Under the system, the U.S. is not a capitalist country, it is a socialist welfare State for the elite, compliments of inflation
Socialism For the Elite, Not Capitalism
The distinction between the United States of America’s version of ‘green’ Socialism and what is traditionally known and reviled as ‘red’ Socialism is that the recipients of the welfare are wealthy asset owners/investors. You see, it’s okay when Socialism serves the ruling and majority classes.
You own a home that has appreciated in value to bubble proportions? You’re an asset owner and your asset has been inflated in perceived value, compliments of the Federal Reserve system. My wife and I sold our bubble asset a year ago at what I believe was the top of the market. I guess you’d call that bubble “Capitalism”.
In related news, I was heartened by Sunny Po’s post at X. Despite the Big Beautiful debt bill about to further blight our country and its younger generations, there are signs of hope that ‘enough is enough!’
My daughter* informed me that I have Marxist leanings, not due to inherently anti-Capitalist views, but due to beliefs contrary to the modern U.S. version of Capitalism, and furthermore, anti- the increasingly sanitized, aesthetically vacuous state of society itself.
When she assigned me that label, I was surprised, to say the least. But that is because I was less-than-educated about Marxism and because she meant it in the context of my social criticism and longstanding admiration of the Situationist International, a sort of combination of artistic and social critique and Libertarian Marxism from the 50s and 60s (I do not get hung up on labels, I just know what I do and do not agree with).
I’ve written about this in the past, but here goes again. A much younger Gary walks into the Institute of Contemporary Art in Boston at the suggestion of and accompanied by an artist girlfriend at the time. I was blown away by the concepts of Guy Debord and his horde of malcontents. Certain sentiments I’d harbored started to make sense.
In their expanded interpretation of Marxist theory, the Situationists asserted that the misery of social alienation and commodity fetishism were no longer limited to the fundamental components of capitalist society, but had now in advanced capitalism spread themselves to every aspect of life and culture. They rejected the idea that advanced capitalism’s apparent successes—such as technological advancement, increased productive capacity, and a raised general quality of life when compared to previous systems, such as feudalism—could ever outweigh the social dysfunction and degradation of everyday life that it simultaneously inflicted.
The Spectacle
Look at those mesmerized automatons, content and consuming what they are fed (no pun intended, but we’ll get to the Fed in a moment).
Walking into the ICA that day and exploring its exhibit finally gave perspective to my intolerance for a society gone stupid (long before a reality TV star gained the White House), and my personal view of the Society of the Spectacle is pure and deeply held. If that is some variant of Marxism, or some similar kind of ‘ism’, then yes, I am that.
I presented this montage of stupidity in a post a few years ago. Sure, nobody really takes this shit seriously. But they accept it as if it is something real, and in many cases, fetishize it. We are a society in which millionaires, billionaires, and opportunists with few morals laugh all the way to the bank as they entertain the great unwashed and help them continue to slumber, as if it were all well and normal.
Our Heroes
Under the Federal Reserve system – or as I’ve called it over the last 2+ decades, the system of Inflation onDemand – every time an economic cycle has met its natural end through liquidation of the previous up-cycle/boom, the Federal Reserve has sprung into action, monetized financial “assets” and printed money (really funny munny).
They printed bull markets and seemingly stable economies circa 2001-2003, circa 2008-2015 (a 7 year blight featuring ZIRP, courtesy of Sir Prints-A-lot, your hero and mine, Ben Bernanke) and circa 2020, when Jerome Powell went balls out to blow a systemic gasket with the most intense and focused inflationary operation yet.
Inflation is not the rising price/cost effects everyone bitches about. Inflation is the act of money creation (monetary) by the Fed. Then the government jumps in on the spending side (fiscal) and compounds the problem as it doles out funding to favored areas. Sort of like the big, disgusting debt bill coming to a late-stage society near you. Ask Rand Paul, son of renowned Libertarian Ron, what he thinks about the “big, beautiful bill”.
But then again, our president is a guy from a reality TV show. When he was younger, his mug was all over the tabloids. Just like Taylor Swift above or…
Human Commodities
Human experience has been commoditized to absolute inanity. As the Everyman is increasingly disenfranchised, these symptoms of the divide between the haves and have-nots seem to become more pronounced. Especially as huge numbers of Everymen and Everywomen consume stupidity I guess because… that’s what we do in America.
The Federal Reserve system has created a safety net that has cemented perceptions like those your financial advisor relays to you. The stock market always comes back. Stay the course. Buy the dips. There are few better investments over the long run. That is all true. But what is also true is that the Federal Reserve has printed those bull markets.
Can it still do so?
Here I interject that NFTRH was busy in Q1, 2020 advising that Powell was doing just that, printing an inflationary recovery, which spawned the bull market that drags on to this day. So it’s not the writing of a sour grapes spewing perma-bear. I am currently only long (plus lots of cash and equivalents). This has to be stated so readers know they are not reading someone’s “book”.
But I also use the elegant picture I call the Continuum to advise that the conventions of pre-2022 are no longer applicable in the new macro. I will not venture beyond the scope of this article (I’ve written reams about the implications), but simply note that those consuming convention pre-2022 are still doing so. The herd is uncritical, sloth-like, obedient.
What was, no longer is.
Demanding More Inflation
Back on message, Trump was voted back into the White House because… well, look at the broken down, played-out blue side of the aisle. And because he told people what they wanted to hear. But his demands that Powell drop interest rates while the bond market is saying the opposite shows that he either does not know the source of inflation or does not care about it.
Trump is very wealthy, after all. Inflation has been very good to #45/#47. When he harangues Powell to drop the Fed Funds rate, he is actually demanding he create the next inflation problem. Again, inflation is money creation. Rising prices that result from money creation are the effects of the inflation as too much newly created funny munny chases finite assets, services, etc.
Think about this. We are now a country with very deep divisions and a lot of anger juxtaposed against the pictures of privileged banality and outright stupidity I’ve cited above. It is not sustainable, this comfortable commoditization, this lack of demand for things of substance like real creativity, art, and sure, entertainment. It’s like the country is sleeping soundly in its convention while at the same time it is splitting its seams with growing anger and division.
Inflation has created this mess.
Our hero pictured above, and those who came before and after him, have ruined whatever Capitalism used to mean in this country. That’s not to say it is alive and well in other countries. It’s not. Other countries have central banks too. They also have centralized monetary authorities that decide the terms, cost and conditions of money. Central banks do this by manipulating debt in a global system that has lost its moorings. One mooring, monetarily at least, is gold.
But this is not an article about gold. It is about one country, among others, that was given license decades ago to do whatever it wants with no restraints, as long as the debt can be manipulated by the Fed and expanded by government. Big beautiful bill, anyone? Comin’ right up!
Meanwhile, as if it’s a reality TV show, we have weekly tariff on, tariff off drama. Targeted deportees on, targeted deportees off drama, as Trump talks about putting a leash on ICE to keep from destroying whole industries like farming and hotel/hospitality (and judging by the thoughtful input of a subscriber who is a Homebuilder included in NFTRH 869 last weekend, he’d better start considering the Homies as well).
Inflation onDemand, Not Capitalism
Capitalism is about the deployment of capital into productive areas. It is not about printing enough money to open the flood gates of capital indiscriminately washing over whole industries, regardless of whether those industries’ constituents are productive or not. Capital is printed and sent into the economy and it has to go somewhere.
With a system that depends on using new “munny” to fund the whole damn economy, this “capital” is shoved by the banking system and the investor class into every nook and cranny of productive and non-productive economic endeavor alike.
Meanwhile, we are increasingly a nation of linear, conventional automatons, consuming it all. Accepting it all. And in my opinion, fighting the wrong enemy: each other. The enemy is the system itself. The system of Inflation onDemand.
Now I go back to managing the markets as I have to admit, the societal/systemic crisis per the above makes my work really interesting and rewarding.
* While the present has been complicated by certain issues beyond my control, limiting my attention to my main gig with the financial markets, the future will ideally include a podcast where my daughter Izzy and I use markets perhaps as a springboard to wider discussions of society and the mounting problems therein. This in addition to select guests from the financial and art/music worlds. Heck, maybe the political world too. Who knows?