Ep. 579 – Job Market Distortions + Higher Taxes

The Kapital News
The Kapital News
Ep. 579 - Job Market Distortions + Higher Taxes

For the second consecutive week, initial jobless claims came in under 600k to stand at 547,000 for the week ending 17 April. While this figure is below that which was witnessed during the depths of GFC, we cannot forget the Pandemic Unemployment Assistance program that was created by the Federal government. This figure came in at 133,319, which means in aggregate, weekly claims were 680,000 – still higher than the GFC, yet trending lower, and that is good news. The prior week was revised higher by 10k to now stand at 586,000. In aggregate, across all forms of unemployment insurance, some 17.4 million Americans continue to claim benefits. This gives us a de facto unemployment rate of 12.5 percent, which is more than double the official unemployment rate of 6.0 percent.

The Federal Reserve’s balance sheet hit another all-time high and now stands at $7.82 trillion, which was a week-over-week increase of $27 billion. The Fed remains committed to their QE program of purchasing at least $120 billion of US Treasuries and mortgage-backed securities per month. This will take their balance sheet to at least $8.5 trillion by the end of the year, and The Kapital News is projecting that it will be closer to $10 trillion! For context, their balance sheet was just shy of $900 billion during the GFC. This is nearly a 10x increase in just a little over a decade! And do recall that when QE was announced that it was going to be temporary. This program is a couple of years away from applying for a driver’s license – so much for short-lived. It is important to note this because current Fed members are stating that inflation will only be transitory. The same people who said QE would be temporary are saying the same about inflation – see where we are going with this?

As The Kapital News has been mentioning since we have been online starting in 2019, is to get ready for tax hikes. We were running trillion dollar deficits prior to the pandemic, the subsequent lockdowns, and massive spending programs. It is basic math at the end of the day. We are all for cutting taxes, in fact, we want to see the income tax abolished, along with the Federal Reserve. However, if policymakers are going to cut taxes, then they need to cut spending as well. Only solving for half of the equation is asking for trouble – i.e. large deficits. These deficits bring about the hidden tax of inflation, and now because of the size of our deficits, tax increases are coming. It was only a matter of time, but now the Biden Administration is discussing raising taxes. Their first target is capital gains taxes in a show to target the rich, but make no mistake that they will also be broad-based when the dust settles. We are dealing with a $28.2 trillion national debt. We are on the path to spend nearly $8 trillion this year alone, which gives us a deficit of over $4 trillion! Our deficit alone is higher than all of the tax revenue that is brought in annually, which is currently around $3.5 trillion! How sustainable do you think this is? And unfortunately, there is not much to show for it. So it is another double whammy as usual as we have to contend with the inflation tax and an increase to direct taxation. It should also be stressed that confiscating the entire net worth of the country’s wealthiest individuals would only cover expenses for several months. Point being, we are in a lot of trouble and attempting to tax and spend our way out of it, is not the solution. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Inflation #Taxes #Debt #Spending #Gold #Silver #USA #Bailouts #Liberty #Leadership #Justice #Truth #EndTheFed #bananarepublic #FireCongress

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