Tag: economy

US Credit Card Defaults Soar To Crisis Highs As Inflation Storm Crushes Working-Poor

The party is long over for the bottom third of US consumers, as maxed-out credit cards and depleted personal savings have pushed credit card loan defaults to their highest level since the 2008 financial crisis.

Financial Times cited new data from BankRegData revealing that credit card companies wrote off $46 billion in “seriously delinquent loan” balances in the first nine months of the year—an alarming 50% increase from the same period last year and the highest level in 14 years.

US credit debt recently surpassed $1 trillion and continues to expand rapidly. Making matters worse, annual percentage rates (APRs) on credit card debt have hit record highs, compounding the financial misery for cash-strapped consumers in the era of failed ‘Bidenomics’. 

Despite the interest rate cut, the average APR on credit card debt reached a new record at the end of the third quarter. 

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Every Bureaucrat Destroys 138 Jobs

An Auburn University study says every single regulator destroys fully 138 private sector jobs every year you keep him on the job.

With nearly 300,000 federal regulators, the shock is that we still have any jobs at all.

The Two Scariest Words in the English Language

A lot of the excitement around the Department of Government Efficiency — DOGE — focuses on the dollars saved. But more important is all the things the federal government destroys with those dollars.

Specifically, the millions of jobs destroyed by the two scariest words in the English language: federal regulators.

A few weeks ago I mentioned how DOGE under Elon and Vivek is taking aim at the regulatory mothership that strangles the American economy and fuels the totalitarian administrative state — you may remember it from Covid.

A mother ship that is oddly enough unconstitutional according to a pair of recent Supreme Court decisions — Loper Bright Enterprises v Raimondo and West Virginia v EPA.

I asserted this could unleash the economy like nothing we’ve seen in the past century.

And the reason is because it’s hard to overstate just how destructive regulations are. 

Every Regulator Destroys 138 Jobs

One 2017 study by the Phoenix Center and Auburn University found that every single full-time regulator destroys 158 jobs. 

GDP-adjusted to today, that translates to $16.5 million of economic output. For a hundred-thousand dollar bureaucrat.

This lost output is made of jobs and businesses that were never started. Or were stunted by strangling regulations — which are generally bought by big corporations specifically to strangle small competitors.

Along with mom and pops chased into bankruptcy as collateral damage to new regulations — say, a diner forced to spend $30,000 on a low-energy exhaust fan.

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Communism Fumbles Again: Cuba Importing Resource It Was Once Famed For Producing

It’s undeniably one of economist Milton Friedman’s most famous sayings about the failures of central planning: “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.”

This was, of course, a stroke of hyperbole. Not even a billion Keynesian ditch-diggers could empty the Sahara.

However, we have seen the closest thing to Friedman’s vision coming true: In Cuba, an island practically made of sugarcane, the communist government now needs to import sugar.

It’s bad enough that, according to CiberCuba — an expatriate-run outlet which is critical of the government — a pound of sugar now costs 600 pesos on the island, or about $25 USD.

“Despite efforts to revive the sugar industry, the sector continues to face serious challenges, including failures in the last harvest,” CiberCuba reported earlier this month.

“During the session of the National Assembly of People’s Power, Cuban Prime Minister Manuel Marrero Cruz recalled when Raúl Castro remarked that ‘it would be an embarrassment to have to import sugar.’ He then stated, ‘and well, we are experiencing that embarrassment because we are importing sugar.’”

Cruz “emphasized that the crisis in the sector is such that the country has also stopped exporting sugar, which was a key component of the economy,” according to CiberCuba.

And it’s not just dissident outlets like CiberCuba that are reporting on the failures of Cuba’s sugar industry, either. Earlier this year, the BBC’s Cuba correspondent, Will Grant, filed a piece about the failures of the system.

Shocker of shockers, you know what’s to blame? Communism!

“Cutting cane is all Miguel Guzmán has ever known. He comes from a family of farm hands and started the tough, thankless work as a teenager,” the May piece began. “For hundreds of years, sugar was the mainstay of the Cuban economy. It was not just the island’s main export but also the cornerstone of another national industry, rum.”

“Today, though, he readily admits he has never seen the sugar industry as broken and depressed as it is now – not even when the Soviet Union’s lucrative sugar quotas dried up after the Cold War,” Grant noted. “Spiraling inflation, shortages of basic goods and the decades-long US economic embargo have made for a dire economic outlook across the board in Cuba. But things are particularly bleak in the sugar trade.”

“There’s not enough trucks and the fuel shortages mean sometimes several days pass before we can work,” Guzmán said under a “tiny patch of shade” while he waited for Soviet-era trucks to arrive.

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Germany’s Economic And Political Suicide

It’s that festive time of the year when interesting tales get told around a fireplace. So here goes (minus the fireplace).

Once upon a time there lived a country that was the envy of the world. It was among the world’s pre-eminent producers of manufactured goods. From chemicals and pharmaceuticals to precision engineering and the brewing of beer, it was second to none. Its people’s work skills, industriousness and discipline became the national hallmark of civilisational success. The country gained fame and fortune in bringing the luxuries of fine automobiles to the world’s rich and aspiring middle classes.

Alas, a blight visited that once great country not more than a score of years ago, though its destructive seed had been planted earlier. It was not some external force or act of God. Rather it was a sickness of the mind, a debilitating disease of the soul, that vexed that country’s ruling class. In restless search for virtue, the country’s rulers paid obeisance to the Goddess Gaia and promised the nation’s blood and treasure to satiate her inviolable sovereignty over her earthly domains.

This, then, is a tale of woe and misery. This Christmas shall not have been one of unalloyed merry times and good cheer. And while beer will have been drunk and dinners eaten in many a hearth and eating place, the lifeblood of that nation shall be constricted and its breathing blocked by a cursed phlegm as normal life resumes in the New Year.

Within the fateful score of years of becoming afflicted by the primordial cult of Gaia, the world’s envy has now become a sad basket case. Its economy has been tarnished as “the sick man of Europe”.

The beginning of the end of the German miracle

While the travails of Germany along with the economic stagnation of Europe as a whole have been apparent for some years now, the spate of dire headlines have gathered pace in recent weeks as the coalition government collapsed.

“Behind Germany’s Political Turmoil, a Stagnating Economy” — New York Times (December 17th)

“Germany Is Unraveling Just When Europe Needs It Most” – Bloomberg (December 15th)

“Europe’s Economic Apocalypse Is Now” – Politico (December 19th)

If Europe – and its economic powerhouse Germany – remains on its current trajectory, its future, Politico says, “will also be Italian: that of a decaying, if beautiful, debt-ridden, open-air museum for American and Chinese tourists”.

The economic rot induced by the adoption of Energiewende policies for the “energy transition” in 2010 resulted ultimately in the recession of the German economy in the last two years.

Among the manifestations of this rot are the growth of corporate bankruptcies in double digits, soaring layoffs as the Federal Employment Agency said that the unemployment figure could exceed the three million mark for the first time in 10 years at the beginning of 2025, and the crown jewel of German industry, its automative sector, announcing massive job cuts.

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Economic Reconstruction and the Police State

One of the most common justifications for increasing state police and military power is that it guarantees the security of citizens. Without basic security, it is impossible for people to devote themselves to the pursuit of their social and economic goals. In the US there are proposals to send in the military to help enforce a crackdown on illegal immigration. In the UK, some police stations have proposed to send armed police patrols to Christmas markets, to keep traders and shoppers safe from terrorists. Yet it is less often recognized that the police state, which may be defined as “an enormous government apparatus of prisons, prosecutors, police, and bureaucrats,” is inimical to economic liberty.

Debates on the role of the police state are also pertinent in understanding the Reconstruction Era (1865-1877) in the American South. One of the main justifications given for the presence of federal militia in the South was that this was necessary to maintain law and order. It is too often presumed that social and political upheaval in the Reconstruction South was entirely explained by the fact that “racists” did not like the idea of black people being armed or enfranchised. The federal militia was said to be required to protect black people from such racism.

This reduction of Reconstruction history to a tale of racism disregards all the other factors involved, including a phenomenal rise in the role of state militia in daily life. It overlooks the fact that the presence of federal and state troops across the South was an ever-present sign of living under occupation, one that was greatly resented by Southerners.

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“Surprising Link” Between UAP Sightings and Economic Conditions Revealed in Controversial New Research

New research reveals a surprising connection between Unidentified Aerial Phenomena (UAP) sightings and financial conditions across the United States, according to a study by a team with The Hebrew University of Jerusalem.

Dr. Ohad Raveh of Hebrew University and Dr. Nathan Goldstein of Bar-Ilan University have introduced innovative methods of measuring public interest by analyzing UAP reports, which they say has revealed “a surprising link between UAP sightings and macroeconomic conditions at the U.S.-county, state, and national levels.”

Their findings challenge conventional metrics for assessing economic behavior, revealing how UAP sightings align with financial trends, inform policymaking, and provide insights into public adaptation to economic shocks, such as the COVID-19 pandemic and shifts in monetary policy.

In an email to The Debrief, Dr. Raveh explained what motivated he and Goldstein to explore the potential connection between UAP sightings and economic conditions.

“As a social scientist fascinated by the UAP phenomenon, I was disappointed by the grave scarcity of studies that examine the social aspects of it,” Dr. Raveh explained, “especially as official reports (by NASA and others) confirm that about 95-98 percent of UAP sightings have conventional explanations, thus suggesting that patterns of UAP sightings are rooted in human and social behavior.

“This inspired undertaking a deeper examination, pursuing an unconventional hypothesis which ties sky viewing to economic attention,” Raveh said.

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Printing Power: The Central Bank And The State

“Printing Power” in our title has a double meaning: It can mean “printing power”—the power to print money, which central banks have. But we will focus on “printing power”—the central bank’s money printing as an essential source of the power of the state, including of course the Federal Reserve’s printing to promote the power of the United States government. 

The Fed is good at literal printing, exercising its monopoly of currency issuance granted by the government. It has outstanding $2.3 trillion in pure paper money circulating around the world, of which perhaps 45 percent, or more than $1 trillion, is held abroad. All the currency represents zero-interest-rate financing of the Fed and the US government. With interest rates currently at 5 percent, this means a potential profit of $115 billion a year for them by the Fed’s having issued the currency. 

The Fed is also good at metaphorical printing, which is simply entering credits on the deposit accounts of banks in its own books. The Fed thereby creates money which it can use to buy the debt securities of the Treasury, or, in other words, to lend the printed money to the government. The Fed now has $4.1 trillion in deposits. 

All together then, as of October 2024, there is $6.4 trillion in currency and deposits used to finance the American state’s programs, payroll, interventions, subsidies, and wars. The Fed can and does use its buying power to keep the interest cost of the government’s debt lower than it would otherwise be. At peak Fed, in March 2022, the Fed owned $8.4 trillion in Treasury debt and government mortgage securities. 

Because the central bank prints power for the state, virtually all governments want and have one. 

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China has Banned US Exports of Key Minerals for Computer Chips – Leaving Washington with Limited Options

China recently banned the export of the minerals gallium and germanium to the US amid growing tensions between the two countries on trade.

The minerals are of critical economic value because they are used in computer chips, in military technology such as night vision goggles, and in the renewable energy industry, where they are important for manufacturing electric vehicles and solar cells. All of these areas are very sensitive sectors for the US and EU.

China has overwhelming market power over supply, because it is the source of 98% of primary gallium and 91% of primary germanium. Primary refers to “raw” sources such as mineral ore. In several sectors where the minerals are used, there are no substitutes for them.

Gallium and germanium are present in very low concentration as byproducts of major minerals – they’re known as trace minerals. Germanium’s primary source is the residue from zinc refineries and coal fly ash (a powdered residue produced when coal is burnt in power plants).

Gallium is mainly produced as a byproduct of bauxite ore (which is the main source for aluminium) as well as the processing stage to extract aluminium from bauxite.

The Chinese ban on exports of these minerals to the US closely followed Washington’s third crackdown in three years on China’s semiconductor (computer chip) industry. The US wants to curb exports of advanced chips to China that could be used in applications that threaten America’s security.

For example, advanced chips could be used in electronic warfare applications that make use of artificial intelligence (AI), or in advanced weapons systems such as hypersonic missiles. China said its ban on gallium and germanium was because of the minerals’ “dual military and civilian uses”.

According to a report in Reuters in 2023, the US Department of Defense holds a strategic stockpile of germanium, but no reserves of gallium. In October 2024, the US Geological Survey (USGS) estimated that a total ban on the export of gallium and germanium could result in a US$3.4 billion loss to US GDP.

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Understanding The ‘Raising The Debt Limit’ Scam

Last week President Trump tweeted, “I requested that Mitch M & Paul R tie the Debt Ceiling legislation into the popular V.A. Bill for easy approval. They didn’t…Could have been so easy-now a mess!”

Trump seemed awfully cavalier about raising the debt limit, didn’t he? Isn’t raising the debt limit a really big deal? Isn’t it capitulation by all conservative-minded Americans? Isn’t raising the debt limit tacit approval for the US Government to even further exceed its Constitutional boundaries? Well, maybe. But more importantly, the ‘raising the debt limit’ debate is just another scam on the American people, perpetrated by those we elected to represent us in DC, another reason they all must be replaced. 

The periodic raising of the so-called “debt limit” is simply the natural order of things anytime a national government chooses to carry out its financial responsibilities under a private banking system rather than a truly sovereign, national monetary system. The banking system in our case is that of the Federal Reserve.
Although it could if it chose, the US Government does not create and issue dollars…AKA, money. Instead private Fed member banks do, the largest of which are on Wall Street. Importantly, however, those banks only issue dollars when someone promises to pay them back, with interest. And because the banks do not issue the dollars to pay the interest, the only way for a society as a whole to pay back what has already been borrowed is to keep borrowing more and more, and pay off older loans with new, larger loans. The entire American economy ($68 trillion in debt), including the US Government ($20 trillion in debt) is testimony to that fact. There is no mathematical solution for this system. It cannot be paid off from within. And while the system runs, the bankers get richer and richer, the population gets poorer and poorer, and the Government goes more and more in debt. It is a covert, wealth transfer mechanism-the biggest scam in the history of mankind. And as long as the Federal Reserve System stays in operation, it will remain mathematically impossible for America to become a nation other than one that is increasingly encumbered in debt.

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Inflation Bites: The $38 Million Man

It’s easy to think of “inflation” as an abstract economic principle and forget that it has real impacts on real people.

Federal Reserve Chairman Jerome Powell acknowledged the pain of price inflation during his press conference at the close of the December FOMC meeting.

“We understand very well that prices went up by a great deal, and people really feel that, and it’s prices of food and transportation and heating your home and things like that. So there’s tremendous pain in that burst of inflation that was very global.”

Powell did not admit that he and his fellow central bankers were largely responsible for that pain, although he took credit for bringing inflation down, saying, “Now we have inflation itself is way down — but people are still feeling high prices — and that is really what people are feeling.”

Yes, Jay. We are feeling those high prices — because they haven’t come down! In fact, they continue to rise, just not as quickly as they were last year.

I might note here that inflation is on purpose. Making prices rise and go up is a stated policy. They just don’t want prices to rise so fast that you notice.

Unfortunately for the powers that be, you’ve noticed.

Just how much have prices gone up?

According to the most recent Consumer Price Index (CPI) data, prices are up 2.7 percent in the last year. But those of us living in the real world know prices have gone up much more than that.

Joaquin Henault and Laura Williams recently highlighted the dollar’s loss of purchasing power using the “Big Mac” index.

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