Category: Daily Insights

When we left off yesterday, we were exploring the idea that it could possibly be Springtime for America and our economy.

I would have immediately rolled my eyes had I heard someone make such a statement eight months ago. After all, it’s been clear for a while now that we’ve been hurdling towards a sovereign debt crisis in this country.

Yet, the US government continued to run massive deficits and pile up even more debt regardless. It was like they were intent on skimming every last cent from their grift before the train sped over the cliff.

The only way to avoid that fate is for the government to get its fiscal house in order. And soon. Nearly $17 trillion worth of US Treasuries are coming due over the next three years. That’s almost half the national debt.

Since the US government runs budget deficits each year, the only way it can repay those bonds coming due is by issuing new bonds. But will the market step up to buy $17 trillion worth of newly issued Treasuries over the next three years?

Given that the federal debt didn’t hit $17 trillion until 2013, it took the US government 224 years to amass that level of indebtedness. And now it has to re-issue that much in just three years’ time?

That’s simply not going to happen if the government continues to run $2 trillion budget deficits each year. Because we’re talking junky-level financial management here. And who’s going to lend $17 trillion to a junky?

The good news is that there is hope. As cynical as I was about this eight months ago, there’s now a path forward to a balanced budget and fiscal sanity.

Continue reading “The Path to Fiscal Sanity”

Spring has finally sprung here in the mountains of Virginia. Winter’s last ride is over.

It has been a while since I’ve written to you… everything is moving fast in the world of finance and economics. It’s a lot to keep up with, and there’s always a tug-of-war between narratives and counter-narratives out there. But I’m starting to wonder—could it be Springtime for America as well?

Things that I didn’t think were possible are starting to happen. Ideas that were once considered extreme are starting to circulate. Here’s one of them:

Think about it—Donald Trump announces the External Revenue Service, and his goal is very simple… his goal is to abolish the Internal Revenue Service and let all the outsiders pay.

You see, Musk is going to cut $1 trillion – that’s his job. And then we’re going to get rid of all these tax scams that hammer against America, and we’re going to raise a trillion dollars of revenue. That’s how we’re going to make America great again!

The above quote came from newly appointed Commerce Secretary Howard Lutnick at an interview last month. Lutnick is the CEO of investment giant Cantor Fitzgerald – which also happens to be one of the 24 primary dealers within the Federal Reserve System.

This is quite a privileged position to be in. The primary dealers bid on US Treasuries at auction and receive direct access to the Fed’s cheap financing through the discount window and repurchase (repo) agreements.

All that’s to say that Lutnick is a true insider. He’s attuned to the plumbing that underlies the dollar-based financial system. And here he is talking about abolishing the IRS…? How’s that for a sea change?

Continue reading “Springtime for America?”

Hey friends – I have a short note for you today to close out the week…

I’m happy to say that we’ve had a real winter up here in the mountains of Virginia—for the first time in several years. The ground’s been covered with snow for most of February.

Here’s the latest:

I’m not sure what could be more beautiful than this. Appalachian winter in all its glory.

Meanwhile, America’s Great Reorganization continues to get more and more interesting. Now the Secretary of Commerce is out there telling people that the goal is to cut $1 trillion in spending, create $1 trillion in revenue by monetizing assets… and then to abolish the IRS and get rid of the income tax.

If they are serious about creating a golden age for America – I’m not sure anything would do the trick better than scrapping the income tax. Just imagine…

I’m not getting too excited yet. Talk is cheap, as a wise man once told me. But there’s no doubt that this is all getting very interesting.

I’ll have more nuanced updates for you soon. But until then, I’d like to invite you to give the Remnant Finance Podcast a look. The hosts invited me on this past week and we had a great discussion spanning macroeconomics and a whole host of other topics.

You can find our podcast episode below. But it’s one of many great episodes available in the Remnant Finance archive. The hosts are naturals and the topics are always interesting and relevant. This has become a can’t-miss podcast for me each week.

I attended my daughter’s dance class at a historic Appalachian opera house this week… and I was struct by its design. A local Masonic Lodge commissioned construction of the building, and it opened its doors in 1906.

The theatre was originally known as the Mason Hall and Opera House of Clifton Forge. Today it’s known locally as the Masonic Theatre. Here’s a shot I took from the balcony.

I’ve never been to a play or a musical of any kind – I suppose I’m about as uncultured as one can be in that regard. So I didn’t know those elevated opera boxes were really a thing.

I read through a little bit of the theatre’s history as I waited for the dance session to start. Old Western movie icons Lash LaRue and Tex Ritter once performed on this stage. And apparently William Jennings Bryan gave a speech there during his final presidential campaign of 1908.

Then I found my way to the underground level out of curiosity – and I was equally impressed. It seems the building was built directly over top of a creek that flows into the Jackson River, which snakes through the region. Check this out:

Continue reading “The Breadcrumbs and the Golden Age”

We’re talking about reality and fantasy this week.

For those just tuning in, the adoption of a purely fiat monetary system – where governments and central banks print money at will – created a fantasy world.

Trillions of newly created dollars have poured into the economy over the last few decades. Those new dollars stole purchasing power from the dollars already in circulation and pushed interest rates to zero—making credit widely available, even for destructive projects.

In that world, governments behaved as though they had infinite amounts of money to spend… because they seemingly did. The US government ran up a debt bill of over $36 trillion over a period of about 50 years.

If we average this out, the US government had to spend $2 billion per day to accomplish this. That’s over $83 million every hour. How’s that even possible?

And here’s the kicker – these figures only account for the money that they spent in excess of tax revenues.

If we look at the federal budget by year, the US government has spent roughly $150 trillion since 1970. That’s $7.6 billion a day or $317 million an hour.

Now think about this – if we go back to 1980, there was less than $1.6 trillion in circulation. That’s the total amount of money that existed in the economy.

Classical economist Frédéric Bastiat wrote in 1848 that: “the State is the great fiction by which everyone tries to live at the expense of everyone else”.

What we’ve just lived through is that observation on steroids. And the DOGE (Department of Government Efficiency) audits that are starting to come out confirm this in a big way…

Continue reading “The Great Fiction – in Evidence”

It’s time to get back to reality.

If we step back and look at our world objectively, the age of central banking and fiat money perpetuated a fantasy world. Interests rates always went down, stocks almost always went up, and the government could print money for any and all manner of bone-headed and sometimes evil programs.

With the tie to gold severed in 1971, our dollar became a floating abstraction – something that could be created ex nihilo, nihil fit. That’s Latin for nothing comes from nothing.

If we look at the chart, interest rates fell consistently from 1982 until 2008. Then they hit the floor, seemingly lifeless.

In 2008, Federal Reserve (the Fed) Chair Ben Bernanke announced that the age of global central bank coordination had begun. Their plan was to fix interest rates at zero and leave them there for the foreseeable future.

There are two things to note here…

First, it took globally coordinated policy to push rates to zero and keep them there. No single central bank could have pulled that off on their own… because market forces always work towards equilibrium.

Perhaps more importantly, interest rates are by definition the price of money. They are the cost of borrowing money.

When interest rates are zero – what does that say about the money?

Continue reading “Exiting the Fantasy World”

After nearly a month of frigid weather, the snow has finally thawed here in the mountains of Virginia. The temperature surpassed 40 degrees over the weekend… and it felt like Spring.

I already miss the winter wonderland. There’s something beautiful about seeing a white landscape in all directions.

I could go for another month of this view. Alas, it’s time to get back to reality. And that’s exactly what we have to do in the world of finance and economics as well…

If we step back and look at it objectively, we can see a clear shift in American society several decades ago.

Continue reading “Getting Back to Reality”

Hey friends,

Just a quick update on my homeschooling series from last week – for those who are following along. And thanks to everyone who responded with support and ideas. I can’t tell you enough how much I appreciate it.

As a quick refresher, a state senator in Virginia put forth a bill (S.B. 1031) that would eliminate the religious exemption for homeschooling in the state. It’s nothing more than an overt attack on homeschool freedom and religious liberty.

When we left off last week, I attended the Education and Health subcommittee hearing at which they planned to review and vote for S.B. 1031. I’d never done anything like that before… I usually try to avoid politics as much as possible.

But in this case I felt compelled to show up and voice my opposition to their attack on liberty. I wanted them to know that they wouldn’t be able to sneak this one in without some backlash. And it seems I wasn’t the only one…

Homeschoolers packed the room for that hearing. It was standing room only two rows deep. So guess what they did?

Continue reading “Fighting City Hall”

We’re talking about the Virginia Senate’s attack on homeschool freedom and religious liberty this week.

As a quick refresher, a senator from Fairfax County put forth a bill that would eliminate Virginia’s religious exemption for homeschooling and managed to push it through to a sub-committee hearing in a matter of days.

The bill is S.B. 1031. It’s a blatant attack on the 0.6% of Virginia’s school-aged children who homeschool under the religious exemption. And that’s it. For the remaining 99.4% of the population… nothing at all changes.

When we left off yesterday, a group of us were waiting outside of Senate Room C to attend the sub-committee hearing and speak out against the bill. They didn’t like that we arrived early… so they made us wait in the hall.

The clerks arrived to let us into the conference room right at the appointed time. They then took their place in front of the hallowed high-back senator chairs in the front of the room – looking very nervous.

Continue reading “The Nature of the Beast”

“Oh, so you’re one of those whackos…”

I was trying to get a read on him as the elderly gentleman approached me. I didn’t sense hostility… but I didn’t sense a kindred spirit, either.

“Yep,” I replied. “Crazy as can be.”

The scene was Senate Room C in the Virginia State Capitol building. I ventured into the Belly of the Beast last week to voice opposition to a senate bill that would eliminate the homeschooling religious exemption in the state.

When we left off yesterday, a custodian had let me into the locked room ahead of the bill’s sub-committee hearing. In turn, I opened the doors for the old man.

As he approached me, he quoted the qualifying requirements encoded in the statute that recognizes the religious exemption for homeschooling in Virginia. Then he asked me directly: “Does this describe you?”

I answered that it did. To claim the exemption, you must submit a written letter to the local school board explaining why you qualify for it. I understood the law well.

“That’s what motivated me to take the day off to be here today,” I explained.

“If one assumes good faith, one would expect every bill proposed to seek to address a clear, objective, and measurable problem. That’s not the case here. This bill would negatively impact a tiny minority group of people… and do absolutely nothing for anybody else. It’s nothing more than an attack on homeschool freedom and religious liberty.”

“You’re right,” he answered – his serious tone unchanged. “But there have been some cases where parents have claimed the religious exemption and then neglected the children. There was even a murder in one family claiming the exemption a number of years back.”

“That’s not specific to the religious exemption,” I stated. “Those sound like instances of individual bad actors. There will always be bad apples… with anything.”

The old man nodded his head.

Continue reading “Uncovering the Agenda”