Hi everyone—I’m so glad to have you here. What a week.
I apologize for the recession.
This week I was informed by Fortune Magazine that my grumpiness about it may be the very thing that caused it in the first place. Some sort of recursive paradox of cursed psychological telekinesis, perhaps:
Friends, I’ve about reached my limit with this nonsense.
Again, I don’t know if it’s incompetence or malice that’s behind all the lies and gaslighting these days but it doesn’t matter: These people don’t care about you, and that’s my optimistic take. They appear to despise you entirely, and clearly find your very existence and recent discontent extremely inconvenient.
You and your grumpiness are the cause of the recession. You are the cause of inflation. You are the carbon that needs to be reduced.
You should also cut our wealthy unelected overlords a break. I mean they have a hard job, unlike YOU, you ungrateful pleb:
The White House Press Secretary doesn’t even understand why people think things are so bad in the first place. She says things are fine.
She thinks we’re good here:
Really? Ok, let’s have a look to see if reality can back up these claims:
Michigan consumer sentiment just came out at the lowest on record in 85 years.
Target, one of the major US retailers and a good indicator of the state of the broader retail sector, had to cut its profit outlook for the second time in three weeks “as it rushes to ease an inventory surge by marking down more merchandise and canceling orders.”
Analysts are seeing a massive surge in credit card usage, as consumers are “tapped out” and maxing out their cards.
Mortgage demand falls to the lowest level in 22 years amid rising rates and slowing home sales (Expect home prices to start falling next, as sellers start listing well below floor price as each tries to undercut the other for getting equity out of the market.)
Things continue to resemble the lead up to the 2008 financial crisis on multiple fronts, not the least of which is oil
The yen continues to crash catastrophically as Japan’s grand experiment in Modern Monetary Theory proves not to work as well in practice as it appears to in the fancy academic models. This might not sound like a US issue but as I explained back in Issue 74 it absolutely is.
US price inflation was underreported to be 8.6% this week, now the fastest year-over-year growth in CPI in over 40 years. Don’t forget that Professional Economists™️ and Market Analysts™️ thought inflation had peaked in March at 8.5% and was going to start trending downward in April and May.
So, who is more likely to be lying here? The White House Press Secretary or the retail, consumer, housing, debt, forex, and energy data? Does this really look like an economy that’s in a better place than it’s been historically, and that we the American people are “well positioned” to “take on” inflation? Are we expected to ignore all of this evidence that things are not good and just trust them?
They’re lying to you because they don’t want you to freak out like a petulant child. I’m drawing your attention to the truth because I want you to be appropriately informed like a sensible adult.
Their track record for being trusted is about as abysmal as it gets.
Remember when the government told you last December that gas prices will fall below $3 a gallon?
I do, because I was out here telling my friends and family that this was ridiculous and price inflation of essential goods like food, fuel, and shelter was only getting started.
How did I know this even though Russia wouldn’t invade Ukraine for several months? Am I psychic? Was it a good guess? Do I know something they don’t?
Or am I just not lying to you?
But look, you and I know a lot of the narrative they’re trying to spin on us isn’t true, and frankly I don’t think I need to keep harping on it. You get it. I get it. We get it.
Prices are high, things look dicey… I don’t need to keep pointing out the lies and “unexpected” consequences to poor policy decisions week in and week out.
I set out to write Surf Report to help share knowledge with others and connect underreported dots about markets and macro while being less dry and condescending than the other financial rags out there. This way we could all grow to be a bit more savvy and tuned in to aspects about monetary policy and the economy that we weren’t taught in school but is immensely valuable when it comes to making good financial decisions.
Unfortunately, I did not anticipate being lied to this much and have resorted to making sure folks are aware just how frequently and egregiously it’s occurring. I don’t like being the bearer of bad news—I don’t like being lied to—but the truth doesn’t care if you like it or not.
Speaking of truth and an honest signal in a world gone mad, let’s not forget about Bitcoin.
As overleveraged market participants (both institutional and retail, across both traditional finance and crypto) continue to scramble for liquidity and are being margin-called into selling what they have to not necessarily what they want to, the Fed wasted no time to try to take another jab at Bitcoin… and failed spectacularly. 😅
The St. Louis Federal Reserve wrote an article trying to scare people out of owning hard, high quality, non-state-controlled money by using the price of eggs as an example, attempting to demonstrate how vOlaTiLe Bitcoin is as a store of value compared to the US dollar as illustrated by charts over the past year.
There’s a reason these losers didn’t want to draw attention to the comparison on a timeframe any longer than that 🙄:
Central banks and governments don’t want you to own things they can’t control. They don’t want you to have cars out of their control or homes they don’t own or food they don’t sell for cheap, not if they can help it.
They’ll tell you it’s to Save The Planet™️, For Your Own Good™️, etc. It’s not.
By blaming large collective groups or large nebulous threat models, and by selectively choosing chart data and anecdotes that tell the story they want to tell, institutions can curry the favor they need to implement large sweeping rules and restrictions. Anything smaller than a complete existential threat or the end of the world wouldn’t be enough to justify such draconian control measures. So possibilities are framed to appear more inevitable than they are, and risks are exaggerated.
Again, these people do not have your best interests in mind, they only have their own. They’re trying to prevent a panic and escape wealthy & unscathed. They probably will.
As I said at the top of this Report, I’ve about reached my limit with the nonsense. But believe it or not I’ve never felt more bullish on the future and excited to continue building it—with or without the clown show in tow.
I’m looking forward to life on the other side of our current dystopian gerontocratic regime, and think that if you’ve got a full freezer, some skills & income streams, and a non-zero, non-trivial amount of Bitcoin in tow, you’ll look back on this time as a hot mess but an instructive hot mess. Lessons are being learned, and hopefully some of them came from this newsletter.
The adults who raised us to tell the truth and take responsibility for our actions are still out here in positions of power doing the exact opposite, and refusing to cede power to younger generations.
I’m ready to start being the bearer of more good news, more truth, and more responsibility. To be the opposite of corruption and hubris rather than the guy who keeps pointing it out.
We’ve all gotten the picture by now.
I think we’re good here. I think that’s enough.
BREAKING: Surf Report is taking a summer break! 🏄♂️
I like to pause and refresh this bad boy from time to time, and now is one of those times. But this is also where you come in:
I’d love to hear from you! Leave a comment below or shoot me a line to tell me what you’d like to see more or less of in the next iteration of the Report, or what you’ve found most useful/valuable/interesting.
Reader feedback like this helps me steer things in the right direction and ensure it’s a good use of your inbox. And if you can’t think of anything but are going to miss the Report while it’s gone, well… that’s nice to know too. I like to respect the laws of supply and demand around here.
In the meantime you can probably find me somewhere on the tweetbox getting up to no good and talking about Bitcoin, if that sort of thing strikes your fancy.
Okay, that’s about it. I appreciate you, much love, and…
Until next time 🤙,
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Surf Report: I think we're good here