Maggie's Farm

The retail public has been liquidating -- like the proles they are -- ALL the way up this bull market.

Perfect.

Folks, you can throw away ALL prior norms when the Fedsury is printing new money like a maniac.

It's CASH you don't want to hold. For in an era of vast money printing -- globally -- it's cash -- and it's sisters that are being debased.

Stocks, in contrast, represent proportional OWNERSHIP of REAL PHYSICAL ASSETS. And the typical corporation is inherently leveraged -- that is -- it holds a SHORT position against the value of the currency/ US Dollar.

This reality was slowly perceived during 1922-23 in Germany. The market whipped all over the place. Only at the end, did investors FINALLY scope to the reality: corporate debts had been wiped out. The firms, themselves, soldiered on. The bond holders were utterly destroyed. The stockholders came on through the other side -- in most cases -- better than ever before! Their money engines were still intact.

The are four types of modern money:

Specie:
silver and gold coins... perhaps copper and nickel should now be included. No re-assay, no re-weighing required. Government minted to published standards.

Vault/ Warehouse receipts:
the original banknotes... they started out circulating as paper equivalents to specie on deposit in some bank vault... then morphed to bullion... and ultimately expanded to include commodities stored in BONDED warehouses. (3rd party held keys) This last financial device was introduced by the Dutch -- and was THE mechanism that supported the tulip bulb mania. Bonded commodities included: pepper, salt, tobacco, and a slew of spices. These receipts were denominated in round figures -- entirely imitating banknotes. They did require counter-signatures from 3 top ranking local merchants before they passed on without further endorsements -- as if banknotes. Those signatures live on in our modern currency -- which features double endorsements: Treasurer and Secretary of the Treasury. (Yes, that's where and when the legal legacy of said signatures got started; notionally these two high officials are personally responsible for the authenticity of the currency.)

These instruments did not circulate far from Rotterdam -- for obvious reasons. They were turned in to obtain the commodities all the time. In the meantime they circulated like 5th party. endorsed, checks.

At this time, their legacy lives on in Red Chinese BANs ( Bond Anticipation Notes -- see ZeroHedge. The mimicry is astounding.)

(Private -- ie commercial, retail, industrial...) Debt backed money:
-- both electronic and banknotes
This is BY FAR the dominant form of money in the Western World. Up until QE#1 virtually all money came from this one source. It's created the very instant a commercial bank extends credit, retail or wholesale. It's destroyed the second that the debt is paid down. This dynamic has the Fed monitoring bank loans like a vulture. (Dying banks are its speciality.) When banks are on a tear, they spew loans -- and money -- into the economy from every point on the compass. This WIDESPREAD injection of new money is the true source of classic inflation.

(Public ie Federal government) Debt backed money:
-- both electronic and banknotes.
This type of money APPEARS to be the same, it spends the same, etc. BUT it's solely created by the establishment of Public Debt -- that is POLITICALLY driven debt creation. This is anti-rational, economically ruinous, debt generation. It's parasitic, as a consequence.

Critically, this type of money flows from ONE SPIGOT only. It absolutely does not spring out of everywhere as an adjunct to private decision making. When it goes on a tear, we must term in HYPERINFLATION.

It gets its name from history: governments -- unlike private parties -- never back off from the printing press until they flat-line the national economy. The name comes from its END STAGE CHARACTER -- as in totally crazed debasement/ currency rejection and a devolution back down to a barter economy.

Hyperinflation has absolutely nothing to do with inflation. Kind of like elephants and elephant seals. Commercial debt creation NEVER gets as insane as governments do. Private parties pull in their horns.

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We have, at this time, flat to declining commercial lending. FICO scores have cratered. Qualified borrowers are scarce. This is the SOLE reason why banks are not lending -- and leaving their cash back at the Fed. This reality is deflationary.

We also have, at this time, a government budget that is being fed by hyperinflating the money supply -- by $85,000,000,000 per MONTH. That's not inflationary -- it's hyperinflationary. This causes strange concentrations: Wall Street is rolling in lucre because all of the new money passes through the Primary Dealers first. The rest of the commercial world is starving for credit -- Wall Street's FICO is now through the roof.

So, the NYSE is blasting ahead, retail is liquidating, and the insiders are loading up huge. They fully realize that to hold cash is to be ruined. US Dollar denominated assets -- ie cash or debt-assets (bonds, notes, pensions, annuities, money funds, t-bills, etc.) is getting wealth taxed by said debasement.

If you must hold cash -- get it into a stronger currency -- say the Canadian Dollar. (Not that I'm recommending even that, it has its own troubles.)

That money is originated from four entirely different sources is NOT a part of MMT. The brainiacs actually think that all dollars are the same.

That crowd include the Fed, BTW.

Which means that the planet is screwed.

One can do worse than be blind. You can view the world backwards.

CF. Barry.