The Fate of Biden’s Agenda
‘Baby, baby, baby, you’re out of time
‘Baby, baby, baby, you’re out of time’
The Rolling Stones
The Dow began the week with a small tremor, with a headline from Barron’s: ‘Stocks Sink on Worries over Omicron and the Fate of Biden’s Agenda’.
By noon, the Dow was down 650 points. By the end of day, it was still down 433 points. No biggie…
The fate of Biden’s agenda was determined on TV on Sunday, when Senator Manchin from the beautiful hick-and-hollow state of West Virginia said he would not go along with it.
‘I will never forget the warning from then Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, that he delivered during a Senate Armed Services Committee hearing during my first year in the Senate. He testified that the greatest threat facing our nation was our national debt and since that time our debt has doubled.’
Yes, the debt is still growing…and Manchin is right. This is no time for another US$4 trillion boondoggle. We’ll have to wait for the next ‘emergency’!
But we’re not going to be tempted into negativity. This week, the spirit of Christmas is upon us. We fight against it as best we can. But here in Ireland, the music, the decorations, the salutations, and well wishes overwhelm our more natural weltschmerz.
This is the shortest day of the year. At this latitude, barely has the sun risen when it is ready to set. It never actually rises in the sky, it simply rolls over the treetops to the south of us…and then at 4:21pm today, it disappears altogether.
Driving into Youghal, there are three reindeers lit up with electric bulbs. Then we see the holiday lights on the hillside…the flashing Santas…and coloured garlands looped lazily across the street.
All ye faithful
People wear masks in the shops. But outside, they are mostly barefaced and greet each other in the narrow streets with yuletide smiles. Yes, it’s Christmastime in the city.
On Sunday, we attended a carol service. We drove up to the huge edifice, St Mary’s. A small child toddled out in front of the car.
‘There are few enough practicing Christians in Youghal as it is,’ Elizabeth warned.
‘You better not run over one of them.’
St Mary’s was built around 1220. It’s a collegiate church and the oldest still in use in Ireland.
Our residual band of hardy carolers gathered in front of it outside. The wind blew steadily, but not fiercely. It was overcast with the temperatures in the low 40s.
‘A beautiful day,’ the parishioners told each other, bundled up in coats, hats, and scarves.
‘It’s been nearly two years since we’ve been able to sing,’ said the minister.
‘So let’s really take advantage of it.’
And so we did…sticking to the favourites, some of which were sung to different tunes than those we remembered. ‘O Come, All Ye Faithful’, ‘O Little Town of Bethlehem’, ‘Hark! The Herald Angels Sing’.
‘It brought tears to my eyes,’ Elizabeth reflected later in the day.
‘So many memories…so many years. Those hymns recall so many Christmases…midnight candle-lit services…Christmas pageants, with the children dressed as sheep or shepherds. Those are some of the most precious moments of our lives…’
She paused, deep in remembering.
‘And they went by so fast…’
We could see Elizabeth’s eyes misting again. We decided to divert the conversation.
‘The Fed says it’s going to reverse monetary policy,’ we replied.
The words fell from our lips like drops of oil on a wedding dress. But it did the trick. We were now back on hard ground, safe and stupid, talking about things we couldn’t do anything about…for which we are not to blame…and about which most people couldn’t give a damn.
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The death of EZ money?
But in keeping with the holiday spirit, instead of our usual gripes and snipes, we’ll think of how others will suffer from the Fed’s policy ‘pivot’.
First, we hasten to point out that the Fed’s new ‘tightening cycle’ is not likely to result in a serious cinching. So far, only the gullible, porte-parole media and naïve investors think the Fed is going to go through with it…and return the nation to ‘normal’ monetary policies.
Alas, reports of the death of EZ money are greatly exaggerated. Instead of giving it its last rites and a decent burial, the Fed continues to show it dirty pictures, still trying to get it excited with an additional US$3 billion per day of prurient new money.
Instead of adding US$4 billion per day…it will just add US$3 billion. Then, it says it will add less and less…until the need for life support comes to an end sometime next year. And then, if the coast is clear, it will consider letting interest rates come up out of the basement where they have been imprisoned, almost continually, since 2009.
No serious person thinks this will actually stop price increases. But what it might do is cause Wall Street to panic. Yesterday, the stock market shivered. Tomorrow, it might catch a cold.
For The Daily Reckoning Australia
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