Tuesday, June 15, 2021



Increasing taxes and rising inflation are a deadly combination. "Taxflation" is what we find ourselves in now globally as freewheeling politicians ratchet up the pain and are beholden to nothing but their own egos. Be afraid on this solemn day dear readers of the unencumbered politicrat whose loyalty lies only with increasing power. Beware what constitutes your "fair share," as soon it will be your full share! 

Every year Americans dutifully write out a myriad of checks to local, state, and federal governments to help fund our collective defense, social programs, and politicians' salaries under the banner of "civic duty" which is enforced by the threat of imprisonment. What other "civic duty" is compelled by the potential loss of liberty? What would be the collection rate if taxes were voluntary? Imagine if freewill dictated the scope of the government we received.

While the Biden Administration is planning to increase the budget of the IRS to something akin to a nation-state, increase tax rates, and (obviously) increase spending, the barn door is wide open out back. Billions in fraud, pork, and ill-executed government spending leaves the taxpayer without a doubt as the most maligned and least-loved animals in the barn. If America was "Animal Farm" the taxpayer would be the horse. And I think I have a pretty good idea who the pig(s) are feeding at the trough.

What to do dear financial farmers? "Fight, fight, fight against that dying light" of freedom! Readers of this blog well know I support voting, and especially voting with your feet out of states entrenched in burgeoning socialism. For those with strong backbones, however, there is yet another option: Run. And by "run," I mean run for office at the most promising level where victory may be assured. Change the potential outcomes of a country increasingly on the course of taxflation. It's your money, and the politicians work for YOU...isn't it about time we see some real return on our investment? 

Tuesday, June 8, 2021

Pipes & Rails

 Pipes & Rails

Velocity of Money is "a measure of the number of times that the average unit of currency is used to purchase goods and services within a given time period." The chart above illustrates the historical rate of money usage, with gray-highlighted areas indicating recessions. Up until the mid-1990s the velocity of money was pretty stable. Something happened in the late 1990s however that permanently slowed the usage of traditional forms of money...the internet sparked a tsunami of credit card usage.

Although in circulation for decades prior to the internet surge, credit cards had typically been a "wallet utility" in place of cash or check, not the primary form of payment. With the rise of the internet using a credit card to pay for goods became the de facto solution (readers of this blog old enough to remember eBay prior to credit cards at the dawn of e-commerce will remember sending physical checks to sellers for auction wins!)

Credit cards, however, are not included in the velocity of money because they are considered a debt instrument, hence in the late 1990s we see a precipitous falloff in the velocity of money which usually would be consistent will a massive recession (we have had those as well, most notably the internet bubble, 9/11, 2005 commodities crunch, 2007-2009 global financial crisis, and of course more recently the global pandemic 2020-2021.) One trend has remained in an upslope though; credit card issuances and credit card transactions.

Consider the fact that there are well over 2.8 BILLION credit cards in circulation globally. Although that leaves several billion people uncredit-carded, the credit card companies are working hard to close that gap.  One of the most stunning statistics, and there are many which would make an actuary gleeful, are the daily number of transactions. A Nilson Report indicated in 2018 that there were approximately 1 billion transactions PER DAY. This report is simply fascinating and worth a read. 

OK, so what does all this credit card talk have to do with being a financial farmer? A lot. My theory is that we  should be looking to own velocity; put another way own the roads and tollbooths, not the cars. Or maybe more relevant to today's fascination with "cryptocurrency," own the pipes and rails that it travels over so you can make REAL money on transaction volume. Consider the potential of non-cash transactions projected in the coming years:

Until citizens have the opportunity to own a tax collection and enforcement agency like the IRS, the next best thing in the financial world is to own velocity. It is a bet on population. It is a bet on commerce. It is a bet on technology. The underlying currency itself isn't necessarily as important as the monopolistic positioning of the "pipes & rails" on which it travels; ie we should NOT really be concerned whether dollars or bitcoin or Swiss Francs are being swapped, but rather that we're getting a piece of every single transaction at scale.

Sunday, June 6, 2021

D-Day Remembrance

 D-Day Remembrance 

Few events have defined a generation more than D-Day. To a large part, an entire generation risked it all to save it all; democracy, freedom, and human rights. In the short term they succeeded. Along with saving the world as they knew it, the Greatest Generation also raised the Baby Boomers. In many ways the two generations couldn't be more different.

When the good times came after World War II there was an economic and social boom unprecedented in the annuals of history. The fruits of their sacrifices were harvested as America rose to global prominence in many fields; engineering, medicine, and business to name a few. But as President Eisenhower well warned us, there also rose a new enemy, the "military-industrial complex."

The MIC has metastasized over the ensuing decades to capture a wider and wider swarth of society, to the very point now that we once again see authoritarianism and socialism rising in the United States. It is extremely troubling to see the unprecedented growth of regulation, taxation, and group think in government which is dismissive or outright hostile to very American citizens elected officials allegedly represent. Canceling, muzzling, and jailing dissent has become commonplace. In many ways, the American government itself has become a criminal enterprise. On this solemn day, I ask what have we wrought from our nation's sacrifice?