The ballgame is changing. And fast!
Both Wall Street and Washington went off the deep-end during the 2020-2021 pandemic period—spending, borrowing, printing and speculating like never before in history.
But the nation’s financial bacchanalia is now over. The time of reckoning has commenced.
That we are now reaping the whirlwind should not be surprising. Just recall the staggering magnitudes of the fiscal and monetary madness that erupted during the 12 months after March 2020.
On the fiscal front, Congress enacted $6 trillion of Covid-Lockdown bailouts and stimmies virtually sight unseen. That figure was 7.5X the actual $800 billion loss of GDP during the same period. It was also equivalent to $49,000 for every single household in America.
Likewise, the Fed’s balance sheet soared from an already bloated $3.8 trillion in the fall of 2019 to a peak of $9.0 trillion a few months ago.
Yet, how do you even comprehend that $5.2 trillion of central bank balance sheet expansion? After all, what it actually measures is the cumulative gobs of new fiat credits being printed day-in-and-day-out?
Still, here’s one powerful metric that our mad-money pumpers in Washington surely didn’t notice as the ran the Fed’s printing presses red hot. To wit, the Fed’s balance sheet crossed the $5.2 trillion mark for the very first time in history on March 25, 2020.
That’s right. It took the Fed 106 years from the day it opened its doors for business in 1914 to reach the $5.2 trillion mark. And then it replicated that figure in a matter of months.
It is any wonder then that we have had rampant inflation? That is, massive bubbles in the stock, bond, real estate, crypto and other risk asset markets, followed by the highest rates of consumer inflation in 40-years.
And that these inflationary forces have now become deeply embedded in the economy, with unit labor costs up 6.4% on a Y/Y basis. That’s the highest rate of gain since September 1982.
Needless to say, this is what happens when you monetize nearly 100% of Washington’s explosion of borrowing and spending. But the laws of sound money, fiscal rectitude and economic gravity can’t be defied indefinitely.
It was always ordained, therefore, that there would be a time of horrible reckoning. And that time has now arrived.
Accordingly, it is more urgent than ever before to get informed, focused and prepared.
That’s the mission of David Stockman’s Contra Corner.
Five days per week we provide facts, charts, history, analysis, assessments and warnings about the madness at loose on both ends of the Acela Corridor connecting Washington and New York.
We don’t buy the mainstream narrative about most everything. We think the US economy is weak and debt-ridden, not awesome and that the Fed is destructive, not beneficent.
Likewise, we put little credence in the related stories about stocks which never go down or correct. We also dispute the Covid Lockdowns & Mandates, the Forever Wars, the Climate Crisis, the Woke Awakening and the rest of the Fake Narrative promulgated by the liberal elites.
Similarly, we take with a grain of salt the phony bickering among the bipartisan duopoly on Capitol Hill. Both sides are overwhelmingly in the business of perpetuating their tenure in office and assiduously milking the Washington gravy train of lobbies, PACs and organized racketeering to do so.
Instead, we dissect the headlines and hot spots of the day from a fiercely independent vantage point based on 50-years of experience on both ends of the Acela Corridor: As a US Congressman, President Reagan’s budget director, Wall Street investment banker, original partner of the Blackstone Group, private equity investor and best-selling author.
Unlike the MSM megaphones and groupthink transmitters, we have a filter.
It’s rooted in a firm belief in personal liberty, free market capitalism, sound money, non-intervention abroad and very limited-scope, constitutionally- shackled government at home.
When the current headlines, in-coming data, longer-term trends and relevant history is strained through these filters, you get an unvarnished picture of reality that the mainstream media and partisan hucksters from both sides of the aisle do their level best to bury.
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So Buckle-Up Real Tight!
Unprecedented Political and Financial Shocks, Spills and Booby-Traps Lie Dead Ahead.
America’s Decades-Long Folly Has Reached the Breaking Point Owing To—
• Massive Fed Money-Printing;
• Reckless Borrowing by Government, Business and Households alike;
• Unhinged Wall Street Leverage, Sepculation and Financial Engineering;
• Corrupt Bipartisan Racketeering and Incumbency Protection Schemes in Washington;
Covid-19 Was Just the Pin That Shattered the Financial Fantasy and initially Sent 70 Million Americans Streaming to the Unemployment Offices.
At the Same Time, the Resulting Discombobulated “Mail-In” Election Shattered What Remained Of a Functioning Government In Washington.
The Blame Has Many Financial Authors—
•Greenspan, Bernanke, Yellen, Powell…. Plus legions of Wall Street Cheerleaders and Keynesian Economists. All Have Fueled The Folly Of Rampant Monetary Stimulus
•It Also Includes a Long-String of Elected Politicians Who Recklessly Courted Disaster—The Bush’s, Clinton, Obama, Trump, Pelosi, Schumer
And Now After 47-Years On the Public Teat, Sleepy Joe Biden, Too
The Desperate Money-Pumping by the Fed and Fiscal Incontinence of the Politicians Fueled False Prosperity on Main Street and Rampant Speculation and Immense Financial Bubbles on Wall Street.
It Also Generated Hideous Windfalls to the 1.0%, 0.1% and Billionaires Who Own Nearly 90% of the Stock—Even As Real Wages and Living Standards Stagnated In Flyover America
And we do mean stagnate. The inflation-adjusted hourly wage rate for manufacturing workers is no higher today than in was back in 1970 when Joe Biden abandon his ballyhooed working class roots and first got elected to the public payroll instead.
The fiscal and monetary excesses of recent years were bad enough, but then Wanna Be Medical Dictators, Hysterical Media and Power Hungry Politicians concocted Lockdown & Mandate Nation…..Sending the US Economy into the Tank and middle class living standards plummeting yet again.
Like Always, Main Street Has Been Left High & Dry, Ensnared In the Lies, Scams and Self-Serving Mendacity of the Washington-Wall Street Axis
But Contra Corner’s Got You Covered
We give the Fools & Clowns who pretend to rule us no quarter
We Lay Out the evidence and issue the indictments Exactly Five Days Per Week…
And For Just $1 Per Day!
Perspective, Perspective, Perspective!
That’s what Contra Corner provides. A framework for interpreting and assessing the flow of mainstream events and news which are usually not what they are cracked-up to be.
That’s because they are rooted in a poisonous foundation of easy money, cheap debt, sweeping financialization and unbridled speculation that has been injected into the American economy by the Fed and Washington politicians over the last three decades. This has—
- Turned Wall Street into a dangerous gambling casino that has siphoned trillions of cash from corporate America to fund stock buybacks, M&A deals and other forms of unproductive financial engineering
- While leaving Main Street buried under $92 trillion of public and private debts and faltering investment in growth and productivity
- The result was a society addicted to the hand-to-mouth economics of spending more than you earn
It has also left the American economy exceedingly vulnerable to external shocks like the thundering blow of Lockdown Nation and now the virtual partisan civil war brought on brought on by a divided Congress and executive branch in thrall to its Dem interest group pay-masters.
America’s dangerous economic fragility stems in part from the fact that—
- 80% of households have no appreciable liquid savings or rainy-day funds
- Businesses have piled their balance sheets sky high with debt and artificially extended their supply chains to the four corners of the earth in order to goose short-run profits and share prices—the risks be damned.
So both a renewed financial and economic crisis and an abrupt change of course lie dead ahead.
The 30-year party of False Prosperity is over!
The 2020s will be a decade when the chickens come home to roost.
As the next two years unfold, they may occasionally oxygenate and prop up Sleepy Joe in front of the Oval Office teleprompter to talk unity and hope. But the Kamala Harris/Progressive Left Regency will only massively exacerbate the crisis with a tsunami of new spending, borrowing, regulating, taxing and Nanny State meddling.
And if you overlay on all that a renewed Biden-promised burst of unconstitutional assaults on personal liberty, private property and business enterprise—then the limits of kicking the cans of delay and denial down the road to tomorrow will be reached.
Indeed, America’s economic and political fantasies will soon be overtaken and crushed by its accumulated due bills.
- Bubbles will be burst.
- Speculators will get carried out on their shields.
- Easy money wealth will evaporate.
So that’s why you need to get prepared now. And one good way to start is with a subscription to David Stockman’s Contra Corner.