Wealth Effect News In a Deflationary Economy: ESG-Socialist-Progressive Era Policies In The United States Deflating Global Economy, Fiat Money Propping up Western Governments, Debt Signals – July 23, 2023

One has to ask, what is keeping the global economy afloat? As the evidence clearly suggests, even with all the “wealth effect news,” the global economy is clearly deflating. Well, confidence in fiat money, namely confidence in the U.S. dollar, remains at an all-time high, but faith in fiat money doesn’t equate to EFFICIENCY in the marketplace, which is clearly at an all-time low.

A market reliant on FISCAL policy is anti-capitalism, sure it can be argued that a republic is necessary, but when fiscal policy dominates the GLOBAL economy, one has to see depression waiting in the wind.

In economics and political science, fiscal policy is the use of government revenue collection and expenditure to influence a country’s economy.

Most people in the financial community do not want to accept the reality of the PETRODOLLAR. The petroleum dollar was actually created via DEMAND to usurp the gold standard. Was the petrodollar a necessity at the time of its creation? I can’t answer that question, but it did make a lot of sense based on where the world was headed at that time.

In 2023, the world is reliant on oil and other CHEAP fossil fuels, and Environmental, social, and corporate governance (ESG), a form of corporatism/fascism, seeks to use FISCAL POLICY to usurp that dominance.

The markets can PUNISH warmongers; however, an economy reliant on FISCAL policy relies on POLITICANS to make the right decisions. In 2023, U.S. President Joe Biden declared war on fossil fuels via FISCAL POLICY.  Joe Biden’s progressive-socialist tools are primarily over-regulation which from a financial perspective equates to driving up DOMESTIC production costs.

Now, one will ask how this creates deflation in the GLOBAL economy. The answer is simple. Most developed nations have FISCAL policies that PUNISH consumption. Whenever I think of Europe, I get depressed; most of the policies enforced in Europe PUNISH consumers, which differs in the United States.

In the United States, a lot of their PRIOR economic policies reward consumption, and this system, unique to the U.S., is being destroyed by the Biden Administration.

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This is TRICKLING down to the rest of the world because as Americans consume less, manufacturing nations like China are losing their primary customer. But it’s not only China; it’s all the other countries reliant on the U.S. economy that are feeling the pain.

The world’s two largest economies need each other and if the U.S. consumer consumes less, capital has to be redeployed elsewhere, and even if this capital is redeployed elsewhere, it’s not a guarantee that said capital will return the same yields as it once did.

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Now, most people like to blame the Federal Reserve and other central banks for these problems, whereas I point the blame where it should be “The VOTER.” If you’re a believer that pollution is a huge problem in the world today, you have to know that China is the main culprit.

But the rise of China exists primarily because of FISCAL POLICY in the Western world, and ESG is a LAZY way of addressing bad fiscal policy. It sounds archaic at this point to write about how the minimum wage law destroys the free market, but as an example, minimum wage laws, whether Federal, State/Provincial, or even municipal, equates to artificially high prices that allow technocracy like China to challenge any DEMOCRACY on almost anything, without the fear of repercussions.

Capital controls exist in China, and because China is NOT a democracy, it can debase its currency anytime it wants or even BUY other currencies to manipulate the markets.

This entire scheme exists because of FIAT money, which FUELS bad fiscal policies; because the Chinese Communist Party doesn’t have to worry about DEMOCRACY, it can focus its attention on managing its economy.

China can’t micro-manage its economy but it can do a better job than any developed Western nation addressing economic concerns, such as ENERGY policy. In the Western world, “Eat Thee Bugs” is a topic of discussion, primarily because Socialist-Progressives-Environmentalist, have zero interest in fixing the economy and instead are obsessed with “SOCIAL JUSTICE.”

In the mind of a left winger, the economy is on AUTO-PILOT; it’s hard for them to comprehend that people will become more UNPRODUCTIVE if the incentives are changed. If my reward for a hard day’s work is a plate full of bugs “rich in nutrients,” how likely am I to wake up in the morning and go to work, especially if the government promises me free money for doing NOTHING?

ESG also includes trans rights, recently a Transexual won a beauty pageant, now there are some men who like to dress up as women, who are attractive enough to pass as women, but the trans person (Rikkie Valerie Kollé) who won the beauty pageant is Dylan Mulvaney ugly. This individual is so visually unappealing that one has to ask, what market are these ESG people targeting?

I would call the modern social justice movements not only uneconomical but severely damaging to the economy; then we have to return to the energy policies that are fueling the war in Ukraine.

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I’m not a fan of Donald Trump, but when the current front-runner of the Republican Presidential nomination says if he’s elected, he will end the war in Ukraine quickly, I believe him; why? Because the Joe Bidens war on fossil fuels is financing this war.

It’s called OPEC+ Russia for a reason; this is the petrodollar people like ME are referring to. Now there are financial nerd types that like to remain in their comfort zones, citing that the petrodollar is fiction, but CHEAP energy is the economy, and when energy is not cheap, progressive policies tend to make problems even worse.

As an example, most Western nations have PRICE CONTROLS everywhere; most government workers in developed nations pay government workers and entities employed by the government an above-market wage.

a Wage is nothing more than a fancy word for PRICE; when I say wage, your mind forgets that a wage is the PRICE of labor. So when energy prices rise, earners want their WAGES to rise; to keep pace with inflation well, once these WAGES rise, they’re not coming back down, which is why I often write that we’re either headed for a period of Austerity or a period of DEPRESSION.

In most undeveloped nations, because working for the government pays an above-market wage, most AMBITIOUS people in undeveloped nations want to get into politics, most of these individuals in undeveloped nations, have little to no understanding of economics, and many were trained to be MARXISTS.

Now if you look at open border policies, most of the people moving into Western nations have little to no comprehension of Austrian Economics, equating to their future VOTERS likely voting for the politician who makes them FEEL GOOD!

 

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I’d argue both Donald Trump and Joe Biden are “feel good” politicians. Therefore people disinterested in the MACRO picture of the economy will imagine that a BIG GOVERNMENT of their choosing is the best path forward for the global economy.

This ofcourse, GUARANTEES economic deflation in the future, as the voters will imagine that politicians and their fiscal policies are the only way to go when in actuality, the path forward should be LIMITED government, so much so that the government has little control over the DIRECTION of the economy.

Interesting times ahead!