Money is what releases real resources like labour and commodities, and government spending is how money is added to the economy (private sector bank accounts). Treasury budget-deficits represent the money that was left in the economy (i.e., not taxed back and cancelled). FEDERAL GOVERNMENT DEFICITS = PRIVATE SECTOR SURPLUSES Treasury budget-deficits are good for the economy, yet nearly everyone on this planet has it backwards!

Fear of impending recession, coming out of the Fed’s announced tightening cycle, has driven the herd out of the stock market. …

The class of reserves referred to as “other” are used to pay the quarterly Treasury interest on bonds. $40B — $50B is paid mid-quarter (August 15). In August of 2021, the SPX fell around the interest payment but rallied right after. This year, the same pattern could be developing. We might see a drop in the SPX over the next 2–3 days and then a rally until the end of the month.

Corporate income taxes are a proxy for profits. Corporate income taxes, collected since since mid-April, are up 7% yoy. Stocks are priced for lower Q2 earnings. We track corporate taxes as a way to measure earnings in close to real time. …

The market and the economy are “all about the money”; they are both fundamentally tied to the flow of funds — even though there are lag-times of variable length. That is why we pay more attention to fiscal policy than we do to monetary policy. …

“We need to recognize that we’ve got an overheated economy that we are going to need to cool off,”… Larry Summers said on Friday (Wall Street Week) There he goes again, the prima-donna inflationista spouting off. “Overheated” economy? Why does he think that? Because prices are rising and the hospitality…

​ There was nothing new in the Fed minutes. In December, the Fed said that it would slow the purchases by $30B/month. That means its balance sheet will continue to INCREASE until March. After that, it could start reducing it (QT), but so what? All it means is that the…

Can there be a free market if there is a monopoly? Is there a monopoly in the issuance of dollars? The answer to the first question is, no. The answer to the second question is, yes. The conclusion then is: debt markets and the stock market are not free markets…

Is mathematics discovered, or invented? Is science discovered, or invented? What about art? Science, is clearly discovered. If Einstein had not realized that E=mc², then, eventually, someone else would have. Art, on-the-other-hand, is clearly invented. If Da Vinci had not created the Mona Lisa, no one else would have, and…