February 15, 2021
Earlier this past week -- unable to sleep and at the darkest part of the night, I found myself on a journey across the windswept landscape of Uptown Manhattan. It was snowing; the once-dazzling thoroughfare of Central Park West had transformed into a wintry, nocturnal version of Gary Cooper’s “High Noon”.
I won’t offer additional details; after all, some matters (even within this sacred circle of trust) must remain private. Right?
Save this. On the very last leg of this excursion, I committed to a quick (is there any other kind?) stop at the 7-Eleven on Columbus Ave. Not gonna lie: I was jonesing for a Big Gulp. And maybe one of those delicious enchiladas that rotate so enticingly at the front counter. While it was a sinful, deliciously sinful mission, I felt it to be my destiny, and was not of a mindset to consider other alternatives.
But when I arrived at the threshold of that paradise -- recognized, universally by its magnificent red, green (and orange) signage, I encountered locked doors and a crudely written window note that read:
Closed? How can that be? Is it even legal? For a 7-Eleven to be anything, at any time day or night, other than open for biz? I been around a long time, and hard-won experience had given me the impression that the only reason the joint even exists is because of its 24/7 operating status.
I consider the episode to be an enormous personal setback, an assault on everything I hold to be holy. Even days later, I am only beginning to recover.
And I was of an attitude to get some satisfaction, was gonna take my beefs directly to the Head Man at Parent Company – Southland Corporation (located in Big D). Only to discover that: a) Southland went bankrupt some thirty years ago; and b) those formerly reliable convenience stores are now majority owned by the Japanese – residing, as such, within in a jurisdiction where, due to geography, cultural differences and other factors, I was unlikely to exact my swift justice.
I was able to gather myself -- sufficiently, at any rate, to return home. Whereupon I filled up a 7-Eleven Big Gulp cup – one of many in collection I am (or was, until the above-described outrage took place) proud to have accumulated -- with ice water and took what comforts I could from the exercise.
But I was still hungry, nay, hangry. And the cupboard was bare. Plus, much as I love ice water, it wasn’t by any stretch the Mountain Dew that I craved. Something was missing; my taste buds wanted more, and the only thing I could think to do was open up my veins and bleed a little of my own plasma into the cup.
I know. I need help. But on the other hand, isn’t that a little bit like what we’re doing to our capital economy? Gorging on our vital parts to quench our insatiable thirst for immediate gratification?
How else to explain all of the money we’re printing – legal tender for all debts, public and private – and handing it out to recipients -- a large portion of whom have no logical forums whereby to spend it?
And the government has no plans but to give away, and spend, more – without even engaging in pro forma discussions about fiscal balance sheet impacts. The Congressional Budget Office just dropped its formal 2020 deficit estimates a couple of days ago, and, in aggregate, they clock in at a cool $27.9 Tril. But that’s before we tack on the just-passed-by-reconciliation $1.9T relief package, which, along with other unfunded goodies, will surely take us to > $30T.
And all against a current GDP of just under $19T, buckling under the burden of carrying all that paper while still serving as the engine for supply of food, shelter and other forms of succor to the masses.
No f_cks given as to how we might pay this debt. But then again, no f_cks are needed. Because we know the answer: we will just paint our problems away with new money.
And, almost imperceptibly, it’s draining us; mostly as felt through the declining investment power of the dollar, which, as presented in the following table, no longer swaps so good against certain assets, as it did, say, 10 months ago:
Approx. 2020 Low
How Many Benjaminz Will It Cost You Now to Buy vs. Spring ’20 Levels
Baltic Dry Shipping
Case Schiller Home Price Index
Somehow, improbably, none of these trends (including the leap in the Baltic Dry Shipping Index) are reflected in our official inflation statistics. January PPI came in at 1.1% year-over-year, so all good, right? Well, the Commerce Department Producer Basket might be pretty stable, but hard assets that one might hold in the stead of Benjaminz, are, as indicated above, exploding to the upside.
Except Gold, which the book says should be rocketing here. Poor Gold, not even worth a buck twenty- five against those Bloviating Benjaminz! But Bravo Bitcoin! Which would’ve copped you more than an Eight Ball, had you been wise enough to engage in said copping, say, early last Spring.
And there was big news in BTC-land this week, tidings which went largely (and perhaps justifiably) unremarked (what, with Impeachment II and the prospect of Pitchers and Catchers reporting in ten short days otherwise hoovering up our bandwidth).
Specifically, the world’s largest custodian: BNY/Mellon, announced that it would accept the little crypto critters inside its hallowed, steel-reinforced vaults. Brothers and sisters: this is worth noting. Crypto investors now have a big-ass fiduciary watching over their bits/bytes stores of value. Which means that these assets can be rehypothecated, used as lending collateral. And (fluidly) sold short.
I can’t think of anything more bullish for the asset class (yes, even the bit about shorting), coming, even as it is, at a time when it has already annualized at about a ten-bagger over the course of the last year.
But it all comes back to gulping down our own plasma; it’s just another reason to bail out of Benjaminz as quickly as one can. I’m not concerned that we won’t. Quite to the contrary; I’m certain we will.
And this concerns me.
And, given all of the above, I feel I have no alternative other than to embrace the plasma-drinking crowd and encourage you to ditch whatever Benjaminz you may still have laying around.
No, the rally is not over and won’t be until it is. At which point, well, I don’t really want to think too much about that. In the meantime, while, yes, it’s a roll of the dice, but I’m here to tell you that it’s the policy makers who have caused them bones to tumble, and all we can do is to roll with them. They may land on Seven. Or Eleven. Or they could come up Snake Eyes.
But under no circumstances do I believe that we should end up in the “no dice” configuration, in which I found myself the other night. And, to add insult to indignity, the Valentine’s Day roses I ordered for a true love of mine on February 12th are still pending delivery. Perhaps this is why the University of Michigan Consumer Sentiment Index took a spill in January:
Consumer Confidence: I Guess I’m Not the Only Mofo Searching In Vain for a Big Gulp:
I reckon, on balance, I shouldn’t have taken that walk; should’ve stayed exactly where I was: warm, welcomed and wanted.
But noooooooo, I had to tramp out into the snow, and, among other things, have my blissful ignorance about my local convenience store– its flighty ownership status and its hours of operation – shattered into dust.
And to top it all off, I’m a little light on my plasma.
So, I reckon it’s time to take my leave, wishing everyone a happy Valentines/Presidents Day (the latter a day of rest that most everyone should enjoy, whatever their viewpoints may be about Birthday Boys George and Abe).
And, as we pause for a time, I hasten to remind you that there are still many miles for us to travel, and I myself pledge to you to try my best to choose my steps more wisely in the future.