Oligarchy unchained
Joe Biden has just delivered his farewell address. Having not have been a supporter of most of what his administration did, I confess it was a pleasant surprise. In particular he recalled and renewed the warning from Eisenhower’s farewell address, updating it to the “tech industrial complex”. I could quibble with details, but in broad strokes it was on point.
We have been growing a new oligarchy, Our biggest and most powerful corporations are bigger and more powerful in real terms than ever. It’s a product of years of artificially low interest rates. It’s no accident that this oligarchy has flourished since 2008. Artificially low rates forced savers out of savings and into the stock market, providing subsidized capital to those with the best access to the capital markets. Other factors such as lowered tax rates even for trillion dollar corporations made a secondary contribution.
A complete analysis is beyond the scope of this post, but the problem didn’t start with freedom of speech in social media, and social media fact checkers didn’t end it. It started with the excesses of easy money and low interest rates. The cure starts with reversing these ills. It can continue with higher tax rates for the biggest and richest corporations, paired with a deduction for dividends paid. If a graduated rate structure is good enough for people, it’s good enough for corporations. Bond interest is deductible, and dividends are the analogous cost of equity capital.
These measures would help discourage the runaway accumulation and bottling up of capital in corporations, and render a lot of otherwise piecemeal and unwieldy antitrust action moot. The undue concentration of wealth and power the president warns of was produced by misguided policies and can be solved by sound ones.
Gold is solidly back above the $2700 level. I’m sticking with my earlier calls for a $2600-$2800 trading range.
https://financology.net/2024/09/24/gold-is-relentless/#comment-3857
https://financology.net/2024/11/11/market-update-4/#comment-4005
For now. If the Fed follows through on speculation about further rate cuts, this area will be a launching pad for further upside. To the extent the Trump administration makes any progress on getting deficits under control, it could persist. But in the longer run it’s hard to see anything but runaway Federal debt and Fed monetization thereof; so gold looks like essential insurance for the foreseeable future.
Oh the humanity!
https://www.cnbc.com/2025/01/17/vanguard-fined-more-than-100-million-by-sec-over-violations-involving-target-date-retirement-funds.html
Exactly what horrible thing did Vanguard do wrong here? Looks to me like a flaw in the tax system, and the government passing the buck. Pending fixing the tax regulations, the possibility of the IRS excusing the artificial tax liability appears not to have been considered.
Vanguard is owned by the investors in its funds. Those investors, the ones the SEC is supposedly trying to protect, will pay the fine. There is no separate entity out there from whom to assess the cost.
Well, here comes trump
You betcha … and we’re in for some big changes. The business news is swimming with predictions as to what policies will be proposed, what will be implemented, etc. I don’t think it’s that complicated. For better or worse, Trump has been telling us what he wants. So what policies will be proposed is an open book. What will be implemented will be less … we know he starts at the extreme and works towards the middle.
Despite for example all the apocalyptic predictions around tariffs, they will come out lower. That’s a good thing … tariffs will be net beneficial but only as long as they’re moderate. We went too far with aggressive globalism; we don’t need the pendulum to swing to the opposite extreme. Expect illegal immigration to collapse, but deportations, while they will happen, will focus most intently on those who have broken other laws as well.
The front where least progress seems likely is federal deficits. It’s encouraging that finally there is serious talk at the highest levels about getting it under control, but a lot of damage has already been done and it’s not easily going to be repaired. Deregulation is a given.
I don’t know much about foreign policy. I can only say I hope he succeeds in winding down war and particularly US involvement in war. It’s time to retire the notion that it’s the US’s job to rule the world.
https://dailyreckoning.com/ron-pauls-2025-new-years-resolutions/
mega mum update
Mum is vastly better, she made so far 80/90% recovery.
To think that 2-3 weeks ago i was sitting along side her bed holding her hand as i thought (& had been medically advised that she had ZERO immune system) that it was going to be her last night on this earth.
Bit by bit, step by step she fought back bravely & we doing vastly better. I am still awaiting blood results but she seems much better. She is also far more mobile, she no longer needs her walker but i stil guide her up/down stairs.
Still needs nappy, although more “predictability” is now coming to when she might need the loo……so far we getting back to normal…..ish
My Thanks for the personal requests for divine intervention.
Cheers
Mike
Good news, Mike. To more of the same🙏
Well, here we go!
he come out swinging!
https://www.youtube.com/watch?v=SgaN9hEZM7o
100 years ago america started down the path to empire, now its on the path walking away back to what the US should always been. The City of London will get chopped up!
WE going for multi-powers…………..& those European/Limey assholes will NOT be part of it!
Mike
Trump’s rhetoric has suggested he’s less imperially inclined, but some of his appointments suggest a hawkish foreign policy bent. First time around he didn’t appear to be a big NATO booster, and he’s promised to wind down the Ukraine war. The establishment – the MIC, deep state, etc – aren’t just going to fold up their tents and go home though, and he will be under a lot of the same pressures as his predecessor. His “America First” base pulls the other way; less interventionistic. All told, it’s just too early to tell. My read is he will be less outwardly oriented and more focused on domestic priorities, but how much so remains to be seen.
Oh….heres davoS/WEF
https://www.telegraph.co.uk/business/2025/01/20/britain-and-eu-face-migrant-crisis-unless-russian-assets/
They want to steal Russia assets to “Fund” Ukraine for 4 years until, may be they can put their own Man/Woman in the White House…………
its a bit “Alex Jones”………but i think i deal was broke.
Syria is dumped by Russia…a trade for ending the ukraine war.
other deals are in play, the MIC will carry on just fine without Ukraine as trump makes euro-scum to re arm.
Any way, we see………………….now what about silver?
Mike
I don’t follow silver closely, but gold has reclaimed the $2750 level. Back to the races? Probably not. It still looks solid, but a repeat of 2024’s sparkling performance in 2025 is unlikely.
Political blackmail. We can defend somebody else’s borders but not our own?
The opening salvo from Trump II is less than impressive. His solid performance on the border crisis is being diluted by his involvement with the likes of TikTok and SoftBank. There is still a war in Ukraine going on and the US is still supporting it. Wasn’t that supposed to end on Day 1? Trump was elected President of the USA, not CEO of USA Inc.
The last thing this economy needs is more government involvement. Government’s job is to support a free, fair and level playing field, not play favorites.