In case you’re stuck in a blue state dutifully handing half your money to Somali Learing Centers, brace yourself: They’re coming for the other half.

That oceanfront condo in Florida’s starting to look mighty good.

Ten Blue-States Locking the Gates

At least ten states are now exploring an exit or wealth tax to squeeze the last drop from fleeing residents.

That includes California and New York -- of course. Michigan, Colorado, and Washington state — until recently a zero income tax state. Massachusetts and Connecticut are trying to pass one, and Minnesota, who pioneered the modern Learing Center.

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In dollars, California’s wealth tax is the crown jewel. It would impose a one-time (allegedly) 5% tax on the entire net worth of the roughly 200 billionaires who live in California, where the top 1% already pays half of state income tax.

A companion bill would add a 1.5% annual wealth tax.

More Tax, Less Revenue

Like all wealth taxes, California’s hits unrealized gains. Meaning company owners will have to sell 5% of the company given almost all the wealth of California billionaires is in the company they founded.

Selling 5% means the stock price crashes and they potentially lose control.

Then they’ll have to keep liquidating a percent and a half every year until they either lose the company or... move to Miami.

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As billionaires flee, this takes out the the roughly $3 billion in California taxes those 200 people currently pay -- as in the wealth tax would reduce revenue.

Worse, some will take their companies with them, which employ between one and two million Californians -- pretty much the entire upper middle class outside city workers paid half a million to ensure fire hydrants have no water.

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So it could sum to $10 billion of lost revenue. Soaking the rich don’t come cheap.

In fact, one study by five Stanford economists found a wealth tax modeled to raise $100 billion could actually reduce revenue by $25 billion — on top of the exodus of jobs.

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Eat the Rich. Then Eat Everybody Else.

The problem is new revenue spawns new parasites, who need feeding. So when the billionaires leave they’ll turn to millionaires. Which is pretty much any Californian who owns a house.

At which point it’s the Detroit doom-loop: Eat the rich til you run out of rich, move on to the kinda rich, the not really rich. When the smoke clears you got welfare and people who don’t have any other option. Well, and the city workers with the fire hydrants.

Happily for California’s Learing Centers and fake hospices, California Democrats are trying to push retroactive exit taxes that would continue taxing you after you leave.

You can check out any time you like but you still gotta pay.

This has already kicked off an exodus, with an estimated $700 billion of assets fleeing the state -- roughly the GDP of Switzerland.

And it’s a warning shot to any livestock still hanging out at the slaughterhouse.

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What’s Next

The California blend of wealth tax and exit tax is spreading across blue states, stuck between a massive fraud and welfare class and taxpayers who know how to move to another state.

New York’s pushing a 9% exit tax. Along with a 4% annual wealth tax -- so far only hitting second homes -- Mamdani’s so-called pied-a-terre tax.

These will spread as income taxes rise; Washington and Michigan just hiked their top rate to nearly 10%.

New York City’s already 11%, with plans for 17%.

If you’re in the crosshairs and mobile, it’s probably time to talk to an accountant about changing residency, selling before the taxes — with enough lead time to escape the exit tax. And structuring your business and trusts so you’ve got something left after the Learing Centers are done with you.

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AI can now hack everything as Anthropic’s new model finds more exploits in a couple weeks than the entire global security community discovered in the past decade.

Will we go back to pen and paper, fedexing silver coins to pay the Netflix bill, and burying gold in the backyard.

Mythos can Hack “Everything”

Last week AI company Anthropic -- of Claude fame -- announced its internal Mythos AI model can hack “everything.”

As in every operating system -- Windows, Mac, Unix. Every database. Every web browser -- therefore every website.

So hospitals, power grids, military, the stock market. Your bank.

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Just days later Treasury Secretary Bessent called in top banks to coordinate emergency countermeasures.

The reason is just weeks after release, Anthropic’s Mythos AI found 4,000 so-called zero-day vulnerabilities -- meaning nobody knows about them so there’s no defense.

Which is more than the entire global security industry found in the past decade.

Anthropic immediately set up Project Glasswing to bring in 40 partners to design defenses before Mythos goes public.

These include Microsoft, Apple, and Linux. Browser companies. Security companies like Crowdstrike.

Cloud infrastructure like Amazon and Google -- who run pretty much every website.

Chipmakers, banks. And, of course, the Department of War.

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The problem is over the past 30 years everything has moved online. Paychecks, medical records, retirement savings. Supply chains for food, for gasline. The electricity. The databases that know who you are and what you own.

We did this because it’s cheap and convenient -- imagine trying to run an economy without computers.

But it came with major hacks -- in 2017 Wannacry and NotPetya wiped out hundreds of thousands of PC’s and servers at major companies including hospitals.

In 2020 Russia sat inside Tresaury and Justice for 9 months undetected. A 2024 attack cost $22 billion and froze prescriptions for millions while hospitals couldn’t get paid. China stole 21 million US security clearance files -- which looks an awful lot like an act of war. Equifax leaked 147 million Americans social security numbers.

So 4,000 of those. In a couple weeks.

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Government to the Rescue?

It’s tempting to say enough is enough, it’s time to throttle AI. The problem is whatever Mythos can do today, Chinese opensource can do in 6 to 12 months.

Meaning we’re on the AI rollercoaster, like it or not, climbing higher every day. And the only solution is good guys go faster than the bad guys.

Just like gun control cripples the good guys and bounces off the bad guys, AI regulation cripples Anthropic and Glasswing but the bad guys get it next year.

So the focus is defense and making sure government’s not interfering with the goods guys.

Top companies will deploy defenses in time. The half-assed will not. Including the poster child of half-assed, government databases and systems, from voting to tax refunds to social security

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How to Play It

If you think markets are under-estimating hacking risk, the most obvious play is buy security companies like Crowdstrike (CRWD), Palo Alto Networks (PANW), or the Global Cybersecurity ETF (BUG). Note they’ve been on a recent downturn because, ironically enough, markets think AI’s better at defense.

Which raises the question you could just buy the AI’s on the assumption AI defensive spend grows.

Alas, you can’t buy ChatGPT or Anthropic unless you’ve got a hookup since they’re not publicly traded. For most investors the closest is Google, which owns Gemini. With the caveat that Google’s huge, so mostly you’re buying online ads.

Or go upstream and buy AI picks and shovels (TSM, AMD, AVGO).

As for your assets, on the off-chance bank accounts get nuked it sets off a rush into things AI cannot hack. Meaning physical gold, physical silver and, of course, Bitcoin.

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A new study predicts 86% of AI unemployment will be women.

And not just any women: rich Democrat women.

Tragically, AI is coming for the notorious Karen who’s overpaid for what she produces but still needs to see the manager.

The reason is the industrial revolution took jobs from people who work with their hands — routine physical work. But AI is taking routine paperwork — people who forward emails, schedule meetings, and sit on diversity committees.

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AI is Coming for the Karens

Last week, think tank Brookings issued a new study estimating 37 million American workers are “highly exposed” to AI replacement.

Brookings thinks most of those will easily transition into a different role because they have broad skill sets or they’re smart.

For example, software or finance are on the firing line for AI replacement. But they’ll adapt as automation creates new jobs since it raises incomes and deepens production — products get better.

But Brookings estimate there’s about 6 million of those who will not adapt, primarily in clerical and administrative roles.

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What’s interesting is the distribution: Brookings estimates 86% are women. And they work at big organizations with lots of routine paperwork -- colleges, hospitals, big companies, government.

In healthcare, for example, hundreds of thousands of workers never see a patient -- they see paperwork.

It’s worse with federal workers, who are also mostly women.

Going by the fact nothing got worse when DOGE fired 300,000 of them, many are useless. Just imagine how useless they’ll be when AI can do their job for free.

A lot of these women may be low skill, but they’re high education -- and high income. Which they’re about to lose. Which won’t make them happy.

In a recent CNBC interview, Palantir CEO Alex Karp laid it out: “If you’re going to disrupt the economic and political power of highly-educated female voters who vote Democrat while increasing the power of vocationally trained working class males ... and you think that’s going to work out politically, you’re in an insane asylum”

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Who Goes First?

So who are these soon to be jobless Karens?

A study by AI company Anthropic -- of Claude fame -- thinks AI could ultimately replace over 90% of tasks in administrative, clerical, and middle management. And over 80% in arts and media and law firms -- don’t let your kids go to Hollywood. Or becomes lawyers.

This sounds dire, but remember the adaption. Software, for example, has been automating for 50 years -- punch-card feeders are long gone. During dot-com, website developers were supposed to be obsolete any day now, and 50 years later they’re still here. Because the work got more complicated even as the basic stuff automated.

So the vast majority of that 80 to 90% will reskill, including software, finance, marketing and managers.

The problems are those clerks and admins, secretaries, sales assistants, customer service, payroll... HR. Heaven help you if you’re a diversity consultant who doesn’t know how to flip a burger.

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What’s Next

I’ve argued AI will be the opposite of the industrial revolution: Instead of replacing routine physical jobs it replaces routine white collar jobs. With robots coming decades later since you need one AI for 8 billion people but you need 5 robots per McDonalds.

This creates a generation-long blue collar boom as automation itself makes us rich, which raises demand — and pay — for blue-collar jobs. But it will absolutely redistribute income -- and power -- from high-income, high-education, largely female white collar workers to the plebs.

This is terrifying for Karen -- she already make less than the plumber, she would make less than the Uber guy.

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Portfolio Returns

March was brutal for markets as Iran blindsided stocks, gold and silver, and bonds. Pretty much everything but Bitcoin.

On the month, the benchmark S&P 500 lost 4.4%, while my two portfolios lost 3% in the “Market Neutral” portfolio and 7% in the “Adrenaline” long-only portfolio.

This brought year to date returns to minus 4.5% on the S&P, plus 4.6% on the “Market Neutral” portfolio, and minus 5.5% on the “Adrenaline” portfolio.

Annualized, that’s minus 17% on the S&P, plus 20% on Market Neutral, and minus 20% on Adrenaline,.

Breaking it down, on the month growth picks lost 5.5% — growth typically goes down harder when markets fall.

In the market neutral portfolio this was cancelled by shorts, which lost a pleasing 5.9% — so you made money.

But the hedges — gold, silver, Bitcoin — lost a sobering 10.6% on the month. Driven by gold’s 11% loss on the month, silver’s 23% loss, all while Bitcoin rose a modest 2%.

In short, broad stocks, growth stocks, and Bitcoin did what you expect in a sudden war, while gold and silver — which usually rise during war — tanked. Probably because both were in meme-stock territory the previous six months and the paper-hand tourists bailed.

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Economy

A lot has changed since the March newsletter, written the day before the war started.

Oil added $50 a barrel, which nearly doubled inflation expectations — they went from 3% to 5%.

On GDP, the Fed’s GDPnow indicator dropped from 3.5% pre-war to just 1.6%. So growth got cut in half economywide.

Rule of thumb is a percent of GDP is worth a million jobs. So if the war keeps going this will increasingly show up as lost jobs which will, of course, hand the midterm elections to Democrats.

Now, I normally focus on the economy, but at the moment all eyes are on Iran.

Namely, how long will Iran disrupt oil. Because it’s not the war itself that’s crushing markets — Clinton bombed Iraq periodically throughout the 1990’s and markets didn’t care.

So it’s really about how long oil will be disrupted.

For that, there’s 2 indicators you can watch in real-time: Oil futures, and prediction market odds of a ceasefire.

Between the two, oil futures are more optimistic, estimating 60% odds of a ceasefire by September, 70% by October, and 80% by the end of the year.

While prediction markets say we’re 45% odds of a ceasefire by July and just 71% by the end of the year.

Either way, they expect the war to continue past Trump’s original 2 month promise, which would wrap things up by end-April.

This is partly because the hoped-for uprising by the Iranian people hasn’t occurred. And it’s partly because the regime itself seems to be more secure than ever. Polymarket odds of Iranian regime change are actually lower than they were the day Trump started bombing.

So even if Trump decides to stop bombing, both oil markets and prediction markets think it may keep going.

Investment Impact

Pretty much everything that did really well just before the war did terrible since the war. This is because wars set off a flight to safety, and investors start by selling their winners.

To illustrate, in January and February the benchmark S&P 500 (SPY) rose just 0.6% -- annualized 3.6%. Which is historically very low -- it’s averaged 11% per year since 2000. But it’s still growth.

But since the war, SPY is down 4.4% in a month. Which is annualized 58% -- full-blown recession moves.

Gold and silver have been the same pattern on steroids: In January and February gold (GLD) rose 22% and silver (SLV) 32%.

Which translate to goofy annualized rates -- 231% for gold and 427% for silver.

And then... similarly goofy drops in the war: In a single month GLD lost 11% while SLV lost 23%.

Which translate to annualized losses of 76% in gold and 95% (!) in silver.

What’s Next

Everything depends how long the war goes. If it keeps going through 2027 inflation soars from oil and government spending, while oil crushes GDP, jobs -- and apparently any investment outside energy and defense stocks.

But if it ends fast, the fundamentals are unchanged and we return to the pre-war economy of fast growth, peak productivity, falling inflation and rising jobs.

The problem for investing the war is Trump is almost uniquely chaotic — at 2pm the war’s wrapping up, by 4pm we’ll bomb Teheran into dust.

So unless you saw the war coming your assets already took the hit but if you now flip into a war portfolio of energy and defense you risk getting double-slammed if there’s a surprise ceasefire. Cry twice.

So investing the war is collecting dimes in front of steamrollers. I’d sleep better investing the pre-war economy and waiting out the storm.

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Portfolios

So with that, an update on the portfolio compositions and tweaks-- both the “Adrenaline” growth portfolio and the “Market Neutral” portfolio.

Read more

It’s official: the federal government is bankrupt.

You probably knew this. But Treasury admitting it is comforting. Or perhaps terrifying.

Last week the Department of Treasury released it consolidated financial statements for fiscal 2025, reporting that the federal government has just over $6 trillion in assets -- land, buildings, student loans. But, according to Treasury, it has nearly $48 trillion of debt.

That comes to negative $42 trillion. Which is roughly half a million dollars for a family of 4.

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Worse, it’s deteriorating at $2.5 trillion per year — about $3,000 per month for that family of 4.

You’ll notice $48 trillion of debt is more than the official national debt, which just crossed $39 trillion 2 weeks ago.

That’s because of trillions of so-called non-debt liabilities like federal employee pensions and loan guarantees where government guarantees crony loans since it looks better than writing checks.

And keep in mind this is just the debt they know about. For the 29th year in a row the federal government auditor -- the GAO — stuck a big disclaimer saying this is only what they could find.

So there could be a lot more -- nobody knows. Certainly not the department that’s supposed to know.

Off-Balance Sheet Debt

It gets much worse. Because Treasury’s tally excludes $88 trillion in so-called off-balance sheet debt.

This is made up of even more pensions the government has guaranteed — like railroad workers. Along with Social Security and Medicare the government has promised to pay -- and will pay, given these are politically untouchable.

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This $88 trillion of off-balance sheet debt rose by nearly $10 trillion last year with ongoing Social Security and Medicare shortfalls.

$10 trillion comes to an almost comical $12,000 per month for that beat-down family of 4.

Put it together and it’s at least $136 trillion dollars of debt, rising$ 12.5 trillion last year.

Put differently, one third of everything you made last year went to taxes.

Another third was earmarked for future government spending.

You live on the crumbs.

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Converting all this into a typical American family, they make 80,000 a year — about $7,000 per month.

They carry between $150,000 and $200,000 of regular debt -- mortgage, cars, credit card.

And they owe $1.5 million of government debt -- rising at $12,000 per month. And that’s just the debt Treasury knows about.

Spot the problem.

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What’s Next

The war’s hogging the headlines at the moment. But behind the scenes we are headed off a fiscal cliff.

They’ll borrow as much as they can -- apparently $48 trillion so far -- to postpone the crash. To postpone that day when lenders stop, market interest rates spike, and we get a financial crisis that makes 2008 look like a picnic.

The solution’s easy: Slash federal spending by a couple trillion. Maybe hold off on new land wars for a couple decades. Close some Somali Leering Centers.

Even — dare we dream — a balanced budget amendment. Or my personal favorite, Warren Buffet’s proposal that if Congress can’t pass a balanced budget they have to resign and are banned from politics for life.

None of those will happen.

Because for both parties kicking the can is a lot more fun than slashing Washington.

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Cracks are spreading in the $1.8 trillion dollar private credit industry. Echoing the 2008 financial crisis but this time gutting the load-bearing walls.

On Tuesday the Financial Times reported Ares Management, which runs $623 billion, limited redemptions in one of their flagship funds.

That’s the asset management equivalent of a bank run -- investors can’t pull their money because it could spark a fire sale that could collapse the whole fund.

For scale, $623 billion would make Ares the 9th largest bank in America -- just ahead of Capital One.

Spreading Cracks

Ares joins a rogues' gallery of funds that have locked redemptions, starting with Blue Owl which was managing just over $300 billion -- more than American Express -- before it did start fire sales.

During the Blue Owl drama, JPMorgan CEO Jamie Dimon warned when you see one cockroach there’s more. And they’re now coming every couple days: We’ve seen locks in Blackstone, Apollo, Cliffwater. Just last week Morgan Stanley capped redemptions at a major private income fund.

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What’s driving it is what drives every bank panic: bailouts encouraged risk. Namely, since the 1990’s finance assumes it’ll a bail out from the Fed if things go bad.

The iron law of finance says more risk more profit -- you can charge more on a risky loan. So bankers do what bailouts pay them to do: Get rich or die trying.

On the ground, that meant hundreds of billions in loans to dodgy borrowers with sweetheart terms that let the borrower roll over the loan if they can’t pay -- so-called covenant-lite deals.

So borrow $100 million at 10%, and when you can’t pay the $10 million interest they just call it a $110 million loan and pretend everything’s fine. Known in the game as “extend and pretend.”

That hides the fact borrowers are in default. Because a loan in default might be worth 30 cents on the dollar. Or 5 cents. Like Enron but an assembly line.

The Fed’s Bait-and-Switch Hikes

Meanwhile, the Fed -- as always -- fed the fire with interest rates.

You’ll recall back in 2023 a clutch of banks went bust because their bonds were worth less after the Fed hiked rates for Bidenflation. Rate hikes lower bond prices, which left trillion dollar holes in bank balance sheets.

That happened on steroids to private credit, much of which went to commercial real estate that got double-hit with work from home and blue-city mismanagement that crushed office prices with vacancy rates hitting 40 year highs -- one in five offices is now empty.

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Even more money went to dodgy corporate borrowers to fund leveraged buyouts that are now swimming in debt, like First Brands that went out last month with $12 billion in default. Sera Simmons, Citrix, and Envision may have doubled that.

With potentially a lot more: Barclays estimates half of private credit loans are to software and business services that are getting gutted as AI gives it away for free.

The problem is when the loans go bad, investors get haircuts -- some get wiped out. That matters because nearly half of private credit money came from pensions and insurance companies.

If they can’t pay pensions or insurance claims that has bailout stamped on its head.

What’s Next

The Fed’s permanent bailout and interest rate adventures created a monster in private credit. Nobody knows how many cockroaches there are -- not surprising considering they’re hiding it.

And if the Ponzi does collapses, you will pay it off -- as always, bankers eat their wins, you eat their losses. While GDP could take up to a half-point hit — representing about half a million jobs.

It’s not 2008 scale — yet.

But given the near-weekly blow-ups it could get big fast.

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Last week Facebook announced they’re laying off 20,000 -- one fifth of the company -- blaming AI.

In a cruel irony, they’ll be plowing those 20,000 salaries -- and the free backrubs -- into building more AI data centers.

With AI job replacement finally putting some numbers on the board, it’s a useful time to ask what happened last time we wiped out two-third of jobs: The Industrial Revolution.

Interestingly, AI is almost the opposite of the industrial revolution: It doesn’t replace physical jobs, it replaces mental jobs.

In fact, it makes physical jobs pay more because automation makes us rich — that’s the whole point, automation replaces expensive production.

Of course, this shift from white-collar to blue is deeply disturbing for the over-educated white-collars who spent their life looking down on working men. And who write the AI doom porn.

The Industrial Revolution and Jobs

When the industrial revolution hit in the early 1800’s, roughly 70% of Americans worked on a farm. The other 30% were domestic servants, traders -- wholesale and retail -- and skilled crafts: weaving, cobblers, blacksmiths, tailors.

Fast forward 200 years later and the farm workers went from 70% to 2%, replaced by tractors, combines, and refrigeration.

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The servants, traders, and skilled trades got converted into mass services. So you don’t have a maid and butler, instead you have a poke bowl delivered while the dog’s at the groomer.

In fact, we almost doubled services because the industrial revolution made us rich -- consider in 1950 almost nobody got their dog groomed, their nails done at a salon, or had a personal trainer.

So these went from 30% to 50% of jobs.

What happened to the other 50?

A big chunk sadly, went to government, which grew from 2% of jobs in 1800 to more than 20% today. Because good times make big parasites.

Another chunk was healthcare, which went from almost nothing in 1800 -- you basically went to the hospital to die — to around one in eight today.

The final 20% got replaced 1 to 1 by what we now call white collar work -- cubicle jobs, accounting and finance, tech, analysts, administrative jobs.

These are in the firing line of AI.

Now they won’t all go — customers still want to talk to a human financial advisor, and somebody’s gotta check what the AI’s doing.

But if we lose, say, 15 of those 20, how will be replace them?

Easy: the same way we did last time. Services, trades, healthcare.

After all, we’re not trying to replace 70% of farm jobs like the industrial revolution, we’re talking one fifth that. And if AI automation makes us rich like industrial automation did, services and trades alone cover it.

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Jobs after AI

On the ground, a boom in services would mean regular people consuming personal services like rich people do today — almost nobody would mow their own lawn just like almost nobody cuts their own hair or raises their own chickens.

On trades, more factories, bigger houses, second houses, swimming pools. More stuff means more trades all require more skilled trades. This will continue at least through the robots, which will comes decades after AI since you need one AI for 8 billion people but you need 5 robots per McDonald’s. Meaning robots are your grandkids’ problem, not your kids.

For perspective, the first factory was electrified in 1880. Then it took 30 years for half of American factories to be electrified — many in India still aren’t.

Of course, the problem with all this is that driving an uber pays a lot less than being an accountant. But before the industrial revolution clerks lived in poverty: The automation and attendant wealth is what made accounting valuable.

If AI delivers the productivity revolution it promises, Starbucks will pay six figures. And if it doesn’t, false alarm: AI was a bust.

What’s Next

Even if we eventually replace lost jobs at twice the pay -- or five times -- AI job replacement will hurt the young and unskilled. And it will gut high-income, over-educated white-collars including the journalists, professors, and analysts who write AI doom porn.

Meaning there may be light at the end of the tunnel, but there’s a lot of disurption — and a lot of AI doom porn — between here and there.

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This could double gas prices in Europe. Which could spark a recession, chase the rest of Europe’s heavy industry to America, and leave European households facing thousands in electric bills.

Perhaps Europe shouldn’t have closed their coal plants to entertain climate activists.

Putin Tightens the Screws

Last week Vladimir Putin took advantage of the Iran war to tighten the screws on Europe, musing that “perhaps it would be more profitable for us to stop supplying the European market” in favor of other “interesting markets” -- presumably China and Asia.

The context here is natural gas is a much smaller market than oil -- about $150 billion a year exported, compared to $1.3 trillion in oil.

But it’s also an essential market, with about half of natural gas going to electricity generation since gas is much cheaper than oil. The rest goes to heavy industry -- steel, chemicals, fertilizers -- and household heating.

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The problem is natural gas is much more rigid than oil, which you can put it on a boat and aim anywhere.

In the case of gas, it’s limited by specialized infrastructure since it requires cooling to negative 260 degrees Fahrenheit to make it liquid. Unlike oil that’s liquid at room temperature.

This means there isn’t a global price for natural gas, it’s different prices everywhere. "Henry Hub” in the US. Japan-Korea Marker -- JKM -- in Asia. And TTF in Europe.

Henry Hub has barely moved on the Iran war, since the US is a net exporter of LNG. So while oil moved 50% -- depending on the hour -- Henry Hub’s only up 10%.

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It’s a very different story in Asia and Europe -- TTF was $32 on the eve of the war, spiked to 54, and are now around 49 dollars -- up over 50%.

The problem is Middle East gas was just 8% of Europe’s supply. But Russian gas is almost twice that — about 15%.

In other words, 8% of supply spiked prices by half.

And now Putin’s threatening to triple that hit.

This would gut what’s left of European manufacturing, especially energy-intensive industries like steel, cars, and building materials. As well as chemical-intensive industries including fertilizer for farmers.

That could spike European food prices — which could lead to social unrest that we already saw when the Ukraine war cut strangled Europe’s fertilizer supply.

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Trump’s 2018 Warning

It didn’t have to be like this. Back in 2018 Donald Trump warned Germany it would become “totally dependent” on Russian energy if it didn’t start building infrastructure for US gas imports.

Germany’s diplomats smirked at the dumb American.

And they kept smirking when Trump warned Germany to stop demolishing their coal and nuclear plants for the global warming pixie farts.

Of course it played out exactly as he warned: Germany demolished 15 coal plants and all of their nuclear generators, knocking out nearly a quarter of their energy and spiking household electric rates to 3 to 4 times US rates.

And 8 years later Putin’s still blackmailing Europe with gas.

What’s Next

It took the Ukraine war for the EU to finally build terminals to buy American gas. But they were still using cheap Russian gas even though in theory they were at war.

They’ll now scramble to buy American to avoid an industrial wipeout and voters waving electric bills with their pitchforks.

This will take months since LNG supply is generally locked up in long-term contracts.

In the meantime, Europe is left praying for a short war with no backup plan

.

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Turning Donald Trump’s totally awesome 1980’s boom into a 1970’s quagmire?

As soon as the bombs started falling over Teheran, American markets crashed. Bonds fell. Silver plunged. Even gold is down.

Oil, of course, jumped from $67 to $75 per barrel.

Oil Disruption

Markets always react fast to war – and they can over-react. The question for the real economy is how long does this war last.

This is because the main impact is oil prices. And these are driven by supply disruptions from the Middle East.

About one-fifth of oil exports pass Iran’s Strait of Hormuz. Another third are in range of Iranian missiles.

The US actually imports almost none of this Middle Eastern oil – it’s just 2% of our consumption. But oil prices are global so what happens in Iran does not stay in Iran

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On the day bombs started, ship traffic in the Strait of Hormuz fell 70%. Within 3 days it ground to a “total halt.”

Trump responded with government guarantees on ship insurance, which helps. But traffic won’t recover until the bombs stop. So it’s a question of how long the bombs continue.

Trump is currently promising the war will last just 4 weeks. But the administration is also messaging it will go “as long as it takes.”

You do that to demoralize the other guy. But it means this is not a one night stand like Venezuela or last time Trump bombed Iran.

Iran’s Impact on the Economy

There’s 3 key baskets of economic fallout: Growth. Jobs. And inflation.

Historically every $10 rise in oil knocks about two-tenths of a percent off economic growth. That’s small in an economy that’s growing over 3% -- it lowers wage growth by about $200 per year.

But it goes on top of expensive oil to heat your home or gas your car. A $10 jump translates into 25 cents a gallon of gas. Together with heating and trucking raises household costs another $300 a year.

And it bumps inflation by up to a third of a percent.

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Next, expensive oil and growth both hit job creation -- $10 might drop job creation by 10 to 15 thousand per month.

All this is painful. But it’s not recession. What would put us in recession is a long war.

A recent study by Deutsche bank looked at historic oil shocks, concluding you need a 50 to 100% ongoing jump in oil to set off a recession.

This would imply oil prices of $100 to $150 — on a sustained basis, not just a spike.

The good news is, according to Deutsche, even at $100 — or $150 — oil only causes recession when you’re already limping.

The 1970’s is the poster-child for an oil crash. But we were already in bad shape thanks to Washington’s so-called guns and butter policy of dumping trillions into the welfare state while ramping up the Vietnam War.

It’s important to note the Nixon Shock and lost decade kicked off long before the oil embargo.

In contrast, today we’re growing at 3 percent according to FedNow. Productivity is soaring 4.9% -- one of the highest since the Reagan boom.

So oil could knock us into the 1% to 1.5% on growth. But it won’t set off a recession unless the Fed panics on oil prices and hikes rates. Which could mow down millions of jobs.

What’s Next

For now the war’s biggest impact is oil prices.

But if it keeps going those cascade into growth, jobs, and inflation.

At which point Donald Trump could throw away his hard-earned boom just in time for Midterm elections.

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Year to date, the aggressive “Adrenaline” portfolio is up annualized 10.3%.

The safer “Market-Neutral” portfolio soared an annualized 57.3%.

Both blew out the benchmark S&P 500, which is actually slightly down for the year.

As background, I used to teach MBA investment analysis and corporate strategy, and worked real-world corporate strategy at a pair of multinationals in the US and Japan. I’ve managed assets using classical and Austrian economics business cycle analysis since the early 1990’s.

Macro Thesis as of March, 2026

The economy is humming along with GDP growth of 3.5% (if you strip out last year’s federal shutdown). Productivity growth is singing at 4.9% -- one of the highest since the 1980’s.

Jobs are finally turning up, with official numbers showing about twice as much job creation as the economy needs. Inflation continues falling, now at 2.4% if you believe government numbers and under 1% if you prefer private aggregator Truflation.

Credit metrics are benign -- financial conditions, commercial loans, and credit spreads are quiet. The closest to a rumble is reckless loans in private equity, which are still in the tens of billions -- not structural.

Stocks, on the other hand, are having a sluggish 2026, with the S&P 500 (SPY) slightly negative year-to-date. But this could be digesting the late 2025 jump, when the S&P did annualized 20%.

More important, both model portfolios turned in very solid returns — 10.3% and 57.3% annualized.

With that, specific picks and portfolio changes for this month:

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Will AI make everything so cheap — including wages — it sets off an economic doom-loop?

Is there such a thing as too much efficiency.

Last week the Dow dropped 800 points -- worth a trillion dollars -- on a piece of speculative fiction from a small stock analyst called Citrini Research.

The report predicted AI would set off a doom-loop of what they call “ghost GDP” where we make stuff but nobody gets paid for it.

Economically, this is incoherent: When you make stuff either workers get paid, shareholders get paid, or it’s consumer surplus — better known as rising living standards.

The industrial revolution, for example, was a mix of all three.

Still, the Citrini report touched a nerve on Wall Street after weeks of the so-called AI disruption trade. Which I predicted would be the investment theme of 2026 on this very newsletter, turning tidy profits so far.

The question is what gets disrupted. And what gets boosted.

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How AI Affects Stocks

The key to AI and the economy is AI will do interesting things to non-AI business.

For most businesses it helps because AI makes stuff cheap. Potentially 20 times cheaper, going by a recent Goldman Sachs case replacing entry-level bankers.

That reduces costs, which boosts profit margins. Which makes stocks go up.

But there’s also a bunch of companies where AI destroys profits by commoditizing the product. For example, licensed images when anybody can prompt an image. Or management consultants, advertising agencies, and low-end Indian IT shops that can be replaced with AI.

This displacement is already becoming a major market theme. A few weeks ago a tiny Florida company that made karaoke machines switched to an AI trucking router it said could cut trips by 3 to 4 times. That set off a 25% drop in shipping company stocks.

AI disruption is coming weekly in software: Last week a random blog post showing AI can handle Cobol programming knocked 12% off IBM — $30 billion down the drain.

These isolated executions will continue even if the vast majority of companies get improvements in margins — and stock prices.

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How AI Affects Jobs

But what about the jobs -- for most people that’s most important.

The key is every automation creates more jobs than it destroys -- and those jobs pay a lot more. Like 20 times more.

This is true since fire, agriculture, writing. Ox-plows, waterwheels, windmills. The industrial revolution and the internet.

In terms of jobs, automation is an escalator where you take a step down every so often — your job pitching hay was replaced by a tractor.

But the tractors themselves raise incomes. So jobs that used to pay crap now pay a lot.

Consider 100 years ago major league baseball players worked day jobs at the deli. Today, construction laborers take cruises to the Bahamas. A new report says babysitters make 25 bucks an hour.

The claim is this time is different because AI replaces intelligence. But this is fighting the last revolution: Intelligence only emerged after the industrial revolution stole the more valuable physical jobs.

Displaced workers stepped down to service jobs. Which are now more than 75% of all jobs. And pay much better than pitching hay in 1820.

AI will do the same with services, the trades, and personal creation. All of which soar with rising incomes from automation itself.

Consider there are 300,000 pet groomers, 330,000 personal financial advisors, and 370,00 personal trainers in the US — industries that basically didn’t exist in the 1950’s since people weren’t rich enough.

For the trades the key is robots come much slower than AI — one AI covers 8 billion people, but you need 5 robots per mcDonalds.

Finally, original creation, from hand-made chairs to... writing substacks on the economy.

Consider that hand-made things are worth more than machine-made despite having more flaws. Or that vending machines were supposed to replace bartenders a hundred years ago. Or the strong preference people already have for human-created content over AI slop.

This is human value in dollars and cents. And it dramatically increases post-AI because of the wealth automation creates.

AI will cause real disruption between workers switching careers — which we already do every decade — and individual companies becoming commodities.

But when the smoke clears the money comes from the automation, the jobs come from being human.

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“Experts” predicted inflation would soar in a second Trump term. Instead, it crashed.

Prices are still high, of course. But we’re actually flirting with deflation with inflation under 1% according to real-time price tracker Truflation.

So why were the experts so wrong: Was it pure bias.

Or are left-wing Keynesian models garbage?

Before the 2024 election, CNN ran an open letter by no less than 16 Nobel Economists — one in three living laureates -- warning inflation would rise under Trump from the 3% it was running at the time.

In fact inflation went down under Trump. It’s currently running 2.4% year-on-year but actually under one percent according Truflation, which more accurately tallies the drop in housing prices and rents.

The “Expert” Predictions

Their argument was tariffs would be passed on to consumer, which didn’t happen in Trump’s first term nor his second -- the Chinese ate them both times

But the big one is their models said Trump would grow the economy too much. Namely, that his $4.8 trillion of tax cuts in the Big Beautiful Bill would combine with degulation to “risk accelerating the economy when the Federal Reserve is working hard to slow it down’

As in the Fed was dutifully strangling the economy but President mean-tweets would make it grow too fast.

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So in standard Keynesian there’s a trade-off between growth and inflation, called the Philips Curve. It says if the economy grows fast you get inflation -- it supposedly overheats. So the solution is strangle.

This is garbage. Because classical economics -- and Austrian economics -- say productive growth reduces inflation. While unproductive government spending -- Somali Learing Centers, windmill subsidies, welfare for illegals -- are inflationary.

Keynesians can’t see this because they’re effectively correlating inflation and GDP — using unemployment as proxy. As Elon famously noted last year, you could fire all the car workers, replace them with twice as many DMV workers staring out the window at twice the pay, and your GDP — and jobs — would go up.

Why Production Lowers Infaltion

To see why production lowers prices, imagine a big pile of all the money circulating — circulating as in exclude savings, which are salted away for a rainy day where they don’t chase prices up.

So a big pile of circulating money.

Then take all the stuff for sale in another pile. Divide them and presto: dollars per stuff.

If money is growing faster than stuff there’s too much money and prices go up.

But if stuff is growing faster, it takes fewer dollars to buy a widget. Prices go down.

That’s exactly what’s happening right now: M2 money supply is growing at 4.4% but productivity is growing at 4.9%. The stuff’s growing faster than the money. Which is trending us towards deflation.

Incidentally, the main reason M2 is slow is federal spending’s growing at just 2% -- compared to 11% in Biden’s last year. Federal spending is on what passes for a diet in Washington.

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This explains why left-wing economists and politicians actively try to strangle the economy: In their mind strangling the private economy leaves more inflation for government to spend.

But in reality they’re shrinking the entire pie plus making total inflation worse. Stagnation plus inflation — stagflation.

What’s Next

The Philips Curve inflation-growth tradeoff has been wrong since Milton Friedman savaged it in his 1967 “The Role of Monetary Policy.”

But socialist universities -- and socialist Nobel Committees -- keep pushing it to grab more of the productive economy for the government who pays their salary.

Meanwhile, the collateral damage -- the inflation and the strangled wages -- hits other people, especially blue-collars they probably enjoy seeing suffer.

If Trump’s investment-led boom continues while Congress keeps deadlocking spending growth inflation will stay tame all year.

Alas, we’re still not out of the woods — $2 trillion deficits keep marching us towards the bond-market apocalypse. Which the “experts,” in all likelihood, will miss again.

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Florida just made gold and silver coins legal tender. Joining a dozen states making up one quarter of the population of our fair republic.

Is it the end of the road for the confetti the Federal Reserve prints in the basement.

Florida’s new legal tender law is set to kick in this year, recognizing gold and silver coins as legal tender for buying and selling, for debts and taxes, and expliclty protecting contracts made in specie -- as in selling a container of sham-wows for an ounce of gold.

Florida joins a dozen states including Texas, West Virginia, and Arizona that have passed similar laws.

In all cases, you’re not required to use gold and silver -- both sides have to agree. So it’s parallel money to the infamous federal reserve note.

And, like the dollar, it means no capital gains tax -- if you like your gold you can keep your gold.

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What it Means for the Dollar

Alas, states can only do so much: For gold and silver to replace the dollar you need Washington to open the banking system.

Specifically, equal treatment of gold and silver bank accounts, and the all-important Federal Reserve Master accounts that allow banks to move money with each other -- called clearing. And to access ACH so you can pay your mortgage from your bank account.

Without that, gold and silver will remain fringe. With near-zero impact on dollar demand — hence on the dollar itself.

Of course, the Fed and legacy banks will fight this with everything they’ve got. Because the Fed can’t print physical gold or silver. If you can’t print, you can’t bail out. Ending the Fed’s permanent bailouts of fractional reserve banking that feeds your life savings into the Wall Street inflation factory.

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Printing Money from Thin Air

To illustrate, today when you get a loan or mortgage, the bank requires you to open an account at that bank. You might think that’s weird -- you want a loan, not an account.

But the reason is the bank is not handing you money from the vault, it’s literally printing the dollars from thin air.

And it can do this because the Fed promises to bail it out if it runs out of cash.

So a counterfeiting cartel. Siphoned directly out of your pocket.

Of course the Fed also gets in on the action, printing their own money in the basement, called Quantitative Easing or QE.

But most of the money printing is Wall Street. And gold and silver break this.

Wyoming’s Caitlin Long actually tried this, opening a full reserve bank in 2020-- Custodia -- that held 100% of deposits in the vault.

In other words, what people think banks do.

She got a license from Wyoming. But was shut out by the Fed and OCC, who know it would gut Wall Street.

After all, why would anybody park money in a bankrupt casino that’s lent out ten times its cash when you can park it in a vault.

What’s Next

Getting back to the gold standard -- or gold and silver “bimetallic” standard -- is ideal. But historically it takes a major crisis. Meaning the most viable path is parallel currencies — gold, silver, or Bitcoin competing on an even playing field.

One in four states are on-board for gold and silver. Now it’s up to Trump to direct banking regulators — and Congress to open Master accounts — to level the playing field.

If they succeed, it blows a hole below the waterline of the fractional reserve boom-bust factory that puts Americans on food stamps to keep Wall Street in hookers and yachts.

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Last week Elon Musk predicted AI and robots will drive “double-digit” GDP growth by 2028 -- comparable to China’s fastest growth rates in the go-go 1990’s

He actually floated triple digit growth down the line.

First, is it possible. Second, what does it mean for wealth, incomes. And jobs.

Elon made the prediction in reaction to our current blockbuster GDP growth -- currently estimated at 5.3%.

The History of GDP and Tech

Alas, historically even the biggest technologies have turned in nowhere near that kind of growth.

Railroads and agricultural mechanization did closer to a percent of GDP per year in their first decades. The telegraph and steam engine were half that. The automobile was 2%, tops.

Electricity -- probably the biggest tech of the past 200 years -- was at most 5% at peak deployment. Then again, computers didn’t show up at all in GDP -- economist Bob Solow famously quipped computers are everywhere but the productivity statistics.

Now, a lot of that is limitations to GDP itself, which simply tallies up all the money spent. So a lot of the internet was taking stuff you paid for and making it free. Meaning it made your life better by trillions but reduced measured GDP.

And that’s a standard pattern: New tech makes stuff cheap. Which raises productivity can shrink GDP.

Consumer Surplus

Happily, economists have a fix for this called Consumer Surplus. Which measures what you would have been willing to pay.

To illustrate, toilet paper costs 3 cents per serving. But you’d probably pay 3 dollars before going to the alternative. Meaning toilet paper creates 100 times its GDP in surplus.

For eggs it maybe 5 or 10 times. For most of what you do on the internet it’s nearly infinite -- pay nothing, get something.

A 2004 paper by William Nordhaus tried to estimate consumer surpluses across historical innovations, arriving at roughly 50x.

So pay a dollar, get 50 in joy.

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That means in terms of consumer surplus it’s absolutely doable to get Elon’s double-digits: One Harvard study estimates AI already generates 97 billion a year in surplus -- roughly 15 times revenue.

And once AI fixes the hallucination problem it will be mass deployed in companies, driving enormous drops in prices since AI is hundreds of times cheaper than humans.

Throw in robots with big AI brains and you go vertical: Imagine a home-bot that folds laundry and does brain surgery better than humans. For free.

And then there’s the holy grail: Artificial General Intelligence, or AGI. Holy grail because it’s smart enough to improve itself. Meaning very quickly it would do everything better than humans. Again, for nearly free.

Essentially, think of all the free stuff on the internet, and lay that onto the physical world.

This is what Elon’s hinting at with triple-digit growth.

AI and Jobs

Heady stuff.

But what about jobs — high incomes are no good if you’re unemployed.

Predictions are already flying that AI will take millions of white collar jobs in the coming years.

MIT says 1 in 8 jobs. McKinsey says 1 in 3. Goldman predicts 300 million layoffs by 2030. Followed with a decade or two delay by robots doing all the physical work.

Happily, we know what automation does to jobs because technology has been replacing jobs for literally thousands of years. Ancient Greeks worried about ox plows leaving men unemployed. Medieval Europeans about waterwheels. The industrial revolution wiped out farm jobs. In the 1980s Hong Kong lost its entire manufacturing industry in about 10 years to China.

Every time the jobs were 100% replaced by new jobs that pay much more. And that are far more pleasant.

The Candlemakers’ Petition

There’s a useful metaphor by 1800s economist Frederic Bastiat called the Candlemaker’s Petition, which satirically asks the king to ban the sun since it steals so many jobs with light and warmth.

Just think of all the unemployed candlemakers and firewood choppers.

Of course, in reality we pocket all that sunny goodness and find other useful things to do -- wood-choppers build houses instead. Candlemakers deliver your groceries.

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In fact, automation already replaced all the jobs. Over and over.

Consider that in the 1800’s almost everybody was a farm laborer. Now 4 in 5 American jobs are services -- from cubicle drone to bartender.

In Hong Kong it’s almost 90%.

To illustrate, there was a time people cut their own hair, raised and slaughtered their own meat, babysat their own kids -- no daycare, no schools, no senior living facilities.

Today even the poorest Americans buy meat at grocery stores instead of raising cows in the backyard.

AI and robots keep it going: Jobs shift to things that have value because they’re done by a human.

The New Jobs

This includes classic services like child care — a nanny in every home. Elder care — tell me again about your knees. Therapists, tutors, personal trainers who hold you accountable. Pet-sitters, stylists, home designers, private chefs.

It also includes hand-made things — even today hand-made stuff is more valuable even though machines make fewer mistakes.

But here’s the key: Bartending or chair-making don’t pay much today. But they pay a lot after AI and robots.

Just like the industrial revolution, the reason AI and robots take jobs is because they’re massively cheaper. Massively cheaper massively raises incomes.

So the industrial revolution replaced stolen farm jobs with service jobs that paid 10 times more. Essentially, workers took a step down on the escalator. But automation sent that escalator up 10-fold.

Translate to today and we go from cubicle jobs paying 80k to bartenders and chair-makers making half a million in today’s terms.

If that sound ridiculous, consider a house painter in the US makes 20 times India -- 200 bucks a day versus 9. And that’s only half an industrial revolution -- India does have electricity.

What’s Next

The future’s bright, but there will be millions of lost jobs in-between. Just like the industrial revolution.

Government’s job is to get off our back so it’s much easier to create jobs.

The idea is copy Hong Kong — new jobs at twice the pay. And not Detroit where the new jobs were effectively banned, replaced with welfare — effectively Universal Basic Incomes.

What comes out the other side is jobs that pay much better -- and are much more enjoyable -- than today’s cubicle jails our children and grandchildren will pity. Just like we pity the backbreaking farm jobs automation stole in the industrial revolution.

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For the month of January returns were 3.5% in the aggressive portolio, and 4.0% in the market-neutral portfolio. This was 5 times higher than the S&P500, and it translates to between 50% and 60% annualized returns.

Macro Thesis as of February, 2026

My macro thesis for 2026 remains strong GDP growth — and therefore strong stockmarket performance — driven by consumer spending and a tsunami of money pouring in from:

• Tariff re-shoring,

• Ongoing federal deficits,

• AI infrastructure build-out,

• The Fed now turning solidly inflationary with even faster rate cuts

Warsh’s appointment as new Fed chair slammed gold and silver because markets see him as hard-money compared to the other candidates. Which lowers expected inflation.

The kicker is CBOE interest rate expectations actually fell on his appointment. Suggesting he’ll actually run even easier rates, but probably draining liquidity (QT). So it’s still a tossup what that means for gold and silver.

As for potential storm-clouds, recession odds are still around 20% for the year, and things could change fast if we see a collapse in investment and job growth or some external disaster. So it’s prudent to carry hedges, or even to run shorts if you’re risk-averse.

Core Strategy

I used to teach an MBA course on investment analysis using Austrian Economic Theory to assess where we are in the business cycle, which is the single most important factor in how investments perform.

In short, if we’re in the boom part of the cycle you buy growth assets — right now AI stocks are a peak growth asset.

And if we’re in a bust you either short the bubble if you’ve got balls of steel or — more prudent — put some into hedges like gold and so-called “defensive” stocks like utilities or canned soup.

With all that, here’s the picks:

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The German economy -- the powerhouse of Europe -- grew for the first time in 4 years, by a laughable 0.2%

And even that was entirely bought with government money.

Meanwhile the US is currently growing at 5.3% -- faster than China.

So 27 times faster.

Sadly, Germany’s 15 minutes of growth won’t last given their crushing energy problems, crushing migrant crisis, and the fact Donald Trump is stealing Germany’s industrial crown jewels that form the backbone of European industry.

First the numbers. German statistics agency Destatis reported GDP grew 0.2% last year -- that’s the entire year.

That’s big in Germany considering they actually shrank since 2019. Seven lost years.

This matters because Germany is nearly a third of industrial production in EU -- with a lot of the rest being German subcontractors in places like Poland or Belgium.

Who are now fleeing to Donald Trump’s America.

How Germany Destroyed Itself

The three big reasons Germany is hurting are energy, China, and a skyrocketing administrative state.

German energy prices blew up after pink-hair environmentalists shuttered gigawatts of coal and nuclear, followed by Russian energy strangled over the Ukraine war.

This is exactly what Trump warned would happen back in 2018. To raucous sneers from German diplomats.

German energy prices are now nearly three times costs in US manufacturing states like Tennessee or North Caroline. That’s rough on German households but it’s crippling for bedrock industries like steel, cars, and chemicals.

Number two is China, which went from export paradise for German companies to dumping what it can’t sell in the US.

Since 2019 Germany went from a $25 billion trade surplus with China to a $90 billion deficit today. Scaling that to the US it’s like going from a $150 billion trade surplus to a $600 billion deficit.

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Runaway Administrative State

Finally, the administrative state, where Germany’s empire of red tape is sinking the entire economy -- especially small business.

A recent study found regulatory compliance in Germany consumes one in five employee hours — 2 to 4 times the US level.

To give a flavor, German companies need to get written permission and keep it on file to hold a birthday party for an employee.

Even tiny companies need a dedicated recycling officer (Abfallbeauftragter) and privacy officer (Datenschutzbeauftragter).

One heat treatment regulation was updated 18 times in a single year — every time with new paperwork or capital investment.

The rule of thumb in regulation is total lost production is seven times direct compliance costs in reduced investment and business when regulations either banned it or forced ruinous capital investments like “green” pizza ovens.

That implies regulation alone is cutting the German economy roughly in half.

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Real-World Impact

In the last year alone Germany lost half a million jobs -- in US terms that’s 2 million jobs.

Worse, Germany replaced them with 200,000 additional bureaucrats to suck the life out of what businesses remain.

That’s a problem because a Mercatus study found every additional regulator kills roughly 140 jobs. Meaning once those 200,000 bureaucrats are in full swing, they’ll take out literally millions of jobs in endless mandates, fines, and fees.

This creeping Sovietization has already made Germany poorer than Louisiana. Growing two tenths of a percent every seven years it’s on its way to West Virginia.

And it’s going to get worse. Because Donald Trump is doing everything he can to lure away their crown jewels with the carrots of lower taxes and lower regulations.

Along with the stick of tariffs that are currently 15% on German cars — about $6,000 or more. And 50% on German steel.

Since Trump took office, BMW, Volkswagen, and Mercedes have all announced plans to move to Alabama and South Carolina. Along with hundreds of their suppliers and giants from chemicals and pharmaceuticals to industrial machinery and cranes.

What’s Next

Unfortunately for Germans -- and Europeans -- there’s no help coming.

• The Greens own European energy.

• The China dumpfest isn’t ending while Trump’s in office.

• And the red tape is actually getting worse: Remember those 200,000 fresh bureaucrats.

Most brutal, German bureaucrats and employees of state-funded enterprise now make up one in five voters. That’s comparable to social security recipients in the US, widely considered politically untouchable for their votes.

If the administrative state in Germany — and Europe — is similarly untouchable, it’s a straight line to serfdom.

Perhaps Europe’s best hope is the US does so well that European voters wake up and demand radical change while there’s still a functioning economy left.

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Stocks had an exciting week as we went from everything bubble to everything crash in about a day and a half.

With gold and silver loving every minute.

The Japan Crash

In case you just woke up, stocks crashed on Tuesday -- Monday was a holiday -- losing 870 points on the Dow.

Mainstream media blamed Trump’s tariff threat over Greenland. But thanks to Bitcoin…

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The Atlanta Fed just announced GDP growth is a blistering 5.5%.

Meaning America is currently growing faster than China.

Will Chinese have to teach their kids English?

The Fed took time out from its war on Trump to admit we are in a Reagan level boom even as legacy media keeps pimping the Trump Depression.

It’s not just growth: Unemployment’s down to 4.4%. …

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Raising questions why We the Suckers are still paying an income tax originally imposed as a temporary levy to finance World War One. Which ended some time ago.

And that apparently now mainly funds welfare fraud.

$1…

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If you need to lear your kids you will need a new Somali daycare. Happily, you’ve got thousands of empty ones to choose from.

The nation is being seized by what Zerohedge calls the Nick Shirley effect as hundreds of citizen journalists fan out exposing what looks like tens of billions -- perhaps…

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