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America’s Propaganda Economy

The running joke on the American people is that the world they live in is vividly different from the reality presented to them by the financial, media, and political elites.

For example, after the October inflation report, the Reuters headline and story was this:

Inflation in the US is improving, the public mood is still sour

The underlying story which is not stated in the article above but is all to obvious is how the elites present the data, which in any normal universe or time line would be called “propaganda.” The idea is that the masses are too stupid to understand just how good the economy is and their beliefs are based on antiquated ideals because Modern Monetary Theory is too difficult for Joe Six-Pack to understand.

However Mr. Six-Pack can understand that egg prices are back above $3.00 per dozen and his beer now costs 5-10% more than it did in December.

If one is to believe the inflation data over the past week, then it is obvious that political not economic motives are the driving factor in the presentation of the reports.

In the links below, I have highlighted some of examples of these stories pushed by the financial, media, and political propaganda machine work together to promote a “narrative” for the ignorant citizenry.

Why Biden gets little credit for a strong US economyThe Financial Times

Biden goes into 2024 with the economy getting stronger, but voters feel horrible about itAP

The economy is improving under Biden. But many voters aren’t giving him creditThe Washington Post

3 Reasons Biden’s Strong Economy Is Unpopular The New Yorker

So what is the so-called real rate of inflation? If one subscribes to the Atlanta Fed Sticky-CPI indicator (as these pages do) then the reality is that the target is far below the desired level of 2% for the Federal Reserve and indicative that the risk of a repeat of the 1970’s is still present.

That sure doesn’t feel like what the propaganda says.

The FOMO Show

Another aspect of America’s economic propaganda machine is the constant theory that we all have to improve our lot in live and live like or better than the Jones down the street. They got a minivan, so I have to buy a “luxury” minivan. They added a swimming pool, so I have to buy a boat. Even if my family can not afford it despite great financing terms.

The idea that the individual has to buy x, y, or z or else they are not “in” at that moment is pervasive in the US consumer based economy and has overlapped now into investing to a degree of insanity reminiscent of the 1920’s.

FOMO, or “fear of missing out” is nothing new. In the 1920’s there was a real estate boom just like 2004-2008 and again, it originated in Florida as the magazine cover below highlights.

That’s right folks, September 14, 1925. Thus what is old is now the “new new” and people had FOMO in the 1920’s also with regards to real estate. But it expanded far past land speculation as the crash in 1929 illustrated.

The Nvidia of the 1920’s was the Radio Corporation of America. If anyone asks the average under 30 investor today what or who RCA was in American history, very “few” would be able to accurately describe the importance of this company and the technological revolution they introduced with affordable radio sets for the majority of American homes, along with the innovations for broadcasting on radio and television in the future.

Graph Commentary added by JohnGaltFLA

The image above was from a slide presentation, Bubbles and Crashes Dilip Abreu Princeton University Markus K. Brunnermeier Princeton University Hedge Funds and the Technology Bubble.

Thus one has to ask who is not in tune with this era, just what is FOMO and why should I care?

From the National Institute of Health:

Fear of missing out (FoMO) is a unique term introduced in 2004 to describe a phenomenon observed on social networking sites. FoMO includes two processes; firstly, perception of missing out, followed up with a compulsive behavior to maintain these social connections. We are interested in understanding the complex construct of FoMO and its relations to the need to belong and form stable interpersonal relationships.

Fear of missing out: A brief overview of origin, theoretical underpinnings and relationship with mental health
Mayank Gupta and Aditya Sharma

The emphasis is my own, but highlights how this translates into investing. In fact this week with the issuance of the Bitcoin ETFs, the financial media immediately began promoting their next bubble.

Next up, we’ll be promoting investments in voodoo priestesses and ETFs for compasses made from corn cobs.

The propaganda aspects of this are obvious. If you don’t own x, y, and z in your portfolio, you are a loser and will miss out. If you missed the stock rally because of your broker, portfolio manager, or 401K, you’re a loser and you missed out.

‘FOMO’ creeps into markets as stocks post best month in a yearYahoo Finance

And if you’re too scared to invest in “Artificial Intelligence” because you do not understand the practical applications according to financial media, then you deserve to miss out.

This will not end well for the masses.

Be Scared When It’s Time to Date TINA

Why would I date someone named Tina? Well the acronym is popular and was made popular by the mainstream media, financial media, etc. during the Trump administration and also the pandemic. If you didn’t get your shots plus four boosters, you missed out. And if you didn’t buy Treasuries in 2021 and 2022, by golly you didn’t pay attention.

So who, or what is TINA?

From Investopedia:

TINA is an acronym for “there is no alternative.”

It is often used by investors to justify a lackluster performance by stocks on the grounds that other asset classes offer even worse returns.

Acceptance of TINA can lead to the “TINA Effect,” a phenomenon in which stocks rise only because investors see no viable alternative place to put their money. In particular, during times when bonds are performing poorly, stocks appear to be the only choice.

On January 11, 2023, Reuters published the following piece:

Move over TINA, it’s time for TARA

Excerpt:

A shakeout in financial markets triggered by central banks’ sudden move to abandon ultra-low interest rates has created a casualty money managers will not miss: TINA.

The acronym for There Is No Alternative to owning equities described how loose monetary policy since 2009 put stocks on steroids because yields on fixed income products such as government bonds became too low to bother with. TINA was the only trade in town.

But as high inflation has forced major central banks to increase the cost of money, TINA’s reign is over, leaving trillions of dollars worth of investments looking for a new home as investors adjust to a new, more varied, era.

“There is now TARA,” said Andrew Balls, CIO for Global Fixed Income at PIMCO. “There is a reasonable alternative.”

Bad news sparky. TARA is dead.

Then again, if one uses TINA as their standard, one’s 401K or retirement investments might be dead also. The problem is people use fear instead of intelligence as their guide and every time this has happened in history, markets correct violently by more than 20-30% and leave the average schmuck retail investor holding the bag of excrement.

So far the propagandists have pushed the issue to the point where a repeat of the 1970’s is impossible, the Federal Reserve is too smart to make the same mistakes again and again, and we have competent political leadership in Washington, DC.

If any of my readers believe any of those statements in the previous sentence, you have not been reading my articles for any period of time or have been vaping illegal substances.

The facts betray the propaganda and this time, it is more similar to 1979-1980 than any other period in American history. The weak leadership in DC is promoting global instability. The lack of actual bankers and economists inside of the Federal Reserve is promoting the idea of easing without conquering inflation to introduce stagflation to at least get through the 2024 elections. Worse, the two political parties are led by incompetent morons who are willing to sell out the American people for a financial crisis after they leave office as long as they can get that last convertible contribution to their PACs.

Good Lord help us.

In summation, if anyone believes the amount of disinformation being promoted by governments (local or Federal), the mainstream or financial media, or those who propagate policy and economic data you deserve to lose everything. You would not buy a car without lifting up the hood. You would not buy a home without getting it inspected and a thorough title check. Lastly you would not send your children to a Doctor with a last name of Mengele.

So why in God’s name does anyone believe anything that is being published in the mainstream now? TINA? FOMO?

Or are we back to the original foundations of our modern economy started in 1913 with financial theory behind the origination of the Federal Reserve:

The greater sucker theory.

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