Power Politics – Fat Tail Daily | Australian Markets

‘Any contingency you want, we’ve received it.’

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–Pete Hegseth, US Secretary of Defense

Hegseth was speaking about how to show a non-drawback into a drawback. And how to run the world.

Greenland has been a non-drawback for as long because the US has existed. And a pleasant non-drawback at that. Associated Press is on the story:

Hegseth says the Pentagon has contingency plans to invade if obligatory

Defense Secretary Pete Hegseth appeared to acknowledge that the Pentagon has developed plans to take over Greenland and Panama by drive if obligatory.

Donald Trump claims to ‘run the country…and the world.’ Nowhere within the Constitution is there such a job description. America was speculated to be a nation of people who would run their own lives…having fun with life, liberty and the pursuit of happiness, unimpeded by the feds.

The president was speculated to execute the legal guidelines of the land as specified by the Constitution and elaborated by Congress and the courts. His primary position was to guard The People from their authorities. In different phrases, he wasn’t meant to run the nation in any respect; it was speculated to run him…he’s its prime ‘public servant.’ As for the world, it could actually take care of itself.

But heck…it’s 2025. And politics are on the rise. Military drive is the last word expression of politics. Hegseth is able to invade any nation, metropolis, or Home Depot you need.

At any given time, a society solely produces a lot wealth. It can then devour it. Or, it could actually save and invest…in order to provide more sooner or later. The actual ‘political’ query is: who decides?

As a basic rule, the feds waste wealth. And the more of it that’s beneath their control, the poorer the society turns into.

Compare North Korea to South Korea. Same land. Same climate. Same people. The distinction is politics. When the 2 separated, the North was richer than the South, as a result of it had more industry. Even as late as 1970, per capita GDP within the North was over $350. In the South it was barely $250.

But right now, North Korean GDP/capita is up to $640…whereas in South Korea, it’s more than $35,000. That’s the malign energy of politics. The North has a lot of it. The South, not a lot. North Korea has a navy parade virtually yearly. The South hardly ever does.

It doesn’t matter what you call it. Let your politicians run your financial system, as they do in North Korea, and you’ll get poverty and distress.

In the Thirties, for instance, Germany’s Big Man appeared to mild a fire beneath the financial system. Factories boomed. Unemployment disappeared. Foreign guests had been impressed.

But the Big Man favored politics…with tanks and planes coming off the meeting strains, not tractors or autos. Then, with a lot of the nation’s output dedicated to armaments, atypical Germans grew poorer and poorer till the top of WWII. Young girls had been on such tight rations, health officers apprehensive that they won’t have the ability to conceive.

And now, within the USA,… the Big Man good points energy. US corporations used to barter their own trade offers. Now, the Trump Team decides with whom you’ll truck and on what phrases.

New York Times:

President Trump has introduced wave after wave of tariffs since taking workplace in January, half of a sweeping effort that he has argued would secure higher trade phrases with different international locations. “It’s called negotiation,” he not too long ago stated.

POTUS thinks he also needs to determine how a lot curiosity you pay, too. USA Today:

President Donald Trump cited new inflation information in persevering with to stress Federal Reserve Chair Jerome Powell to decrease rates of interest, calling him a “numbskull” however including that he gained’t search to take away him.

“We can’t get this guy to do it,” Trump stated of Powell decreasing charges. “And the fake news is saying ‘Oh if you fired him it would be so bad.’ I don’t know why it would be so bad, but I’m not going to fire him.”

Education was a non-public matter — between the coed and his faculty. But now the politicians have invaded the examine halls and the woman’s locker rooms. New York Times, again:

The dozen board members of the celebrated Fulbright program that promotes worldwide instructional exchanges resigned on Wednesday…

The members are involved that political appointees on the State Department, which manages this system, are performing illegally by canceling the awarding of Fulbright scholarships to virtually 200 American professors and researchers…

But the identical phenomenon happens in your complete financial system. The feds use taxpayer money — and faux money! — to insinuate themselves into every thing. Then, people come to depend on it so closely, they’ve no selection however to associate with regardless of the feds need. The New York Post:

The US might be flirting with a doable financial disaster if Congress fails to cross President Trump’s marquee One Big Beautiful Bill Act, Treasury Secretary Scott Bessent grimly warned Wednesday.

Bessent singled out the megabill’s extension of the 2017 Tax Cuts and Jobs Act and warned that a $4 trillion tax hike from a failure to re-up these cuts would devastate the financial system.

“Sir, I think it could set off a financial crisis, the likes of which we have not seen since ’08, ’09 [the last financial crisis caused by the feds]…”

And why go away high tradition alone? MAGA has lots of low tradition — the president attends skilled wraslin’ occasions…and Lee Greenwood performs at his rallies. (No one with any style in music ought to ever be subjected to Lee Greenwood.) And now, he’s muscled into the Kennedy Center. USA Today:

The John F. Kennedy Center for the Performing Arts has been America’s premiere stage for many years. But more not too long ago, the cultural center has been within the headlines not for artwork however reasonably, politics.President Donald Trump introduced…a huge overhaul on the Kennedy Center that included the termination of a number of board of trustees members, together with Chairman David Rubenstein. And Trump named Rubenstein’s substitute: himself.

Of course, it by no means made any sense for the taxpayers to be placing up with the Fed or the feds’ trade offers and deficits…or supporting the Kennedy Center…or NPR…or PBS…or Fulbright students…or Harvard or some other high-minded sinkhole of public funds. But as a substitute of slicing them off, the Trump troupe simply desires to take them over…and ‘run’ nearly every thing.

A macro forecast: the actual financial system will weaken. And the actual worth of America’s industries will proceed to say no.

Regards,

Bill Bonner,
For The Daily Reckoning Australia

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