- It's not what you look at that matters, it is what you see.
- Henry David Thoreau
Treasury Secretary,
Scott Bessent is the poster child for the elite. The stupidest and most risky thing that you can do with your money is to enter currency. The secretary just wasted millions, no billions of our taxpayer money to prop up the Japanese currency. By doing this, you get a few days of relief with international trading, but whatever the trend was and the reasons behind it, will resurface. Bessent attempts to catch a falling knife.
It gets worse...
Since the Federal Reserve did not lower our interest rate, Bessent enacted his own form of QE. He wastes billions more of our taxes to buy "old" long-term bonds to lower rates. How stupid is that? He spends borrowed money to buy notes that used borrowed money (can you say, rollover) to present an economic picture that all is well. Is this what they teach (Yale) in the Ivy League? It is no wonder how our national deficit ballooned past $40 trillion and counting...He goes on to say these famous last words, "Most probably (expression to cover his ass), our budget deficit under President Trump has peaked."
Repercussions
The world will stop buying our debt because they will see that the BS of Republican Conservatism is just that, talk. They also see our debt growing at 7% while our economy shrinks. At that debt rate, it will only take 5 years to reach $50 trillion. That is doo-do land.
Related
The government is changing its inflation formula, again. It takes effect in September, but the propaganda of lower inflation won't hit the news until next year. People will forget the manipulation to present a better picture. Maybe they will stop saying that breakfast is the most important meal? Why, you ask? Because inflation has hit: eggs, OJ, coffee, half-and-half/milk and bread. Breakfast is expensive.
AI Risk Growing
Broadcom (AVGO) is investing $60 billion in Anthropic's AI platform. Of course, they have to borrow that money which lowers their stock price and get this, they only get a first tranche share. This implies how excessive data centers and AI cost. These AI firms are throwing out money like leaves falling from trees. This is an example of excessive leverage. These type of investments ring the sorrows of the financial crisis of 2008. We already told you about Nvidia with its $225 billion in bonds (debt). However, we have other, new, smaller AI firms that are jumping on the bandwagon. They all are using leverage and going deep into debt. Tera Wulf (WULF) has over 3,000% of shareholder equity in debt. Nebius Group (NBIS) over 106% of shareholder equity in debt. Core Weave (CRWV) reported $46 billion of debt in the 2cd. quarter. None of these firms look economically stable.
Power Grid Problem
Instead of using our taxpayer money wisely like helping the power grid, our leaders only live for today's news. Well, the news for tomorrow is bleak according to CEOs in battery storage. They are saying, "We lack transformers, infrastructure and transmission lines to handle all the extra power that we need, especially with stored energy. We cannot move energy in both directions."
Sad, Shout-out...
...the passing of Father Benedict Chao in Hong Kong at 108. The Trappist monk helped all through the horrors of the Japanese occupation in WWII and the horrors of the Communist Chinese after 1949. Open the gates before him. Rest in peace...
Some Positives
Singapore needs hosing. They lack land. Wisely, instead of stripping its small forest land area, they are trying a new approach. They will attempt to make "manmade islands" designed for housing offshore. We hope it works and provides a blueprint for the world. Maybe they could raise investment money from the TNC ( The Nature Conservatory)?
Past Example
The Seychelles is a small group of islands a 1,000 milles off of Africa in the Indian Ocean. The TNC loaned them the money to maintain the natural features of their islands. This was one of the first bonds for nature. They used some of the money to develop tourism for their small population (100,000) and they are doing well. Very smart...Peace.
