Tag: economy

Is The Federal Reserve Purposely Trying To Destroy The U.S. Economy?

Oops, they did it again.  Even though the housing market has been in a depressed state for an extended period of time and even though economic conditions are slowing down all over the country, the Federal Reserve has once again refused to lower interest rates.  What in the world are they thinking?  I certainly share President Trump’s frustration with the Fed.  Central banks all over the world have been cutting rates, but our central bank just won’t budge.  Have Fed officials gone completely insane, or are they purposely trying to destroy the U.S. economy?

Those that have been following my work for an extended period of time already know that I am not a fan of the Federal Reserve at all.  And now we have another very clear example of the Fed’s lack of competence…

There were two Fed governors that did not agree with this decision.  This was the first time since 1993 that more than one Fed governor has dissented…

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Western Pressure On India Over Russia Already Backfired Even If It Partially Complies

India’s former Permanent Representative to the UN Syed Akbaruddin recently published an informative opinion piece at NDTV titled “Tariff Blitz: Is India Becoming Collateral Damage In Someone Else’s War?”

The gist is that the West, via Trump’s threatened 100% sanctions on Russia’s trading partners upon the expiry of his deadline to Putin for a ceasefire in Ukraine and the EU via its new sanctions barring the import of processed Russian oil products from third countries, is putting undue pressure on India.

They can’t defeat Russia on the battlefield by proxy, nor will they risk World War III by taking it on directly, so they’re going after its foreign trade partners in the hopes of eventually bankrupting the Kremlin.

This is counterproductive though since their threatened sanctions could torpedo bilateral ties, push India closer to China and Russia (thus possibly reviving the RIC core of BRICS and the SCO), and spike global oil prices, which hitherto remained manageable due to India’s massive imports from Russia.

Nevertheless, partial compliance is also possible due to the damage that Western sanctions could inflict on the Indian economy, so it can’t be ruled out that India might curtail its aforesaid imports and no longer export processed Russian oil products to the EU.

Full compliance is unlikely though since India would risk ruining its ties with Russia, with all that could entail as was touched upon here, while reducing its economic growth rate through higher energy prices and thus offsetting its envisaged Great Power rise.

Even in the scenario of partial compliance, however, Western pressure on India over Russia already backfired.

Their coercive threats and the very real consequences for no compliance whatsoever, presuming that exceptions can be made for partial compliance, are reshaping Indian policymakers’ views of the West and breeding resentment of their governments among its society. The “good ‘ole days” of naively assuming that the West operated in good faith and was India’s true friend will never return.

This is for the better from the perspective of India’s objective national interests since it’s more useful to have finally realized the truth than to keep having illusions about the West’s intentions and formulating policy based on that false perception. Conversely, this is for the worse from the perspective of the West’s hegemonic interests since their policymakers can no longer take for granted that India will naively go along with whatever they request and blindly trust its intentions. This new dynamic might lead to rivalry.

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War Bankrupts Empires, Nations & City-States – Here We Go Again

France was on the brink of its Fifth bankruptcy in 1720. France defaulted in 1558 under Henry II, following the costly Habsburg-Valois Wars (also known as the Italian Wars), the outright repudiation of debt, and currency devaluation. Then in 1648, a Debt Crisis occurred under Louis XIV (Early Reign) with the Thirty Years’ War (1618–1648) and the Franco-Spanish War (1635–1659). Louis XIV suspended payments and manipulated currency. Then, in 1661, there was another financial collapse under Louis XIV, when Finance Minister Nicolas Fouquet was arrested for corruption. Jean-Baptiste Colbert later reformed finances, but debt remained high.

Then, in 1715, France fell into bankruptcy following the death of Louis XIV. The War of the Spanish Succession (1701–1714) left France deeply indebted. The regency of Philippe d’Orléans implemented the Visa of 1715, a partial debt repudiation. This brings us to 1720 and the collapse of the Mississippi Bubble (John Law’s system), for which history blamed him without examining France’s chronic debt problems. John Law’s speculative financial scheme collapsed, resulting in hyperinflation of paper money and a banking crisis. The French government defaulted on its obligations.

This was followed by the 1770  Bankruptcy under Louis XV. The Seven Years’ War (1756–1763) and financial mismanagement led to another debt crisis. The Finance Minister Étienne de Silhouette and later René de Maupeou imposed austerity and partial defaults.

Then, just 19 years later, this brings us to the debt crisis that sparked the 1789 French Revolution. The Pre-Revolution Financial Crisis was when France was effectively bankrupt under Louis XVI, leading to the Estates-General and the French Revolution (1789). The revolutionary government later repudiated royal debt.

Then, 23 years later, we come to the 1812–1813 Financial Crisis under Napoleon. The Napoleonic Wars drained French finances. The government resorted to forced loans and currency debasement. Just 5 years later, we come to the 1818 Post-Napoleonic Debt Restructuring. After Waterloo (1815), France struggled with reparations and debt. The Duc de Richelieu negotiated loans to stabilize finances. It is a wonder why anyone lends to governments that always want war.

We arrive at the next Revolution in 1848 and the 1848  Financial Crisis during the Second Republic. The February Revolution led to a credit crunch. The government imposed emergency financial measures, as it was unable to meet its debts, given that this was a socialist revolution against the wealthy.

Never learning from the past, which they always seem to assume is gone, we again arrive at the 1871 Post-Franco-Prussian War Bankruptcy Threat. Here, France had to pay 5 billion francs in reparations to Germany after losing the war. The government took massive loans (e.g., Morgan Loans) to avoid default. This was also why France demanded reparations from Germany after World War I, which resulted in bringing Hitler to power in 1933.

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Democratic Party posts Biden-era price hikes in widely-mocked X post attacking Trump

A tweet from the official Democratic Party’s X account was ridiculed on Thursday after inadvertently showing prices skyrocketing under former President Joe Biden.

The post attempted to describe rising grocery prices under “Trump’s America” using a graph dating from October 2019 to 2025. The graph claimed that “U.S. Grocery Prices Reached Record Highs in 2025” with prices “higher today than they were on July 2024” in categories such as dairy, produce and meat.

However, many X users pointed out that the graph, in fact, showed prices skyrocketing in 2021 when Biden was president and only leveling off at the end of 2024 when President Donald Trump was re-elected.

“You’re showing us a graph of stable prices suddenly rising the moment you came into power and then steadily rising higher and higher until Trump was reelected,” political commentator Chad Felix Greene wrote.

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Bank Branches are the Latest Creative Destruction Casualty

Over 8,000 bank branches are expected to close worldwide in 2025. Approximately 3,200 of those closures will take place in the United States. Q1 experienced 148 net branch closures in the US, with all major banks slated to close branches throughout the year.

These are merely bank closures and not bank failures, although two smaller US banks did fail this year. People simply prefer online banking as we have made the switch from relational to transactional banking.

Bankrate conducted a survey that found 77% of Americans prefer online digital banking, yet other surveys believe the figure is closer to 89%. Digital banking has been rising in popularity in recent years, up from 203 million domestic users in 2022 to the 216.8 million projected users in 2025. The survey found that 34% of consumers use online banking on a daily basis, consistently checking their account and transactions. There has even been a 19% increase in use among the 65+ crowd who is least likely to use digital services.

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No Escape From Washington’s Fiscal Doomsday Machine

If you don’t think Washington is in the maws of a Fiscal Doomsday Machine, think again.

And the place to start is with the 30-year CBO projections—expressed as the dollar increase from the current $29 trillion level of publicly held US Treasury debt.

To wit, if Washington does nothing except leave current tax, spending and structural deficit policies in place (i.e. baseline policy), the publicly-held debt will grow by $102 trillion over the next three decades, reaching a staggering 154% of what would be $85 trillion of GDP by 2054.

Moreover, that outcome assumes that Rosy Scenario does not loose her footing for even a moment through the middle of the century. Stated differently, the underlying CBO projections presume that there will be no recession during the 34 year span from 2020 to 2054, and that, in fact, there will be perpetual full-employment at about 4% from here on out.

Of course, during the last 30 years there have been three recessions (shaded area) and no such full-employment perfection was even remotely achieved. The short spells of 4% unemployment or under, in fact, were few and far between—in stark contrast to the CBO baseline which presumes 4% unemployment year after year until 2054.

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Report: California’s $20 Fast Food Minimum Wage Led to 18,000 Fewer Jobs

California’s new $20-per-hour minimum wage for fast food workers has resulted in a significant decline in employment in that sector, leading to 18,000 fewer jobs than would have been the case otherwise.

That’s according to a new paper released by the National Bureau of Economic Research (NBER) this month, which said:

We analyze the effect of California’s $20 fast food minimum wage, which was enacted in September 2023 and went into effect in April 2024, on employment in the fast food sector. In unadjusted data from the Quarterly Census of Employment and Wages, we find that employment in California’s fast food sector declined by 2.7 percent relative to employment in the fast food sector elsewhere in the United States from September 2023 through September 2024. Adjusting for pre-AB 1228 trends increases this differential decline to 3.2 percent, while netting out the equivalent employment changes in non-minimum-wage-intensive industries further increases the decline. Our median estimate translates into a loss of 18,000 jobs in California’s fast food sector relative to the counterfactual.

HR Grapevine added:

The Employment Policies Institute estimated that “non-tipped restaurant workers [lost] 250 hours of work annually,” translating into up to $4,000 in lost income. That drop equates to seven weeks of work each year per employee.

The California Globe reported that “thousands of fast food jobs were shed by companies in anticipation for the higher costs,” including 1,200 drivers at Pizza Hut. Once the law took effect on April 1, 2024, “restaurants automated what they could to avoid the higher wages,” and “some fast food restaurants also closed.”

By June 2024, Stanford University data indicated “over 10,000 fast food jobs were already lost.” While the Governor’s office disputed the figure, saying fast food jobs had increased, it “stopped by the fall when it became apparent that federal data wasn’t on their side.”

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China’s Economic Demise And Its Impact On The US

Few are as candid and historically accurate as hedge fund manager Kyle Bass when identifying structural breaks in the global economy. In a recent interview, Bass painted a grim but telling picture of China’s economic condition, warning:

“We are witnessing the largest macroeconomic imbalances the world has ever seen, and they are all coming to a head in China.”

While China has long been touted as the next great economic superpower, its recent trajectory reveals a far different story, one marked by policy missteps, systemic financial rot, and a rapidly eroding growth engine.

Bass didn’t mince words either:

“China’s economy is spiraling with no end in sight.”

China’s GDP deflator, the broadest measure of prices across goods and services, continues to decline as economic activity erodes.

For investors around the globe, this isn’t just a regional concern; it’s a seismic macroeconomic event that will ripple through capital markets. The implications are significant for U.S. investors because when global economies falter, especially one as large and interconnected as China’s, capital doesn’t just vanish. It moves. That movement will significantly impact U.S. assets as flows transfer back into U.S. dollars and Treasury bonds. This global repositioning of capital isn’t merely a symptom of market volatility; it reflects a profound reevaluation of risk in the face of deteriorating confidence in China’s financial system.

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Macron’s Globalist Economic Betrayal: Poverty Levels Rise to Unprecedented Levels in France

Under Emmanuel Macron’s leadership, France is grappling with a poverty crisis not seen in three decades. Instead of fostering self-reliance and growth as promised during his presidential campaign, his policies have fueled dependency on temporary government handouts, leaving millions in dire straits as those crutches are withdrawn.

According to the latest data from INSEE, France’s national statistics agency, poverty shattered records in 2023. A staggering 9.8 million people—roughly 15% of the population—fell below the monetary poverty line, defined as monthly income under 60% of the median (about €1,288 for a single individual). That’s an alarming increase of 650,000 people in just one year.

“This marks an unprecedented surge in nearly 30 years,” observed Michel Duée, director of INSEE’s household resources and living conditions division. To find comparable levels, one must look back to the economic turmoil of the early 1970s.

The root cause? The abrupt end to short-term “exceptional aids” like inflation bonuses and back-to-school payouts introduced in 2022 to prop up purchasing power. As these fiscal band-aids expired, reality hit hard.

Hardworking self-employed individuals and micro-entrepreneurs have borne the brunt, their livelihoods eroded by bureaucratic hurdles and economic stagnation. Meanwhile, indicators of hardship are exploding, utility shutoffs for unpaid power and gas bills have skyrocketed and rental evictions are surging at an unprecedented rate.

Most heartbreakingly, single-parent families, predominantly led by dedicated mothers raising children alone, are suffering the worst. Their poverty rate jumped nearly three percentage points from 2022 to 2023, dragging more children under 18 into destitution.

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From the eggs to the courts: A clash over animals, eggs and affordability

In an escalating federal-state battle over food policy, the Trump administration this week sued California over its animal welfare laws, alleging they drive sky-high egg prices. The lawsuit, filed July 9 in Los Angeles federal court, argues California’s ballot initiatives—which banned restrictive hen cages and set space requirements for farm animals—violate federal authority. Agriculture Secretary Greg Zoeller called the state standards “bureaucratic red tape” suppressing supply and hiking costs in a market already strained by avian flu outbreaks.

Legal battle over animal welfare standards shelved under the spotlight of price increases

The lawsuit targets two key California laws: Proposition 2 (2008) and Proposition 12 (2018). These measures mandated that egg-laying hens, veal calves and breeding pigs be allowed to stand, lie down and turn freely without cages—a rule applied to all eggs sold in California, including out-of-state imports.

The Justice Department claims these voter-approved requirements conflict with the 1970 Egg Products Inspection Act, which grants federal regulators sole authority to set safety and quality standards. “California has blocked affordable farming practices,” argued Assistant Attorney General Brett Shumate, citing a 20% statewide price hike post-Proposition 2.

Critics, however, frame this as a repackaging of the administration’s prior inflation-fighting rhetoric. “This is another chapter in Trump’s crusade to dismantle humane laws while blaming states,” said Humane Society director Kitty Block. Her organization points to studies linking crowded cage systems to salmonella risks—arguments unresolved in Friday’s filing.

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