The economy is booming. But nobody’s hiring.

Is creating jobs a lost art from a far-gone age?

Last week the Atlanta Fed put third-quarter growth at a sizzling 3 and a half percent. Yet September added just 29,000 jobs -- basically flat in an economy of 163 million jobs.

Traders on kalshi forecast an almost as bad 70,000 this month -- less than population growth. In a sizzling economy.

The puzzle is unemployment is actually low at 4.2%, where it’s been for pretty much a year and a half. Jobless claims are actually near historic lows.

In other words, companies aren’t firing workers. They’re just not hiring new ones.

This is odd -- usually booming GDP spawns jobs like mushrooms after rain.

And the reason could be Artificial Intelligence -- superintelligence if you didn’t get the memo.

The idea being that AI isn’t crushing jobs by the millions, but it is encouraging companies to do more with the people they’ve got. Meaning they’re delaying new hires.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

College Grads Take it on the Chin

The first casualties are recent college grads, especially those destined for America’s cubicle farms.

An August Stanford study found that employment among 22-to-25-year-olds in AI-exposed occupations was almost 20% below low-exposed jobs.

With the gap growing by a third in the last year, from 15% fewer hires to 20% fewer.

Interestingly, experienced workers have no gap -- just the new hires.

So junior programmers, administrative assistants, entry-level analysts, the army of recent graduates whose job was to rearrange PowerPoint to entertain middle-managers.

This is creating an interesting labor market: experienced workers are valuable because they’re actually more efficient with AI.

But New graduates can’t get the experience because AI replaced them before they even showed up.

So AI’s not taking all the jobs, but it is taking the first rung of the career ladder.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

Is This Time Different?

We’ve seen this movie before.

In 1900, half of American workers worked in agriculture. Along came tractors and combines and today it’s less than 2%.

Yet America didn’t end up with 38% unemployment. Because workers were freed to make cars, airplanes, write software, and teach yoga.

It happened again when computers eliminated typists, bookkeepers, and clerks. Creating millions of jobs in software, telecommunications, online commerce and fulfillment centers.

Because technology doesn’t simply eliminate work. It makes workers more productive, lowers production costs, increases purchasing power -- customers buy more stuff, especially services: Great news for yoga instructors.

The catch is those new jobs don’t appear automatically. Entrepreneurs have to create them. And that’s where governments enter the story.

Starting a business -- or hiring your first employee -- can mean licenses, zoning, permits, tax registrations, insurance mandates, payroll compliance, labor-law restrictions. An obstacle course trying to crush the next wave of jobs.

These matter most to small companies, precisely where the next generation of jobs should come.

New business establishments already create roughly 4 million jobs a year. But imagine how much faster if starting a business -- or hiring an employee -- was like ordering a t-shirt on Amazon.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

What’s Next

The solution isn’t to ban technology any more than banning tractors or electricity. It’s to unleash tomorrow’s entrepreneurs.

Slash occupational licensing, payroll taxes, employment-law complexity. Strip away unnecessary permits and zoning. Make it easy to start a business, experiment, and hire the first employee.

Technology has been eliminating jobs for thousands of years. In fact, that’s how we became rich, the industrial revolution wiping out farm laborers.

But what we didn’t have in 1840 was an empire of tax and regulation roadblocking millions of new jobs.

If that doesn’t change, this time will be different.

Enjoyed this article? Get the next one free.

Join 23,000 readers who get my weekly take on the economy, markets, and freedom, in plain English with no spin.

Plus regular deep dives like the Fall of Rome and the Weimar hyperinflation.

Subscribe now

Want to invest alongside me?

My paid subscribers get my monthly investment guide, with the actual stocks I’m buying and shorting.

So far this year my $100,000 model portfolio has returned 51% annualized.

For just $8 a month, get my latest picks, market analysis, and monthly updates.

Subscribe now

Or take a peek at what you’re missing in my latest investment guide:

Profstonge Weekly

October Update: Jobs Recover, Bonds Panic

First, investment returns on the month…

Read more

25 days ago · 25 likes · Peter St Onge

See you next week!

Will bonds crash stocks, spark a banking crisis, and send us into a recession that could cost millions of jobs?

Is it time to stock up on cat food.

Across the West, bond yields are soaring -- meaning bond prices are crashing -- from a combination of runaway government deficits and inflation.

Now you may not care about bonds, but bonds certainly care about you.

Because soaring yields can tank stocks -- and gold. They can trigger bank failures like in 2023 when Jerome Powell’s panic-hikes crashed bonds.

They can devastate capital-intensive industries like the AI data centers currently propping up roughly half of economic growth.

And they can send the entire economy into recession as soaring borrowing costs force companies to abandon trillions in investments -- malinvestments in Austiran economics.

The warning signs are flashing worldwide.

In France, the prime minister warns that runaway government debt poses a “mortal danger” to the country, leaving France “on a cliff’s edge.”

French bonds hit their highest level in nearly 25 years -- worse than the European debt crisis that followed 2008.

In America, the 10-year bond recently crossed 5.3%, up more than a third since Trump started bombing Iran, which lit a fire under deficit and inflation fears. 5.3% is the highest since 9/11.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

What’s Driving the Bond Panic

The immediate trigger is inflation fears, especially oil prices from the Iran war.

But the deeper problem is decades of governments spending trillions they don’t have.

America’s on track to $2.5 trillion of annual deficit. As a share of the economy that’s something we’ve never seen since the World Wars.

The problem is the debt compounds. As in, if you’re paying interest 5 cents on the dollar, every $2.5 trillion leads to a permanent $125 billion in additional federal spending just to service the brand new debt.

For perspective, $125 billion is roughly 3 times the budget of the Department of Justice. For one year’s deficit. Again and again.

It’s like paying off your credit card with another credit card. But every new payment they hike your rate.

That panics bond investors. Who demand even higher rates to cover the risk that governments default — either so-called hard default where they stop paying. Or the much more common soft default of letting inflation melt the debt — and the bonds.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

How a Bond Crisis Turns to an Economic Crisis

The problem for the real economy is what happens in Washington doesn’t stay in Washington.

High yields drive up the cost of borrowing across the economy. This strangles growth and new investment, but it devastates existing investment since projects that made sense at 3% interest don’t at 6%.

In Austrian economics these are called malinvestments. And today’s biggest candidate is AI.

Goldman Sachs estimates tech giants will spend roughly $1.2 trillion in 2027 building AI. For perspective, all investment in the entire economy -- which is roughly 1/4 of world GDP -- is only 4 trillion.

One recent study estimated AI and IT are now driving 92% of GDP growth.

If borrowing costs soar, those trillions crash. Chip orders disappear. Data centers get canceled. Millions of construction workers get laid off.

And given AI and IT are now roughly 40% of the S&P 500, stocks crash.

Along with banks, since rising bond yields crush the bonds filling their vaults. When assets fall below deposits, presto, the bank’s out of money. We get an ominous Sunday night “everything’s fine” presser by Bessent and Warsh.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

What’s Next

The solution’s very easy: balance the budget. Of course, the problem is government deficits have no natural predator in Washington.

We saw from DOGE how impossible it is to even slow spending, and Congress has spent decades passing balanced budget mechanisms that get gamed to oblivion before the ink dries. A balanced budget amendment stands a snowball’s chance in modern Congress.

So deficits aren’t going anywhere. Meaning the bond crisis isn’t going anywhere.

What’s the end game? As alway, the money printer. Central banks step in and print money to buy government bonds, trading higher inflation for capped bond yields.

Politicians get their spending. Bondholders get their money back.

You — and your children — get the inflation.

Enjoyed this article? Get the next one free.

Join 23,000 readers who get my weekly take on the economy, markets, and freedom, in plain English with no spin.

Plus regular deep dives like the Fall of Rome and the Weimar hyperinflation.

Subscribe now

Want to invest alongside me?

My paid subscribers get my monthly investment guide, with the actual stocks I’m buying and shorting.

So far this year my $100,000 model portfolio has returned 51% annualized.

For just $8 a month, get my latest picks, market analysis, and monthly updates.

Subscribe now

Or take a peek at what you’re missing in my latest investment guide:

Profstonge Weekly

October Update: Jobs Recover, Bonds Panic

First, investment returns on the month…

Read more

22 days ago · 25 likes · Peter St Onge

See you next week!

Latin America’s populist revolt is exploding.

Giving hope to the long-suffering people of the region. While accelerating the conservative transformation of millions of US Hispanics who Democrats just got finished importing.

Last week it was Brazil, who’s done being Socialism’s lab rat with populists crushing the first round of the presidential election and now running 83% odds on Kalshi of winning outright.

Populists swept a slew of seats in Congress, doubling their Senate seats while the ruling socialists lost 2 in 3 of their senate seats

Brazil brings it to 8 out of 8 elections won by populists across Latin America since Trump defunded USAID, Washington’s left-wing tax-funded election fixing operation. Your tax dollars no longer at work.

So what’s going on, beyond USAID?

For one, it turns out socialism didn’t work. Again.

In the last decade GDP growth across the region has been stagnant at under 1% per year. Meanwhile Latin American socialists -- like Ameican socialists -- prefer to hug criminals instead of locking them up.

So incomes are stagnant, streets are unsafe. Eventually voters connect the dots.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

The Models: Argentina and El Salvador

The most dramatic so far -- and models for the rest -- are Argentina and El Salvador.

In Argentina, Javier Milei inherited 300% inflation and budget deficit of 5% of GDP -- in US terms a trillion and a half. It took him literally 3 months to balance the budget, and with a year he slashed inflation 15 fold.

In El Salvador Bukele inherited one of the worst homicide rates on earth -- statistically 1 in 12 Salvadorans would be murdered at some point in their life.

He slashed it by 99 percent using the crazy idea of locking up gang members and repeat offenders. El Salvador is now safer than Canada.

Now populists across Latin America are making pilgrimages to study the Milei model and the Bukele model. Because Latino voters apparently consider not getting murdered a kitchen-table issue.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

Latin America’s Endangered Socialists

Aside from communist dictatorship Cuba and Venezuela -- and junior dictatorship Nicaragua -- there’s only 3 left-wing governments left in Latin America: Uruguay, Guatemala, and Mexico.

Guatemala could flip next year, Uruguay’s not voting for a couple years, but Mexico’s the interesting one for Americans.

The good news is Mexico’s got a rising populist star in Ricardo Pliego.

The bad news is Mexico’s next election isn’t until 2030 and the ruling leftists are weakening but remain popular since they buy votes like a 1920’s Chicago machine and are riding the same anti-Trump wave as Canada’s useless PM.

Still, 2030 is a long ways, and we’ll see if Mexicans lose patience with Morena’s slow growth and high crime like the rest of the region.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

What’s Next

Every ingredient of the left’s collapse will continue: economy and crime under socialists. USAID money.

This matters for the long-suffering people of latin America.

But it also matters because 1 in 7 US voters are now hispanic, and many pay close attention to what’s happening in Latin America.

When Bukele’s crime miracle or Milei’s inflation miracle are kitchen-table topics for US Hispanics it concentrates minds.

US Hispanics are already abandoning Democrats in droves: In 2016 Trump lost them by 38, in 2024 he was within 3 points.

If Latin America flips US Hispanics to Republican after Democrats imported tens of millions it would be one of the most delicious ironies in American history.

Enjoyed this article? Get the next one free.

Join 23,000 readers who get my weekly take on the economy, markets, and freedom, in plain English with no spin.

Plus regular deep dives like the Fall of Rome and the Weimar hyperinflation.

Subscribe now

Want to invest alongside me?

My paid subscribers get my monthly investment guide, with the actual stocks I’m buying and shorting.

So far this year my $100,000 model portfolio has returned 51% annualized.

For just $8 a month, get my latest picks, market analysis, and monthly updates.

Subscribe now

Or take a peek at what you’re missing in my latest investment guide:

Profstonge Weekly

October Update: Jobs Recover, Bonds Panic

First, investment returns on the month…

Read more

23 days ago · 25 likes · Peter St Onge

See you next week!

The average new car just crossed $50,000 according to Kelley Blue Book.

50 grand used to be a luxury car that would impress the ladies. Now it’s a boring car that impresses the loan officer.

Toss in thousands in fees and “market adjustments,” skyrocketing insurance thanks to trial lawyers and illegals yolo-ing with no drivers license and no car insurance. And car loans that just hit an 7% thanks to the Federal Reserve and a new car is running the price of a starter home in 1990.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

How we Lost Cheap Cars

This isn’t because America forgot how to build things. We build fighter jets, rockets, AI data centers, and enough compliance paperwork to heat a small city.

It’s because Washington took the basic car and forced up the price with manufacturing regulations, taxes, monopolistic rules and green mandates.

Politically, pile 50 grand cars on top of half-million dollar starter homes, thousands-a-month health insurance, and bankruptcy-inducing medical costs and it’s putting Gen Z into debt slavery they’re voting Socialist in dreams of escape.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

Trump Ends Biden Mandate

This week, Trump took a big step to help, formalizing a rule to roll back Biden-era fuel-economy mandates that had become a stealth EV mandate requiring an absurd 50.4 miles per gallon in just 5 years.

To put that in perspective, the 1980’s Yugo with aluminum foil quarter panels you could dent with a finger got 29 per gallon. The original 1960 Mini, which was slightly bigger than a lawnmower, got 39. Biden’s handlers put 50 into law.

Getting a full-sized car -- or an SUV -- to 50 means tens of thousands of exotic material, and emission tech complete with the dreaded auto-stop feature. Or the actual goal, forcing you into an EV.

Trump lowered it to 35 mpg. Still up from 30 today, but no longer written by people who think every American family should drive a government-approved toaster.

Of course it’s not just mileage rules, it’s a thousand little costs, all stapled together: compliance credits, dealer monopolies, factory permitting, lawyers billing $900 an hour to dodge climate activists waving tree frogs.

So what would cars look like without this regulatory gauntlet? We have a natural experiment in China, which is building fully functional cars for 10,000.

During his recent sit-down with China, Trump said he’d be open to Chinese automakers building plants here. Of course they’d have to completely redesign for our empire of climate-fairy bespeckled red tape, so they’d be a lot more.

But the wider point is instead of handing yet another million-job industry to China, just stop crippling American production.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

4 Steps to Cheap Cars

First, finish killing the EV mandate and let electric vehicles -- or small fuel-efficient cars -- compete on the merits.

Second, end California’s regulatory veto. California is big enough that its rules effectively write national rules -- exactly what the Commerce Clause is supposed to prevent. A state that can’t keep its lights on should not be writing national industrial policy.

Third, break the dealer cartel. Franchise laws block direct sales, limit competition, and turn buying a car into a hostage negotiation tacking, according to one study 5,000 dollars on the cost of a car.

Fourth, make it cheaper to manufacture in America. Faster permits for mines, refineries, power plants, factories, fabs for chips that go into cars.

Finally, the big kahuna: Bring inflation back down to 2% — ideally to zero — by slashing Federal spending. This stops runaway prices, lets the Fed cut rates to lower car loan interest. Alas, with this Congress — Republican or Democrat — that’s a snowball’s chance.

Americans want safe, reliable, Made in US cars you can buy without pawning the kids. Instead of cheap Chinese cars, Congress can just stop waging war on the car industry and maybe ease off the trillions in fraud and waste.

Enjoyed this article? Get the next one free.

Join 23,000 readers for weekly articles on the economy and freedom, with regular deep dives like the Fall of Rome, the Weimar hyperinflation, and FDR’s Great Depression.

Subscribe now

Want to go further? Paid subscribers also get my monthly investment guide including real-money picks that have made 41% annualized returns so far this year on a $100,000 portfolio.

See you next week!

First, investment returns on the month.

As of this morning, September 30, my watch-list of winners gained 12% on the month — a zany 290% annualized. The losers to short are down an even crazier 17.8% on the month, which is a similarly happy minus 90% annualized.

All this juicy goodness on a month the benchmark SPY (S&P 500) was essentially flat.

That brings the “Adrenaline” growth portfolio to a monthly return of 7.8%, while the “Market Neutral” portfolio is actually up 9.8% on the month since the losers did so bad.

Bringing year-to-date 2026 gains to 36.5% on Adrenaline, a nearly identical 36.8% on Market Neutral. Annualized, both are about 51% — triple the S&P.

Details on the portfolios are below — alas after the paywall.

On to the economy, recession odds are plunging, America is still growing, still hiring, and still spending. So much for AI eating all the jobs and gutting profits in everything else. And so much for the dozen depressions left-wing media predicted under Trump.

But we’re paying for it in inflation, interest costs, and a bond market that’s starting to panic since Congress is spending like drunk sailors who stumbled across 2 and a half trillion dollars.

Going to the tape, second-quarter GDP came in at a tame 1.5% annualized. But real private domestic demand -- consumer spending plus investment, so pretty much the whole show -- was a solid 4.2%. And corporate profits soared by $400 billion in the quarter, a blistering 42% annualized.

In short, this is not a recession even with oil flirting with $100 depending on the week.

Jobs confirmed it: After months of fears of a “no hire, no fire” economy when AI eats all the jobs, August added 162,000 payroll jobs, with unemployment steady at a comfortable 4.1%. The hiring was not spectacular, but it’s solid considering the war and a tight Fed.

None of this is recession territory. In fact, prediction market Kalshi now pegs just 23% odds of a recession by the end of 2027 -- down from nearly half in June.

The catch is inflation, and bond markets that are downstream of it. CPI jumped 0.4% in August -- annualized 5%. Which raised headline inflation to 3.4% year over year.

That’s nearly double the Fed’s target of 2%, which it’s failed to achieve going on five and a half years of “transitory” inflation.

A lot of that is Hormuz-driven energy prices. But even core inflation -- which strips out food and energy -- rose 4% annualized on the month. So even beyond gasoline’s jump of 27% over the year, broad inflation is not dead.

The reason, of course, is Washington keeps pumping out $2.5 trillion deficits. Which going by history will jump to $4 trillion when that recession recession does hit — World War 2 fiscal territory.

And that takes us to the Fed, which resumed hikes last month for the first time in three years. This took us to 4% target Fed Funds Rate.

That’s a lot better than 5.5% a couple years ago, but it compares to just 0.25% during Covid, when the Fed was running the money printers on max to bribe voters into lockdowns.

More than the Fed, the big story this month was the bond market. The 10-year and 30-year Treasury yields are the two to watch. The 10-year is designed to look past the boom-bust cycle -- 10 years bridges a typical cycle. So it’s a market read on long-run inflation, growth, and fiscal credibility. While the 30-year is the longer-duration warning light that, of course, tracks mortgages.

Both leapt this month, hitting the highest levels in nearly 25 years. This is ominous because it means markets are worrying whether the federal government can finance -- and repay -- its exploding $40 trillion of debt.

Because if governments are borrowing too fast -- like, say, 7% of GDP as we’re doing now, which is 5x growth -- then bond investors start to worry they won’t get their money back. They demand a higher rate.

The fear isn’t that Washington will literally stop payment. But they can put a finger on the inflation scale to melt away the debt. The illustrative case is Weimar Germany, which didn’t default, it simply printed money to the point the national debt was worth less than a loaf of bread.

Near-term, rising bond yields pushes up every other rate in the economy — corporate borrowing, commercial real estate, car loans, mortgages.

Long-term, it could set off a doom-loop where higher rates push up Washington’s interest expense -- already more than a trillion a year -- that leads to bigger deficits, bigger interest costs, rinse and repeat bigger and bigger.

Now, there’s an entire industry that’s been predicting a bond market collapse ever since Nixon ended the gold standard. I don’t think it’s happening tomorrow -- bond auctions are clearing, while 5% yields aren’t necessarily dangerous. In the go-go 90’s they were closer to 7%.

But the direction matters: more debt supply, more inflation risk, and fewer buyers willing to subsidize Washington means structurally higher rates for decades. While $40 trillion of debt means 7% would hurt a lot more today than in the 90’s or the 70’s.

Moving to stocks, despite the bond drama, stocks are still humming -- driven by that 40% annualized jump in profits. The S&P 500’s up double-digits this year -- despite the war. Nasdaq’s closer to 20%, powered by AI.

It may not feel like it, but market volatility (VIX) is actually low, surprisingly given ongoing drama in both the trade war and the shooting war.

The wild card is US growth is increasingly depending on AI investment, which is now more than half of annual growth and is by far the biggest capital-spending boom in history.

If AI regulation gets traction, or if upcoming mega-IPO’s of OpenAI and Anthropic get derailed, or if defaults spread on the trillions of data center spend, AI is big enough to pull the entire economy into recession.

Putting it together, the economy is stronger than the doomers say. Inflation is stickier than the optimists say. And the bond market is taking Washington’s debts out of households and job growth.

With that, let’s get to the stocks.

I use Austrian economics to track where we are in the business cycle, then look for companies positioned to profit — and companies that could get crushed when the cycle turns.

Each month I update my buy and short watchlists, along with two model portfolios:

• Adrenaline: 70% stocks, 30% hedges including gold, silver, and bitcoin.

• Market Neutral: 35% long, 35% short, and 30% hedges — designed to reduce exposure to the overall stock market.

The goal isn’t just to pick winners. It’s to find opportunities whether the market is booming or busting.

Below the paywall: My latest stock picks, shorts, and portfolio positioning — including how I’m navigating the AI boom and the risks building beneath it.

It’s $8 a month, including my weekly investment research and full archive of 80+ articles.

Let’s get into the picks.

Subscribe now

Read more

Last week, the Federal Reserve raised interest rates for the first time in three years. Apparently the housing market wasn’t dead enough.

The quarter-point increase took the Fed’s benchmark to nearly 4%, more than double the 1.8% average since the year 2000.

With another 2 hikes predicted by next April.

More important, it sent mortgage rates to 7.12% — which higher than 96% of month since 2000.

For Americans waiting for cheaper mortgages after Bidenflation, the light at the end of the tunnel turned into a train.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

The Covid Lock-In

The problem is millions of Americans are locked in to cheap mortgages they signed during Covid, when the Fed yanked rates to near-zero to bribe voters into lockdowns.

Those cheap rates set off the worst inflation since the 1970’s. And they mean today nearly half of mortgages are currently under 4%. One in five is under 3%.

In other words, for half of Americans, moving into the exact same house nearly doubles their mortgage rate. For the median home, a $980 mortgage payment now would cost $2,312 per month.

The difference being nearly $16,000 per year. In case Congressthings wonder why young people are voting Socialist.

And it keeps getting worse: In the last year alone, a mortgage on the median home is up $265 per month.

Projected hikes could take the median mortgage close to 8% -- spitting distance to $3,000 per month. For the median.

For almost 5 years now, this lock-in has been freezing the housing market, taking it down more than half since the October 2020 peak.

Part of that is higher rates, but the Federal Housing Finance Agency estimates lock-in prevents nearly a million sales per year.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

On the ground, that looks like empty-nesters hogging big houses even after the kids move out -- they can’t afford to move.

While young families are forced to rent since a 7.12% mortgage would require $117,000 in annual income to qualify -- a tall order for twenty-somethings.

Renting means they don’t even start building a nest egg until they’re middle aged.

The National Association of Realtors estimate the age of a first-time home-buyer is now 40, up 7 years in just 5 years. And up from 29 in 1981, when we had a functioning housing market.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

What’s Next

The Fed could fix housing tomorrow by cutting rates. And they were poised to before wartime oil prices, which took inflation from under 2% to annualized 5% since the war began.

So with rate cuts off the table, with deficits driving up mortgages even beyond hikes, and with little effort from Congress to meaningfully cut permitting and regulatory barriers the NAHB says add $131,000 to the price of a home, housing will keep getting worse for young Americans who feel like they’re running on a treadmill living on crumbs.

And are willing to vote for any Democrat Socialist who promises a miracle.

Enjoyed this article? Get the next one free.

Join 23,000 readers for weekly articles on the economy and freedom, with regular deep dives like the Fall of Rome, the Weimar hyperinflation, and FDR’s Great Depression.

Subscribe now

Want to go further? Paid subscribers also get my monthly investment guide including real-money picks that have made 41% annualized returns so far this year on a $100,000 portfolio.

Also check out my weekly interview series. This week I’m joined by economic historian Patrick Newman of the University of Tampa and Rothbard Fellow at the Ludwig von Mises Institute.

We talk about the rise of crony capitalism, why DOGE and the GOP Congress didn’t make a dent, and how it drives young voters into the arms of Socialism.

Then we walk through potential solutions, and whether they can happen before a debt crisis hits.

The oligarchs of artificial intelligence are tearing a page from the Wall Street industrial complex, lobbying to turn AI over to regulators who will outlaw the competition.

To sell the lobby, they’re using a paid army of AI doomers who’ve graduated from AI will eat all the jobs to AI will hack everything and maybe finish off humanity even faster than global warming.

Will they capture -- or strangle -- the biggest technology since the internet. Arguably since electricity.

Last week, Anthropic CEO Dario Amodei penned an open letter — well, an open tweet — arguing to “pace the frontier” and slow down AI.

OpenAI’s Sam Altman and Google DeepMind piled on, making it a trifecta of the big 3 making up nearly 90% of AI revenue.

The AI equivalent of bankers spending the weekend on Jekyll Island.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

The Hack that Started the Party

What kicked it off was a July cybersecurity exercise where OpenAI created a bunch of AI agents that broke into online platform Hugging Face by the decidedly low-tech method of finding logins that engineers had lazily left on public posts.

That is serious. But it was also a security test exposing a security failure, which is why tests exist. If a crash-test dummy goes through the windshield, we redesign the restraint system. We do not pace the automobile industry until horse breeders feel comfortable.

The most revealing failure came during the defense. Hugging Face tried to use Anthropic’s Claude to analyze the attack, but Claude refused specifically because of the kind of rules Anthropic now wants. The defenders turned to a Chinese model instead.

So the burglar was inside the house, Hugging Face was locked out by “guardrails.” So we need more guardrails.

Now, the oligarch’s fears may be sincere. Powerful AI can be dangerous.

Something else that’s dangerous is guns. Yet gun-control laws have a nasty habit of disarming people who obey laws without touching criminals.

Slowing AI would not bind actual criminals, hackers, or Chinese military laboratories. And given the IQ of Washington regulators — and the conflicts of interest in Anthropic’s proposed left-wing activist gatekeepers — we’ll come out more exposed, not less.

Defenders need models at least as capable as the models used against them. Regulation cripples that.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

The Missing AI Job Apocalypse

Before AI hacks the panic was AI would eat all the jobs.

A widely cited 2013 Oxford study predicted AI would take half the jobs in 20 years. Here we are 13 years in and US jobs have actually grown by 19 million.

You literally cannot see AI in the jobs numbers. The closest you get it IT layoffs, which are over-hiring during Covid that was well known before they started using AI as the excuse.

All this despite AI now being used in almost 90% of companies. If AI were a giant pink slip, something should show up in jobs numbers. Instead, crickets.

In fact, a recent study of 22,000 companies found the heaviest AI adopters increased white-collar employment by 10.2% -- and entry-level employment by 12%. Another study found 79% of AI interactions augment workers — make them more valuable — rather than replace them.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

Internet 2.0

Interestingly, we had the same sequence with the internet: First it was supposed to gut existing jobs -- the 1990s quip was the internet’s great at turning billion-dollar businesses to million-dollar businesses.

Next, shadowy super-hackers were going to y2k the electric company and steal your Lexus.

What’s different is the early internet didn’t have a gaggle of oligarchs who know how to buy regulation. Not until the 1999 Microsoft trial did tech realize it had to start buying politicians or be regulated to oblivion.

So unlike the internet, but very much like Wall Street, the AI oligarchs are weaponizing regulation, licensing, mandatory evaluations, approved auditors, release restrictions and coordination among the companies controlling the market.

Each rule creates fixed compliance costs the giants can absorb and startups cannot. OpenAI can employ a building full of lawyers. Anthropic can fund activist auditors. Three guys in a garage cannot.

Moreover, with Anthropic and OpenAI now mapping IPO’s, this is an unusual moment to discover that progress requires locking in their dominance to stem the collapse in revenue per token.

What’s Next

If the danger from AI is as serious as Anthropic and OpenAI claim, let them voluntarily pause.

Stop the next release, the revenue and the IPO valuation. Then maybe we’ll believe them.

Until then, it’s another crony industry trying to buy the finish line. The public gets the fear, the incumbents get the moat. All while China happily scoops up the dominant technology of the next 20 years, complete with military dominance that actually would leave us defenseless.

Enjoyed this article? Get the next one free.

Join 23,000 readers for weekly articles on the economy and freedom, with regular deep dives like the Fall of Rome, the Weimar hyperinflation, and FDR’s Great Depression.

Want to go further? Paid subscribers also get my monthly investment guide including real-money picks that have made 41% annualized returns so far this year on a $100,000 portfolio.

Subscribe now

Also check out my weekly interview series. This week I’m joined by Larry Lepard, author of The Big Print, to talk about the coming age of Permanent Inflation. Driven by $40 trillion of debt now running over $2 trillion per year.

We ask whether America has already crossed the point of no return. Why the 1970’s Volcker solution won’t work this time, and how ordinary Americans can protect themselves.

Last month job growth rebounded to 162,000, temporarily calming fears of a “no-hire, no-fire” economy squeezed between wartime oil prices, slowing growth and, of course, the ever-popular AI eating all the jobs.

Even happier was the federal workforce number: down another 5,000 in August, bringing the total cull to 350,000 since Trump took office a year and a half ago.

So one federal worker in nine.

Unfortunately, it turns out slashing the federal workforce apparently had no effect on Leviathan itself. The federal deficit is running at a $2.2 trillion annualized pace, compared with $1.8 trillion before Trump took a chainsaw to Washington.

This is particularly depressing since we just ran the closest thing America may ever get to a controlled experiment in shrinking government.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

The Perfect Storm

After the 2024 election, we had the perfect storm to shrink Leviathan.

Republicans held the White House and both houses of Congress. Donald Trump is the most government-hostile president since Reagan. And he came in hot, to take an axe to the administrative state.

Elon Musk, a force of nature fresh off firing 80 percent of Twitter, was turned loose inside Washington with a mandate to cut trillions.

All this and the fiscal trajectory didn’t budge.

Because while DOGE could slash personnel, cancel contracts and target entire agencies, it could never reach the machinery producing trillion-dollar deficits.

And now we’ve got a national debt that just hit $40 trillion on August 18, less than five months after it crossed $39 trillion.

This is more disturbing than another round-number debt milestone. Because if unified Republican control, Trump and Elon Musk could not bend the curve, what combination could?

In fact, we’re close to the point that elections no longer determine the size of government. They merely determine who manages its growth.

Want it to grow fast and elect Democrats. Want it to grow slightly slower and elect Republicans. But nothing stops this train.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

Who Feeds Leviathan

The reason Leviathan won’t shrink is the forces that grow government are fundamental.

Taxable prosperity supplied the kindling. Government schooling, left-wing academia, and media brainwashed the electorate. The income tax and Federal Reserve insulate voters from the bill — it’s always somebody else’s money on election day.

Walking through, the first kindling was taxable surplus. In the nineteenth century, most household income went to food, clothing and shelter. Taking half of income would’ve put torches and pitchforks in the street.

But industrialization changed the constraint: Government could now absorb an increasing share of national income while households still became richer in absolute terms.

This economic kindling then combined with political kindling in the form of giving the vote to more people.

Property qualifications once tied voting power, however imperfectly, to ownership and taxation. As those restrictions disappeared, political participation became less connected to being a net taxpayer. Public-choice theory predicts this increases support for programs whose benefits are concentrated while their costs are broadly distributed.

Women’s suffrage represented another major electorate change.

Studies across countries and states find enfranchising women massively expands the size of government -- roughly 4-fold within a generation. With long-run effects three to eight times larger.

This shifted the median voter, especially on health, education and social insurance — the categories that eventually dominated domestic spending.

The final kindling is mass government schooling. This is more recent than people imagine: Only in 1950 did most 18 year-olds graduate from government schools.

And not until 1968 were most voters educated at government schools.

You can almost perfectly trace the size of government to the spread of government education.

Finally, the income tax and Federal Reserve, which both arrived in 1913 when government was roughly 10 times smaller.

Both insulate voters from spending. The income tax concentrated visible tax costs on a minority of voters who actually pay substantial tax.

Central banking and federal borrowing made it easier to separate current spending from current taxation.

Payroll withholding, introduced during World War II by Milton Friedman (of all people) reduced tax salience by siphoning trillions before workers ever saw it. Replaced with giddy celebration when they get a sliver back as their annual tax refund.

Corporate taxes obscure whether the economic burden falls on shareholders, workers or consumers. Deficits shift costs toward future taxpayers who cannot vote today. Inflation siphons purchasing power without a tax increase.

Each mechanism weakens the connection for voters between demanding a program and paying for it.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

Sparks to the Kindling

Kindling still require sparks. And wars, depressions and pandemics supplied them.

Emergencies ratchet borrowing, taxation and administrative controls that would have faced greater resistance in normal times. Some emergency measures disappear, but most of the revenue capacity and bureaucracy survive. Because every emergency expansion grows an ecosystem of beneficiaries with strong incentives to defend it.

When the smoke clears, elections stop mattering. One administration expands programs. The next cuts marginal tax rates, relaxes regulations or closes selected offices. But the entitlement system, tax machinery, central bank, public schools and beneficiary coalitions remain.

Ronald Reagan illustrates the limitation. His administration cut marginal tax rates from 70% to 28% and pursued massive deregulation. But federal outlays as a % of GDP barely budged.

None of this proves that reversal is impossible.

Greater tax transparency. Federalism so states pay for their own highways and Learing Centers. Institutional spending limits like a balanced budget amendment. Leveling marginal tax rates so more voters have skin in the game.

But ordinary elections face a structural obstacle: brainwashed voters receive benefits and see only a sliver of the ultimate cost.

Having just come off the perfect storm with nothing to show, unless that changes it may be unfixable until a crisis concentrates minds enough for fundamental reform.

Enjoyed this article? Get the next one free.

Join 23,000 readers for weekly articles on the economy and freedom, with regular deep dives like the Fall of Rome, the Weimar hyperinflation, and FDR’s Great Depression.

Subscribe now

Want to go further? Paid subscribers also get my monthly investment guide including real-money picks that have made 41% annualized returns so far this year on a $100,000 portfolio.

And check out interview series. This week I joined podcaster Stephan Livera to discuss inflation in an age of soaring national debt and job-replacing AI — and what both could mean for asset prices in the decades ahead.

Especially for young people who can’t afford a house while Fed-enriched Boomers live like kings.

Could America Grow at 20%?

President Trump was in the Oval Office this week explaining why the Federal Reserve should stop strangling the economy when he dropped a vintage Trump number:

“We could have a GDP of 14, 15, 16 and 20” percent growth. If only the Fed got out of the way.

By which he means the Fed printing money with low rates.

Trump’s 20% is definitely a stretch goal; the Congressional Budget Office is currently projecting long-term growth of just 1.8%. Ten times less.

In fact, since quarterly GDP records began in 1947, America has exceeded 20% only once: the artificial 34.9% Covid reopening bounce in 2020.

But the broader point—that America could grow dramatically faster -- is absolutely correct. In fact, there was a time when America enjoyed durable 7% growth. At that rate, real wages grow roughly sixfold in a generation.

Unfortunately, that was the 1870s. Meaning we would have to End the Fed -- End it, not money-print a fake boom. We’d also have to End the Income Tax and DOGE the entire administrative state built by cronies in the Progressive Era through the New Deal to straitjacket the economy into, apparently, 1.8% growth.

So, practically speaking, it’s probably easier to invent cold fusion.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

America’s Forgotten Boom

In his epic History of Money and Banking, Austrian-school economist Murray Rothbard highlighted the extraordinary period from 1869 to 1879 — the very decade mainstream textbooks traditionally call the “Long Depression.”

Using estimates from Milton Friedman and Anna Schwartz, real national product grew 6.8% per year, while prices actually fell by nearly 4% a year.

In other words, the economy nearly doubled while everything got cheaper. So it was prices that depressed, living standards soared.

Unfortunately, the Fed would never allow this today -- it lives to fight deflation, which it erroneously blames for the 1929 Great Depression and which pleases the Wall Street banks who bribed the Fed into being.

Today’s Fed would print $8 trillion to rescue us from affordable groceries.

So where did the growth go? How did we go from a 7% economy to a 2% economy.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

Where the Growth Went

Start with government spending, which knocks off roughly 1.25%. Federal, state and local spending approaches nearly half of everything we produce -- a parasite dangerously close to taking over the host.

That capital goes where lobbyists want it, where it buys the most votes, and a good chunk goes to employing regulators and bureaucrats who dream up new ways to harass entrepreneurs and producers on top of the taxes they take.

Next is regulation. The federal rulebook contains roughly 190,000 pages filling 244 bound volumes. State codes can double this: New York state’s regulatory code runs to 18 million words and 300,000 restrictions. Ohio is 22.6 million words.

Counties can add thousands more restrictions: Los Angeles County publishes an 8-volume set of restrictions. Then cities pile on yet another layer: New York City has over 10,000 pages of mandates and restrictions spanning 21 volumes.

This mountain of rules cripples entrepreneurs. It sends jobs overseas where China winks and nods away rulebooks. It crushes or delayed for decades housing, factories, mines, pipelines, power plants and transmission lines.

Next is the Fed, who drains growth by manipulating interest rates -- or even direct money-printing, called QE. Cheap money sparks artificial “tissue fire” booms followed by busts and bailouts. Each time the economy moves 2 steps forward, it goes 1 step back in a recession, and you pay the inflation.

Then the welfare state, which literally pays millions of able-bodied people not to work, consuming now half of all government spending to, ultimately, buy votes to install socialism on what’s left.

We lose those millions of workers -- or have to import replacements from the third world. And their bought votes feed Leviathan year by year.

Toss in the $40 trillion debt crowding out productive investment. The crony corporate subsidies and tariffs that, unlike Trump’s tariffs for negotiating leverage, live forever as corporate handouts, and it’s a wonder we even manage 1.8% growth.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

What’s Next

Trump is right that America can grow much faster -- probably 4 times faster. Enough that the next generation could be looking at six-figure starting salaries. And their kids would be looking at $250,000 out of high school.

But the way to do it isn’t flooding easy money from the Fed. It’s systematically deconstructing the leviathan government crushing the productive economy.

Unfortunately, Ending the Fed, Ending the Income Tax, and Ending the Administrative State means going up against the entire lobbying industrial complex armed with, of course, tax dollars they steal from you.

Meaning that it won’t happen unless we get a crisis that concentrates voters’ minds enough that, like Argentina and Milei, Americans are ready for radical change.

Enjoyed this article? Get the next one free.

Join 23,000 readers for weekly articles on the economy and freedom, with regular deep dives like the Fall of Rome, the Weimar hyperinflation, and FDR’s Great Depression.

Subscribe now

Want to go further? Paid subscribers also get my monthly investment guide including real-money picks that have made 41% annualized returns so far this year on a $100,000 portfolio.

And check out my interview series. This week I sat down with economist Daniel Lacalle to discuss Europe's migrant crisis and its coming economic and political crisis.

We dig into the migrant invasion of Ceuta, whether Europe can preserve open internal borders while losing control of its external ones, and the vicious cycle linking the welfare state, collapsing birth rates, mass immigration, and still more government.

We also examine why Europe has fallen so far behind America in productivity, technology, and living standards; what to fix first if Brussels handed him Milei’s chainsaw; and whether Javier Milei’s dramatic turnaround in Argentina offers Europe a path back -- or a warning Europe will ignore until it goes over the cliff.

See you next week!

After last month’s 22.5% AI bear market, my semiconductor picks recovered 2.4% in August. That brings the winners to 34.0% year-to-date — 55% annualized.

The AI-disruption shorts went the wrong way, rising 6.2%. Still, their year-to-date profits stand at 24.6%, or 39% annualized.

But this month inflation hedges stole the show: Bitcoin rose 23.3%, silver 14.6%, and gold 10.1%, for a basket average of 16.0%.

Together, the Adrenaline portfolio is up 26.7% year-to-date and the Market Neutral portfolio is up 24.6%, compared with 12.8% for the S&P 500.

In dollar terms, $100,000 invested at New Year is tracking at $126,700 in Adrenaline, $124,600 in Market Neutral, and $112,800 in SPY.

Where the Economy Stands

Second-quarter GDP grew at just 1.5% annualized, down from 2.1% in the first quarter. That is remarkably weak considering federal deficits are running at 11.1% of GDP—nearly three times the 3.8% average since Nixon closed the gold window in 1971.

In other words, Washington is borrowing at emergency levels to produce growth that rounds down to stagnation.

Jobs sent an even stronger warning. Employers cut 23,000 payrolls in July, yet unemployment somehow improved to 4.1%.

Part of the paradox is that payrolls and unemployment come from separate surveys. One counts jobs; the other counts people. But the bigger explanation is that 2.5 million Americans have left the labor force since November.

Roughly half may reflect retiring Baby Boomers and statistical noise. Perhaps one-fifth comes from lower immigration. That leaves roughly one-third unexplained—and disproportionately concentrated among Americans aged 55 to 64.

They could be discouraged workers, people suffering chronic illness, people shifting onto government benefits, or affluent early retirees. The average household headed by somebody aged 55 to 64 holds around $1.57 million in wealth, enough to generate $94,000 per year at a 6% return.

All four groups disappear from unemployment when they stop looking. So a 4.1% unemployment rate does not necessarily mean Americans found jobs. It may mean they stopped searching.

Inflation is equally muddy. Year-over-year inflation is around 3.5%, but much of the increase reflects wartime energy prices. Before the Iran war, monthly inflation was nearly flat, while some private measures were below 1%.

The Fed must decide whether to fight today’s energy shock or assume it fades. So both halves of its mandate are malfunctioning: jobs fell while unemployment improved, and inflation rose while underlying domestic price pressure cooled.

Jackson Hole Meets the $40 Trillion Debt Bomb

That made Kevin Warsh’s first Jackson Hole address the month’s main event.

Markets hoped Warsh would validate rate cuts. Instead, he said inflation remains above the Fed’s 2% target, financial conditions remain loose, and the central bank still has “work to do.”

Traders pushed the probability of a September hike from roughly 35% before the speech to 56% afterward. The two-year Treasury yield jumped nearly 12 basis points to 4.35%, its biggest one-day post-Jackson Hole increase since 1996. The ten-year rose to 4.72%.

More important, Warsh said forward guidance has “outstayed its welcome.” That could end the post-2008 regime where the Fed became Wall Street’s portfolio manager, telegraphing cheap money so large institutions could pump stocks, real estate, leveraged buyouts, and financial engineering.

The Fed–Wall Street machine also squandered America’s reserve-currency privilege. Global demand for dollars should have been a national windfall. Instead, Washington, Wall Street, and the Fed siphoned it into bailouts, asset inflation, and government consumption.

Regular Americans never got the windfall. Instead, they got an overpriced currency that hollowed out manufacturing.

The other big news this month was the national debt crossing $40 trillion, up $2.4 trillion in less than eight months. And it’s driven by transfers — welfare, benefits, and pensions — that not only make up nearly half of all spending, but cannot politically be cut going by last year’s Battle Royale over SNAP fraud.

Interest expense along is approaching $1 trillion per year, on its way to $2.1 trillion by 2036 according to the CBO — and that’s assuming no recession, war, bailout, or new emergency.

Higher yields increase interest costs, which hit companies and consumers, but also increase the debt. That is the architecture of a fiscal doom loop. And the bond vigilantes finally noticed, bidding up interest rates on the national debt on fears they’ll either pump inflation to melt the debt or, if it comes to it, just default like several states did in 2008.

Markets Review

On to the money. Broad stocks survived the bond turmoil, with the S&P 500 reaching a 12.8% year-to-date gain—roughly 20% annualized. But with the ten-year Treasury paying about 4.7%, every S&P 500 sector now offers a dividend yield below government bonds. Stocks finally have competition.

AI infrastructure recovered unevenly from last month’s crash, while AI-disruption tempered some of their misery all year.

But hedges were the month’s clear winner. Bitcoin gained 23.3%, silver rose 14.6%, and gold added 10.1%. Driven by investors confronted $40 trillion of debt, trillion-dollar interest costs, wartime inflation, and the possibility that the Fed will continue debasing rather than force Congress to cut spending.

With that, updates on portfolio holdings, performance, and what’s next — especially for AI stocks. If you’re not subscribed, it’s 8 bucks a month to cover the time it takes, and your subscription includes the weekly articles and access to all archives — more than 80 articles and growing.

Subscribe now

Read more

The national debt just crossed $40 trillion.

Congratulations, Congress -- you stole every penny.

That’s up nearly $2.4 trillion in less than eight months. It’s also roughly double the debt America carried just nine years ago.

What’s driving it? Simple: The welfare state is eating America.

Including welfare, benefits, and pensions, nearly half of all federal, state, and local spending now goes to transferring money from one group of people to another.

That’s roughly six times what America spends on defense. And it comes to nearly $5 trillion a year. Going by recent revelations on fraud rates -- or welfare usage in previous decades -- at least 80% of that is fraud or unnecessary vote-buying.

Implying that the entire deficit is, in fact, waste and fraud.

In other words, America is no longer a limited government with a safety net. It’s a transfer state where the main purpose of your taxes is largely buying votes.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

Emergency Deficits Without the Emergency

Federal deficits along are now running 11.1% of GDP, compared with an average of 3.8% in the half centry since Nixon killed the gold standard. Note that half-century included the cold war, multiple recessions, bailouts, wars, and a pandemic.

And here we are tripling it with no emergency on sight.

Interest on the debt alone is approaching $1 trillion per year—roughly as much as national defense. In a few years it will be higher than Social Security, which naturally is now “bankrupt” — meaning even the IOU’s ran out — thanks again to a Congress with no guard rails.

In other words, we’re borrowing the money not for new roads or schools. Not even for social security checks. We’re borrowing it to pay for yesterday’s vote-buying.

By 2036, the Congressional Budget Office now expects annual interest costs to reach $2.1 trillion. And it expects debt held by the public to surpass the World War 2 peak.

Note that assumes no recession, no major war, no new emergency.

This is vanishingly unlikely given the Federal Reserve now has a 113 year record of delivering recessions like clockwork, thanks to boom-bust manipulation of interest rates that deliver tissue-fire booms followed by wipe-out recessions.

And when the next recession comes, going by history, the deficit will soar by yet more trillions as tax collections collapse and demands for welfare spending soar.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

Why Nobody Stops It

This is obviously unsustainable. Yet nobody tries to end it. Elon Musk tried moving heaven and earth, aided by unified control by the “small government” GOP. We had a President who thinks the Federal government is a leech.

And it all bounced off.

Because every transfer program creates a constituency that snowballs pressure for more transfers.

We saw this last year with SNAP cuts, where even Republicans were afraid to couch a program that is overwhelmingly fraud and unnecessary grift.

Because while a program like SNAP matters to regular voters, it’s existential for the tens of millions who take your money.

In other words, the benefits are concentrated and visible: a monthly check, a subsidized premium, or a government-funded service.

But the costs are dispersed among millions of taxpayers—and increasingly pushed onto future taxpayers who cannot vote yet.

That makes the transfer state nearly impossible to reform.

The end result is politicians can survive another trillion dollars of debt. They may not survive trimming a benefit.

So each election brings new promises, outpacing the productive economy squeezed to pay for them.

All while the debt -- and the eventual crash -- compounds against us.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

Rome’s Warning

Rome faced the same basic arithmetic: Political promises outrunning production.

The empire maintained an expanding army, a sprawling bureaucracy, public grain distributions, and increasingly expensive efforts to purchase political stability.

But conquest slowed, the tax base weakened, and emperors discovered that cutting promises was dangerous.

Their first move was to buy time with inflation, debasing the currency just as the Fed debases the dollar today.

Under Augustus, the Roman denarius was 98% silver. By Gallienus it was 2%.

The Fed’s actually done it faster, sending the dollar from 1/20 ounce of gold to, today, 1/4700. A 99.6% debasement that would put Nero to shame.

What’s Next

For Rome what came next was ugly.

Prices rose by 1,000% in parts of the empire. Good coins disappeared into hoards. Trade shifted toward barter, gold, and payment in kind.

Inflation made contracts unreliable and trade dangerous. Heavy taxes pushed small farmers off their land. Merchants withheld goods rather than accept rapidly depreciating coins.

As commerce shrank, the tax base shrank with it—forcing heavier taxes on what was left and further debasement on whoever remained productive.

Ultimately Rome was too poor to pay off neighboring barbarians. And too corrupt to mount a defense when the time came

The only way America avoids this fate is the one thing Congress will never do: Cut spending.

Enjoyed this article? Get the next one free.

Join 23,000 readers for weekly articles on the economy and freedom, with regular deep dives like the Fall of Rome, the Weimar hyperinflation, and FDR’s Great Depression.

Subscribe now

Want to go further? Paid subscribers also get my monthly investment guide including real-money picks that have made 35% annualized returns so far this year on a $100,000 portfolio.

Also, check out my interview with Jim Iuorio, author of The Unfiltered Investor newsletter talking about soaring bond yields and what they mean for the economy and for the accelerating debt crisis.

We cover gold as a lifeboat, whether AI can save this economy — or accelerate the crash. And whether stocks are pricing in the risks or are we headed for a crash.

J.D. Vance is taking heat for questioning whether the strong dollar is actually good for America. One critic went after Vance for “explicitly arguing to make America poorer.”

There’s a grain of truth there. Losing the strong dollar reserve-currency status would make Americans poorer—potentially much poorer. But that’s only half the story.

Because reserve-currency status handed America an extraordinary windfall that Washington, the Federal Reserve, and Wall Street siphoned off. Leaving regular workers to pay the bill for an overpriced currency that exported our manufacturing base.

What is Reserve Currency Status

So, first, what is reserve currency status. The idea is that your currency is so strong or dominant that the entire world has to use it to underpin their own currency. This has been the US dollar since the British torpedoed the pound after the Great Wars.

The upside is you can print pallets of green paper and trade it for toasters and semiconductors. The downside is it also makes your currency more expensive.

The expensive currency is still a good deal if you’re pocketing free toasters. But the problem is the Fed takes that freebie and inflates it away with low rates, which benefit corporations, rich borrowers, Wall Street who gets a cut on every loan, and the biggest borrower on earth, the Federal government.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

When the smoke clears, regular Americans did not get the free toasters. But we did get the expensive currency that devastated the Rust Belt.

Worse, if you now end reserve currency status -- say, by running $2 trillion deficits in relative peacetime so the world loses faith in the dollar -- it means the dollar could collapse by double digits as foreigners dump their dollars.

This erodes the wealth of every dollar holder -- which is overwhelmingly the regular Americans who never got the free toasters in the first place.

That is the reserve-currency trap.

So gaining reserve currency status rewarded corporations, Wall Street, and the biggest borrower on earth, the Federal Government. But losing it hits regular Americans buying groceries, gasoline, medicine, clothing, electronics, and everything else tied to global markets.

So we got suckered. But the scam is obvious only when we lose it.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

What Should Have Happened

The reserve-currency dividend could have been used to build the world’s most productive economy: infrastructure, energy, factories, research, capital equipment, and a government balance sheet strong enough to survive wars and recessions.

Instead, it financed federal consumption, financial engineering, trillion-dollar bailouts, and trillion-dollar deficits.

And it’s not just the strong dollar they squandered.

Chinese industrialization delivered cheap manufactured goods. The internet slashed the cost of information and coordination. Container shipping and global supply chains transformed the cost of moving goods. Automation made each worker dramatically more productive.

Yet none of these productivity miracles lowered prices. Because Washington spent every dividend.

Entrepreneurs keep performing miracles. The political class keeps converting those miracles into larger government, higher asset prices, and more debt.

The difference is that we’re not going to uninvent shipping containers. But we can certainly lose reserve-currency status.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

What’s Next

Vance is correct that the strong dollar and global demand for American assets have subsidized imports, encouraged financialization, and weakened parts of the industrial base.

But his critics are also correct that deliberately weakening the dollar means deliberately reducing Americans’ wealth. A manufacturing revival, if it comes at all, would take years. The higher prices would arrive immediately.

The answer is not to throw away the privilege.

It is to stop squandering it. Cut the deficits. End the Fed’s serial bailouts. Stop using cheap foreign capital to finance government consumption. Make America the best place on earth to build factories, generate energy, invest capital, and hire workers.

Use reserve-currency status to rebuild the productive economy that supports it.

Vance is right to recognize that reserve-currency status has become a resource curse. But you do not cure a resource curse by destroying the resource.

You cure it by taking it away from the people who are wasting it.

Enjoyed this article? Get the next one free.

Join 23,000 readers for weekly articles on the economy and freedom, with regular deep dives like the Fall of Rome, the Weimar hyperinflation, and FDR’s Great Depression.

Want to go further? Paid subscribers also get my monthly investment guide including real-money picks that have made 35% annualized returns so far this year on a $100,000 portfolio.

Subscribe now

Also, check out my interview with Jeffrey Tucker of the Brownstone Institute on Fauci’s Covid diaries, why nobody will be held accountable for the Covid disaster, and why this pattern keeps repeating from the 2008 crisis to the attempted coup against President Trump.

Last month jobs in the American economy fell by 23,000 yet the unemployment rate improved to 4.1%.

This gave ammunition to both sides: The doomers point to falling jobs, the optimists point to an unemployment rate that matches or beats 90% of months over the past 50 years.

So which is it: Are we in a jobs recession? Or is a falling labor force a good thing?

Mixed Signals

Part of the paradox is even though both jobs and unemployment rate come from the notorious Bureau of Labor Statistics, they’re different series.

Payroll growth is estimated through a survey of employers -- which has pathetically low response rates, so it’s mostly guesstimates. While the unemployment rate comes from a separate survey of households.

So the first counts jobs; the second counts people. Since one person can hold two or three jobs, while payrolls excludes unincorporated self-employed, unpaid family members, and many agricultural workers, the number of jobs and the number of people working do not necessarily move together.

But the bigger issue is the main driver of the paradox right now is millions of Americans are dropping out of the workforce.

As in there’s fewer jobs, but there’s even fewer people in the workforce. Which mechanically reduces the unemployment rate because the unemployment rate doesn’t measure everyone without a job. It measures people without jobs who are actively looking for work, divided by the total labor force.

In other words, if somebody loses a job and looks for another one, that person is unemployed. But if he gives up searching, retires or otherwise leaves the labor force, the government no longer counts him as unemployed.

That creates the strange result we just saw: fewer jobs, but an even sharper decline in the number of people participating in the workforce.

So the falling unemployment rate may not mean that Americans are finding jobs. It may mean Americans have stopped looking for them.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

Falling Labor Force

In raw numbers, since the labor force peaked in November of last year, 2.5 million people have dropped out of the labor force.

About half of that is statistical noise and natural aging -- millions of Baby Boomers reaching retirement age every year.

Roughly a fifth is reduced net immigration -- fewer arrivals and more deportations.

Leaving a mysterious third -- which appears to be concentrated among Americans aged 55 to 64.

That group is especially interesting because most are still below the traditional retirement age. They are old enough to leave the workforce but generally young enough that their departure is not automatic.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

One possibility is discouraged workers. Older employees who lose a job can have a hard time finding another position with comparable pay and status. After months of unsuccessful applications, some may simply stop searching and live on savings. Or on their spouse.

They disappear from the unemployment statistics, but they have not disappeared from the economy.

The second possibility is health. Chronic illness, disability and lingering health problems could be pushing more people out of the labor force before they planned to retire. Turning them from a potential producer to a long-term economic burden.

A third possibility is more people living on government benefits, including fraud. During the spending orgy of Covid, government spending on welfare, benefits, grants, and social services rose by over 60% — hitting almost a trillion dollars in handouts.

Finally, the fourth possibility, which is much brighter: Americans may be retiring early because they can afford to.

Older households own a disproportionate share of stocks and real estate, which have been dutifully pumped by 40 years of easy money from the Federal Reserve.

According to the Fed’s own Survey of Consumer Finances, the average 55-64 year old household is worth approximately $1.57 million. Invested at 6% per year, that’s over $90,000 a year without runing down a dime of principal.

All three explanations produce the same government statistic. But they describe very different economies.

Because a discouraged 60-year-old who has given up looking for work is evidence of labor-market weakness. A sick 60-year-old leaving work is evidence of a health and productivity problem. A 60-year-old retiring because his 401(k) doubled is evidence of rising wealth.

For now, we do not have enough information to say confidently which explanation dominates.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

What this Means for the Fed

The modern Fed trades off two numbers: jobs and inflation.

On inflation the Fed’s already swimming in muddy water: Year-on-year inflation’s running 3.5%, but everybody knows that’s energy talking from the Iran war. Before the war started, monthly inflation was nearly flat, and private-sector analyst Truflation had inflation under 1%.

Meaning the Fed’s not sure where to go from here: Respond to today’s headlines, or assume the war will be over soon, as markets and the general public assume.

But now it’s jobs that are also getting muddy: Falling payrolls and falling unemployment leaves the Fed confused until it can figure out what’s happening.

And the usual suspects aren’t much help: Temporary-help employment, which leads the broader labor market, has recently been improving. Weekly unemployment are historically low. Corporate earnings forecasts are rising, which is usually where they hoard workers. Layoffs are historically low, despite the supposed AI job armageddon.

What’s Next

Even in the best of times the Fed’s a speeding car at night with no headlights, responding to last month’s report to make decisions that won’t impact the economy for 18 months given monetary lags.

Right now, even those headlights aren’t working. Which makes it a splended time for Kevin Warsh to announce a true “regime change” -- get the Fed out of the business of manipulating interest rates.

Enjoyed this article? Get the next one free.

Join 23,000 readers for weekly articles on the economy and freedom, with regular deep dives like the Fall of Rome, the Weimar hyperinflation, and FDR’s Great Depression.

Want to go further? Paid subscribers also get my monthly investment guide including real-money picks that have made 35% to 37% annualized returns so far this year on a $100,000 portfolio.

Subscribe now

Also, check out my interview with Tho Bishop of the Ludwig von Mises Institute on the rise of Socialism in the Democrat Party and what it means for Democrats, Republicans, and the future of the Republic.

See you next week!
Peter

35 years after the Soviet Union collapsed, the Communist bread line is poised for a comeback in the Big Apple, as Zohran Mandani announces his government grocery stores will be undercutting real groceries by 30%.

Socialism will work this time.

Zohran’s Cheap Eats

The announcement came in a press conference earlier this week, where Comrade Mamdani promised 30% discounts for “essential products” at his new city-run grocery stores.

The problem, of course, is grocery is a razor-thin industry, sporting profit margins of roughly 2%. And that’s with competent management, which New York City is decidedly not famous for.

So even if the socialists somehow manage to run a grocery as efficiently as Aldi or Walmart, the city will be losing an ungodly amount of money -- at least 28 cents on the dollar.

Throw in typical efficiency of New York’s Smartest and taxpayers probably lose closer to 40 cents on the dollar.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

And that’s where the fun begins. Because if city groceries are actually selling food 30% cheaper, that robs enough market share from real groceries that they start going out of business.

After all, private stores must pay rent, property tax, insurance, labor, utilities, security, and New York’s regulatory army.

While Mamdani’s stores get city property, tax exemptions, and apparently an unlimited allowance from mom who’s willing to lose 28 cents on the dollar -- or 40.

So marginal supermarkets close. Others will cancel plans to open.

City Hall will point to packed municipal stores as proof of success — as if it’s hard to attract customers when taxpayers are footing the grocery bill.

Shoot the competition, then congratulate yourself for winning the race.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

Socialist Food Deserts

And then the third act: What happens when taxpayers get tired of the money hole.

Every time New York has seized an industry it turns into a money hole. New York’s city-run transit system -- MTA -- replaced private sector alternatives that used to make money with a government-run system that loses $11.7 billion a year -- roughly $3,000 per household in New York City.

If city groceries approach that number, there will inevitably be calls for subsidy cuts. Given the mandate to keep groceries cheap combined with the costs of government efficiency, that means the groceries will have to cut back on quality.

Meaning they turn from a giant money hole into a slightly smaller money hole full of rotting food.

When the smoke clears, New Yorkers get a couple years of cheap bananas.

Tens of billions of new debt.

And with real groceries fleeing, now they have to take 2 trains and a bus to get to a real grocery store.

In fact, this is exactly what’s happened in dozens of government grocery experiments across the country, from Kansas City which lost $18 million on a grocery that sold rotting food to Chicago, which blew $26 million running 7 stores into the ground.

But socialism will work this time if Mamdani smiles hard enough.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

How to Actually Fix Grocery Prices

Instead of recreating Soviet bread lines on the taxpayer dime, Mandani should sit down with functioning grocery stores and ask how to expand.

For example, cutting property taxes, permitting costs, and construction costs. Relaxing parking rules. Leasing disused public space at a discount to real grocery stores. Re-zoning so groceries don’t have to wait years in limbo for the ministry of red tape to green-light their bananas. Perhaps even arresting shoplifters once in awhile.

The hallmark of socialism is it breaks things, then uses the debris as a battering ram to break more things.

New York already has a distinct absence of proper grocery stores thanks to dysfunctional local goverment. Handing that dysfunctional local government the entire food supply will turn an annoyance into a crisis.

Enjoyed this article? Get the next one free.

Join 23,000 readers for weekly articles on the economy and freedom, with regular deep dives like the Fall of Rome, the Weimar hyperinflation, and FDR’s Great Depression.

Want to go further? Paid subscribers also get my monthly investment guide including real-money picks that have made 35% to 37% annualized returns so far this year on a $100,000 portfolio.

See you next week!
Peter

Subscribe now

And without further ado, the Numbers that Mattered last week, also available on Youtube:

After a spectacular run all year, my growth picks took a big break this month. And it was a doozy, with longs down 22.5%. That brings year to date returns to 30.9% — a still-spectacular 59% annualized.

The shorts picked up some of the fallout, rising 4.1% on the month (which hurts results — you want shorts to go down). This trimmed year to date returns on the shorts to 29% — nearly as good at 55% annualized.

Together, these took the tracking portfolios to 19.0% year to date on the “Adrenaline” Growth portfolio and an even better 20.4% on the “Market Neutral” portfolio. Both good for 35-37% annualized returns.

All of these massively beat the benchmark S&P 500 (SPY), which was flat on the month bringing year-to-date returns to 9.5% — about 17% annualized.

Where the Boom Stands

New GDP numbers came out right in time for this newsletter. Growth moderated to 1.5% in Q2 (April-June), although the Fed thinks we’re accelerating to a current 2.2% on GDPNow and projecting 5% growth for Q3.

5% would be among the strongest growth rates in decades.

Even the Q2 slowdown isn’t as bad as you’d expect with the war and oil prices. And most of it was actually an import surge ahead of expected new tariffs, with a slight ding from lower government spending, which is a fantastic way to lose GDP that wasn’t making us any richer.

Jobs, meanwhile, keep chugging along with 4.2% unemployment all year. The main point worth noting here is the AI jobs armageddon is a no-show for the 12th year running.

The other important number is inflation, where we actually got deflation last month at an impressive 5% annualized clip. That’s entirely oil coming down from its wartime highs, so it’s still noise for now. The rubber hits the road when oil prices return to the pre-war 60’s.

Then we see if the pre-war benign inflation trend returns. If it does, the Fed could do a whipsaw to rate cuts. Which will be spectacular for jobs and growth considering every 1% cut in rates is worth roughly 1 million jobs.

Zooming Out

When I started this newsletter in January I figured 2026 was going to be solid growth from tax cuts and deregulation, along with investment growth from AI infrastructure and tariff re-shoring. All with an assist from Fed rate cuts.

It was looking beautiful, with recession odds hitting fresh lows.

The war got in the way, doubling oil prices — which is bad for business. And flipping the Fed to inflation-fighting hikes, which normally slow the economy. All while tariff re-shoring got torpedoed when the Supreme Court hobbled Trump’s tariffs.

On the other hand, the AI infrastructure story picked up the slack, accounting for up to a third of GDP growth as hundreds of billions pour into data centers. PriceWaterhouse recently estimated 4.7 million blue collar jobs are building data centers, and data center construction passed office construction — a dark juxtaposition, but spectacular if you own Micron or AMD.

More important, even with the Fed flipping to rate hikes, it remains very accommodative, pumping money into the financial system after it learned its lesson in the 2010’s that you never take away the punch bowl.

Good growth and liquidity is literally the poster-child of bubble stage. So the music will eventually run out, but this newsletter is monthly so I feel confident the next 30 days we’ll remain out of recession.

Markets Review

Broad markets were flat this month, but year to date the SPY’s up 9.5%. That’s actually solid historically at an annualized 17%. Even more impressive considering the war — stocks don’t like war, and they certainly don’t like doubling oil prices.

But the big story this month was AI stocks crashing 20%, nearly cancelling the previous month’s rise. This still leaves AI stocks (SMH) up an impressive 45% year to date. But any AI speculator shopping for a vacation pad in Miami last month is looking at Jacksonville now.

The AI Semi crash was driven by some big stars aligning:

• Previous parabolic gains that made over-leveraged traders quick to take money off the table.

• A resumption in the Iran war that was looking almost over.

• A half-trillion dollar IPO by a Chinese chipmaker — ChangXin — that’s years behind on tech but reminded everybody China makes chips, too.

• And, also from China, a new open-source AI model (Kimi) that apparently matches Claude Fable on many metrics. This is apparently because they scraped Fable using “distillation” where you ask Fable everything you can think of and use that as reference. Still, it reminded the world China makes AI, too.

The more important question is what’s next for AI semis — which I’ll talk about in the investment section below.

As for the rest of assets I track, my shorts made of companies I think AI will crush were up on the month but down an impressive 29% on the year. That helped the “market neutral” portfolio that blends AI picks with disrupted shorts.

Finally, hedges — gold, silver, and bitcoin. Bitcoin finally caught a break this month, up 7% on the month. Gold and silver basically held even. Still, across the 3, year to date returns are minus 14%.

Hedges sucking might seem odd considering we’re debasing the currency with $2.5 trillion deficits in the middle of a war — which normally makes gold sing. But my best guess is it’s a reversion after the strong runs in gold and silver last year, while the speculators who usually boost Bitcoin are playing in AI for now. Leaving the true Hodlers to keep Bitcoin side-walking.

With that, updates on portfolio holdings, performance, and what’s next — especially for AI stocks. If you’re not subscribed, it’s 8 bucks a month to cover the time it takes, and your subscription includes the weekly articles and access to all archives — more than 80 articles and growing.

Subscribe now

Read more

Note to Subscribers: Starting this week I’m doing a video round-up of the numbers that matter for the economy and liberty. Including the short-and-snappy version of today’s article, plus half a dozen numbers to shock, entertain, and occasionally horrify. Scroll to the bottom to watch.

New IRS data says the top 0.1% of taxpayers — one in a thousand — pays more than the bottom 80% of taxpayers.

Turns out we’re eating the rich after all.

That comes to 210 times their “fair share.” Essentially, 210 people drinking but the bartender hands one guy the check. With a lecture about privilege.

This comes from new IRS data finding the top 0.1% of taxpayers -- roughly 154,000 returns -- paid $440 billion in their most recent year.

That compares to just $350 billion for the bottom 80% of taxpayers -- which is pretty much everybody else.

It’s even more dramatic for the hated 1%, who pay nearly half of taxes despite earning just 1/5 of income.

Zoom out again and it gets downright comical: The top half of taxpayers cover 97% of the tab. The bottom half -- who alas vote -- paid just 3% of taxes.

So half the country is carrying the other half, plus Congress, plus 47,000 NGOs teaching sustainable Tesla dealership burning to sociology majors.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

The Progressive Tax Racket

Interestingly, despite years of mainstream-media disinformation, the income tax has become dramatically more progressive. In 1980, the top 1% paid roughly 19% of federal individual income taxes. Today they pay almost 40%.

And this happened even though the top marginal income-tax rate fell from 70% in 1980 to 37% today.

Which seems counterintuitive until you consider lower tax rates encourage high-productivity people to work harder -- they don’t have to hand 70 cents to the IRS. That creates jobs, growth, and — yes — income. Which raises the amount of tax they pay even at the lower rate.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

This is the famous Laffer Curve, named after one of Ronald Reagan’s favorite economists, Art Laffer. And the gist is tax 0% and you raise no tax, tax 100% and you raise no tax, there’s a sweet spot in the middle.

So going from 70% to 37% raised growth, raised taxes -- and dramatically raised the share of taxes paid by the rich. Suggesting perhaps we should try 20% tax. 10%. Perhaps no income tax at all, replaced with sales taxes that are far less destructive to growth and jobs.

Visit our Sponsor Coinkite. Protect your Bitcoin with an Ultra-Secure Hardware Wallet. Made in Canada by Passionate Bitcoiners.

Trust Funders of the Welfare State

Aside from the fairness question of one guy paying 210 bar tabs, there’s the political question that if most voters pay no tax that’s methamphetamine to leviathan that lives for tax hikes.

Especially when the new taxes are funding welfare, food stamps, and medicaid that now cover 74 million people who also, alas, vote.

Counting the benefits means the bottom 80% actually pays negative income tax -- they get more benefits than they pay in tax.

And those benefits have positively soared: In 1979 means-tested benefits covered 32% of income for the bottom fifth. That’s now 75% of income taken from people who actually worked for it.

This allows the poor to live a life of gentlemanly leisure, trust funders of the welfare state. According to the CBO, the highest-income fifth of married couples work on average 42 hours per week. The lowest-income fifth chill with just 25 hours a week -- part timers coasting on other peoples money.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

What’s Next

We already have a tax system that places nearly the entire burden on the top earners, then hires tens of millions to sit on the couch and vote for more taxes, more welfare.

And more grift for the politicians.

And yet Progressives still beat the drums about making the rich pay their fair share.

Because it’s not about fairness, it’s about turning the rich into an endless ATM for the crony industrial complex, from bankers and military contractors to Learing centers, teachers’ unions, and NGOs.

The easiest solution is spread out taxes so every voter has a stake in the game. Ideally at a flat rate where everybody pays the same percent of income. Essentially, no representation without taxation. This keeps the rich paying more, but in a way that keeps Leviathan in check.

Of course both parties enjoy taking ever-greater shares of national wealth to squander. So Washington’s happy to play along that the prosperous will never pay their fair share.

And without further ado, the numbers that mattered this week

Enjoyed this article? Get the next one free.

Join 23,000 readers for weekly articles on the economy and freedom, with regular deep dives like the Fall of Rome, the Weimar hyperinflation, and FDR’s Great Depression.

Want to go further? Paid subscribers also get my monthly investment guide including real-money picks that have made 63.6% returns so far this year on a $100,000 portfolio.

Subscribe now

See you Next Week!

Peter

A new study says humans could live healthy to 194.

Which seems oddly specific but it’s also a long time.

And lest that sound bonkers, on a recent Peter Diamandis’ podcast Elon himself said “aging is not that hard a problem,” with that faraway look Elon does when he’s thinking of starting another company.

Now, immortality has been on humanity’s to-do list for awhile. Isaac Newton chased immortality with alchemy. Han dynasty China experimented with mercury and arsenic. Gilgamesh searched in vain for the secret to living forever, which was sadly stolen by a snake.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

The kicker is biologically it’s absolutely possible. Lobsters, for example, essentially don’t age. Naked mole rates live 15 times longer than other rodents -- call it 1,000 years in human terms. Quahog clams are still charming the lady-clams at 500 years old.

The trick, of course, is figuring how they do it and translating that into humans. There’s about 8 mechanisms to reverse what’s essentially the body’s clock, including telomeres, mitochondria, chronic inflammation, so-called zombie cells.

These are the mechanisms the new study modeled, concluding they could buy lifespans of 200 years.

Population Growth

An environment-obsessed media’s first reaction will be overpopulation. But in fact population doesn’t increase as fast as you’d expect.

In rich countries today 1% of people die per year, falling to 0.7% in poor countries since they’re young. So population growth would essentially double in rich countries — 0.9% to 1.9% — but only go up a third in poor countries, from 3.4% to 4.1%.

Put differently, both would return to where they were in the 1970’s.

This is great for Japan or Italy, who are dying off. And it wouldn’t make much difference in Africa for decades.

Visit our Sponsor Coinkite. Protect your Bitcoin with an Ultra-Secure Hardware Wallet. Made in Canada by Passionate Bitcoiners.

The Economy and Immortality

On the economy, you have 3 effects combining to dramatically raise wealth and growth.

First, the preservation of human capital. Ballpark a third of everything we do is thrown away for death, a treadmill that replaces experienced neurologists, engineers, and CEO’s with unskilled 18 year olds.

Second is more direct: Education and healthcare costs plunge, since the ratio of kids and frail elderly to workers crashes. That’s about 1 in 4 dollars we spend.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

And, finally, longer careers. After all, if you’re living to 194 you’re not retiring at 65. This may sound depressing, but remember your assets compound much longer. So you’d do grownup work til 65 then you do fun stuff for the next century.

Put it together and growth and incomes roughly double.

Meanwhile the political consequences are fascinating: People get smarter and more conservative as they age, so voters swing hard to the right. For young people it’s a mixed bag -- faster growth and wages, but tons of old people hogging the choice jobs. And, finally, inequality as those extra decades of compounding mean all boats may rise but rich boats are getting very rich.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

What’s Next

Nature has already solved living forever -- we just gotta find it. Science is hopping along, but the main barrier is regulatory -- governments getting in the way.

200 year lifespans may or may not come in time for Boomers and Gen X. But it’s almost guaranteed for our kids and grandkids unless government kills it.

Enjoyed this article? Get the next one free.

Join 23,000 readers for weekly articles on the economy and freedom, with regular deep dives like the Fall of Rome, the Weimar hyperinflation, and FDR’s Great Depression.

Want to go further? Paid subscribers also get my monthly investment guide including real-money picks that have made 63.6% returns so far this year on a $100,000 portfolio.

Subscribe now

See you Next Week!

Peter

Trump wants to convert Social Security from a Congressional slush fund into real assets you own, like an IRA or 401k.

The difference could mean $60 trillion dollars for the American people — more than the national debt.

This matters because social security is going bankrupt, with trustees saying we’ve got just 6 years until benefits are cut up to 25%. Because Congress pissed away every social security dollar on recreational wars and NGO grants, leaving social security the mother of Ponzis with an estimated $29 trillion of unfunded liabilities.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

Two Ways to Plug a Ponzi

Democrats’ solution -- naturally -- is tax hikes and cutting off wealthier people who paid most social security taxes, Trump wants to shift it towards the 401k and IRA models where you actually invest the money -- and keep it.

That model has generated nearly $30 trillion of assets in IRA’s and 401k’s -- compared to $29 trillion of debt in social security.

Now the details are still coming since Trump accounts for kids were just launched, which seed $1,000 into essentially an IRA for kiddos, to which you can contribute another $5,000 per year.

That may not sound like much, but if you’d done that for today’s 18 year old they’d have $409,000 dollars -- not a bad way to start out.

In fact its enough to buy a house with cash to start a family. And it shows the power of compounding money rather than handing it to Congress to waste.

More important, starting with $409,000 gives young voters a stake in the free-market system Democratic Socialists are currently trying to replace with bread lines.

Visit our Sponsor Coinkite. Protect your Bitcoin with an Ultra-Secure Hardware Wallet. Made in Canada by Passionate Bitcoiners.

Trump Accounts for Grownups

Trump wants to do something similar for the grownups modeled on Australia’s superannuation system where social security taxes go into an account you own and invest like IRA’s and 401k’s.

The idea is it would work like Social Security, but instead of taking your money for Congress to spend the money would go into your account.

In Australia it’s built up over $4 trillion Australian -- in US terms about $45 trillion US.

Translated per American household, that would be about $350,000 in assets intead of $200,000 of social security debt.

If this sounds like a lot, consider if social security was run like a 401k or IRA, replacing social security’s 1.5% returns with 4.5% from a 50/50 stock/bond portfolio (4.5%) or full stock portfolio (7%) the average social security check today would go from $2,084 to between $7,960 (stocks and bonds) and $23,615 per month.

That’s the average check.

Put differently, Congress has effectively stolen between 74% and 88% of your social security dollars. And will keep stealing it until we get private accounts.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

The Road to Private Accounts

Now, the devil’s in the details. First because Trump needs Congress, who enjoys blowing your social security on Leering Centers and wars. Especially Democrats, who’ve fought private accounts for decades since apparently they do not want workers to own the means of production.

Second, because the existing $29 trillion hole in social security means Congress would have a big hole so they’d have to slash spending for a couple decades.

This is certainly painful for Washington’s drunkest sailors, but keep in mind that $29 trillion hole is projected to increase to $72 trillion if nothing’s done.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

What’s Next

For 90 years Congress raided social security, leaving it with IOU’s that are about to run out. Shifting to an IRA type system would turn Social Security from a black hole to a respectable retirement.

And it gives young Americans a stake in the system that keeps us all from starving.

Enjoyed this article? Get the next one free.

Join 23,000 readers for an original article every week with regular deep dives like the Fall of Rome, the Weimar hyperinflation, and FDR’s Great Depression.

Subscribe now

Want to go further? Paid subscribers also get my monthly investment guide including real-money picks that have made 63.6% returns so far this year on a $100,000 portfolio.

See you Next Week!

Peter

It’s “Regime Change” at the Fed as Kevin Warsh carts the Jerome Powell legacy to the dumpster. Sadly, he’s not ready to dumpster the entire Creature from Jekyll Island.

Last week freshly minted Fed chair Kevin Warsh held his first big FOMC meeting, launching multiple salvos that change is coming to the Federal Reserve.

On interest rates it was pretty much what everybody expected, holding rates steady at roughly neutral given the past 40 years.

Fed members’ rate expectations crawled up, which isn’t surprising given inflation took off on oil prices. But the Fed’s not panicking into hikes, which is good.

But the big news was Warsh announcing five changes to how the Fed operates.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

Warsh’s “Regime Change”

As my based colleague EJ Antoni put it, Warsh wants to dismantle the Fed bureaucracy to reorient it to the job it’s supposed to do: fight inflation.

First, Warsh slashed the so-called policy statement the Fed puts out to manipulate markets, replaced with a repeated promise of “price stability.”

Next, he wants to improve the data the Fed uses, which is long overdue since the Fed’s step by step painted itself into inflation data nobody believes: A YouGov poll last year found over half of Americans with an opinion do not trust government inflation numbers.

Third, Warsh wants to slash the mission creep that took the Fed from inflation fighter to economic manipulator to, under Powell, climate change and DEI. Fiddling with systemtic racism while inflation burned at double-digits.

Finally, Warsh announced a review of the 7 trillion dollar Fed balance sheet, which is the accumulated assets -- mostly federal debt -- the Fed bought with freshly printed dollars since the 2008 crisis -- and especially during Covid.

Visit our Sponsor Coinkite. Protect your Bitcoin with an Ultra-Secure Hardware Wallet. Made in Canada by Passionate Bitcoiners.

“Robin Hood” Monetary Policy

This $7 trillion was the main reason for Bidenflation, and Warsh has argued for years to pawn it, cancel the dollars -- which lowers infaltion -- and use that to let rates come down to boost growth.

In other words, take from Wall Street and give to Main Street. Warsh himself has called this Robin Hood monetary policy, and it squares the circle of Trump wanting lower rates without hiking inflation.

That plan got scrambled with energy prices, but Warsh apparently still believes. With the caveat that his hands could be tied since Wall Street long ago digested that 7 trillion and could have a seizure if it’s cut too fast -- which already happened in the so-called taper tantrums when Bernanke tried to drain the punch bowl.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

Don’t Fix the Fed, End It

This all may be helpful, but the larger issue is why try to fix the Fed when you can shut it down. Not as a legal entity -- Congress would have to do that -- but as an economic manpulator.

After all, the Fed is the cause of both inflation and recession, manipulating rates down until prices take off, then fighting that with hikes til you get recession.

The few legitimate things the Fed does like payment and banking oversight are already done by Treasury or OCC. The only thing a Fed adds is a counterfeiting cartel. And bank bailouts.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

Concretely, Ending the Fed as economic manipulator means letting markets set rates -- no forward guidance, no any guidance. Swearing off the money printing -- no QE.

And letting banks know if they over-lend there’s no bailouts coming -- they’ll go bust and get acquired at auction like any other business.

That would be true regime change.

Sadly, Warsh is not a revolutionary -- his regime change is closer to rearranging the silverware. So expect some improvements on the edges, less climate talk, maybe some better inflation data.

And hopefully a Fed chair restrained enough that his boom-busts don’t destroy as many million life savings as the other 16 Fed chairs.

Every week I write on economics to 23,000 readers with regular deep dives into history like the Fall of Rome, the Weimar hyperinflation, or FDR’s Great Depression.

Subscribe for free to get 4 issues a month. Or choose the $8 subscription to support my work and get my monthly investment guide with picks that have made 63.6% returns so far this year on a $100,000 portfolio.

Subscribe now

See you Next Week!

The Supreme Court just gutted one of the load bearing walls of the deep state, voting 6 to 3 to let Trump fire thousands of independent bureaucrats who effectively run the country with minimal oversight from the people voters actually elect to run the country.

Could we see the day when voters actually get to decide what happens to them.

Last week the Supreme Court decided the long-anticipated Trump v Slaughter case, which revisits a 90 year precedent called Humphrey’s Executor that insulated independent agencies from dismissal by the president.

In Bitcoin, the goal is independence, not just exposure. The Bitcoin Way helps step-by-step with Bitcoin self-custody, personal cybersecurity, and even Plan B residency.

This matters because independent agencies control some of the most important policy levers in the federal government, including the FTC that was at issue in Slaughter, which can block corporate mergers.

The SEC, CFTC, and FDIC, which control financial markets and banking insurance. The FCC who controls free speech. FEC for elections. NLRB forunions. FERC for energy markets. EEOC for affirmative action. And USITC that controls much of trade policy.

That’s a substantial part of the federal government, all outside the control of the President. Meaning outside the control of voters, whose only influence is the president and Congress they elect. But with the Filibuster paralyzing Congress that boils down to only the President.

Slaughter put the ball back in voters hands.

Visit our Sponsor Coinkite. Protect your Bitcoin with an Ultra-Secure Hardware Wallet. Made in Canada by Passionate Bitcoiners.

The Progressive Deep State

So the background is socialist Progressives waged a century long jihad to take the government away from voters and turn it into a self-licking ice-cream cone that serves the Progressive revolution.

The landmark moment was the 1883 Pendleton Act that established an independent bureaucracy insulated from political -- hence voter -- control. The excuse was to fight corruption -- which of course is as strong as ever. And the result was voters became spectators while federal workers became an occupying army.

The Deep State was born.

And that Deep State consolidated into so-called independent boards starting with the Interstae Commerce Commission in 1887 that unconstitutionally regulated business, then took off in FDR’s socialist New Deal, with dozens of agencies created to rule the country without voters.

By 1946 this occupying army won the right to effectively write law in the Administraive Procedure Act, then wrangled itself near-immunity from being fired in the 1978 Civil Service Reform Act.

Bringing us to today, where almost 90% of laws are written by bureaucrats, not by elected policians. And, until last week, there’s nothing you can do about it.

Visit our Sponsor Abundant Mines. Mine Bitcoin, Keep the Profits, Reduce your Taxes. We handle Everything.

Giving Power Back to Voters

Slaughter now joins a parade of recent decisions turning the tide, including Seila, Collins, and Loper Bright that give Presidents more control over bureaucrats while giving Congress a bigger role in actually writing the laws that, according to the Constitution, they alone are supposed to write.

But there’s miles to go: On the very same day the Court stayed Trump’s firing of Fed member Lisa Cook -- allegedly on a technicality but possibly revealing a reluctance to let elected presidents control the unconstitutional Federal Reserve that all but controls the economy.

Meanwhile, while Loper and now Slaugter dramaically reshuffle the cards, federal rulemaking, court deference, and federal worker protections remain stubborn and will need multiple decisions to root out.

Visit our sponsor Monetary Metals. Earn 4% interest on your gold and silver, paid in more ounces of physical gold and silver.

What’s Next

In the near term Trump can purge independent agencies so they stop sabotaging his agenda, while agencies like FTC and SEC are likely to pull back on major regulatory pushes to keep their heads down.

But zooming out we could see major reductions in the regulatory tax on the economy that studies imply could double or quadruple wages -- Starbucks and dog-walkers would be making six figures.

And assuming the firing of Fed member Lisa Cook firing is refiled with the technicalities fixed, we could even see a Federal Reserve that actually answers to the people it’s abused for 113 years and counting.

Every week I write on economics to 23,000 readers with regular deep dives into history like the Fall of Rome, the Weimar hyperinflation, or FDR’s Great Depression.

Subscribe for free to get 4 issues a month. Or choose the $8 subscription to support my work and get my monthly investment guide with picks that have made 63.6% returns so far this year on a $100,000 portfolio.

Subscribe now

See you Next Week!