1. Revenue (Top Line)

2. Cost of Goods Sold (COGS)

3. Operating Expenses (OpEx)

4. Profit (Bottom Line)

(Operating) Revenue comprises money generated through main business activities including sale of goods or services. For companies that generate income passively, there are other line items outside of the main four where income may come in. Passive income is excluded as it is not a key component of operating revenue.

COGS refers to the costs attributable to the goods and services that are utilized to achieve revenue. This encompasses direct inputs required to create or provide an additional unit of good.

OpEx, commonly referred to as “burn rate”, comprises all additional costs involved in creating a good or service. This includes corporate overhead, rent, and insurance. The burn rate is a fixed cost regardless of output.

After all Revenue and Costs are accounted for, profit is what remains for the Owner. This is the value generated from business activities.

Modern-day analyses will utilize alternative metrics to analyze the health of a business, including Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). This is a false metric as those are pertinent to Cash Flow. Yes, the business is healthier than the bottom line; however, cash in hand is the most important facet at the end of the day.

In 2020, Hertz, the rental car company, went bankrupt. Leading up to the moment, their revenue had grown 10 straight quarters, and EBITDA was up 50% from the year prior. The unaccounted for debt and interest payments overwhelmed them as revenue decreased, and the company had inadequate cash on hand to service debt, forcing bankruptcy.

Simplified accounting tells the same story as complex reports. Value is profit, profit is cash, and a continually cash-flowing company is stable. This mindset will not garner 10-bagger (10x) returns in a year’s time; it will provide stable growth for the long run.

Energy Prices

$5/gal gasoline is the new norm. The price will not come down, and Iran will be blamed for it. Global demand for energy will steal domestic supply and maintain elevated prices. The US needs this to reduce its trade deficits and the expense of living standards for us, the proletariat. This is already being seen with reduced ethanol limits in gasoline, reducing quality to maintain prices.

Food Prices

Urea prices have increased by 100% over the past four months and are conservatively estimated to reduce corn acreage by 3%. This will have a significant impact on finished goods and food prices throughout the year. I describe myself as corn fed due to the actual amount of corn I eat; however, most people in the US are as well through corn being utilized in meat production, syrups, oils, and more.

Producer Price Index (PPI)

Historically, PPI is a leading indicator for the Consumer Price Index (CPI) by approximately 6 months. In January and February alone, before the real commencement of the Iran conflict, PPI increased 0.5% and 0.7% m/m, respectively. With the inclusion of $5 gas and higher food prices, expect CPI numbers to rise.

Money Velocity

The number of times a dollar changes hands is money velocity. Currently, Money Velocity has risen in the past 18 quarters (1.41) and is the highest level since Covid. As velocity increases, there is more demand for goods, so expect additional upward pressure on prices.

Debt

The US surpassed $39T in debt obligations. As the annual deficit borders on $2T/year, a ponzi scheme can never taper. Knowing the requirements for continued expansion and maintaining a “healthy” economy, the Federal Reserve and US Treasury injected over $250B into the economy in Q1 to maintain bank liquidity.

As the Treasury and Fed continue to be ground between the inflation rock and the debt spiral hard place, expect something to give in the near future.

I currently see two main trajectories and give the likelihood of both a 50/50 chance:

1. The war ends in the next two weeks

2. This becomes a 5-year war

For the two week resolution, Trump knows midterms are impending and needs to have favorable ratings at the polls. To continue the red wave, he needs to create the idea of growth, lower energy prices, boost markets, and keep troops out of conflict.

To fully achieve the desired outcomes in this war, a regime overhaul is required. There is no short term solution to achieve that. For an abrupt ending, we would see a propaganda wave claiming victory; behind the scenes, funds and munitions would be deployed to the area.

The claim of victory would reduce volatility in markets and energy prices, showing the US is back in control. US Hegemony increases the desire for US Debt, lowers borrowing costs, and boosts equity and asset values, creating a sense of growth. Granted a majority of this will be money printing and inflation - the point is the illusion of prosperity while the steam engine runs hot.

In the 5-year plan, oil volatility sparks panic in the bond market and goods inflation. With anticipated inflation, debt buyers demand a higher yield to supplement their loss from inflation. As yields increase, the borrowing costs for the US rise, and money printing is increased to supplement debt burdens, furthering monetary inflation in a doom spiral.

As energy costs increase, the costs for all goods and services rise. This rise is passed down to consumers and predominantly strains the lower and middle classes. In this scenario, Oil could reach $215/barrel, equivalent to its 2008 inflation adjusted high.

At this price, we would see gas prices around $8-10/gallon, higher in places like California, maiming the mobility of the proletariat. Outside of mobility, this will inflate food prices as costs for planting, harvesting, and trucking rapidly rise. As well, ⅓ of the world’s urea supplies (key component of fertilizer) are currently trapped in the Strait of Hormuz; with planting season rapidly approaching for corn, anticipated extremely low yields for 2026 and an oversupply of soybeans by farmers.

With the potential humiliation and actual domestic suffering, we could see a common enemy propagated in the media and a full fledged war. Similar to Ukraine, extensive ground troops would be required amongst autonomous drones and a naval blockade of the area. Iran has a similar climate to the mountain west areas of the US with hot, arid summers and cold, snowy winters.

To fully achieve victory, the US would have to take over key population centers and establish local governments, while leaving the outskirts as a waste of resources and manpower.

What does this mean for us? We could have a continued false sense of growth, where currency evaporates at the logarithmic 7% rate and hard assets prevail. Or, we will see a long, grueling war where many troops will perish, energy costs and inflation decimate the lower and middle classes, and a new, lower standard of living must be realized for a majority of Americans.

As always, we can only control what we can. It’s imperative to know potential outcomes and be prepared if they occur. It’s never a bad idea to have gas in your car, some food in the pantry, and a little cash on hand. We won’t need bunkers; the world is not ending; it is changing.

Cash rules everything around me

C.R.E.A.M., get the money

Dollar, dollar bill, y’all

A business operates in a similar fashion to a rapper. They produce (production), they perform (services), and receive money for their work, cash flow.

On the opposite side of the ledger, they buy equipment and machinery (lavish automobiles), pay for employees (security, video girls), and deduct business expenses (Hennesy, creativity enhancers).

Cash flow has been the death of many businesses (Silicon Valley Bank, Bernie Madoff, 50-Cent) and comes in the blow of bankruptcy. Without cash to fund operations and lifestyles, the producer gets over their skies and is unable to afford their obligations.

In rap videos, you may see young entrepreneurs touting diamonds or rental supercars; these are depreciating assets, practically illiquid liabilities. As cash is required to maintain a status, less is available for reinvestment into the business, and when cash is required in times of necessity, there is none available. This shortage requires the business to liquidate their bling for pennies on the dollar or declare bankruptcy, unable to pay back its creditors.

In an economy, every major recession or scare stems from a cash flow (liquidity) crisis. Yes, the bad debt or overextension is a hindrance, however, it does not become an issue until there the (lack of) liquidity forces a fire sale to raise capital.

Today, the Federal Reserve has prolonged our liquidity issues by directly funding businesses with bad debt in need of cash. This began in 2009 after the recession with Quantitative Easing (QE1) and has continued through today, with $20B being printed and injected weekly.

This continued influx has been a crutch for what’s known as “Zombie Corporations”, those that are inefficient and non-productive in society. They feed off of free money and accounting ruses to stay afloat, draining the overall market.

Today, Cash Still Rules Everything Around Us; however, the faux creation of cash has distorted balances, allowing receivers to artificially stay alive, at the expense of inflation for you and me.

Before this time period, reserves were consistent around 30%, meaning that for every $100 you deposit, someone is currently utilizing $70 of your dollars while the bank holds $30.

After the Great Depression and creation of the Federal Deposit Insurance Corporation (FDIC), reserves ratios decreased through the 20th and early 21st century, down to 10%. In 2020, with the onset of Covid, the Federal Reserve reduced the reserve ratio requirements to 0%, allowing banks to loan out deposits an infinite amount of times.

As banks have more capacity to loan, they require more deals and in an ever more competitive state. The competition pushes yields down, forcing risk profiles to increase to achieve the same metrics as the year prior. Risk continues growing until investments inevitably bust, news of which leading to depositors demanding their cash back immediately.

In 2023, Silicon Valley and First Republic Banks both went under. They had heavily invested in US Treasuries at near 0% rates (true financial acumen). As yields increased and values dropped, depositors began demanding their money. The bank held the assets on their balance sheet at the face value of the bond instead of the market value, making it seem higher. It was when they needed liquidity to pay the depositors that they were forced to sell their underwater bonds for well below face value.

To quell the panic, because every bank in the Country had and still has these bonds and other loans held at face value instead of their pennies on the dollar market value, the FDIC stepped in and stated they would insure all deposits above the traditional $250,000 cap.

The FDIC came out and stated we will insure banks to the maximum extent to prevent any panic. The FDIC only has about $15B in cash, the other $115B being invested in the same securities as the banks, which are underwater on a market value. The cherry on top is that the FDIC’s total $130B is only enough to cover 1.4% of deposits…

This equivalent unrealized loss is currently happening at the Federal Reserve, where their market value is ~$1.1T in the hole. Fortunately for them, instead of needing to sell below face value, they can print infinite federal reserve notes when needed. We trade our finite time for something that is infinite; it doesn’t seem like a good deal to me.

The balance sheet shows a company’s financial position at a specific point in time. It is structured around the accounting equation: Assets = Liabilities + Equity.

• Value of everything the company owns

  • Cash

  • Equipment

  • Investments

  • Accounts Receivable

• Value of everything the company owes

  • Accounts Payable

  • Outstanding Debt

  • Other obligations

• Value of shareholder’s equity

  • Stock

  • Retained Earnings

The income statement, also known as a profit and loss statement (P&L), reports a company’s financial performance over a period of time. These metrics help users evaluate profitability, cost management, and operational efficiency.

• Positives

  • Revenue

  • Investment Income

  • Depreciation

• Negatives

  • Cost of goods sold

  • Operating expenses

  • Fixed expenses

  • Taxes

The cash flow statement focuses specifically on the movement of cash in and out of a company during a period. It is divided into three main sections:

• Operating Activities

  • Core Business Operations, including goods revenue and production costs

• Investing Activities

  • Cash flow from long-term assets, including investment and equipment purchases

• Financing Activities

  • Cash related to debt issuance, repayment, and dividends.

A recurring theme for the next few weeks is that the first two statements can be manipulated; cash flow is king.

On the global hierarchy, there are a few reasons why the United States is sending troops back to the Middle East. It could be zionist puppetry, or ending a CIA-backed regime, tumbling another domino in the deepstate house of cards. Those are theories. What’s below are facts.

Although sanctioned, Iran has been selling oil to China, helping finance Iran and support China’s economy and war machine. The quantities alone aren’t the factor. When combined with Venezuela, the US is strategically removing key importers from China’s 70% imported oil market. Through their Belt and Road initiative (and in exchange for oil), China is heavily invested in Iranian infrastructure.

Technologically, their telecom infrastructure was constructed by Huawei. As well, they have installed facial recognition cameras, helping leadership and police create a surveillance state. Physically, China built the Qom-Yiwu Rail Link connecting key trading hubs and has been sending contractors to create major highway systems through Iran. So if the problem is with China, why are we bombing Iran?

Iran, directly and through terror organizations like the Houthis, has for years attacked cargo ships traversing the Strait of Hormuz. 30% of the world’s seaborne oil trades through this narrow strait of Iran’s coast. Military security, predominantly US, has been required for any non-Iranian or Chinese ship traversing these waters. Through 2025, the US Navy has spent over $3B defending the strait and have used over 25% of their interceptor missile stockpile.

The US must defend global oil trades, an informal mandate to keep the petrodollar intact, however, endless naval guerrilla warfare will deplete stockpiles and leave the US vulnerable in the event of a Pacific theater. To combat this, they are moving first to stop the repeated drain of munitions and to attack China’s resources.

In the Pacific, there is relatively limited oil production. The largest of which are China and Indonesia. In WWII, the Japanese required oil for their new age, agile ships and airplanes. Without native reserves, they were forced to fight their way south in an attempt to secure the Indonesian fields, which required them to spread wide before moving east. The Allies utilized a scorched earth policy in their retreat, destroying all infrastructure so the Japanese could not take over, a similar strategy used in Romania and Maikop against the Nazis.

If we see a stronger US military influence in SE Asia next, it will be clear that we are prepared for conflict. Historically, military events have been the primary catalyst for Monetary Resets; a common enemy would be a great distraction and excuse for the continuing, breakaway inflation.

With the recent strike down of the legality of US Tariffs, there is significant back and forth on the impact of tariffs on both domestic prices and the US’s income statement.

Tariffs are a tax. Like all taxes, tariffs hurt both the producer and consumer through payments of the tax, reducing production and consumption to benefit the omnipotent government’s coffer.

Reduced foreign consumption has positive benefits on the current account (trade balance). Unknown to most, the trade balance is rolled up into the Balance of Payments, which comprises of the current, capital, and financial accounts. As the capital account is negligible in developed countries, it is commonly neglected in analyses.

The Balance of Payments always sums to zero. If not, a country buys or sells reserve assets to stabilize.

As the current account covers trade, the financial account balances it out encompassing foreign investments in treasuries, equities, and direct investment (South Korea funding a smelting facility in Tennessee).

Historically, this was settled with countries exporting gold reserves to trade partners. To bolster those reserves, countries would raise their interest rates to gain foreign investment on a global competitive scale. Vice versa, countries could lower interest rates, which would reduce the value of their domestic currency, making goods more competitive on the global market. This competitiveness would increase their trade balance, offsetting the loss in foreign investment from reduced rates.

The US has been running a trade deficit since 1975. Every year, foreign investment has offset the deficit.

Knowing this, we can derive the impacts of tariffs on the equities market; this was the cause for the April 2025 tariff tantrum in the US market. The strikedown of tariffs allowed the US equity and treasury market to continue going up and to the right unabated.

Beginning in 2022, foreign countries have been reducing holdings of US treasuries and equities. As this continues, the US will have reduced ability to expand its trade deficit without supplementation of reserve assets. The US does have over $250B in foreign reserves, which would last momentarily before structural change to the accounts would be needed…or we would be forced to remove the gold from Fort Knox.

Demographic trends predict your great-grandchildren’s future.

“As the twenty-first century began, human evolution was at a turning point. Natural selection, the process by which the strongest, the smartest, the fastest, reproduced in greater numbers than the rest, a process which had once favored the noblest traits of man, now began to favor different traits. Most science fiction of the day predicted a future that was more civilized and more intelligent. But, as time went on, things seemed to be heading in the opposite direction. A dumbing down. How did this happen? Evolution does not necessarily reward intelligence. With no natural predators to thin the herd, it began to simply reward those who reproduced the most, and left the intelligent to become an endangered species.” - Idiocracy

It is difficult for most people to conceptualize something 1,000 years away, 100-years away, hell even a month away. This inability to see long-term trends and calculate responses will have detrimental impacts on humanity.

Japan is a leading indicator for what happens when birth rates go below 2.1/family. Every generational cycle, Japan will lose nearly half of the preceding population. Without a growing population, there are limited social benefits for seniors, and 25% of those older than 65 participate in the labor market vs 19% in the US. These numbers will rise for both countries over the next few decades. The lack of growth in Japan stems from their restrictive immigration policies vis-a-vis Europe and the US. This will lead to the destruction of their country economically; socially, they will remain strong as they have since the Meji Restoration from feudal states in the early 1600’s.

Europe and the US have chosen to remain economically viable contenders on the global chessboard.

Immigration has stepped in to reduce the burden of a lower fertility rate (1.45 in Europe and 1.6 in the US). Although helping countries economically, immigration is degrading the historic cultures of former empires.

Illinois K-12 reading and math proficiency ratings increased from 41% and 28%, respectively, in 2024 to 53% and 39% in 2025. The standards were lowered. 2026 data from Polizei Berlin state 55% of new cadets require remedial German language training. This is leading to cultural and societal degradation.

Immigration is not inherently bad. Who immigrates is what matters. We are a country founded on immigrants; historically, one had to be resourceful to survive in America. With handouts creating a baseline survival rate, the best and brightest are not forged in the new land. Immigrants can come to America and have a higher standard of living than in their native countries at baseline poverty levels.

Cultural preservation is not racist. It is an expected standard of living in a high-trust society. We can either reproduce internally or immigrate to sustain growth. With the latter, we must demand a cultural standard of integrity, trust, and growth, lest we fear being succumbed to degradation.

“Unaware of what year it was, Joe wandered the streets desperate for help. But the English language had deteriorated into a hybrid of hillbilly, valleygirl, inner-city slang, and various grunts. Joe was able to understand them, but when he spoke in an ordinary voice, he sounded pompous and faggy to them.” - Idiocracy

After leaving the Bretton Woods system in 1971, every country in the world has moved to a fiat currency. Under a fiat system, there is a universal economic Trilemma which all central banks must abide by.The US and majority of first-world countries operate a floating exchange system (Open Economy without exchange rate stability).

Central Banks All Face the Monetary Trilemma:

1. Fixed Exchange Rate (Lack of Stability)

   1. Pegged exchange rate to a currency (Yuan to USD)

   2. Pegged to fixed assets (ie. Gold and Silver)

2. Interest Rate Controls (Lack of Monetary Policy Autonomy)

   1. Ability to manipulate Interest Rates (Eurozone)

   2. Ability to expand and contract credit (Greece)

3. Capital Controls (Lack of Freedom of Capital Movement)

   1. Ability to take Currency out of the country (India)

   2. Ability to spend Currency as desired (banishment of Gold Purchases & Ownership in US 1933-1971)

The graph and list above are the monetary trilemmas. An economy can achieve 2 of the three.

Countries that want to manipulate interest rates and maintain stable currency will limit their capital controls. China pegs the Yuan to the USD and has interest rate autonomy, capital cannot leave the country.

Countries that want to have a stable currency and free capital control will lack monetary policy autonomy. EU countries have a stable currency and capital movement; they cannot individually manipulate interest rates.

In the United States, we have the ability to control interest rates and significant freedom of capital movement, besides regulatory reporting when traveling with more than $10k, and the ability to invest overseas in most countries and assets. Although we are perceived to have exchange rate stability as measured in by the DXY index, as shown in the straight line M2 Log Chart from the first writing, our currency is exponentially losing value.

In the likely near term, this exponential devaluation will require action.

Knowing the fiscal status and necessity of interest rate controls, the United States will be forced to implement capital controls. These will begin under the guise of national security and expand as necessary. For reference, the US has implemented capital predominately during wartime, Revolutionary War, War of 1812, Civil War, WWI, WWII, Vietnam War, and is even seen today with the recent COINS Act. This is a trap.

Before the gates close, capital will continue fleeing to hard assets, gold, silver, productive land, etc. These assets have the ability to outlast depreciation, and some can be held out of the grasp of a greedy, desperate government.

It behooves all individuals to jump on the hard assets train to any degree. The current national portfolio allocation to hard assets is below 1%, whereas historical standards have been greater than 25%.

What the actual F#!% - The audacity of the government to shove loads and loads of horsecrap down our, the general populaces’, throats is ridiculous. It is not our fault; without action, we are to blame.

Historically, this has led to the punishment of politicians, and in extreme cases, political leaders have been guillotined or even eaten by the masses. Without standing up for our rights and what’s right, we will soon lose what may be the last possibility to stand up for justice and freedom.

There are two main, modern ideologies for government control and takeover past the point of revolt. The first is forced submission - an Orwellian philosophy where an authoritarian government controls the population. The second passive submission - the Randian philosophy, where the population relinquishes freedom for security, akin to modern serfdom.

In the popular 1984, Orwell discusses a world with strong regional groupings, Superstates, that control the world through authoritarian measures. With more control on an individual basis, one could conclude that recent Trump Doctrine policy, Greater Americas, could be the beginning of these Superstates. The everyday individual is monitored 24/7, and any unapproved action is met with strict punishment.

On the contrary, Ayn Rand in Atlas Shrugged describes a world where the productive members of society support the masses through guilt. This leads to a world where everyone is supported under control, and nobody is free. This equates to a self-detained zoo animal, where shelter and food are provided at the expense of freedom.

Both authors have contradicting points of view for how a government should be established. Rand was a libertarian, promoting capitalism and individuality, whereas Orwell was a socialist, desiring a selected state to promote the benefits for all and relinquish poverty.

Between the two writings, I see them as complementary with Rand’s relinquishment of rights leading to a totalitarian government that takes control over a feeble population. We must act. We must stand up for justice in and from our government. They will not give up their control unless we act on our unalienable rights.

“The fact that ‘the public’ is just people, made of the same clay as those in the government, means that there is no reason to expect the government to be any more wise or any more moral than the people themselves. There are evil people in every walk of life, and it is a dangerous delusion to think they don’t go into government.” - Thomas Sowell: The Vision of the Anointed: Self-Congratulation as a Basis for Social Policy

For my fellow colleagues hailing from the predominantly homogenous Midwest, the culture shock of Bad Bunny can be surprising or even overwhelming. In fact, the incorporation of South of the Border culture has been a common place for hundreds of years.

Spanish ads can commonly be heard on TV or the radio here in Washington State and can be found on billboards and Instagram ads in places like California, Texas, Arizona, Nevada, etc.

The cultural influence is all around us, giving the US the second largest Spanish speaking population behind Mexico, and the continued immersion should be of no surprise. From Taco Tuesdays at the Bodega with Spicy Margs, Sofia Vergara being a prominent member of the “Modern Family”, and Marty Robbins’ ballads of Feleena, Hispanic influence has and will continue to impact American culture.

As de-globalization and mercantilism take effect, it is prudent for the United States to embrace and join forces with our southern neighbors. Knowing this, Hispanic culture will continue to be socially intertwined.

Knowing this is coming, and its tidal wave is uncontrollable, what can we do about it?

At the end of the day, this comes down to chosen and inherited communities. This cultural influx is a newly inherited community, and like family, we gotta live with it. In ones’ free time, the level of assimilation is at the discretion of the individual. Akin to throwing two pit-bulls in a cage, that line shall not be forced - it needs to be natural and can begin with spicy margs at Rose’s Cantina. Fortunately for us Americans, we have the ability to choose and relocate if we do not want to assimilate.

It is vital to uphold American values at a citizen level. Everyone deserves the right to life, liberty, and the pursuit of happiness. Whether you participate in this cultural influx or not is your choice.

On the other end of the spectrum, new residents and participants in the country, this is America. Everything around us has been built at the expense of our fathers’ blood, sweat, and tears. Respect it. When one comes to America, they are choosing the family that is America, and it comes with all the benefits and negatives. If one wants to promote change, they are more than welcome to; it must not involve bashing of the family, that causes divisiveness and destruction.

Ultimately, with any new group, loyalty is required which leads to respect and inclusion like a group initiation. This stems from participation in the community, politics, public servants, volunteering, etc., establishing and showing willingness to participate in the community.

The change is inevitable, and action is required on both sides. At the end of the day, a majority of people just want to provide for their family and have a vice of their choice to unwind for the day.

With a known history going back over 11,000 years, Money is integral in everyday life. Money is a storage of energy. It allows one to bottle their time (through employment) and trade their only given resource for other stored energy sources, food, shelter, clothing, leisure, pleasure, in various forms including paper, physical, and digital. Today, we operate in a manipulated world as we transact without real Money. The world has been duped.

Money requires five key principles:

1. Divisibility

2. Portability

3. Durability

4. Fungibility

5. Intrinsic Value (Includes Scarcity)

Without these key principles, the title of Money is not fulfilled: everything else is currency - a means of exchange.

Divisibility - Were one to buy a candy bar with a $100 bill, you’d expect change. RIP the US Penny - 1793-2025.

Portability - It’s extremely difficult to take your cow to the store to buy groceries, harder to divide. In our new digital age, portability is taking on a new meaning as stores become cashless and banking is required online.

Durability - Money needs to last. One can’t trade last year’s peach crop for a haircut as it will have rotted..

Fungibility - Money requires consistency across units. A peach from Katherine Barlow is worth a lot more to Sam and the town of Green Lake than one of my measly peaches. So, a price can’t be established in peaches.

Intrinsic Value - Money needs to have intrinsic value, pillared by scarcity. If everyone had a printing press or gold mine in their basement, then those would have no value. It must be universally demanded, as not everyone may want to trade their own resources for pork.

In modern society, everyone refers to (Dollar, Euro, RMB, Yen, Ruble) as Money; they are currency. There is an unlimited supply with no inherent value.

This ruse has given Central Banks the ability to debase currency by printing unlimited dollars, destroying the savor to benefit debtors. Throughout time, this creates the massive inequality we see today, as the value of time is diminished relative to scarce goods.

It is important to note that as time progresses, fiat expands, requiring additional dollars to be borrowed into existence. The price of everything in existence will continually increase. The question is, is their respective growth outpacing naturally, real terms (time), or is it lagging debasement and simply rising nominally.

The chart below correlates the divergence between productivity and real wages to the implementation of fiat currency in 1971. Although wages rise nominally (Green Line), we see and know from experience that real wages are exponentially lagging, explaining the inequality and decimation of the middle class today.

Chart courtesy of WTF Happened in 1971: WTF Happened In 1971?

After witnessing the tumultuous, volatile periods of the last few years, I want to personally extend my thoughts and commentary on the economic state of affairs and where I believe we are headed. My goal is to provide clarity and assurance by filtering media noise and utilizing critical thinking to project over medium and long term time horizons.

Pedagogy is the fundamental root of growth; works of the past provide the building blocks and tutorials for our future. These discourses will draw on the works of Austrian Economists and share their conclusions for how the world truly operates, understanding all means revert. The quote below was given in 1951, seven years after the establishment of the Bretton Woods agreement where US Dollar hegemony was established.

“Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term ‘inflation’ to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation.” - Ludwig von Mises

The chart above is the expansion of the United States Money Supply starting in 1959. Albeit “tied” to gold at the time, one can see the linear rise in supply which, led by the French repatriating their gold, forced Nixon to close gold convertibility and took the United States off the gold standard. This line continues in a near perfect linear fashion, with a slight blip during Covid, to today. The Y-Axis is logarithmic, normalizing the compounding nature of this chart. Observing the trendline, we can extrapolate this over the next decade revealing a true hockey stick in nominal figures. With an average 7%, we can assume the money supply will continue doubling every 10 years. As von Mises states, that is the fundamental definition of inflation, and that new money will always need to find a home.

New money is channeled through the economy in the Cantillion Effect. As money is printed, it benefits those receiving funds directly from the printing press (US Treasury and Federal Reserve) by allowing purchases at lower costs - when less currency was in the system. The immediate benefactors are those receiving direct payments (ie. Alphabet Agencies, Govt. Contractors, and Commercial Banks). This advantage comes at the expense of you and me, the everyday taxpayer. Next, we will delve into the history and requirements of money, explaining how we have been indoctrinated into believing currency is absolute money.