Problems = Questions = ?

 - Sometimes the questions are easy, but never the answers.

- Sebastian

Question: After the Cayman Islands, which country has the least transparency in financial matters?

You might think China or some Middle-East location, but the answer is right in front of you like a misdirection magic trick, the US. Money corrupts and we lead in this sad category.

Question: If new car sales dropped 25% in September and countless retail firms cite product shortages as well as labor problems, how come consumer advocates say spending is strong?

Because the media is controlled with few newspapers to provide real answers that go against the status quo. Consider the latest economic report from Washington. The Labor department announced only 194,000 jobs for the month of September. Then, they followed up by saying, unemployment dropped to 4.8%. C'mon! You know that this is wrong. The media and government has lost touched with reality and the common man. There are 5-million less jobs from the same period one year ago. How long are we going to put up with this BS?

Question: If the US debt is such a concern, why doesn't the dollar decline and sharply?

Because the global community has increased their debt levels at the same time and due to the same problem, the pandemic. Global debt is reaching 260% of world GDP. The US debt level for 2020 hit 107% to GDP. All nations need and have to have low interest rates or the game will be exposed. This is why our founding fathers chose gold as our currency. In a sad related story, the US Congress plays politics with the debt ceiling. You can only "cry wolf" so many times. No one is hears the call. This could blow up one of these days.

Question: If taxes provide more revenue for government, why doesn't the US raise taxes to lower our deficits?

No one wants to say this truth because they fear that they will not get re-elected. One place to start is from a recent report that shows the richest 1% have more wealth than the entire US middle-class. Another report shows the rich void taxes on a yearly basis of $163 Billion with loopholes. We say close them.

Question: The recent quick fix on the debt ceiling pushed it down the road. Does any other nation have this problem?

The only other nation that deals with it is Denmark.

Question: Everyone is talking about inflation. Fed Chairman Powell has been shown to be wrong about his "transitory" nature of price rises. Now, the Fed is using the old playbook of magic and misdirection. Other Fed Governors are taking the podium like Chicago Fed President Charles Evans to deflect the pressure. He backs Powell by saying not only will inflation subside, but fall below the Fed's 2% target. By the way, he does not provide a time table for his claim.

Our answer comes from many sources. Bridgewater's, Jensen joins our chorus by saying that he not only fears inflation, but stagflation. For those of you not familiar with the term, it means little or no growth and higher inflation. Wood Mackenzie reminds us that rising energy prices find their way into our electric bills. This winter those bills will be much higher. The EU reported that energy costs hit a 13-year high for the 19-member group. Overall, their inflation grew at 3.4%. In the US, grocery managers report that only 70% of their orders are filled. By deduction that means 30% of product is short in supply and will result in a higher price. Even the Labor Dept. added wholesale prices rose 8.3% in August year over year (yoy).  Shortage of truck drivers and refrigerated transport resulted in a 10% rise in prices, especially in meat, eggs, milk and pork.

Question: If inflation is evident, how do banks respond?

Quick answer is to raise fees, but there is a bigger concern. The banking industry uses a playbook that seeks financial stability. When inflation appears, some assets get distressed. Banks are not ready for this change in the economy. Problems are under the surface like loans based on asset price. If banking issues arise, the Fed will show its true colors by coming to the rescue. They are the lenders of last resort (LLR) and market makers of last resort (MMLR). 

Dear Reader, as you can see there are many questions, but honest answers are few and far in between. Peace.