“Numbskulls” Rain On The Parade
"We’re going to spend $600 billion a year, $600 billion because of one numbskull that sits here [and says] ‘I don’t see enough reason to cut the rates now.’"(Donald J. Trump)
Summary:
· The algorithms that control the news cycle are raining on President Trump’s Parade.
· The process of Adversarial Cooperation cedes a tactical initiative, in trade talks, to China, to advance the strategic objective of a Trump Third Term.
· Adversarial Cooperation through G(1+6) has been announced.
· Adversarially Uncooperative Chair “Numbskull” is playing the Bond Vigilante by refusing to fiscally submit to President Bond Villain.
· Adversarially Uncooperative Chair “Numbskull” refuses to slow QT or conventionally ease the US fiscal debt burden.
· Adversarially Uncooperative Chair “Numbskull” prefers the honour of insolvency over the dishonour of monetary inflation.
· By sleight of hand and spreadsheet, the UK Spending Review makes increased public sector wages and pension contributions appear as a boost in spending.
· The increased UK public sector pension contributions will become assets under management (AUMs) “between a BlackRock and a hard place”.
· To finance the UK Spending Review sleight of hand, and balance sheet accounting, taxes must rise and/or the quality and quantity of public services must be cut, or all of the above.
· Managers of the AUMs “between a BlackRock and a hard place” will require that their management fees and carried interests are guaranteed and subsidized by the UK taxpayer, in any case.
Extracts
· Inflation is everywhere and always a fiscal domination policy phenomenon for the insolvent Bank of England.
· Continued BOE QT selling realizes balance sheet losses, and makes them worse, by pushing up Gilt yields.
· Lorie Logan’s new monetary policy framework symmetrical definition of the employment mandate confirms the Key Signal that the Fed should currently have a tightening bias.
· Elon Musk confirms the Key Signal that the Fed should currently have a tightening bias.
· Musk’s exit verdict is that DOGE is an empty TACO shell that tastes the same as the Biden Pork Barrel.
· The credit negative DOGE GSE privatization model bubble has been structurally reinforced by the Fed’s get-out-of-jail card for the poster child (WFC) of the housing bubble-driven 2008 Credit Crunch.
· The 2008 Credit Crunch reprise will be structurally enabled by the Fed’s light-touch top banking sector regulations.
· The NY Fed has confirmed that the US central bank is in the same predicament as the insolvent Bank of England.
(Source: the Author, June 7th 2025)
· Rachel Reeves is desperately gambling, with the Gilt Market, for growth to fill her fiscal black hole.
· The Bank of England is being fiscally dominated at the expense of the long-end of the Gilt Market.
(Source: the Author, March 10th, 2025)
· UK public sector pensions will soon be AUMs “between a BlackRock and a Hard Place”.
· Perverse incentives will incentivize Rachel Reeves to cut social welfare, boost taxes and the size of the public sector, and hence the assets under management “between a BlackRock and a Hard Place”.
(Source: the Author, May 31st, 2025)
· Inflation is everywhere and always a fiscal domination policy phenomenon for the insolvent Bank of England.
· Continued BOE QT selling realizes balance sheet losses, and makes them worse, by pushing up Gilt yields.
· The Bank of England needs more Gilts to provide income, to cover its balance sheet losses, but further purchases risk making the losses worse if further UK borrowing pushes up yields.
(Source: the Author, June 7th, 2025)
