Odds and Ends: March 2023

- He, who controls the money supply, controls.

- Rothschild

We begin with the bandito, blindfolded, hands tied and standing before a blood stained wall. We hear a voice,

Listo, Apunta, Fuergo! (ready, aim, fire).

It is now legal in five states. With the claim that letal injection is inhumane and a limited supply with the fear of lawsuits, the old firing squad in back in vogue. The only thing that we see before the wall is small banks, small businesses, workers and consumers. Before we begin to look at the four categories, we must include this sad point.

Shootings vs. Train Derailments

If you count every train car in the recent derailments, it is a neck and neck race to death with school and public shootings. So much for the quality of life and giving thanks to God?

Now, we begin...

Small and Regional Banks...

...were set up by their own greedy nature and a perfect trap by the Federal Reserve. When a bank fails in the US, the Fed seeks a buyer. FDIC covers the regular depositors and the Federal Reserve covers the big guys. We say this all the time. One would think that since we have been right most of the time, that more people would back our call to End the Fed!      

Anyway, after the financial crisis of 2008, Congress passed the Dodd-Frank Bill. It is mostly BS, but it did touch a few strong points. Among those, is bank leverage. It got raised because banks can create money just like the Fed. It is based on their deposits. Say, you put $100 into ADIOS BANK. They can now lend $90 out. They created $90 dollars. Well, the small, regional firms yelled at Yellen, "This is not fair. We can't compete against the big boys. We can't make it!" The cry becomes a worry in what you wish for. Beware the...

Ides of March

On the 15th of March in 2020, the Fed granted the wish by small banks. They eliminated ALL bank reserve requirements for smaller banks. Yes, you read that right. These banks envisioned themselves as the next Goldman. They expanded, rapidly. Someone got worried. Maybe we should cover ourselves with bonds? They purchased "grenade bonds." They bought low yielding 3% bonds that blew up in their face as the Fed raised interest rates. They had a limited cash reserve. The run exposed their weakness. Enter the Fed.

In their machinations, they actually bailed out the big boys by declaring that they will buy up grenade bonds at full value. Would you buy something for a dollar when you knew you could purchase it elsewhere for .50 cents? This is how the Fed helps the money class. Not only that, they will divide the spoils among the big boys who now will grow through this "crisis?" 

It is the same everywhere that central banks control the money supply. Credit Suisse had a phony market cap of $8.51 billion on the day that they crashed. The home central bank was ready to cover all their losses with a $54 billion dollar loan. Could you get a loan for 7x your value? See, what we mean? Keep in mind, these are commercial loans are with a 7-year max and not a 30-year mortgage. Foreign nations make use of socialist concepts. It is why our capitalist firms are at a disadvantage. All their big corporations are backed by the government. This is why China is so formidable. 

As it turned out, they realized this BS manuever will be public knowledge. They covered their ass by "merging" the bank into UBS. Sri Lanka got saved by the IMF from defaulting. This is happening around the world, but kept behind the curtain. 

In a related story, Powell appears before Congress. He is asked by Congress-woman Lummis, "Is our level of debt borrowing sustainable?" He says, "Yes." By the way, our debt level is 120% of GDP. Very bad in our eyes. Will you join the meme? End the Fed!

Small Business...

will suffer due to higher loan costs, shortage of workers and consumers who will pullback due to inflation. At the same time, bigger firms are cutting jobs like Amazon and Accenture. Walmart is closing stores, ending the night shift and cutting jobs. These actions lead to delinquencies and evictions. You can see this aspect in the market in the IWM. This index is the hardest hit of all the market price movements. This also gives foreign firms more ground to expand within our nation. This is very bad in our eyes. 

Workers

We stated last year that this year we would see more strikes by workers. The LA school district starts off our prediction. It is happening in the UK and EU. Sadly, we see job cutting causing more pain. McKinsey announced 2,000 job cuts. Disney just laid off 7,000 to the growing number of firms cutting jobs like the ones mentioned above. We add that to our other prediction: evictions will be back in the news. Very bad in our eyes.

Consumers

they are pulling back with inflation. They somehow manage to make ends meet. With that said, too many are using their credit cards to get by. This is a serious cloud on the horizon. Not good.

One More Prediction?

In the nation of the Central African Republic, Chinese mine workers were shot and killed by alleged Russians. Their mine looted. China vows revenge. This will be the first mistrust of China with Russia. There will be more in the future. Someday, their alliance will bust just like the Russian/German deal before WWll. The Russians will beg the West to become friends again. We can only hope.  Peace.