Postcards: Five Things I'm Thinking Instead of Trading

With Equity Signals under pressure, let's turn our attention to UFC libertarian callouts, the comedy of Harvard, ethical problems at the Fed, and important lessons around global inflation. Huzzah! ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: Five Things I'm Thinking Instead of Trading]( With Equity Signals under pressure, let's turn our attention to UFC libertarian callouts, the comedy of Harvard, ethical problems at the Fed, and important lessons around global inflation. Huzzah! [Garrett {NAME}]( Apr 16   [READ IN APP](   Market Update: We had a sideways start to Tuesday. Not surprisingly, interest rate-sensitive sectors like real estate and utilities remain under pressure. Our energy reading went negative this morning, with materials falling. This is a tricky environment for markets with rising interest rates and chop. We’re currently looking for a rebound in healthcare stocks, as the sector has traditionally done well in negative environments due to the moat around the industry. When you’re 25% of the economy, and the government writes constant checks… it’s an excellent defensive sector. --------------------------------------------------------------- Dear Fellow Expat: Markets are red, but we must pay close attention to a possible bond reversion in the next few days. This feels very comparable to 2022 after tax season. In the meantime, I took a little while just to think this morning—something I don’t do when the market is swinging up. I am taking a lesson from [Mark Ford today](. [Upgrade to paid]( 1. The “Disinflation Narrative” is Never-Ending BS What will it take for us to teach inflation to the masses? Over in Europe, the head of the central bank is doing a victory lap, arguing that they’ve seen enough “Disinflation” to cut interest rates. At what point do they admit that prices aren’t coming down to where they were before they dropped so much money from the sky? I watched a woman on Twitter blame corporate greed for inflation again yesterday. Companies were increasing their prices. Yes, they were because prices increased across the entire supply chain, inventory could be sold at higher levels, and demand was increasing. Note to critics: Companies do not like to have bare shelves… or items out of stock. And if demand increases… price will follow. But you have to return to the inflation sources: The Central bank and Fiscal policy. This is where permanent inflation starts… always. And what did we do from 2020 to 2024? We increased the monetary base by 41%. Now… here’s the thing that gets me. You have people saying that “inflation is coming down.” No, it’s not. Dall-E The inflation rate might be declining (though it’s going up again in the U.S.) Inflation is still going up… prices are still going up. The CPI would need to be negative if we discussed falling prices or “deflation.” Need proof? Look at this figure from the International Monetary Fund. The global financial organization projected that “global headline inflation” will drop from “an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025,” [writes CNBC](. DOES ANYONE AT THAT DAMN NETWORK SEE THE REAL PROBLEM HERE? That’s global inflation. But let’s just use those numbers as an example of the dollar. Let’s say you had $100 in 2022. After three years… your $100 now has the purchasing power of $83.75 in 2022 dollars based on the above percentages. That’s a 16.25% compounding decline in purchasing power over three years… That’s mean inflation, by the way… the global number. [I’d hate to be in—say—Iran, where inflation is 36%, or Argentina, where it is 278%.]( And we wonder why gold is sitting at new records. By the way… barring a massive recession, those numbers are probably wrong. Especially with liquidity rising at an 8% pace. These people don’t explain where inflation originates… because they’d all be fired. 2. Harvard University is a Dumpster Fire I have to hand it to Harvard. It’s much easier to have no academic standards than to punish the guilty for plagiarism. If you recall, Harvard’s former president, Claudine Gay, stepped down this year because of serious school ethics code violations in her research. So, what is Harvard going to do about it? They have assigned her a new course to teach: “[Reading and Research.]( This is a punishment, a great comedy, or a descent into Orwellian madness. I’ll go with the third. Dall-E I feel bad for any kid who breached Harvard’s academic code by forgetting a footnote, failing to put words into quotation marks, or making an honest error on a long paper—only to trigger a brutal “plagiarism” strike on their academic record. Even a small mistake (on purpose or not) can and will leave them out of a Top-Tier Business or Law school while people like the former President keep their jobs. Many people's careers were kneecapped by professors who hammered students for doing far less than what former President Gay did. The double standard is insane. But… what can you do? 3. The Trend Is Bigger Than Harvard It’s also pretty rich that the financial media has wholly similar patterns of plagiarism]( by Federal Reserve Governor Lisa Cook. This is the same academic who engaged in “the attempted defenestration of esteemed University of Chicago economist Harald Uhlig for the crime of publicly opposing the “defund the police” movement,” [according to Chris Rufo](. The [Manhattan Institute conducted]( a deepening study on her academic past…and it’s not good. How Cook is a Governor at the Fed tells you where our system is. [What is the Brookings Institution]( most of our foreign policy team worked) thinking? They’re interviewing her and claiming the Fed is stabilizing prices. If you’re part of the club and the club ignores it… the problem will eventually go away. It’s a two-tiered system. What can you do? 4. We’re Running Low on Conspiracy Theories It was just a year ago that CNBC and Politico claimed that [“Climate Lockdowns” were a conspiracy theory.]( It was deemed “far right” to predict that such actions by bureaucrats would happen. Well… we’re going to need some more conspiracy theories. Dall-E Germany is now threatening to ban weekend driving to save the climate. [It goes:]( “Comprehensive and indefinite driving bans on Saturdays and Sundays” are being considered, Wissing admitted as Germany’s coalition government struggles to set emission cuts per sector under the proposed new climate legislation. Once again, all of this nonsense… I predicted in my book [The Man with the Big Red Balloon]( - a satire on this pathetic movement - in 2016. Where is Charlton Heston to bark about cold dead hands around a steering wheel? Whether it’s national debt or egregious limits on personal freedom, the middle class will always bear the brunt of this. The rich will be able to do whatever they want. Aircraft charter broker [Private Jet Charter]( notes that Bill Gates owns four private jets, a seaplane, and a helicopter. But ordinary people… they’ll have to take the electric bus. I’m at the point where I do hope they try this in the U.S. (California first) so that people who keep voting for this crap get what they supported “good and hard” while they watch the wealthy pollute all they want [due to some shell game around emissions.]( These people are callous, tyrannical, and unscrupulous. I was reminded of a story on LinkedIn that happened yesterday. original source isn’t known, as this statement has been passed around the internet for years](. It told the tale of two wealthy families on the Titanic. The first was millionaire John Jacob Astor IV, who gave up his seat on a lifeboat for two young children. In addition, Macy’s department store owner Isidor Straus said that he would “never enter a lifeboat before other men.” His wife also refused to entire a lifeboat, giving her seat to their maid. Ida and Isidor died together on April 15, 1912. [As Frederick R. Ruehr]( [from other sources]( “These wealthy individuals preferred to part with their wealth, and even their lives, rather than compromise their moral principles. Their choice in favor of moral values highlighted the brilliance of human civilization and human nature.” I have difficulty believing that most American elites would engage in such humility. They’re already shoving us off cliffs to preserve their power. 5. UFC Fighters Should Run the Federal Reserve This was unexpected. Brazilian UFC fighter Renato Moicano won a match the other night. He encouraged the crowd to… yeah… this was unexpected. Moicano loves the U.S. Constitution. He loves private property. And he loves Austrian Economics. Here’s part of his post-fight speech. We’re all adults: “First of all, I love America. I love the Constitution. I love the First Amendment. I want to carry all the f–—- guns. I love private property,” he said. “Let me tell you something: If you care about your f–—ing country, read Ludwig von Mises and the six lessons of the Austrian economic school, motherf——rs!” Let’s dig into this one. Dall-E Ludwig von Mises was a prominent figure in the Austrian School of Economics. He was very critical of socialism and interventionalist policies. Mises focused on several key concepts in Austrian economics. While there are no real six lessons that I know of in a specific list, I’d say that we should start with these. - Methodological Individualism: The Austrian School views the economy through individuals' actions rather than groups (or the government’s intervention). It simply notes that individuals decide outcomes. - Subjective Value Theory: This is the belief that value is determined by the importance that people place on them. Effectively, there can’t be a centralized group that decides what something is worth. Instead, it’s a matter of what people believe matters, and this value will vary from person to person. - Marginal Utility: Utility is an economic concept that doesn’t get tossed around much in the mainstream press. Utility determines the value or worth of a product. Mises would argue that it is the last unit (or the marginal unit) that determines the value of goods added or consumed. This concept enables individuals to comprehend pricing, consumption, and production decisions. - Praxeology: This is Mises’ core approach to economic theory. This argument goes that human actions and decision-making are responsible for economic laws. Now, this assumes that humans are rational, which is a flaw in almost every economic school. - Markets Need Market Forces: Mises was staunchly against socialism and top-down economic models (none have ever worked, and price caps fail). He argued that the impossible challenge for socialism was its lack of a price mechanism driven by market forces. Due to a lack of a pricing mechanism, the rational allocation of resources is impossible in socialist economies (Editor’s note: He was Very Correct.) - Business Cycle Theory: Finally, with assistance from Mises, the Austrian Business Cycle Theory was developed. The central argument is that business cycles result from government manipulation of interest rates and the money supply. This is what fuels unsustainable booms and inevitable busts. Have you been paying attention to the last 30 years? Every boom and bust cycle has been driven by the Federal Reserve, a centralized entity that fixes interest rates, impacting domestic fiscal costs and the real cost of money in the global Forex markets (exchange rates), thus impacting the entire international system. And Finally So that you know, No. 5 is the most important to me on the Mises list. You see, socialism as a system argues that the individual doesn’t matter. This means that a higher centralized authority must make all market decisions. Any socialist must do the following: - Defend the argument that the individual does not matter and that we must eliminate personal economic rights for the “greater good.” - Defend a centralized market price-setting group, and the development of the enforcement mechanism on said pricing. - Defend the new authoritarian hierarchy that eliminates personal privacy to enforce these market prices while stamping out black market activity. That is what the AOCs of the world need to be asked. Put them on their back heels and force them to defend those three points. If they argue that they aren’t defending these three things, they are not socialists. They are just masquerading as ignorant economists with no understanding of how markets or incentives work. Socialism always leads to those three things. They are the features… not the bug. I primarily identify as an Austrian economist navigating a poisonous Keynesian system. We know how they play the game and how predictable this cycle has become. We’ll never get our way, so we’ll focus on what we can control… and buy and hedge accordingly based on these momentum cycles. Stay positive, Garrett {NAME} Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()