From RM re “My Plot for a Science Fiction Movie” in the Aug. 19  issue: 

“Your plot is interesting….

“All it takes is one! One corporate behemoth to slip by the concerned masses and become too big and too powerful. A genie whose authority eclipses the authority of the authorities… and who cannot be placed back in any bottle. So, the land of Meta will have its capital at its corporate HQ but will have territories or colonies around the world.

“We are already seeing some of these corporations create schools and towns for workers….”

My Response: After I published that piece, I realized that there were other parts of my plot that I hadn’t mentioned. For example…

I believe the digital nation-states never wanted to be integrated into the physical nations because their form of government gave them all the benefits that physical nations could offer but with better payoffs and fewer hassles. They had all the money they needed (through their form of voluntary taxation – i.e. subscription revenues) and much greater power than the physical nations in terms of influencing the thoughts and even controlling the behavior of their citizens.

Instead of using a range of forceful penalties for bad behavior that ultimately necessitates guns and prisons, the digital nation-states get their citizens to obey their laws (laws they can make up without the cost and hassle of a legislature) by the non-violent, non-force-based mechanism of issuing temporary to permanent ostracization.

And leaders of the digital nation-states can get a lot richer a lot faster than leaders of physical nations because they own their states and can take from the collective treasury whatever they want in terms of personal compensation, without answering to anybody.

Even if political leaders of physical nations are willing to enrich themselves unethically or illegally by trading on private financial information, taking bribes for “consulting” work, and making promises to their citizens that they can’t keep, they can’t get as rich as Bezos or Musk.

That’s why I believe the US-based digital nation-states were more than happy to simply pay their taxes and be left alone.

 

From SL re my advice to The Donald in the Aug. 23  issue:

“Enjoying your engaging, witty writing, as usual.

“But do you think Trump understands what ad hominem attacks are? Even if he does, they are his stock-in-trade. Asking him to desist from personal insults is like asking a rooster not to crow at sunrise.

“Will the winner be the contestant who does a better job of staying on script? If so, it looks like Kamala to me.”

My Response: Kamala could certainly win if she stays on script. She did a great job in her closing speech at the DNC. She was confident and, dare I say, presidential. Most impressive of all was how she made her six major misleading and outright false statements sound believable.

She won’t do as well if she debates Trump. He can think on his feet. She cannot. If Trump does what I “told” him to do – avoids the ad hominem attacks and hammers away with the facts – he has a better-than-even chance to win.

Dems are feeling a lot of joy and strength now. (Interesting aside: Did you know that Kraft durch Freude – “Strength Through Joy” – was a Nazi slogan in the 1930s?) But the race, as we know, will be decided by the undecided voters in the swing states, and we will see how that looks as the next few weeks pass.

Obviously, I believe a Harris presidency would be a disaster for the US. (Her proposal to levy a 25% wealth tax would destroy our economy all by itself.) However, although a Trump win would be net positive for the US economy in the short-term, his demonstrated commitment to trillion-dollar deficits will lead to a deep recession or hyperinflation, either of which will make the productive population of the US poorer. Possibly much poorer.

In offering my advice to Harris and Trump, I haven’t been thinking of what will be best for the US during what remains of my lifetime, but what will be better for my children and grandchildren. And when I think honestly about that, I have to accept the fact that my DNA gifts to the future of the US and the world will suffer regardless of who wins in November. The insane spending of both candidates and both parties will doom them equally. The only important difference being that Harris is more likely to get us into WWIII.

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My Fourth-Quarter Advice to Kamala and The Donald, Part II 

Last Friday, I wrote about the key issues Trump/Vance and Harris/Walz will be facing over the next two and a half months. A conservative-leaning reader complained, noting that most of the advice I gave was beneficial to Dems.

When I looked over what I had written, I realized that he was right. So today, I’m going to give my helpful counseling to Trump and his team.

Here goes…

Donald – In advising the Harris team, I suggested that it would be wise for them to keep her out of the public eye until November. (“Just read that teleprompter and smile, Kamala. Don’t laugh!”)

As you know, that didn’t happen. Three times she went off script and, obviously without getting clearance from the COPs, announced three policy proposals, one dumber than the other. Why she felt the urge to go solo with these ideas is anyone’s guess. They were so ill-informed – so economically ignorant and politically naïve – that her media supporters had to leap to her rescue almost as soon as the words left her mouth.

The COPs (especially Obama) must be furious with her. Where did she get the idea that she could make complex economic, military, and diplomatic decisions on her own? Was she reading and believing her own hype?

I’m not, as you are not, a huge Kamala fan. She sometimes says and does things that make me wonder if there are any lights on in the attic. But there is a reason she has come so far. It’s not just the boost she got from Willie Brown or now from Joe Biden. We saw that last night in her speech, which was a political triumph. This joy and strength theme is making her core audience giddy. As for undecided voters – it’s difficult to believe it will have much impact.

What will have an impact is her new platform, which is basically a shameless confiscation of many of your strongest policy plans, but lathered with promises that economists said would amount to $5 trillion worth of government giveaways.

I claim partial credit for her great night last night because she stuck to the script that was written for her and never strayed. And she made most of her stated falsehoods sound believable.

So, her three dumb moves last week are all but forgotten and she is now big on closing the border and returning illegal immigrants.

My point, Donald, is that she almost blew it when she ignored my advice, and yet she bounced back strongly when she heeded it. I want you to think about that. And consider the danger of not following my instructions.

I know you pride yourself on saying whatever is on your mind when you say it. I also know that this political personality disorder has won you tens of millions of middle-class and working-class voters that were tired of the ever more ludicrous lies they were being fed.

Nevertheless, I have to remind you: This election won’t be decided by the fan base you have now. It will be decided by undecided voters in the swing states. And to move them to your side, you need a new approach and, in a few cases, a different narrative.

First of all, I know you will attack her for her easy-on-crime policies as California AG. And you should. But if you do it the way you always like to go after your political opponents, you will only cheer up your core at the expense of losing many of the undecideds.

The undecideds are undecided because they (a) have common sense and (b) pride themselves on thinking through the decisions they make. So, we must assume that they are aware that crime has been on the rise since Kamala’s woke ideas on the subject have been effectuated by woke governors and AGs in a dozen states.

Which means that, though the issue of rising crime is a good one for you, the way you bring it to the undecideds is important. If you do it as I’m about to tell you, it should be a slam-dunk in your favor. But if you follow your instincts, you will almost surely lose the advantage that you now have.

You must – I repeat, must – desist from the ad-hominem attacks. Undecided voters are looking for reasons to make their decisions. They are looking for facts. It will turn them off if you try to humiliate Kamala on this issue. Remember, even though the undecideds want to make rational decisions, they don’t know enough about crime or criminal justice to have already formed an opinion on her ideas and history. It will turn most of them off if you treat her like you treated Hillary.

So, how should you act when this topic comes up in a debate (as it most surely will)?

Remember when, after Biden blew himself up at the debate with you, you were asked to respond? You miraculously restrained yourself by simply explaining that you couldn’t understand what he had just said.

That’s the way you need to deal with the crime issue. Resist your impulses and speak as if you believe Kamala is a worthy, or at least sympathetic, opponent.

The undecided voters are looking for facts, not rhetorical combat. If you verbally abuse Kamala, they will see you as mean. But if you treat her the way you did Joe – like a nice person with some mental shortcomings – they will see you as kind.

I give you the same advice when it comes to discussing the economy. Don’t try to shred Kamala when she claims that she and Joe improved the economy with such failed policies as their Orwellian named anti-inflation bill. Undecided voters know how much more they are paying for food and rent and utilities. So treat her gently but correct her on facts.

My specific directions are thus: When she makes a statement that is clearly wrong, look at her for a few seconds as if you are thinking, “Are you serious?” (And smile when you do that.) Then, and this is important, turn away from her and face the camera.

Explain to the camera – i.e., to the undecideds – why the “official government data” on inflation is rigged and wrong. And how even though the rise of inflation has slowed, the current level is still badly hurting middle- and working-class people. Then give three or four specific facts to back up that statement. Three or four is all you need. Watch some Ben Shapiro and Jordan Peterson videos to learn how to mete out your facts in an emotionally compelling way.

(And, by the way, I offer this same advice to you, too, Mr. Vance.)

Do the same thing whenever Kamala says something naïvely woke about geopolitics or foreign policy. Don’t respond to her directly. Make your point as a concerned and edifying message to the public, letting the facts speak for themselves.

It’s highly unlikely Kamala will bring up the fact that we are on the threshold of WWIII. It’s just too obvious to anyone who thinks about it that both the Israel/Hamas and the Russian/Ukraine wars started on her watch. If she does bring it up, say this:

“You know, at the beginning of my term in office, many of my critics were predicting  that I was going to get us into trouble militarily because they believed I was too tough and too inflexible. They thought I wouldn’t be able to deal with our allies and enemies diplomatically. But they were wrong.”

Then point out that you are the only president in modern times that was in office for four years without starting a war.

Let’s see. What else?

As for Walz’s exaggerated claims about his military record, don’t even mention it. Leave that to JD.

If she follows her script, Kamala will harp on abortion-related issues, including the current composition of the Supreme Court and its recent decision re Roe v. Wade. In my advice for her last week, I said that she should deal with these issues strategically – be careful about making exaggerated claims and statements.

Keep in mind, Donald, that many of the undecideds are uncomfortable with the Supreme Court’s decision and also worried a bit about what a conservative Supreme Court might do in the future.

So when abortion comes up, it’s critical for you to come off as compassionate.

Say:

“We are talking about a very difficult decision, one that weighs most heavily on the pregnant mother, but also affects the rights of the father. Ultimately, it must include such considerations as the mental and physical health of the mother, the circumstances of the pregnancy, as well as a realistic conversation about what rights the unborn child might have.”

Then say:

“I would not presume to have the ultimate ethical answer. But I think that for a pregnant   woman to make such a decision without exploring all the issues and complications is not good for all involved, especially for herself.”

Then say:

“As I see it, the Supreme Court’s decision was not about taking a side for or against the right to life or the right to choose but recognizing that the Constitution makes it clear that in nuanced and complicated matters such as these, it serves the Republic as a whole to  have such policies made on a state-by-state basis.”

Then say:

“If voters disagree with the laws and regulations made by their state, they are free to oppose them and overturn them legally if they can. That goes equally for those that are pro-life and those that are pro-choice.”

If pro-choice interlocutors continue to challenge you after you have said all that, say this:

 “Our founders were divided in their opinions about all sorts of important issues. They also were very sensitive to the danger to freedom and democracy that comes from treating important issues as binary questions. It was precisely because of that wisdom, which came from their combined social and political experience as immigrants from countries that had teetered on and experienced tyranny and revolutions, that they invented the concept of separation of powers: the executive branch, the legislative branch, and the Supreme Court. That court was established precisely because they knew that issues would arise about laws and policies that could tear the country apart. It doesn’t mean that their judgements will always be perfect, but it held out the hope that when the future populous became dangerously divided on an issue, there would be one branch of   government whose job would be to make decisions based on their commitment to making such decisions based on the founding principles of the country, which are inscribed in the Constitution.”

You’ll have to stick closely to this script. My guess is that in the swing states, a third of undecided voters are pro-life, another third are pro-choice. That means you and Kamala will be competing for the last third – the undecideds that are truly independent thinkers. Because they like to think for themselves, they will have mixed thoughts and feelings about abortion. My script is designed to win them over. So stick to it. Don’t think you can improvise your way through this minefield.

Okay, Donald, I think I’ve covered the big issues.

The bottom line is this: If you listen to what I’m telling you, you will beat or tie Kamala on all the wedge issues. But to be safe, you should assume that you will come out even on them.

And if that happens, your target audience – the undecided voters in the swing states – will make their final decision based on how they feel about the economy. Which is what has happened with so many elections in the past 20 years.

Remember that the facts are on your side. So, use them. Calmly. And with exactness. Be the rational authority, the man with the truth.

Don’t underestimate Kamala in this regard. She will come to the podium with facts of her own – facts that will sound true, however nonsensical they really are. Her facts will seem believable if she presents them with conviction. And so will yours. Your advantage will be that your facts will be actual facts.

Nobody really understands economics, and that includes the undecideds. If they are upset with the economy, and most of them are, they have no choice but to side with the person that seems most knowledgeable but also the most rational – the person who breaks down the problem into understandable pieces and offers advice that sounds like common sense. You have the edge here… if you can restrain yourself.

I’m going to be watching you next week, Donald, just as I watched Kamala this past week. I’m hoping to see that you will have understood – and paid attention to – my advice.

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My Plot for a Science Fiction Movie…
And, Like Most Good Science Fiction Movies, It Will Probably Come True!

I’ve been saying this for several years, knowing how implausible it sounds.

I’m talking about my observation that several of the largest social media platforms (and to a lesser extent Google) appear to be evolving into powerful digital nation-states with their own citizens, their own laws, their own penal systems, their own educational and communication systems, and their own forms of taxation.

And now it looks like members of the political classes have finally figured out what’s happening and are taking action to stop it.

I said the expansion of their power was inevitable because these digital nation-states will be providing their digital citizens with more and more of what they really want from life – comfort, entertainment, social engagement, and affirmation. The largest of them would therefore become increasingly rich through their voluntary taxation schemes (subscriptions, fees, etc.). They would also become more formidable than physical nations in the sense that they will become, by using their algorithms as they already do, more influential in the news and ideas their citizens are exposed to.

When I look at the digital landscape today, it seems clear that Amazon, Apple, X, and Google (I feel like I missed one. Did I?) are already in this position.

I also said that when members of the political classes that now control physical nations realize how much they are competing with these rising digital nation-states for money and power, they will attack and destroy them through legal means or appropriate them (in form or in substance) and thus maintain their dominance.

The Chinese were the first to recognize the potential threat and established their own state-controlled social media and internet search companies. The Russians and some of the larger Islamic states came next, exerting the one asset they have that the digital nation-states lack: physical force. And now you can see it happening in the US, in most European countries, and even in South and Central America. (Look at what Brazil did to X last week.)

If these big countries are successful at taking over the emerging digital nation-states, they will be in a position to gradually absorb most of the smaller countries of the world. They won’t have to physically conquer them. They will merely have to infiltrate them with their own digital platforms.

This will be welcomed by the members of the political classes that dream about a single world government. But I don’t see that happening any time soon because of the still very deeply established and active Cold War industry and because of some fundamental differences in cultural values that will be difficult to dissolve.

What I think we will end up with is five or six mega-countries that would break down as follows: the United States of America (with Canada and dozens of other countries), the United States of Europe (sort of like the European Union), the United States of China (with dozens of other countries), the United States of Russia (with dozens of other countries), and the United States of Islam, with one possible addition: Japan.

Speaking of digital nation-states having their own cultures, here’s a glimpse of what Google’s will include.

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Trump and Harris: Who Gets the Most Credit for This Bad Idea? 

In June (I think it was), Trump announced that he was going to make workers’ tips nontaxable. Then last week, Harris made the same promise. I’m still shaking my head over that decision: to make the first promise of her platform something that her opponent had promised two months earlier. But what’s really concerning is that the idea, however tasty it may sound as a political popsicle, sours very quickly if you give it any thought.

Thankfully, the WSJ did give it some thought when Trump first mentioned it, and concluded that it could:

* Create a two-tiered labor market where tipped workers would gain a significant advantage over other low-wage employees.

* Push tipping culture into new spaces, even as consumers already complain about how often they are asked to tip.

* Blow a hole in the federal budget.

Click here for details.

Another Shout-Out to Japan 

The US was #1 in the 2024 Paris Olympics, with a total medal count of 126, including 40 golds. China was next with 91 medals, including an impressive 40 golds. And little old Japan – with one-third the population of the US and a hundredth of China – came in third place with 45 overall and 20 golds!

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How Much Do You Know About US Debt? 

Question: Do you know what the current level of US government debt is?

Answer: $35 trillion in national debt – which is $105,000 for every individual and $270,000 for every US household.

Question: Do you know how much of that debt was acquired during the last 12 months?

Answer: $2.3 trillion. That’s about $6.4 billion every single day, roughly $266.7 million an hour, and around $4.44 million a minute.

Question: Do you know how much of your income taxes were spent on interest on the national debt?

Answer: Last year, US Treasury net interest expense was $81 billion. That’s 43% of the $185 billion the government collected in income tax receipts.

I know. This is hard to believe if you trust the government. But if you trust the government, you haven’t thought seriously about it. The way our government works is that all the incentives of the political class favor endless borrowing and endlessly increasing debt. A debt bubble that will one day pop.

Here is Bill Bonner explaining why this is so.

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Antisemitism Watch: Inside the Campaign to Blacklist “Zionist” Therapists 

A therapist on a professional listserv in Chicago posted a request for a therapist who was a Zionist because the potential patient was dealing with feelings about the “current geopolitical climate.” Apparently, this is a common practice – not only to use these professional platforms to make and accept referrals for patients, but also to indicate a preference for a therapist of a particular ethnicity, gender, religion, etc.

One member of the group responded by saying, “I’ve put together a list of therapists/practices with Zionist affiliations that we should avoid referring clients to.” She added: “Please feel free to contribute additional names as I’m certain there are more out there.”

And the situation escalated from there.

As psychiatrist Sally Satel writes in The Free Press:

There are two stories here. The first, no less troubling for being obvious, is that trying to prevent clinicians who support the existence of Israel – or are Jewish, or have Jewish-sounding names – from treating patients constitutes a grave breach of professional ethics.  Interfering with the work of colleagues for political reasons is unconscionable.

But the blacklist is also part of a larger drama unfolding within the world of psychotherapy as more and more clinicians insist that psychotherapy is, foremost, a political rather than a clinical enterprise. It is a trend that I, a psychiatrist, find alarming.

Read more here.

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Is Monkeypox Going to Kill Us All? 

Have you heard about Monkeypox?

Monkeypox (Mpox) is a virus. It emerged several years ago (nobody seems to be exactly sure when) in Africa, in the Democratic Republic of the Conga. Government health officials tried to constrain it but failed. By 2022, like Ebola, it had spread into neighboring African countries, including Burundi, Kenya, Rwanda, and Uganda.

Last week, the WHO declared the current strain “a public health emergency of international concern,” saying that “the potential for further spread within Africa and beyond is very worrying.”

The facts are alarming. For example:

1. The current strain of Mpox (clade I) is more serious than the type we saw two years ago (clade II). Clade I spreads more easily and could kill up to 10% of people who contract it. On the other hand, more than 99% of people who caught the clade II version in 2022 survived.

2. It was presumed at first to be transmissible only by sexual contact, but now researchers are saying that it is spreading by any sort of human contact. During the global outbreak of Mpox in 2022, gay and bisexual men made up the vast majority of cases and the virus was mostly spread through close contact, including sex. But with this outbreak in Congo, a majority of cases and deaths are in children. The reasons for the difference aren’t entirely clear. It could be because kids are more susceptible, says Dr. Boghuma Titanji, an infectious diseases expert at Emory University. Social factors, like overcrowding and exposure to parents who caught the disease, could also be at play.

3. Literally just one day after the WHO classified the Mpox outbreak in central Africa as a “public health emergency concern,” a case of the new mutant strain was confirmed in Sweden. And when asked about the chances of the disease being in the UK already, Professor Paul Hunger, a microbiologist from the University of East Anglia said that it almost certainly is.

It is not in the US right now. More to follow as it is reported.

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Chart of the Week: Inflation Cools Again – What’s Next? 

I’m halfway through writing an essay about the state of the US economy as I see it, including my analysis of US inflation. Reading Sean’s piece on inflation this morning, I thought it would be a good introduction to my piece, so I’m not going to say anything more here – but I am grateful to him for once again looking at popular economic and financial ideas with a contrarian perspective and then breaking down the myriad details into a few observations and insights that I can understand and agree with. – MF 

Back in April, I shared a breakdown of CPI inflation, showing why high inflation remained “sticky” in the first part of this year.

But I also made a prediction:

We should [see] prices level out a bit on their own in the months ahead. Without monetary policy intervention.

So right now, I am still thinking that the Fed might still be on track for at least one rate cut later on in 2024.

My prediction was made based on simple logic and observation. Inflation isn’t magic. It’s just a mathematical model. If you understand how the model works, you can predict what’s coming pretty easily.

But I cannot tell you how many people expressed to me that this prediction was delusional. How many people still expressed concern despite me standing next to the numbers like Vanna White, saying, “Just look!”

Well, here we are in August, and CPI inflation has fallen below 3% for the first time since 2021.

In fact, average inflation in the US over the last 10, 20, and 30 years is somewhere between 2.5% and 2.8%.

So right now, this month, we are officially in the territory of “normal inflation” for this economy.

Why has inflation calmed a bit?

As I said back in April, the high inflation rate was being caused by supply and demand problems in markets like (for example) used cars, which had knock-on effects to other industries such as auto insurance.

But we’re not out of the woods yet…

We are still seeing some areas of the economy experience really bad inflation: hospital and healthcare services; shelter, rent, and housing; and food (especially restaurants).

Because these areas of the economy are inflating too much and too fast, I’ll bet $8 we’re not going to see an emergency cut from the Fed, as some have called for.

But I also still think we’re going to see at least a few cuts in the coming months.

And it’s going to happen simply because the Fed’s monetary policies don’t have much impact on the portions of the economy that are still experiencing inflation.

What is the Fed going to do? Force hospitals to charge less? Build more apartments and plant more farms?

No. Those prices are affected more by market forces, geopolitics, and fiscal policies (i.e., Congress).

The Fed is going to cut rates because the cost of paying the public debt in the US is getting out of control. They’re also going to do it because banks are currently sitting on hundreds of billions of dollars’ worth of unrealized losses.

(Many of these banks hold massive amounts of long-term treasuries. The price of bonds goes down when interest rates go up. This is why we saw several big banks fail last year.)

So we have to ask what the big takeaway from all this is for investors.

There is a big one: Own bonds in your portfolio 10 months ago, like I recommended then.

Now? It’s getting close to too late for you to capture any meaningful total returns as rate cuts are getting “priced in” to bonds.

So make that move now to get a decent interest rate while you can.

And then prepare to sell those fixed income assets when rate cuts end – possibly a few years from now.

– Sean MacIntyre

Check out Sean’s YouTube channel here.

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