Wednesday, December 11, 2019

BREAKING Federal Reserve Holds Interest Rates Steady


As expected, the Federal Reserve has announced that at the monetary policy committee of the Federal Reserve, the Fed Open Market Committee, has decided to leave the interest rates it controls at current levels.

That is, the target range for the Federal Funds rate will remain at 1.50% to 1.75% and the interest rate on required and excess reserves will remain at  1.55%.

Deep dive coverage in the EPJ Daily Alert.

The full Federal Reserve statement is here.

-RW

Free Trade, No Trade and Crony Trade




At the post, BREAKING Trump and House Democrats are on Verge of a Handshake Deal on U.S.-Mexico-Canada Trade, Mike asks in the comments:
Why do you prefer a crony deal to no deal?
RW response:

First I want to make clear that free trade is preferable to crony trade or no trade. However, when the only choices are crony trade or no trade, crony trade is preferable since it means some trade is taking place which has to raise the general standard of living of a region versus no trade.

Consider, this example. There is a product made exclusively overseas because the key ingredients only exist overseas. The product cures some debilitating disease. Under a situation of no trade, say because of a trade war, no one would be able to get this product. That is horrific. On the other hand, full competition might result in a half-dozen firms competing to provide the product. That would be terrific. But let's say one of the foreign companies is a wholly-owned subsidiary of a US company with political power.

That US company has the pull to get wording into a trade deal that will prevent the foreign competitors from offering the product in the US. This would result in a crony deal that would likely make the product more expensive but available in the US.

So when the options are between a no-trade deal and a crony deal, clearly the crony deal is superior because it results in more goods flowing. Though as I stated at the start, free trade is much preferable.

While it is ok to support a crony deal over no deal, it should always be made clear that this is in the context of a free trade deal being superior and the ideal goal.

-RW

The Goldman Sachs Bullish Case for Gold: The World's Super-Rich Are Hoarding Physical Gold


In a note to clients published over the weekend, analysts at Goldman Sachs outlined why the strategic case for owning gold remains strong. The key for them is that the super-wealthy are accumulating physical gold.

"This [data] is consistent with reports that vault demand globally is surging," according to Goldman.

The report went on:
Political risks, in our view, help explain this because if an individual is trying to minimize the risks of sanctions or wealth taxes, then buying physical gold bars and storing them in a vault, where it is more difficult for governments to reach them, makes sense.
Finally, this build can also reflect hedges by global high net worth individuals against tail economic and political risk scenarios in which they do not want to have any financial entity intermediating their gold positions due to the counter-party credit risk involved.
If you don't own any physical gold I hope this spurs you to get some.

I am very bullish on gold. In the EPJ Daily Alert, I write that I expect the gold price to eventually break to new all-time high prices.

-RW

Tuesday, December 10, 2019

China Tariffs Set to Take Effect Sunday to be Delayed by Trump


US President Trump and Chinese President Xi
It appears the Trump Administration will not implement, for the time being, the next round of tariffs on China that were set to go into effect Sunday.

U.S. and Chinese trade negotiators are laying the groundwork for a delay of the fresh round of tariffs as trade negotiations continue, The Wall Street Journal reports.

Presumably, President Trump wants a trade deal done before the 2020 election, though he did recently say that he could wait until after the election to strike a trade agreement.

The tariffs set to go into effect were 15% tariffs on about $160 billion in Chinese goods.

Please note, these trade negotiations are about crony trade deals. For true free trade, all you need to do is open the borders to goods but, still, crony trade is better than no trade.

-RW

UPDATE

President Trump's top economic adviser Larry Kudlow says Dec. 15 tariffs are ‘still on the table.’

“The reality is those tariffs are still on the table, the Dec. 15 tariffs, and the president has indicated if the short strokes remaining in negotiations do not pan out to his liking that those tariffs could go back into place,” Kudlow said at a Wall Street Journal conference on Tuesday.

“So, they could not, but they also could. There is no definitive decision on that yet,” Kudlow added.

Kudlow’s comments came after The Wall Street Journal reported the U.S. was contemplating pushing back additional tariffs on Chinese goods set to take effect on Dec. 15. Bloomberg News also said China expected the U.S. to hold off on those extra levies.

These are the Questions You Should Ask a US Democratic Socialist the Next Time You Hear One Say in Your Presence That Scandinavian Type Socialism is the Ideal

Sweden, the land of billionaires
We have all heard it before.

The minute you point out that communism has been a failure in the Soviet Union, Mao's China, etc., the retort comes from a budding democratic socialist that those regions did not have true socialism and that it is the Scandinavian countries that have true socialism.

Since deep thought and research are not a prime feature of socialists you can smash this notion of their's pretty quickly.

Start with this question: "So you are in favor of the class structure/distribution of wealth that they have in Sweden?"

The budding socialist will answer: "Yes."

Then drop bomb one:

"How is this not the ultimate in a free market-type class structure/distribution of wealth?"

The dim wit will babble here because he really won't know what you are talking about or where you are headed.

It doesn't matter what is said. You will reply, "But, Sweden is probably the easiest place in the world to become a billionaire and has one of the world's highest unequal distributions of wealth in the world. How is that not the mark of a very free-market-oriented economy?"

More dim wit babbling.

Then you hit them with this:

"Sweden has one of the highest rates of billionaires in the world. One in every 250,000 people is a billionaire."

And then you close: "Sweeden may be a welfare state but it is far from socialist with so many billionaires."

You can also hit them with this, and although it is technically true, it is mixing assets with income flow. You can use this point but someone who knows the difference (unlikely to be a socialist) may incorrectly challenge you on the point. This is not improper just complex. It will score points against the weak thinking socialist, but a clever person who knows the difference between assets and income flows may attempt to dirty the water because of the mixing of assets and income flow. The dirtying of the water is incorrect here but it is complex to explain why so only use this against someone who you are confident has no clue rather than a half clue:
An estimate from The Economist finds that the value of Swedish billionaires’ fortunes is equivalent to a quarter of the country’s annual gdp. Only in tax havens such as Cyprus or Monaco, or captured economies such as Russia or Georgia, are plutocrats more dominant.
A few notes:

You might get challenged on the accuracy of your claims. If you are in a bar, this is the time to make a bet.

Here is the link from Economist magazine with the supporting facts, store it on your cellphone: https://www.economist.com/briefing/2019/11/28/in-sweden-billionaires-are-surprisingly-popular

A further note:

In the US there is roughly one billionaire for every 550,000 people.

-RW

The US Budget Deficit Explosion is Getting Very Serious

The federal budget deficit was $342 billion for the just-passed first two months of fiscal year 2020, the Congressional Budget Office estimates, $36 billion more than the deficit recorded during the same period last year.

The largest changes in outlays were as follows (the amounts reflect adjustments to exclude the effects of the timing shifts):

■ Social Security benefits rose by $5 billion (or 6 percent).
■ Medicare spending increased by $3 billion (or 6 percent).
■ Outlays for Medicaid rose by $3 billion (or 9 percent).

These are not the kinds of outlays that are easy to stop. They are politically charged.

The deficit is now on track to surpass $1 trillion in the 2020 fiscal year, which will end September 30, 2020.

CBO is calling the deficit path "unsustainable" and this doesn't take into consideration that we will eventually experience a spike in interest rates.

A perfect storm is developing.

The Federal Reserve, behind all its technical maneuvers, has only one real ability: The ability to print money. That's how they will help get the Treasury out of the jam in the short-term, print money to buy Treasury securities that will finance the debt.

But the price to be paid for this is an eventual major acceleration in price inflation and then what are the Fed and the Treasury going to do?

-RW

Monday, December 9, 2019

Applications Now Open for Mercatus Graduate Student Fellowships

Stefanie Haeffele, a Senior Research Fellow, Deputy Director of Academic and Student Programs and a senior fellow for the F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics at the Mercatus Center at George Mason University, notifies me:

The Mercatus Center at George Mason University is now accepting applications for our graduate student programs for the 2020-2021 academic year!

We offer fellowships for students pursuing graduate school in economics at George Mason University, as well as in other disciplines at universities around the world. Our fellows explore and discuss the foundations of political economy and public policy and pursue research on pressing issues. Successful fellows have gone on to obtain teaching, research, and leadership positions in academia as well as public policy positions in federal and state governments and at prominent research institutions.
 Graduate Student Fellowships in Economics at George Mason University

The PhD Fellowship is a competitive, full-time fellowship program for students who are pursuing a doctoral degree in economics at George Mason University. It includes full tuition support, a stipend, and experience as a research assistant working closely with Mercatus-affiliated Mason faculty and scholars. It is a total award of up to $200,000 over five years. The application deadline is February 1, 2020.

Interested in learning more? Read PhD Fellowship alum Abigail Hall Blanco's alumni spotlight for a firsthand look at life during and after the program.

The MA Fellowship is a two-year, competitive, full-time fellowship program for students pursuing a master’s degree in economics at George Mason University who are interested in gaining advanced training in applied economics in preparation for a career in public policy. It includes full tuition support, a stipend, and practical experience as a research assistant working with Mercatus scholars. It is a total award of up to $80,000 over two years. The application deadline is February 15, 2020.

Read our alumni spotlight of Kristine Johnson to learn more about how the MA Fellowship prepares students for careers in public policy.

Graduate Student Fellowships for Students in Any Discipline and From Any University

The Adam Smith Fellowship is a one-year, competitive fellowship program for graduate students enrolled in PhD programs at any university and in any discipline including, but not limited to, economics, philosophy, political science, and sociology. Adam Smith Fellows receive a stipend and attend colloquia on the Austrian, Virginia, and Bloomington schools of political economy. It is a total award of up to $10,000 for the year. The application deadline is March 15, 2020.

Read more about how the Adam Smith Fellowship gave alum Rosemarie Fike access to a valuable interdisciplinary network and an advantage on the job market in her alumni spotlight.

The Frédéric Bastiat Fellowship is a one-year, competitive fellowship program for graduate students who are enrolled in master’s, juris doctoral, and doctoral programs from any university and in any discipline including, but not limited to, economics, law, political science, and public policy. Frédéric Bastiat Fellows receive a stipend and attend colloquia on political economy and public policy. It is a total award of up to $5,000 for the year. The application deadline is March 15, 2020.

Learn more about the Frédéric Bastiat Fellowship helped make alum Jaime Narbon better economist in his alumni spotlight.

The Oskar Morgenstern Fellowship is a one-year, competitive fellowship program for students who are enrolled in PhD programs from any university and in any discipline with training in quantitative methods. Oskar Morgenstern Fellows receive a stipend and attend colloquia on utilizing quantitative and empirical techniques to explore key questions and themes advanced the Austrian, Virginia, and Bloomington schools of political economy. It is a total award of up to $7,000 for the year. The application deadline is March 15, 2020.

Read about how the program enriched Oskar Morgenstern Fellowship alum Alessandro Del Ponte’s graduate studies and encouraged him to embrace interdisciplinary research in his alumni spotlight.

We invite you to pass along this information to any students or to any professors that might have students interested in our programs. If you have any questions, please let me know.

-RW

BREAKING Trump and House Democrats are on Verge of a Handshake Deal on U.S.-Mexico-Canada Trade

Jennifer Jacobs, senior White House reporter for Bloomberg News, tweets that the Trump administration and House Democrats are on the verge of a handshake deal on the U.S.-Mexico-Canada "free trade agreement."

Apparently, according to Jacobs, plans are being discussed for where to hold the 3-country signing ceremony for USMCA.

USMCA is not a free trade deal, it is a crony trade deal but on the spectrum of no trade deal to free trade deal, I would rather have a crony deal than no deal.

-RW

Paul Volcker Has Died


The inflation slayer is dead.

Paul Volcker has died at the age of 92.

In August 1979, the United States was on the brink of out of control price inflation. It was on its way to a peak in early-1980 of an inflation rate of 14.59% as measured by the consumer price index.

President Jimmy Carter brought in David Rockefeller confidant Volcker to replace the mad money printer G. William Miller as chairman of the Federal Reserve Board.

The New York Times reports:
Mr. Volcker was known to be frustrated with the Fed’s halfhearted efforts to curb inflation, leading Mr. Carter’s aides to warn that he might drive the economy into recession.

Meeting Mr. Carter in the Oval Office, Mr. Volcker slumped on a couch, a familiar cigar in hand, and gestured at Mr. Miller, who was in the room. “You have to understand,” Mr. Volcker said he told the president, “if you appoint me, I favor a tighter policy than that fellow.”
He followed through on his warning to Carter. Upon assuming the duties of chairman, he announced that under his watch the Fed would no longer target interest rates but money supply growth and that he intended to slow money growth dramatically.

And Volcker did dramatically slow money growth which resulted in suffocating the price inflation and bringing on an accompanying recession.

But in the end, he was no consistent sound money operator. In August of 1982, he opened the Federal Reserve money spigots once again and money has been pretty much flowing from the Fed ever since.

Recent Fed chairs barely acknowledge money supply growth. During the reign of Fed chairs Ben Bernanke, Janet Yellen and current Fed head Jay Powell, money supply has not even been mentioned in Fed statements following monetary policy meetings. It is as though they are driving monetary policy with a gas pedal and no brake. It is a very dangerous thing to do.

The threat of a new explosion in price inflation is very real and for those who believe in a Money Control god, the death of the 6'7" Vocker may be the omen that price inflation at a serious pace is about to return. The god has taken the frugal one.

And Volcker was very frugal.

The Times notes:
He was famously frugal, favoring drugstore cigars and ill-fitting suits. In the 1960s, when the driver’s seat in his Nash Rambler collapsed, Mr. Volcker propped it up with a chair and continued to drive the car. As chairman of the Fed, he lived in an apartment building populated by George Washington University students and took his laundry to his daughter’s house in the Virginia suburbs.

There is no one anywhere near the Federal Reserve now who has an appreciation for every hard earned dollar the way Volcker did.  Fed members think they can just print their way out of any crisis. In a way, they are correct---until the money printing itself is the crisis.

-RW


Thank You, Federal Reserve: Yankees Make Record-Breaking Contract Offer of $245 million

Gerrit Cole
 The New York Yankees have reportedly offered free agent Houston Astros pitcher Gerrit Cole a seven-year deal worth $245 million, per Bob Klapisch of the New York Times.

But there is some speculation that the Los Angeles Dodgers or the Los Angeles Angeles could make him an even bigger offer.

Cole's thrown at least 200 innings in each of the past three seasons, accumulating a 3.20 ERA (136 ERA+) and 4.78 strikeout-to-walk ratio.

During the same three years, the Federal Reserve has pumped more than $2 trillion into the system.

-RW

A New York Times Columnist Hails Capitalism

David Brooks
New York Times opinion columnist David Brooks took half of a recent column to hail capitalism.

In an essay titled, I Was Once a Socialist. Then I Saw How It Worked, he sounded almost Misesian or Hayekian in explaining how the world was too complex to be centrally planned.

I mean he really presented the hardcore case:
My socialist sympathies didn’t survive long once I became a journalist. I quickly noticed that the government officials I was covering were not capable of planning the society they hoped to create. It wasn’t because they were bad or stupid. The world is just too complicated.

I came to realize that capitalism is really good at doing the one thing socialism is really bad at: creating a learning process to help people figure stuff out. If you want to run a rental car company, capitalism has a whole bevy of market and price signals and feedback loops that tell you what kind of cars people want to rent, where to put your locations, how many cars to order. It has a competitive profit-driven process to motivate you to learn and innovate, every single day.

Socialist planned economies — the common ownership of the means of production — interfere with price and other market signals in a million ways. They suppress or eliminate profit motives that drive people to learn and improve.

It doesn’t matter how big your computers are, the socialist can never gather all relevant data, can never construct the right feedback loops. The state cannot even see the local, irregular, context-driven factors that can have exponential effects. The state cannot predict people’s desires, which sometimes change on a whim. Capitalism creates a relentless learning system. Socialism doesn’t.

The sorts of knowledge that capitalism produces are often not profound, like how to design the best headphone. But that kind of knowledge does produce enormous wealth. Human living standards were pretty much flat for all of human history until capitalism kicked in. Since then, the number of goods and services available to average people has risen by up to 10,000 percent.

If you’ve been around a little while, you’ve noticed that capitalism has brought about the greatest reduction of poverty in human history. In 1981, 42 percent of the world lived in extreme poverty. Now, it’s around 10 percent. More than a billion people have been lifted out of poverty.

You’ve noticed that places that instituted market reforms, like South Korea and Deng Xiaoping’s China, tended to get richer and prouder. Places that moved toward socialism — Britain in the 1970s, Venezuela more recently — tended to get poorer and more miserable.
This is good enough commentary to get him a gig here at EPJ. But the whole column wasn't as encouraging. The second half went way off the rails. After acknowledging that the economy can't be planned, he suggested areas where the government needed to plan things:
Today, parts of our capitalist system in the United States are in good shape. Growth is remarkably steady, inflation is low, employment is high, wages for the poorest Americans are rising twice as fast as for high-wage workers.

But capitalism, like all human systems, is always unbalanced one way or another. Over the last generation, capitalism has produced the greatest reduction in global income inequality in history. The downside is that low-skill workers in the U.S. are now competing with workers in Vietnam, India and Malaysia. The reduction of inequality among nations has led to the increase of inequality within rich nations, like the United States.

Also, education levels have not kept pace with technology. More people grow up with inadequate schools, disrupted families and fragmented neighborhoods. They find it harder to acquire the skills to become good capitalists. The market is effectively closed off to them.

These problems are not signs that capitalism is broken. They are signs that we need more and better capitalism. We need a massive infusion of money and reform into our education systems, from infancy through life. Human capital-building is like nutrition: It’s something you have to attend to every day. We need welfare programs that not only subsidize poor people’s consumption but also subsidize their capacity to produce.

We need worker co-ops, which build skills and represent labor at the negotiating table. We need wage subsidies and mobility subsidies, so people can afford to move to opportunity. We need tax subsidies for health care, to make it easier for people to switch jobs. We need a higher earned-income tax credit, to give the working poor financial security so they don’t get swept away amid the creative destruction. We need a carbon tax, to give everyone an incentive to reduce carbon emissions without pretending we know the best way to do it.

A big mistake those of us on the conservative side made was to think that anything that made the government bigger also made the market less dynamic. We failed to distinguish between the supportive state and the regulatory state. The supportive state makes better and more secure capitalists.
Wow, if there was ever a case of the theoretical soundness not being applied to the practical, this is it.

This is either a case of Brooks not deeply understanding what he wrote in the first half of his column or not having the ability, in the here and now, to go against popular establishment trends.

I would bet it is the second. If you are part of the elite in any way, it is difficult to go against the grain. If you do that too often, you are going to be out looking in. This is too great a danger for most who have been put in a position of New York Times-style influence.

But a half-column deeply sound is still impressive.

This one column puts him leaps and bounds above his Times colleague Paul Krugman.

What can we expect next from Mr. Brooks next?

I will keep on watching and report back if anything interesting develops in his column.

-RW


Sunday, December 8, 2019

So What Does Nouriel Roubini Really Think About Crypto-Currencies?

As I pointed out in my video, Who is Buying Bitcoin and When Will They Stop?, bitcoin (and the greater crypto-currency world) is completely driven on momentum.

Roubini is on to something when he warns that it could crash another 99%, but these kinds of near pump-and-dump type operations don't crash in just one day. They can have strong counter moves against the general downtrend. But don't get sucked in, peek momentum most likely occurred at the end of 2017.

It is very dangerous to be long now and I say this as a person who has successfully traded bitcoin from the long side in the EPJ Daily Alert on two separate occasions.

The easy money in trading Bitcoin was made long ago. It's over. I just don't see where a powerful new group of buyers are available to come in and power Bitcoin to new high prices.

-RW

Socialism and the Green New Deal are Economically Impossible


Richard Ebeling emails:

Dear Bob,

I have a new article on, "Socialism and the Green New Deal are Economically Impossible".

This coming year, 2020, marks the hundredth anniversary of the publication of Austrian economist, Ludwig von Mises’s,” famous article, “Economic Calculation in the Socialist Commonwealth,” which appeared in German in 1920, and which was expanded into a full-length book on every facet of socialism two years later in 1922. In this article and the later book, Mises demonstrated the inherent and inescapable unworkability of a centrally planned economy once government has done away with private ownership in the means of production, and the resulting end to market competition and a functioning price system on the supply-side of the economy.

What I try to show in my article is that Mises’s argument against socialist planning is more than a closed episode in the history of economic ideas. With the rise of the new call for “democratic” socialism and the demand for a Green New Deal, his critique of the command and control economy – this time in the name of “saving the planet” from global warming – is just as, if not more, relevant than ever in the face of what is actually being proposed for ending any sort of functioning competitive market economy by implementing the demand for a “green” system of central planning.

 Best,


Richard

 Socialism and the Green New Deal are Economically Impossible

By Richard M. Ebeling 


The Spanish philosopher, George Santayana (1863-1952) is usually credited with the phrase, “Those who cannot remember the past are condemned to repeat it.” Nowhere is this truer than with the renewed idea and demand for the establishment of a socialist economic system. 

Why the Best Restaurants Are On Quieter Side Streets


Christopher Ingraham writes:
Here’s an odd spatial quirk of the New York dining scene with implications for wherever you eat: restaurants located on the city’s streets get better Yelp ratings than those located on avenues, according to a clever analysis by Alex Bell, a New York City resident and engineer.

A bit of context: Manhattan’s streets typically run east to west. They’re shorter, narrower and less trafficked than the island’s avenues, which run north to south and tend to be major thoroughfares, both vehicle and pedestrian.

Those differences are immediately apparent when looking at the city’s official road classifications: Avenues tend to be listed as major arteries, while streets are considered collector and local roads.

Several months ago, George Mason economist Tyler Cowen recorded a podcast with urban planning expert Alain Bertaud of New York University. Cowen asked whether Manhattan’s streets or avenues had better food. “In the streets, definitely,” Bertaud responded, because “you have more specialty restaurants in the streets. In the avenues, you have more people who are just transient, just pass by and are looking for faster food.”

Bell decided to test this hypothesis by harvesting the Yelp reviews of 20,000 Manhattan restaurants. The data showed that the average street restaurant had a Yelp rating of 3.62 stars, while those on avenues received 3.49 stars — a difference that isn’t likely to be random statistical noise.

More to the point, outstanding restaurants — those with a rating of 4.5 stars or higher — were nearly 50 percent more likely to be located on a street than on an avenue. Bell found that “18% of restaurants on the streets had a score of 4.5 or higher, compared to 13% of restaurants on avenues.”

The difference appears to be tied to the relative amounts of foot traffic on streets and avenues, as Bertaud posited. Streets see fewer pedestrians, and off-the-beaten-path restaurants may need to optimize for quality to keep customers coming back. Restaurants on avenues, on the other hand, are virtually guaranteed a relatively large traffic stream. That may force them to place more emphasis on volume, particularly if they’re dealing with higher rents as a result of their busier location.

Noam Chomsky Attacks Milton Friedman (And Misses)

Ramin Zareian with Noam Chomsky in his office at the University of Arizona
During an interview with Ramin Zareian for The Red & Black, Noam Chomsky took a slap at Milton Friedman:
[T]he UBI was supported by Milton Friedman, for example, the far-right, but you have to look at his reasons. He wanted to do that to eliminate the entire welfare system. That’s a catastrophe. There are people who need things over and above. We’re not all identical, but with right-wing libertarian ideology, we’re all equal. We just enter the market, and everything goes wonderfully. In the real world, it just doesn’t happen to be like that. A mother with three kids enters a market differently than Milton Friedman does, needs special care. If you eliminate the entire welfare system, that’s a catastrophe for the part of the population that isn’t relatively privileged and wealthy. On the other hand, if you introduce the UBI as a kind of a floor along with a decent social-benefit system, it could make sense.
There is a lot wrong with the above.

Libertarians view Friedman as soft on the universal basic income issue. A true free-market economist would never support UBI. And Friedman, who has to be considered a mechanic for the state, was not against government payouts to the lower chunk of the masses. He was merely attempting to change the structure of the way payments are made via his negative income tax program. The money would flow as it would under a welfare problem just the technicalities of the money flow would change.

Chomsky also distorts libertarian ideology in his comment above. Nowhere in libertarian ideology is the view held that everyone is equal. Libertarians hold the exact opposite view. See, for example, Egalitarianism as a Revolt Against Nature and Other Essays by Murray Rothbard. 

-RW



Saturday, December 7, 2019

Comparing Winter Average Temperatures Across the United States

Some great data from  StateDataLab.org, the best government watchdog number crunchers on the planet.

Below is their chart comparing winter average temperatures in California, Illinois, and New York to the 50 state average.


-RW

How Did This Happen? Mainstream Media Subscription Sign-Ups Explode Over Thanksgiving Weekend

It wasn't just high definition televisions that consumers bought over the Thanksgiving holiday weekend.

There were no pictures of the rush, but subscriptions to mainstream media publications explode as well.

On Cyber Monday, The Wall Street Journal and Wired both recorded the biggest single day of promotion subscription sales in their histories.

On Black Friday, Barron’s experienced the same. And New York magazine, which began offering promotions on Friday, logged its best four-day sales stretch ever, reports Digiday.

And here I thought it was only EPJ Daily Alert new subscriptions over the holiday weekend that broke records. It must be Fed money pumping that is filling the economy with loose cash.

OK, for those of you that missed it, I am running the EPJ Daily Alert trial subscription again this weekend.

So dig into your newly printed Fed money and sign up today. I will explain in the ALERT what all this money printing will mean and how to prepare for the consequences, whether you are an investor, businessman or just curious.

Sign up for your trial EPJ Daily Alert subscription here.

-RW

Friday, December 6, 2019

A Banana Duct-Taped to a Wall Just Sold for $120,000


A banana duct-taped to a wall sold for $120,000 at Miami's Art Basel this week.

The piece, called "The Comedian," was created by the Italian artist Maurizio Cattelan.

Emmanuel Perrotin, the gallery owner from where the piece was sold, told CBS News that Maurizio's work is not just about objects, but about how objects move through the world.

This is the best evidence yet that we are still in the Federal Reserve money printing boom phase of the business cycle. You never see this kind of nuttiness during the bust phase.

According to CBS News, the artist did not provide any instructions for buyers on what to do when the banana starts to decompose. The Miami Herald, though, reported that owners can replace the banana, as needed.

In 1961, Manzoni sold 90 small cans labeled “Artist’s Shit (Merda d’Artista) for roughly $30. In 2016, the Milan-based auction house Il Ponte Casa d’Aste reportedly sold one of the cans for nearly $300,000.

In 2017, he created "America" an 18-carat-gold toilet. It sold for $6-million and this summer was stolen from England's Blenheim Palace.

-RW

UPDATE

Via Miami Herald:

The London-based White Cube gallery in the booth next door to Galerie Perrotin removed a floor installation because the crowd to see the banana was just overwhelming.

Perrotin installed a silver rope line in an attempt to keep the crowd in check Saturday afternoon. Four Miami Beach police officers also gathered outside the gallery to keep order.


Trump Federal Reserve Board Nominee Dies

Economist Marvin Goodfriend, who was nominated by President Trump for a position on the Federal Reserve Board of Governors, has died.

The nomination was never confirmed by the Senate and it expired in January.

An extreme Keynesian, Goodfriend was no friend of sound monetary policy. He was in favor of negative interest rates during downturns. That is he wanted to charge savers for saving.

He died on Thursday, December 5 at the age of 69.

-RW