Debt, Dollars, and Dysfunction: The Case for Monetary Reinvention and Regulatory Reform

[cmartenson (Chris Martenson)]

Originally published at: https://peakprosperity.com/debt-dollars-and-dysfunction-the-case-for-monetary-reinvention-and-regulatory-reform/

Executive Summary

Chris and Paul Kiker discuss the current geopolitical tensions and their surprising lack of impact on the financial markets. Despite significant events, such as missile launches, the markets remain stable, which both find perplexing. They explore the potential reasons behind this, including the influence of automated trading and the complacency of investors. The conversation also delves into the U.S. government’s deficit spending and its implications for the economy, as well as the potential for regulatory reform inspired by international examples.

Geopolitical Tensions and Market Reactions

They discuss the surprising stability of financial markets despite significant geopolitical tensions, such as missile launches into Russia. They express confusion over the lack of market response, considering past events where such tensions would have caused market fluctuations. The conversation suggests that automated trading and investor complacency might be contributing to this phenomenon.

U.S. Government Deficit Spending

The discussion highlights the U.S. government’s deficit spending, which is about 6.5% of GDP. Chris and Paul express concern over the potential economic impact if this spending were reduced, as it could lead to a significant economic downturn. They also discuss the growing national debt and the increasing portion of government revenue going towards interest payments.

Regulatory Reform and Economic Growth

Chris and Paul explore the potential for regulatory reform in the U.S., inspired by international examples like Argentina. They discuss how reducing regulations could stimulate economic growth and increase individual opportunities. The conversation emphasizes the need for a balance between necessary regulations and those that hinder economic progress.

Key Data

• The U.S. government’s deficit spending is about 6.5% of GDP.
• Interest on the national debt is projected to be $1.4 trillion for the 2025 fiscal year, consuming about 25% of government revenue.
• Argentina’s inflation dropped from 17,000% to 2.4% in one year following regulatory reforms.

Predictions

• There may be a significant economic reset if the U.S. government reduces deficit spending and addresses the national debt.
• Regulatory reform could lead to increased economic growth and opportunities for individuals.

Implications

• The stability of financial markets amidst geopolitical tensions suggests a potential disconnect between market behavior and real-world events.
• Reducing government deficit spending could lead to economic challenges but may also create opportunities for long-term growth.
• Regulatory reform could enhance individual economic opportunities and stimulate business growth.

Recommendations

• Individuals should consider developing a financial plan to navigate potential economic changes.
• Engage with financial advisors to understand the implications of current economic conditions and adjust strategies accordingly.

[randommike]

Financial Times has this to say about stocks and the Cuban Missile crisis:

"Looking back, the US stock market was moderately perturbed by the Cuban Missile Crisis, a standoff between the US and the USSR running from the 16th to the 28th. Here’s the chart for the S&P 500 that month: About a 7 per cent drop, mostly recovered by the time Khrushchev blinked.

Maybe the stock market isn’t the best way to assess existential risk. Still, step back a bit and the market had already experienced a big fall since the previous December, losing more than a quarter in value."

[jisaac]

Sensible regulation is a good thing - like banning outdoor use of neonic insecticide, appliance energy efficiency certification and standards, requiring cat converters on cars, banning poisons like tartrazine in foods.

Too much just strangles the economy.

There’s a fine balance and it has to be gotten right, going full out libertarian and trying to scrap it all is not the way to go.

The united states actually seems to have the worst of both worlds - have too large gov’t, too many bureaucrats making rules yet too corrupt to do sensible things like ban outdoor neonic use while strangling/killing the economy - especially small business - at the same time!

[ilovemartinis]

Chris, rather than competition from the Treasury, the Fed should face competition from the individual states - I have in mind state-issued transactional gold, as advocated by Kevin Freeman of the ‘Pirate Money’ podcast.

This is not a return to the Gold Standard. It is using gold again as money via debit cards.

It might be worth having Kevin Freeman on your podcast, e.g. to see how far along this political movement is.

[bj-brown (Barbara)]

Having done call center set up, I really take issue with Paul’s idea that I want to hear make nice chit-chat. What a waste of my time. I want “this is FN/LN, job title”. What can I do for you today. PERIOD No how are you or any other attempt to waste my time by building rapport. I demand efficiency!
That means no prefab scripts telling me I’m recorded, etc. A quick, efficient ID verification. Then direct answers to my specific question. Call center operators get waste time, CYA scripts that they may read or may be played while I’m waiting on hold.
I want service, NOT Warm Fuzzies. I don’t care if I feel good, I want results.
Yes, we all like cheerful, personable service people, but these days, we get “NICE” service folks whose job is to tell you why you will NOT get service while keeping you happy and thinking someone was actually making an attempt to help. The are NOT trying to help. They are paid to pacify the masses, not provide service.