Current Affairs

 

BLUE ORIGIN FOUNDER Jeff Bezos and Virgin Galactic founder Richard Branson have been working for the past 20 years to get their companies’ rockets built and launched. Now both are preparing to suit up and ride their own spacecraft. Bezos announced on Monday that he’ll blast off July 20 on Blue Origin’s New Shepard rocket, riding to the limit of Earth’s atmosphere. Meanwhile, Branson is expected to fly this summer on the Virgin Galactic VSS Unity rocket plane to the same zone.

The rich-guy space race between Bezos and Branson (SpaceX’s Elon Musk is the odd man out for now) may convince other well-heeled space tourists who want assurances that a rocket ride is both fun and safe. But experts note that space travel is always risky, even when spacecraft have undergone years of testing. Blue Origin’s flight will be its first launch with human passengers; previous flights have only carried a mannequin. For Virgin Galactic, it will be only the second time the rocket plane has carried people.

“When you’re flying humans, it’s always one step more complex than just flying an uncrewed mission, and that’s because you have the lives of six people that you have to worry about,” says Laura Forczyk, an Atlanta-based space industry consultant who has flown several times with NASA on zero-g research flights. “Blue Origin has no reason to fear that something will go wrong, but you never know. Space is a risky business.”

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Canadian Investors Now Eligible for Greg Weldon’s Money Management Service

Greg has been a valued contributor to MoneyTalks, The Inside Edge and the World Outlook Financial Conference for over 15 years, and we are very pleased to let you know that Canadians are now able to directly access his Managed Money services. How pleased? Well, since his now famous Age of Aquarius speech, live in Vancouver at the World Outlook Financial Conference on Feb 6th 2020, clients have seen a total return AFTER FEES of 47.1%.

  • Clients open their own accounts, in their own names, NO money is commingled, ever, nor does Weldon have ANY access to  the client’s money.
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  • For more information or to explore opening an account please contact Katelyn Ellis at katelyn.ellis@gmail.com

It is changing the fate of millions today and potentially billions tomorrow

 

I was at the Bitcoin 2021 conference in Miami this past weekend and the commentary surrounding it has been, well, shockingly bad, to say the least. We have momentous events happening in crypto. Some good, some bad. However, what I find fascinating — if not a bit alarming — is that every opinion concerning these events are couched in nothing but existential terms.

There are existential threats surrounding bitcoin but most of the people espousing opinions on it are not the ones threatened by bitcoin or its opponents.

The permabears, embarrassed after an historic run from $3000 to $64,000, chuckle gleefully about a 50% pullback no reasonable bitcoin bull would ever argue against happening. The arguments that come out are laughably naïve if not ignorant.

In the immortal words of Dean Wormer, “Fat, drunk and stupid is no way to go through life, son.” Most of them come from the U.S. and Europe, making their irrational hatred of bitcoin truly a first world problem.

Everyone wants to be the first to have that novel insight, be the one who scoops everyone else to gain some pathetic little bit of street cred in cyberspace that they rush to their phone to put out there for the world to see just how little they’ve actually thought about what’s going on.

Doomscroll through Bitcoin Twitter and you’ll see most everyone turn into some version of Flounder.

While I was at Bitcoin 2021 the thing I kept saying was never in my wildest dreams did I ever think I would see anything like this in association with bitcoin. We were so far away from my first reading the white paper and downloading an early wallet/miner that simply taking a step back and soaking in what was happening around me was overwhelming.

And, in many ways, meaningful.

Because what I was truly blown away by wasn’t the spectacle it was the fact that the ethos of bitcoin was still intact amidst all the Vegas. That same ethos that drew me to it out of curiosity in 2010 is alive today in the people who are directing its future.

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The Consumer Price Index jumped 0.6% in May, after having jumped 0.8% in April, and 0.6% in March – all three the steepest month-to-month jumps since 2009, according to the Bureau of Labor Statistics today. For the three months combined, CPI has jumped by 2.0%, or by an “annualized” pace of 8.1%. This current three-month pace of inflation as measured by CPI has nothing to do with the now infamous “Base Effect,” which I discussed in early April in preparation for these crazy times; the Base Effect applies only to year-over-year comparisons.

On a year-over-year basis, including the Base Effect, but also including the low readings last fall which reduce the 12-month rate, CPI rose 5.0%, the largest year-over year increase since 2008.

In terms of the politically incorrect way of calling consumer price inflation: The purchasing power of the consumer dollar – everything denominated in dollars for consumers, including their labor – has dropped by 0.8% in May, according to the BLS, and by 2.4% over the past three months, the biggest three-month plunge in purchasing power since 1982:

On an annualized basis, the three-month drop in purchasing power amounted to a drop of 9.5%, and this eliminates the Base Effect which only applies to year-over-year comparisons.

That plunge in purchasing power is “permanent” not “temporary.”

Yup, the current plunge in purchasing power is permanent. And the plunge in purchasing power in the future is also permanent.

The only thing that might make a small portion of it “temporary” is if there is a period of consumer price deflation, which has happened for only a few quarters in my entire life, for example in the last few months of 2008, which is indicated in the chart above. So I’m not getting my hopes up.

The rest of the time, we’ve had lots of decline in purchasing power. And that has proven to be rock-solid “permanent,” and we never got that lost purchasing power back.

Durable Goods inflation exploded by 10.3% from a year ago.

And it jumped by 3.0% in May from April, the biggest month-to-month jump since 1980. The problem is across the board, but the biggest biggie is used vehicles.

Used Vehicle CPI exploded by nearly 30% year-over-year, and by 7.3% just in May. I have long been fuming about and dissecting the reasons behind this price surge, based on data from the auto industry. And it is now seriously showing up in used-vehicle CPI.

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Prices are rising almost everywhere you look.

Steel, lumber, plastic and fuel. Corn, soybeans, sugar and sunflower oil. Houses, cars, diapers and toilet paper. Prices are rising almost everywhere you look.

The post-pandemic recovery is in full swing and the global economy is struggling to keep up. Following a collapse at the start of the pandemic as businesses closed and millions of workers lost jobs, demand has rebounded with a vengeance, spurred by government stimulus and consumers flush with savings.

But companies that idled factories or put workers on furlough during lockdowns are now unable to secure enough raw materials to build the houses, make the cars or assemble the appliances that are suddenly in high demand.

Companies are furiously trying to restock inventories following last year’s global recession, straining supply chains already reeling from the pandemic to breaking point. A shortage of shipping containers and bottlenecks at ports have made matters worse and increased the cost of moving products around the world. Throw in accidents, cyberattacks, extreme weather and the huge disruption caused by the desperate hunt for cleaner sources of energy, and you have a perfect storm.

There’s no telling how long demand will outpace supply, especially as the pandemic continues to rampage through some of the world’s biggest economies. But there have already been shortages of everything from microchips and chicken to chlorine and cheese, and prices are spiking.

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