Fed to stay at the fight longer, and markets that have bet themselves up on pivot hopes are going to be disappointed. Those are a few simple predictions for 2024.

The war in Ukraine is likely to bring additional economic hits and military risks that could broaden significantly. The UK has stated it is aware of a five-year plan between Russia and its allies to spark military troubles in many parts of the world for the West to spend their fortunes fighting. Whether that is true or not, I don’t know, but it seems a likely risk.

The Fed’s tightening cycle is highly prone to end in bank failures like we saw last year, and is already resulting in business failures and rising defaults in the commercial real-estate arena. In March, the Fed’s emergency banking program as well as all the reverse repo loans that stored cash on the side for banks to use as needed for a buffer to the Fed’s QT come to an end. The emergency bank program, of course, could easily be renewed if the Fed becomes aware of troubles; but the simultaneous of the Fed’s huge buffer called the Reverse Repo Facility, makes March a riskier month for bank troubles than others have been.

We are already fully in a manufacturing recession and walking the edge of a services recession … even if GDP growth never cracks below zero due to unbelievable CPI manipulation in health-care insurance that went unquestioned by mainstream media as well the cartoon methodology used for decades now to measure the costs of home ownership. The housing market is still holding many home prices up, even pushing them higher in many places, and we don’t know when the ice dam that has locked up home inventory will break, deluging homeowners and banks in underwater valuations on their assets/collateral.

All of those known major risks—none of which are unlikely to blow up this year—have gathered as elements of economic chaos around the year 2024. That is considerable risk of economic collapse. It is not that all of the things listed above will break down, but that it only takes one or two to break to start a slide as controlled as an avalanche when so many troubles overhang the economy that are ready to break loose.

I’m not saying we will wind up in the Great Depression II this year, but we will feel the swift momentum of the avalanche of economic collapse under our feet this year from some of these forces for chaos, if not all, and we’ll likely witness some new inventions in bank and maybe even business bailouts to make it through. We can be sure of bailouts wherever trouble hits because this is an election year, and no president gets re-elected if the economy fails. America votes it pocketbook. So, even if the Fed doesn’t cooperate due to inflation, the government will intervene at great additional cost to the already downgraded national debt.

Yet, that stack of troubles is not the half of it.

Getting into the full belly of this looming abyss may take a little longer than a year—maybe another two or three years, maybe even longer than that because there is a lot of decay and bad design to be exposed in our financial structures. Here’s a partial list to capture the scale of troubles that fill our economic system right now:

• massive unplayable debts in business and homes and government;

• exploding interest burdens for government and business and consumers as rates rise on those existing mountains of debt where interest was once almost non-existent;

• gross overvaluations of stocks and homes;

• cancerous corporate conglomerations where large businesses consumed bad businesses during defaults and have indigestion from the consumption that they are not admitting to;

• grossly imbalanced distribution of wealth and the rage that may finally come out of that when the rich get bailed out again and the poor get poorer;

• the failure to ever restore regulations against financial greed that was once not tolerated, such as stock buybacks, because the greedy want those things in order to turn the stock market into a casino for the rich, and such as the needed return of Glass-Steagal, which kept greedy bankers from becoming so deeply involved in stocks and other speculative investments;

• stock-trading algorithms where the inventors don’t even know how the algos are playing the market and playing each other anymore because they were designed to rewrite their own code based on what they tried that worked or failed;

• and AI that could take over those mischievous algorithms unbeknownst to anyone for reasons that may have nothing to do with the investor’s wishes.

That is not intended as an exhaustive list of the kinds of things we know are lurking beneath the surface. It’s just enough to give a sense of how riddled with flaws the economy is. So, it is certainly a downhill road from where we stand once things start to break.

Then, of course, we have the WEF talking up the possibility of the next pandemic to such a degree that some think it is planned (and it may be) while shutting out knowledge of damage from the vaccines created by companies that were assured under Operation Warp Speed of never facing law suits if their rush to a vaccine resulted in serious injuries or deaths, thereby heightening their willingness to take such risks with people’s lives in order to make quick money and big money. The WEF, of course, is planning the course of the whole world with no input from average people, but it is deeply dismayed this year to find out how many people are resisting its plans.

There is just too much potential bad news, deeply entrenched greed and even corruption built into this morally rickety, often Fascist, top-heavy economic framework built to serve the top 10%, but especially to obscenely enrich the top 1%.

As the Fed’s tightening causes some structural members of our economic framework to crack where these problems have burrowed in like termites, we can be sure the Fed has limited knowledge about where those cracks will appear—like the limits on its ability to see the banks that were going to break in 2023 and do something about it in 2022 to make sure that didn’t happen. The Fed’s foresight has always been as horrible as their oversight, missing so many major problems until they blow up. Because they don’t ever seem to know where the breaks will cure, we have seen that they always resolve the problems they helped create with massive new emergency bailout programs that form the next set of troubles. (As I laid out years ago in my little book.) They are like an arson who runs around putting out fires he set.

We also saw in 2020, as I said in earlier years would be the case with the Fed’s next bailout programs, that the Fed was dead—dead in terms of its ability to rescue its own failed rescue programs any more. The Law of Diminishing Returns for Fed rescue went full vertical, so markets went vertically down and were unrestrained by Fed intervention. The basis of my prediction was that we had already seen that each new round of QE had to be larger than the last and run longer in order to rescue us from the collapse that started as soon as the earlier round of QE ended (the dynamic of the cycles that I laid out in that easy to read and often humorous little book).

That was revealed in 2020 when we saw the Fed pull out all the stops with its largest QE EVER, and the stock market still kept crashing headlong into the abyss anyway. It took the full power of the US government joining the Fed by turning Fed funds into helicopter money to finally get enough rocket power needed to arrest the fall because the Fed, left on its own was dead. It’s programs had finally reached their limit.

So, what happens this time when things break apart? Will the joint power of Fed and feds be enough to stop the fall? Or do diminishing returns now mean even that joint power will not be enough to stop the crash. This time the Fed has inflation to fear, which will make them reluctant to do as much, considering how much inflation their last joint rescue fueled. Prior to that 2020 massive heap of bailouts, the Fed couldn’t get inflation up when it tried.

That makes this a different world now to where, if the Fed does join forces with the government in doling money to the masses again, we could finally see that hyperinflation or something close as we pile new inflation onto the current inflation that is already rising again on its own. We know the Biden government is highly prone by philosophy to dish out the dole, and that it also needs during an election year to take that route, but its harder to say what the Fed will due because it doesn’t likely want to be blamed for even worse inflation that wills cream failure of its last attempt to the public. So, that is running ahead of the game for now. I’m just saying that different chemistry during the next crisis is why bailouts will likely fail when that time comes, and any failure of bailouts adds to the chaos.

In the midst of all these possibilities for chaos, we have now come into the presidential election year. If you are inclined to believe the major elements above look like impending chaos, they are only half the picture compared to what this election likely adds. While I’ve made the recounting of some of the many major chaotic pressures that are building available here for free to all readers, the rest of this Deeper Dive, covering my predictions regarding the election, are for paying subscribers only because a guy has to make a living (and it’s not a big one) if he is going to devote so much time to covering all the news on this and thinking it through. However, I wanted everyone to have a more complete sense of why I am saying 2024 will be “The Year of Chaos.”

It will be no small thing to face, and this election year is going to make all of the above so much more inflammatory.

Before I go into the election year, let me lay out my preferential bias for the election:

My own predilection for the election is simple. I can’t stand either candidate at all. I deplore them both. Really, truly, deeply cannot stand them for more reasons than I can give here, but I’ll give a few.

Let’s start with the Demonrats: I loathe the way Dementia Joe’s liberal policies are damaging our society. I’m also surprised the man hasn’t killed himself by falling over his own feet or tipping over his bicycle and breaking his head. Good thing for him he wears a helmet. He should wear one when walking or standing at a podium, too. The only thing that scares me more than NoMoJo is that Mamala could wind up replacing him when his brain short circuits completely upon his next fall.

I hate the way Jumpin’ Joe leaped out of Afghanistan by empowering some of the world’s most extreme terrorists with ship loads of some of the world’s most powerful conventional American weapons while leaving Afghans who supported us standing on airstrips, hoping futilely to be transported out before the Taliban swept in and possibly killed them. It was a despicable breech of trust with the better people in Afghanistan and embarrassing for our nation.

I deplore him for using LGBTQ+++ as the primary basis for deciding whom to hire in government, putting in place people who’s primary goal AND QUALIFICATION is not great education or great health, etc, but just stuffing as much LGBTQ indoctrination into society as he can. I despise the whole let’s play “The Emperor’s New Clothes” by pretending people actually can change gender even though NO ONE has ever come close to pulling off a full transformation, and I despise the way he and his are forcing people to use speech that affirms such changes as real even with people who haven’t even attempted the transformation yet; but mostly I despise how they are teaching children that such miscreation of their own flesh can really change their gender. These are the true deplorables, and the children are Le Miserables.

I am disappointed and was personally hurt financially by the fact that Biden turned out to be every bit as divisive as Donald Trump in how he pitted citizens in a sharp divide against each other. He did this by stating emphatically that the unvaccinated were the cause of Covid’s spread. I hate the way his government censored me and many others from sharing anything outside the government’s chosen narrative about Covid. I hate his dictatorial ways of forcing people to inject experimental government drugs into their bodies by cutting off their livelihood entirely if they refused. It was the most autocratic, nearly Hitlerian government I’ve ever witnessed right down to the vaccine ID ghettos for the Great Unvaxxed.

There is plenty that I cannot stand about Sleepy Joe Biden. This is just the short list, as example. It could easily be expanded into an article.

Now let’s turn to the Republicants: They cannot seem to accomplish anything, even when they were fully in power! I deplore their chosen orange leader, Trump. I like that fact that he fights tenaciously for conservative causes because conservative people are his only base; but I think he also stirs up a massive backlash against those causes by how divisively he goes about it. We need someone who can push for the causes, but also plant them as solidly legitimate and hard to stand against in the minds of most Americans—someone who can, like Reagan, build a majority consensus around reasonable ideas and make bad ideas laughable. Trump laughs at his enemies, not their political ideas.

I would like the fact that he takes down liberal media for their fake journalism and bias if he actually made them reform or go out of business by doing by it; but he makes such a media carnival of reality TV out of it that I think it is all just Roman-arena entertainment for the masses, more than an effective takedown of biased journalism. It all became the White House edition of reality TV, and I think he thrives in all aspects of his life on negative energy, meaning he absolutely loves to watch a good fight; therefore, he creates as many fights, even within his own cabinet, as he can, just like he did on The Apprentice, because it is great entertainment, not because it is great management. He even loved to watch the heavy-weight champions in his own cabinet go at it like a cock fight. He’d sit back then say, according to others who were there, “Boy, they really went at it, didn’t they?” But this is government, not entertainment, and we need someone who can bring a deeply divided nation together, rebuild a sense of shared values and who can govern. That would be a nearly impossible job for anyone after the last seven years; but Trump certainly will never be able to do any of that. It’s not in his character or his skill set.

Trump even failed to do many of his biggest campaign promises that he bloviated about, assuring us they would be “easy, so easy, just you wait and see.” For example, he didn’t replace Obamacare. He didn’t even repeal it when congress was fully controlled by Republicans. That was a gross failure of leadership that happened because he made no creative effort to galvanize his own party behind a plan that was “a great plan, the best plan ever” because he had no such creativity. He waited for Republicans in congress to come up with a plan, instead of leading them, because he never had a plan and never put together a team that could create a plan. Yet, he told us, “It will be perfect plan, the best plan ever. Just you wait and see. And, you know what, it will be easy, SO easy!” Easy, my eye. With four years in office, neither he nor the Republicant congress ever presented anything that looked remotely like a real plan at all! And, you know what? If you cannot present a well-integrated plan that clearly beats the plan you have in place, then, of course, you will fail to repeal the plan that is in place because it’s obvious to most people you don’t really have an alternative to offer. So, he’s a loud mouth that can’t deliver because he’d rather provide reality-TV entertainment than do real day-in-day-out hard brainwork with congress to work out a thorough plan.

He didn’t get Mexico to pay for a wall either. Not even close. Neither import tariffs nor export tariffs are paid by Mexicans. Import tariffs are paid by the American importer and passed on to American consumers. Export tariffs are paid my American producers, but the American producers had limited leverage to pass those costs on to Mexican consumers because they cannot afford it, so they went elsewhere. When you place import tariffs, you can entire your whole population into paying them or into also buying from other nations. When you place export tariffs, it's usually in order to limit the export of things your own population needs, such as limited food or limited rubber in times of war, because all the countries you export to can often just go to other nations in many cases, which Mexico did. So, it doesn’t do much to them.

In fact, very little of those tariffs even got passed along to Mexico as price adjustments. Also, no money from tariffs went into a wall fund. It went into the general fund that pays for everything. The money Trump was able to get for building the wall was all scrounged out of ALREADY-APPROPRIATED military funding that he repurposed. Fine, but it was approved for the military before tariffs went into play. So, it was not money from Mexico. The rest came from crowdsourcing his own voters, who paid for most of what got built. So, the whole “and you know what? Mexico will pay for it, and that will be easy” was bull$h!+ from the get go.

I hated everything about his risky warp-speed development of a vaccine for a disease that mostly only killed people who were close to dying anyway, and I especially despised his effort to make certain that warp-speed happened by indemnifying the drug companies from any damages their rushed drugs eventually created. That law assured drug companies would take huge risks in order to become the ones to profit first and most because little could be held against them if they killed people.

I hate how he used government money to fund the development of the most widely experimental vaccine in history and then used government money to buy huge amounts of drugs the government paid to develop in the first place and used government money to pay to have it injected, as well. He funneled hundreds of billions of dollars to rich MEGA Pharma. (Might as well call it MAGA Pharma under Trump because that is pure economic Fascism!) I hate how he gave Dr. Fauci the bully pulpit, standing right behind him, on a daily basis and how he gave him greater power than anyone in that position ever had.

I hate the way Trump initially went along with national lockdowns that devastated the country economically to such a huge extent that we are still struggling under the damage created, and I hate how he created massive bailout programs to curb the damage of those lockdowns, which were misused and exploited by major corporations that didn’t need them because their buyback money would been enough, had they not used so much of it to enrich themselves for years, including his own private corporation, and how all of that eventually delivered the huge inflation that I said it would while he was still in office. (Obviously, it takes time for those trillions of dollars to disperse through the economy and drive up prices, but I showed how it would do so while he was still in office).

I hate how he was a big mouth about locking up Killery Klinton but then said she was “good people” and let her go. I hate how he drained the whole swamp into the White House, putting the military top brass in charge of everything, putting notorious war mongers like John Bolton in high positions of influence, and putting Goldman Sachs execs and ivy-league bankers in charge of all financial and commercial departments of government. He gave more ear to Jerod Kusner and the lovely and sweet Ivanka than to the grizzled and irascible Steve Bannon, whom he kicked out and for what? I never saw a swampier White House in my life.

Then, when his team failed him, as they almost always did, he blamed them for being morons, instead of himself for failing the primary job of a good leader, which is assembling a great team. The buck stops with the guy who constantly hires all the people he calls “idiots.” And, yet, it was OBVIOUS that many of them were gross swamp creatures before he hired them, and I pointed all of that out before he was inaugurated. So, no, Trump did not EVER show he was playing 40-D chess by keeping his enemies close. It was nothing but a zoo if miscreants the entire four years. He was not a victim. He empowered them! He is a snake-oil salesman and a narcissist who would readily rip the nation to shreds to save himself from becoming a “loser” because that is exactly how narcissists act.

America never felt worse to me than it did after four years of Trump … well, until Joe Biden was put in charge! My experience of Amerika has gone downhill consistently since George Bush II put us into a war in Iraq that America needed like a dented head and drove the nation for eight years headlong into the Great Recession and then gave up on his “capitalist principles to save capitalism”—except that he really gave up those principles to save the worst of Capitalist pigs. It was pure socialism once it came to dealing with their losses. Obama, then, continued those programs and created more and bailed out and protected everyone from prosecution who created the Great Recession, just as Bush had done. He also, of course, liberalized American politics more than Clinton had done. Trump turned the whole of America into entertainment television for the masses, set us all to hating each other and put the swamp in charge of everything. Then Biden turned America into a Wonderland of gender fantasy over reality and drove a vaccination needle like a wedge to divide the country in hatred as he walked around on stage like a zombie shaking hands with dead people. There is nothing about the way America changed under any of those presidents that I like! It has just consistently gone downhill faster. If I could do anything, I’d throw the lever into reverse for about forty years, and get back to where things were, at least, reasonable—back to the days when we all said, “I may not agree with your opinion, but I’ll fight to death for your right to have it and express it.”

So, my predilection for the election is that both candidates die or, more kindly and Christianlike, simply be replaced by their parties with true statesmen like George Washington or Abraham Lincoln; but that’s never going to come from the two clown cars that control American politics. Now that you know my own intense bias against either candidate, I will go on to show how and why this election will bring more chaos than we’ve ever seen … from both sides … regardless of who wins (guaranteed, and it will be easy, so easy just you wait and see.)