Tag: economy

DOGE Reveals Mind Shocking Fraud Propping Up Economy

Former Wall Street money manager and financial analyst Ed Dowd of PhinanceTechnologies.com is back with an update of a report on “Danger of Deep Worldwide Recession in 2025.”  It was not just heavy government spending on illegal immigration, but “mind shocking” fraud that has been revealed with DOGE (Department of Government Efficiency).  Investigators have uncovered $115 billion so far with many hundreds of billions more to be exposed.   Dowd says, “Both sides of the aisle are probably going to have problems.  The DOGE revelations are mind shocking.  The clear way in which the government was spending money through NGOs (non-governmental organizations) and people taking kickbacks and profits along the way is going to come out.  There may have been theft along the way.  What business does Stacy Abrams have getting $2 billion for an NGO?  This doesn’t make any sense.  It’s going to be shocking, even shocking to me.  I knew there was rot in the system, but the mind blowing way the NGOs were used to facilitate the illegal immigration just blows my mind.  The 10 million plus illegals that came in over the last four years, you just don’t wake up one day in Central America and say I am going to the Darien Gap, and go to the Mexican border and then meander my way into the interior of the US without a tremendous amount of aid along the way.  NGOs facilitated that and probably took their cut.  What was the all-in economic cost of the goodies they got once they got here?  Plus, the NGOs spent and what the government spent themselves to facilitate this, it’s not hard to imagine $50,000 to $100,000 all-in cost per illegal. . . . This is the all-in cost up and down the entire economic food chain. . . . It was anywhere between $500 billion to $1.5 trillion depending on the illegals.  It was an illegal project funded purposely, and it was very logistical.  It was not something that just happened overnight.”

The result, says Dowd, was the US economy was propped up when it should have already tanked.  Now, all this spending on this illegal invasion is going away.  Dowd says, “When we wrote our report, we were surprised on how fast DOGE would get to work. . . . This is why our thesis is playing out a little quicker than we thought. . . . The housing market was on fragile ground the last year or so.  It was held up by illegal immigrants supporting rent prices.  So, as that unwinds, we think there will be a mini 2008–2009 housing issue.  Housing prices are going to come down, and that is a big driver of consumption in the economy.  That needs to happen because home affordability is off the charts.”

Dowd also see a recession coming as the government downsizes, illegal alien funding gets cut and illegals continue to self-deport.  Dowd says, “Consumer confidence has taken a nosedive recently, and you can see why.  There are 10 million to 15 million illegal immigrants worried about their gravy train coming to an end.  So, they may be holding back on their spending.  There are millions of government employees worried about their jobs.  Then, you have the NGO networks that employ about 6 million people.  So, you have about 20 million to 25 million people that are in the workforce . . . worried about where their money is going to come from, and that can cause consumer spending to slow down.”

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Europe Waves The White Flag: EU Prepares “Term Sheet Of Concessions” For Trump Trade War

In what may be the first clear confirmation Trump’s plan to realign the global trader system is working, moments ago Bloomberg reported that the European Union is identifying concessions it’s willing to make to Donald Trump’s administration to secure the partial removal of the US tariffs that have already started hitting the bloc’s exports and that are set to increase after April 2.  

According to Bloomberg, EU officials were told at meetings this week in Washington that there was no way to avoid new auto and so-called reciprocal tariffs that Trump is launching next week. Discussions also began on what the contours of a potential deal to reduce them should eventually look like.

That prompted the European Commission (which handles trade matters for the EU) to start working on a “term sheet” for a potential concession agreement, which would set out areas for negotiations on the punitive trade measures, including lowering its own duties, mutual investments with the US as well as easing certain regulations and standards.

In short, Europe – led these days by France’s Macron – did what Europe always does when led by the French: it surrendered.

The reciprocal tariffs which will be unveiled on April 2 are meant to strike out against what Trump considers to be unfair levies on US goods as well as non-tariff barriers, such as domestic regulations and how countries collect taxes, including the bloc’s value-added tax, digital taxes and regulations. The EU says its VAT is a fair, non-discriminatory tax that applies equally to domestic and imported goods (for more on the framework for Trump’s reciprocal tariffs, see this).

The news, which is actually rather bad for Europe as it confirms the continent will be unable to retaliate fully and instead will be on the receiving end of Trump’s trade war, sparked a brief rally in the Euro…

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Even if the war ended tomorrow, Ukraine could end up broke by 2026

There is no plan in place to fund the Ukrainian budget after 2025.

Even if the war ends by the summer of 2025, it will take some time to reduce military expenditures, leaving European nations on the hook. It’s not clear that European elites have fully understood the political costs, however much longer the war continues.

With intensive, U.S.-brokered negotiations ongoing in Saudi Arabia involving separate Ukrainian and Russian delegations, hopes are rising that the Trump administration will finally be able to bring an end to the war.

But even if the war ends tomorrow, it would be unwise to assume that Ukraine could reduce military spending close to prewar levels.

Ukraine now has almost 900,000 men and women at arms, a threefold increase from peacetime, and that doesn’t take into account irrecoverable losses through death and injury. Estimates vary widely, but the casualty rate is commonly thought to number in the hundreds of thousands, with compensation provided to the injured and families of the deceased.

The war in Ukraine has therefore come at a vast financial cost to that country. Ukraine’s defense spending has risen tenfold since the 2021 budget was announced, when social welfare payments were the country’s biggest expenditure.

This has left a gaping hole in Ukraine’s finances that no amount of tax increases or Western donations will be able to fill over a sustained period without political consequences.

Since 2022, Ukraine has run an average budget deficit of over 22% of GDP. Based on the current exchange rate, Ukraine’s budget shortfall in 2025 amounts to around $41.5 billion. And that assumes defense spending falling slightly this year. In the hopefully unlikely event that war continues to the end of the year, the Ukrainian state would need to revise its budget upwards as it did in 2024.

Today, Ukraine’s domestic revenue, including taxes, excise, and duties, just about covers the cost of the defense effort, which in 2024 accounted for 64% of its total budget expenditure. That includes significant tax increases as the war has gone on. Total tax revenue will have risen by more than 100% since the war started and personal income taxes by over 200%. This in a country in which, according to the Wilson Center, 50% of the population lives at a basic subsistence level.

As Ukraine is cut off from international capital markets, it has had to meet the difference through aid and loans from Western nations.

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The Economy of Denial: Addiction, Extortion, Deception

Denial doesn’t end well, and the ‘Economy of Denial’ is destined to deconstruction.

Even the most opinionated become circumspect when the discussion turns to The Addiction Economy, for the term The Addiction Economy calls things by their real name, which disrupts our protective shield of denial.

Yes, denial, for ours is an Economy of Denial, where the surface stability of normalcy demands we avoid calling things by their real name at all costs, for that lays bare the core mechanisms of the Economy of Denial: addiction, extortion, deception. This is a jarring, disturbing mirror, for we see our own reflection.

We become quiet when The Addiction Economy comes up, for the core concept here is that highly profitable addictions have been normalized to the degree that the majority of the populace is addicted but doesn’t identify their addiction as an addiction because the words addiction and extortion have such negative connotations that they threaten both our sense of normalcy (i.e. belonging to the safe, stable, acceptable majority) and our self-pride that we’re far above the poor lost souls who succumb to addiction.

Addiction calls up images of illicit drugs and lost souls trapped in destructive dependency. Since discipline and will power are the highly valued engines of accomplishment, we view addicts with disdain, for their emotional craving for immediate comfort and solace has overwhelmed their rational will.

This is why saying that we’re addicted to our phones, social media, snacks, junk food, fast food, novelty, selfies, entertainment, the endless scroll of “news” and all things “money” is so disquieting, as all of these addictions have been normalized. Since “everyone does it,” it can’t be an addiction, right?

The denial isn’t just about recognizing behaviors as destructive dependencies; it’s also a denial of the core dynamic of our economy, which is weaponizing and normalizing our instincts to overcome our rationality. As Charles Darwin observed, “The very essence of instinct is that it’s followed independently of reason.”

It’s natural to seek sources of immediate comfort and solace, and be drawn to sources of novelty, distraction, amusement and belonging that are socially approved. These are our instinctual, hard-wired drives for dopamine hits and endorphin highs.

What The Addiction Economy does is exploit these instincts by engineering products and service to be so addictive that dependency is guaranteed. Given an immediate dopamine hit, rationality and will both dissipate into the ether, and the instinct to get another hit of comfort and solace increases.

Bet you can’t eat just one is the entire goal, and it’s easily amplified / weaponized. But just as important as the weaponization is the narrative control of normalizing destructive dependencies: impulsively looking at our phone hundreds of times a day isn’t like an addict seeking a hit; it’s normal. Turning to snacks for dopamine hits isn’t an addiction, it’s normalized. Everyone snacks, all day long.

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The Darkest Secret Behind Democrats’ Economic Policy

I’m a realist. I understand there’s always going to be hypocrisy on both sides of the political aisle. And I also understand that, as far as politics go, monetary policy is pretty much “the third rail.”

As I’ve always said, if there’s one thing that should alarm you about today’s monetary policy — which is damn close to full-on modern monetary theory — it’s the fact that both political parties agree on it. Are there any other issues that you can think of off the top of your head that both parties agree on and never argue about? I sure as hell can’t.

But while both parties have generally embraced the way the country has run monetary policy, their respective stances on how the country runs fiscal policy are quite different. And therein lies the basis for why today’s revelation matters.

There’s no doubt the United States needs to make dramatic spending cuts to prevent itself from spiraling—either downward into an eventual debt default or upward into hyperinflation. If you want a primer on why that is, I’d recommend listening to this one-hour, simple-to-understand synopsis of the country’s financial position, followed by this appearance by Jim Bianco on the Julia LaRoche podcast a couple of days ago.

Right now, the political climate consists of Republicans taking a chainsaw to anything they can get their hands on in government to cut spending, and Democrats protesting any and all cuts for any reason they can drum up. Hashing out individual issues worthy of cuts is not what this article is about, so we’ll save that discussion for another day.

This article is meant to point out the fatal hypocritical flaw that exists in Democrats’ reasoning as it relates to the country’s financials. Everybody understands the simple idea that if we run up too much debt, the country could, in essence, go bankrupt. But what’s really alarming now is the pace at which we are running up this debt. It’s why this chart of the national debt is going parabolically higher. The number $35 trillion is astonishing — but the rate with which we are moving higher is beyond breakneck.

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US Recession Risks Not As High As The Media Suggests

U.S. recession risks have been a headline over the last few weeks as the markets sold off.

“Goldman Sachs and Moody’s Analytics in recent days joined forecasters raising alarm about the increased likelihood of an economic downturn. The warnings coincided with a market plunge touched off by U.S. tariffs against Canada, Mexico, and China, some of which were delayed. Retaliatory tariffs issued by China on Monday deepened a trade war between the world’s two largest economies.” – ABC News

That concern is interesting as there was no such concern in January.

“As of January, the risk of a U.S. recession was considered small. A low unemployment rate and rising wages meant consumers were continuing to spend, inflation was drifting down towards the Federal Reserve’s 2% target, and the U.S. central bank had cut interest rates by a full percentage point since September. Fed officials considered it a stable foundation for continued growth, and many economists thought the central bank had nailed a “soft landing” from the high inflation of 2021 and 2022.” – Reuters.

Over the last couple of weeks, the market sell-off eclipsed 10% on an intraday basis, sending investor sentiment plummeting to levels usually seen during more significant declines and previous bear markets. While the markets have had a phenomenal run over the past two years, investors seemed to have forgotten that markets tend to correct now and then.

The one thing you can always count on during a sell-off is the media trying to formulate a headline to rationalize investor actions. During this particular decline, it was the return of a U.S. recession.

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LA Budget Crisis, Deficit Approaches $1 Billion, Layoffs ‘Nearly Inevitable’

L.A.’s financial problems exploded into a full-blown crisis on Wednesday, with the city’s top budget official announcing that next year’s shortfall is now just shy of $1 billion, making layoffs “nearly inevitable.”

City Administrative Officer Matt Szabo said Mayor Karen Bass’ proposed budget, which will be released April 21, will close that gap, but it will require difficult “cost-cutting decisions.” He warned that the severity of revenue declines and rising costs has created a budget gap that makes layoffs “nearly inevitable.”

Szabo, in his presentation to the council Wednesday, attributed the city’s financial woes, in part, to increased spending on legal payouts, which have ballooned over the last few years. Tax revenues have been coming in much weaker than expected — and are expected to soften further in the upcoming budget year, which starts July 1.

Pay raises for city employees that are scheduled to go into effect in the coming budget year are expected to consume an additional $250 million. On top of that, Szabo said, the city needs to put hundreds of millions into its reserve fund, which has been drained in recent months in an attempt to balance this year’s budget.

Councilmember Katy Yaroslavsky, who heads the budget committee, said the council will need to look at the possibility of asking unions representing city workers to defer the scheduled raises or make other concessions.

“I think everything needs to be on the table,” she said in an interview.

David Green, president and executive director of Service Employees International Union Local 721, called Szabo’s remarks “short-sighted and irresponsible.”

“There’s no question that all of us are in shock with this number,” said Councilmember Bob Blumenfield, who sits on the council’s budget committee.

Blumenfield predicted that city leaders would need to seek financial concessions from the workforce.

“Eighty percent of our expenses is labor,” he said. “If we are short more than 10% of our budget, the ‘math doesn’t math’ without looking at labor costs.”

Over the last two years, Bass and the council have signed off on raises and increased benefits for an array of unions — first police officers, then civilian city workers, then firefighters.

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19 Reasons Why the Federal Reserve Is at the Heart of Our Economic Problems

Most Americans have absolutely no idea how we got into the mess that we are in today.  The reason why the U.S. government is 36 trillion dollars in debt and our society as a whole is 102 trillion dollars in debt is because the system is performing exactly as it was designed.  We have a system that was literally designed to create colossal amounts of debt.  But if you ask most Americans about this, they cannot tell you what the Federal Reserve is or why it is at the heart of our economic problems.  When Americans get into discussions about the economy, most of them still blame either the Democrats or the Republicans for our rapidly growing economic problems.  But the truth is that the institution with the most power over our economic system is the Federal Reserve.  So exactly what is the Federal Reserve?  Most people would say that it is an agency of the federal government.  But that is not entirely accurate.  In fact, the Federal Reserve itself has argued in court that it is not an agency of the federal government.   The truth is that the Federal Reserve is a privately-owned banking cartel that has been given a perpetual monopoly over our monetary system by the U.S. Congress.  This privately-owned central bank has been destroying the value of the U.S. dollar for decades, it has run our economy into the ground, and it has driven the U.S. government to the brink of bankruptcy.  The Federal Reserve operates in great secrecy  and it acts as if it is not accountable to the American people.  Yet the decisions that the Federal Reserve makes have a dramatic impact on the lives of every single American citizen.

If you really want to understand what is causing our economic problems, it is absolutely crucial that you understand exactly what the Federal Reserve is and how it is systematically destroying our economy.  Once you understand the truth about the Federal Reserve, you will view economic issues a whole lot differently.

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How Tariffs Will Lower The Cost Of Living

Critics of President Trump’s trade policy – tariffs, tariffs, and more tariffs – cry that tariffs will cause inflation and make Americans poor. This is false.

Although there will be a brief period where the market adjusts to the new normal, tariffs will not cause inflation. In fact, tariffs will lower the cost of living in the long run.

Perhaps the more interesting question to ask is: inflation of what? Consumer goods? Why are these critics not concerned about the inflation of assets like houses or investments that are caused by economic globalism and the trade deficit?  Why are the Democrats and Neocons so preoccupied with keeping the cost of disposable products low, when people cannot afford their rent or mortgages?

Contrary to popular belief, tariffs did not raise the cost of goods during President Trump’s first term, and they are not likely to do so the second time around. 

There are a few reasons for this.

First, a tariff is a tax imposed on imports. For example, a 25% tariff on steel would increase the price of steel coming from Canada or South Korea. However, that same tariff would not apply to steel that was made in America. In this way, tariffs are a completely avoidable tax. If you do not want to pay tariffs, buy American. Simple.

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What Are The Left’s Solutions For The Problems They Created?

The Wall Street Journal has consistently criticized Trump’s economic policies, particularly his ongoing “trade war” with Canada, over the past several weeks. And certainly, the tensions are regrettable. Trump’s trolling of the insufferable Justin Trudeau, with talk of Canada becoming the “51st state,” perhaps only galvanized the Canadian left. It unfortunately may ensure that the only real hope for a Canadian return to normality, the election of Pierre Poilievre, may be lost.

That said, does the WSJ truly believe that the current $1.7 trillion budget deficit stacked on top of $36 trillion in national debt and an annual $1 trillion trade deficit are sustainable in any fashion? Do they believe any Republican president would have survived the midterms if he cut or “reformed” Social Security? If so, consult the fate of the recommendations of left-wing Barack Obama’s 2010 Simpson-Bowles commission (“The National Commission on Fiscal Responsibility and Reform”).

DOGE, the effort to demand either symmetrical or no tariffs, closing the border, the rare minerals agreement, etc., are all controversial, even desperate efforts to stave off insolvency.

NAFTA was sold on the promise of trade equilibriums, eventually leading to no tariffs and rough parity. Yet Canada currently runs a $60 billion surplus largely because of its energy sales and selective tariffs on U.S. agriculture and some manufactured goods. That sum might be tolerable from a friend and not worth the acrimony, even with the present massive trade and budget deficits—if it had occurred in isolation.

But it did not.

The Canadian surplus is force multiplied by its chronic refusal to spend a measly 2 percent of its GDP on defense. Canada could have easily offered a partnership with the U.S. to explore joint missile defense or shared Arctic Ocean naval patrols with a new fleet of Canadian and American icebreakers.

But it did nothing of the sort.

Worse still, no Canadian leader can offer any defense of their policies, such as: 

“We believe a $60 billion surplus with our free-trade American partner is justified, and we also believe we are further correct in not spending our promised 2 percent of GDP on defense.” 

Their veritable retort of “Trump is a monster” is no defense at all.

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