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The Government's Next Policy for Taking Wealth from Its Citizens: Carbon Credits
Here is what we are getting into today:
Seigniorage: How Governments are Quietly Taking Your Money
Misguided Protectionist Policies Threaten US Global Standing
Data from Europe Hints at Imminent Recession: Is the Government Ready?
Rovist Markets and the US-China Tensions
Title: Carbon Credits Are The Biggest Scam Since Indulgences... How You Can Avoid Being Fleeced
Author: Nick Giambruno
Here are the key highlights:
The Catholic Church in the Middle Ages made a fortune from convincing commoners to buy indulgences to alleviate their sins. Today, mainstream media, central bankers, and their political allies are capitalizing on this by convincing the public to pay for their alleged climate sins through Carbon Credits.
Carbon Credits are simply a devious way to tax, regulate, and control people. Carbon accounting is becoming more widespread, even showing up on Google Flights.
Canada has already implemented a federal carbon tax, causing the price of food and other goods and services to skyrocket. The federal carbon tax in Canada is set to triple by 2030.
Fiat currency is the tool traditionally used by central banks to facilitate this wealth extraction. Governments in countries like Venezuela and Zimbabwe have pushed their currencies to the point of worthlessness, having taken as much wealth from their citizens as possible through seigniorage.
Seigniorage, or the ability for governments to control the money supply and extract wealth from citizens, is becoming less effective.
Carbon credits are a policy being implemented around the world in order to reduce global emissions and combat climate change. Central banks exist to extract wealth from the public and redistribute it to those with political power.
Price increases are hitting multi-decade highs and fiat currencies are quickly losing their value. Central banks are debasing fiat currencies to the point that they can no longer extract as much seigniorage as they used to.
This presents western governments with a big financial problem and they need to find a new way to harvest wealth from their citizens. Carbon credits are the new mechanism of seigniorage designed to transfer wealth from citizens to the politically connected.
Title: Friend-shoring vs. "Buy American".
Here are the key highlights:
The Biden administration has opted for protectionist policies targeting China due to its increasingly aggressive posture and for the perceived job benefit for Americans.
This thinking is misguided, as it fails to take into account changes in the global economy since the last time protectionism was widely practiced, including the efficiency of global supply chains and the need for a coalition of allies to counter China.
Protectionist policies are counterproductive, as they anger our allies and prevent us from building the necessary coalition.
Brad Setzer is wrong to lump together America's allies with China when talking about currency manipulation, as many of our allies are helping to sustain industries vital to the US.
Instead of forcing allies to give up their currency manipulation policies, America should focus on winning the Cold War by working with its allies to make the world more secure.
YouTube Channel: Eurodollar University
Title: They jumped the gun on the soft landing, just as markets predicted.
Here are the top takeaways:
Global economy is in a period of transition and many believe a soft landing is inevitable, but recent data from Europe suggests a recession may be on the horizon.
German GDP growth and retail sales data suggest the country is heading for recession.
Central bankers and economists have used econometric models to predict the future, but these models have failed to take into account important market data
Causes of a potential recession include the slowing of the Chinese economy, increasing instability in the labor market, and tension between Russia and Europe. Consumers are also not as resilient as in the past and the situation is likely to get worse before it gets better.
Markets have been warning of this, but government has been slow to act due to a desire to avoid another lockdown and a general feeling that the economy isn't as bad as it could be
The government needs to act now to avoid a full-blown recession.
Title: "Disneyland Is Over" For 'Mickey Mouse' Investors: The Fed Still Has 'The Mother Of All Bombs' To Drop
Here are the key highlights:
The world in 2023 is full of new realities created by history's actors for others to study. The US isn't the only one offering a melian dialogue.
The new left and new right create their own empires of reality. Social and mainstream media echo chambers are created and ring-fenced with politically correct and incorrect landmines.
Radical-conservative Rove's idea of politics is that there is no objective, verifiable reality, and reality is what you say it is. (We will refer to this as rovist)
Markets are now rovist in many respects, with investors piling into Chinese assets in spite of the geopolitical tensions between the US and China. The Economist has published an article saying China is trying to ease tensions, but the US is not. Davos, Paris, and Berlin are insisting that Beijing must be included in world trade plans.
Xi Jinping is expected to travel to Moscow to visit Putin in the days leading up to the first anniversary of the Ukrainian invasion. The trip could be seen as a reaffirmation of the 2022 Sino-Russian partnership, rather than a new Chinese stance on the war. The timing of the visit is questionable, and could potentially mark an escalation in Russian fighting. The agenda of the meeting is unclear, but could include discussion of tactics, strategy, and current markets.
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