📈💰📊 𝐓𝐡𝐞 𝐄𝐜𝐨𝐧𝐨𝐦𝐲 𝐈𝐬 𝐒𝐩𝐥𝐢𝐭𝐭𝐢𝐧𝐠 𝐈𝐧𝐭𝐨 𝐓𝐡𝐞 𝐇𝐚𝐯𝐞𝐬 & 𝐓𝐡𝐞 𝐇𝐚𝐯𝐞 𝐍𝐨𝐭𝐬 #𝐞𝐜𝐨𝐧𝐨𝐦𝐲 #𝐢𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧 #𝐜𝐨𝐧𝐬𝐮𝐦𝐞𝐫𝐬 #𝐜𝐩𝐢 #𝐜𝐨𝐧𝐬𝐮𝐦𝐞𝐫𝐬𝐩𝐞𝐧𝐝𝐢𝐧𝐠

https://www.youtube.com/watch?v=fTfztYk0WSU&list=PLVz16niX2rGe3-uBlgX5ZNiH4PNaa3kwa&index=1&pp=iAQBsAgC

Families Across the U.S. Are Struggling With High Prices

https://www.nytimes.com/2026/06/27/opinion/grocery-prices-inflation.html

#Economy #PersonalFinance #Inflation

Contradictions

In my previous post I poured some distilled thoughts over a couple of bitcoin outlooks and arrived at salient contrasts:

• Signal and Noise

Today, full credits for the feature image and the 200 character summary go to ChatGPT.
I will elaborate on a number of contradictions that since bubbled up. I will lead with a couple macro themes of most pertinence to the markets. From there, we will revisit a central thesis of this blog, namely universal basic income. The discussion, albeit brief, will make the presented thesis significantly more specific. So motivated, addressing the thesis in the context of this post will mirror an additional layer of complexity that the specificity itself introduced. Ultimately, the post will fade into the matter of U.K. politics, regarding current events – aligning to the discussions my earlier, more raw posts were centred on. Some of that earlier tone will feed through, as my sentiments are unchanged. I’ve kept it isolated as I assume many wouldn’t agree with the lengths I go to nor, hence, find the criticism pleasant.
The issues are highlighted, should you wish to quickly scroll through.

If I think the economy is about to tank then why don’t I think the Fed needs to cut?
Well, in short – because the more imminent problem is inflation.
Many recessions were led into by the Fed tightening. I mentioned already that between a hard and a soft landing the Powell Fed was delivering no landing. They unmistakably delivered inflation, failed to tame and now left it to Warsh. To their credit, the Covid shock and the prelude to it showed central banks indeed control inflation, if you doubted that. And this was through the issuance of base money.
Today’s world is slightly different than the one we found in 2020, most pertinently due to the abandonment of a fractional reserve. The primary factors that determine inflation are supply and demand. Both are recorded as monetary quantities. Things such as “late cycle credit growth” come to mind. Ultimately, should Warsh come to rely on a restricted quantity of reserves to combat the phenomenon of inflation he will find that the only effect will be to strain liquidity in the inter-bank system. The lesser availability of reserves will increase their price and this itself will pressure the effective spot rate upwards of the Fed’s target. An offsetting factor we can expect to find will be a premium on payment settlement, which should ring a bell as the issue central to stablecoin regulation. So, should we restrict one form of base money (the reserves) we may find it substituted with another (short dated treasuries, i.e. bills). I already warned about the fact that the regulation de facto removes the Fed’s monopoly on determining the money supply as well as talked through the risks. Here we will again traverse these topics. The exact point of the stablecoin regulation is to ensure the stablecoins are fungible in place of dollars: they’re everything a dollar is, except not being issued by banks through credit but backed by a reserve made up of the U.S. Treasury bills and the actual dollars issued by commercial banks. It’s evident the Fed’s influence on the supply of stablecoin-money is only in the second order. While I previously warned against stablecoin issuers making a windfall by not passing through income, currently their insistence on being able to do just that coupled with our context highlights the issue as central to offsetting inflationary pressure: you will be less likely to spend your stablecoin if it bears higher interest. Under this circumstance nothing at all is lost: the Fed maintains effective control of inflation even as the money supply grows independently and so makes raising the spot rate more probable.
It’s the ability to deliver on the employment side of the dual mandate that comes into question.
The core mantra of monetarism is that it’s not the quantity of money that matters but rather the rate of interest.
If we find the money supply has increased, which aggregates that construe it have changed? Clearly, the actual circulating supply of the stablecoin-money expands the aggregate of effective liquidity, to a degree inversely proportional to the spot rate. The created-but-not-spent as well as spent-but-idle coins would count towards the liquid savings of the private sector. However, holding these is equivalent to holding Treasury debt and the proportion so backed should be excluded. As well, being backed in part by deposits these are not actually deposits and by very definition can’t be deposits. Hence, it’s appropriate to exclude counting the so backed proportion too. Our answer is an increase in effective liquidity to the degree the issued stablecoins are backed by T-bills.
Should tokenised payments come to dominate the real economy, cet. par. a good amount of currency will be released from use. By definition we find that a proportion of the already existent dollars in turn shifts into the residual component of the money supply, where it latently supports the prices of financial assets – ranging from debt to bitcoin. A sudden increase in latent deposits in fact pressures lending rates down. (But a bank lending below the funds rate would soon need to borrow reserves in order to make inter-bank payments.) If the result is that spreads compress and lending volume increases, if only to fund tokenisation, the banks will have found a seemingly endless supply of deposits and, we would expect, aggregate demand shifted up.
We find a currency increased in offer but has lost utility and short term government debt that gained it.
Conversely, should payment beneficiaries for whatever reason prefer converting the stablecoins to actual dollars we will find downward pressure on the stablecoins’ par value as well as upward pressure on T-bill yields. If interest rates are elevated and the rate of de-leveraging exceeds that of leveraging we shall naturally find the money supply declining.
Monetising sovereign debt through tokenisation is a weak form of the so-called modern monetary theory. As such, it’s inherently inflationary and necessitates higher spot rates. Luckily, in our world debt bears interest and hopefully the conclusion of the debate regarding stablecoins will be that it’s OK to pass it through.
A data-aware central bank certainly should be able to successfully navigate this environment. Despite remarks, it remains unclear how much of its credibility would the Fed trade-off against an inflationary overshoot, as well as when would T-bills be spent – likely if their yield falls below inflation, regardless if the economy stalls or booms (when it’s in fact expected returns that would kick off the cycle of selling the instruments). Clearly, inflation being the default outcome of variance in growth surely is a consequence of the high level of financiation (i.e. “storing value” in instruments without intrinsic value) that predates stablecoins, which, merely, make it more probable.
Warsh Fed’s expected path (in so far as there is such a thing) is seemingly counter-balanced by the stablecoin universe and in a good way. This universe would indeed act as “rails” that support valuation of both bitcoin and bonds. Money would remain hot and inflation an overarching issue. The front end of the yield curve would sell off and the far end rally. We may see spreads between the spot rate and bill yields widen. Flatteners all of the sudden again seem like a sure thing, free money. But, between now and then the stablecoins actually need to come to life and U.S. growth and issuance remain sustained and limited, respectively. It’s the perception of a crisis at a time of moderate growth that allows for accomodative policy that allows for bonds and risk assets to simultaneously rally. If growth sputters or the crisis mistakenly appears fixed, like we said numerous times already, all bets may be off.

How is it that a crisis of the dollar would not lead bitcoin to materially appreciate?
Well, strictly speaking – and I analised this already – yes, the fall in value of a currency would lead to an increase in the nominal price of select real assets denominated in it, even if they fall in value expressed in other currencies. The thing to observe is that in this scenario bitcoin might come in focus as an alternative currency (framework) that would then be dismissed as inappropriate. It can not save the world because it isn’t a viable currency. By observing its hypothesis fail, it would lose value. But also, and more importantly, it’s the U.S. that is the “crypto capital of the world.” A crisis of its currency implies a crisis of its economy and therefore weakens the crypto world. Crypto is built on top of the current monetary system. It can not function without it. And if it could, this would certainly not be because it has furthered monetary theory. Hence, if the economy is in crisis replacing one thing that’s failing with another built on the same principles will not resolve anything. Crypto fails under the burden of evidence on its own accord.
But then again, bitcoin – and the orthodoxies associated with it – is the currency – and the monetary framework – of choice of the global right. Like Tesla and SpaceX stock, we shouldn’t be surprised to find their price supported as while we find unwavering commitment of acolites.
In a future AI-ruled utopia, do we expect to find tweaks to the current monetary framework, it replaced with one that makes managing the economy harder, or no such thing at all?
What are the remaining valid crypto hypothesis? Being the last known survivors? The ultimate lenders?
It’s a space shared with gold, facing different challenges.

Wouldn’t UBI lead to inflation?
UBI distributed as investment credits is a thesis central to this blog.
The following figures1 summarise, showing my expectation of the evolution of GDP in response to changes in the distribution of inequality.

It’s evident the boost in demand, ahead of any adjustment on the supply side, would lead to inflation.
Regardless of UBI, a liberal trade regime and investment following a schedule where those with the highest expected returns are made first result in global specialisation based on competitive advantages that minimises costs and maximises supply – i.e. arrives at optimal efficiency.
Assuming that developing countries have both a larger consumption gap, i.e. suffer from greater inequality, and a competitive advantage in terms of labour costs, the benefits of UBI should be comparably greater than in the developed world.
The following paragraph may read unsavoury to some.
In the developed world, the inequality coupled with political organisation among the better-off precisely act to prevent a further drain of demand and investment abroad. The ruling castes are disciplined. Everyone’s aspiration should be to invest every effort to join them, abandoning all intellectual integrity. Especially since this bifurcation is permanent, including the serfdom of the worse-off – for the perfidiously and silently implied benefit of the realm.
In an open developed economy, we assume the benefits presented in Figure 2. and 3. would, to a significant extent, be transferred abroad.
Precisely this limits domestic inflation: it’s exported – together with employment.
A shift in the ownership distribution of investment while its aggregate volume remains fixed should not lead to a change in its geographic distribution. That is, of course, true only so far as the anterior distribution is efficient – i.e. not excessively affected by political factors. Also, if we expect a more equal distribution of investment to increase competition this should result in their decreased efficiency – in the sense presented in the above figures. A single integrated investor balances its income and expenditure, trading off pricing power and salary expenses. In such a centrally managed economy the growth of demand, credit, and in turn profit is directly determined by the ability of the planners to predict and control the tastes of the population. Competition decreases prices. If we hold the view that the core benefit of a free market economy is to both allow the discovery of consumer preferences and increase supply-side efficiencies through open competition, then we should expect a normalisation of investment to result in greater real output. Where I have previously allowed for the change to be Pareto-neutral, now I can no longer claim this to be certain. By decreasing the transfer of wealth accessible through financialisation and the leveraging of property rights in favour of a performance based distribution of income we motivate the quest for knowledge and achievement which are the bedrocks of progress. Changes leading to a more granular and specialised economy, besides increasing incentive for personal productive attainment and responsibility – a historical advantage of the capitalist over the communist system, allow aligning competition horizontally instead of vertically where efficiency is averaged out as gains in one area are offset by losses in another.
Reducing the effective strain of the workday increases the fitness of the population and releases potential energy.
Viewed in global aggregate, or in terms of a closed economy UBI is beneficial. If this is so, then in terms of competition between countries and economies the outcome should be that those who adopt the policy end up employing those who don’t. The exact focus of terms of trade should then be to ensure property rights. More precisely, this means investment can flow across borders only when there is a clear understanding and agreement regarding what, under the letters of the laws, are the appropriate protections of benefits associated with ownership. Absent such an agreement, trade should nonetheless flow on a basis of exchange of raw materials, finished goods and services. If that was so, a country adopting UBI should cet. par. find itself in possession of offerings in higher demand and a natural position of running a trade surplus.
In general, inflation occurs when demand – measured in terms of currency – increases relative to supply. UBI implemented as outlined in the figures above doesn’t escape this fact. However, I found it pertubes – for the better – what in real terms is attainable at a given price-point.

Keir Starmer quits as Labour leader and PM?
This couldn’t have come any sooner. Here things get feisty but I sure won’t sound like Kemi.
To carry over a bit of context from the previous section, the European Union – despite all its hype of social justice – utterly fails at delivering a meaningful progressive agenda. To the contrary, and the tune of the so-called European People’s Party, what prevails is a blend of modern feudalism and a state-centred quasi-socialist planned economy. It’s a union in which lobbying the Commission is the peak of business, in which the right in power is bouyed by the right (mostly) in opposition that would aim for the same outcomes but with more authorithanian, Draconian methods – beyond a plot twist. It’s a union that replicates without understanding, that is clueless, that can’t even begin to conceptualise what the errors of economics are, yet along find alternatives. It is with such a Union that Keir Starmer was “rebuilding our relationship.” It’s such a fold he was busy realigning with. It’s his fold.
In taking credit for moving the Party past being “bankrupt” (in the many ways) he implies there wasn’t anything between Johnson’s Conservatives and Corbyn’s Labour. Yet, he took forward both the lack of vision and the patchy alternatives. Antisemitism has no place in life. Standing firm in that regard must be the standard. To this Keir Starmer can take credit, in so far as his assertions held true. But what truly was that changed about the Party, that made its narrative suddenly so compelling? Havock in the other camp and a patched facade were the start.
The task? To carry forward a society “where everyone is seen, everyone is valued.” He speaks differently, but continues to deliver surveillance and profiling for security. This mustn’t be so.
An economy atop G7? Yes, due to work not done in Q4/25 carrying over into Q1/26, a statical anomaly – a straw. Inflation making the well-off better off and an economy wobbly as “the series of interest rates cuts” he was so proud of is about to get unwound to counter it. Investment? Infrastructure? Big government running pulling (the) strings, not the houses promised. “Fastest fall in NHS waiting lists for 17 years?” Yeah, maybe, in absolute not relative terms. (I’m not aware if those are the right statistics, but they are out there.) “Rights for workers and renters” something granted by decree, not what arises naturally in the unfolding of society. A government not setting conditions for the right outcomes to emerge but patching gaps. Old, insufficient ways. “Biggest uplift in defence spending since the Cold War” really something that should make us all feel secure and press the pedal for more, more, more. “Tough on Putin” (rightly) can’t be a blank slate for mindlessness. War is not change, but neither will every peace be.
The job of the leader of Labour or any party on the left isn’t and can’t ever be to gaslight the people. That is for the Boris Johnsons, Trumps and Farrages of the world, the von der Leyens and Kallas’es.
But he did one thing right – he left, and left in good style. For that, Sir Keir, thank you.
We can’t blame him, nor Labour for there being forces of darkness that lurk.
In practical terms, there is lots of unfinished work – reforms that fell short. The most important is the electoral system: to amend first-past-the-post with preferential voting. The European proportional representation system ensures that fringe parties are a reality that the mainstream can push off against. Contrary to it stands a choice between progress and decadence, civilization and tyranny which so amended would include our preferences on who to lead the way.

我試著用PCE物價指數年增率短期趨勢的結果，寫了更醜的動態視覺化的圖。

這並沒有比我用Excel的圖(第二張圖)好看啊......😞

那種數據的短期趨勢的表現，動態視覺化是很難良好呈現的。

真搞不懂，為什麼說要動態視覺化才叫做有數據分析技術。明明數據分析的關鍵是如何讓數據結果呈現出來，分析結果表達清楚。

這世道，有點讓人感覺本末倒置。

#MathAI #PCE #物價指數 #visualization #inflation #usinflation

The Data-Center Boom Is Sparking a Third Wave of Inflation

https://www.wsj.com/economy/the-data-center-boom-is-sparking-a-third-wave-of-inflation-926adc6e

#news #tech #technology #AI #datacenters #aislop #nvidia #finance #inflation

Families Across the U.S. Are Struggling With High Prices

https://www.nytimes.com/2026/06/27/opinion/grocery-prices-inflation.html

#Economy #PersonalFinance #Inflation

«Der Dollar könnte bereits nächste Woche Kursschwankungen verzeichnen: Sollten Sie sich auf neue Kurssprünge einstellen?»

https://ukraine-nachrichten.de/dollar-k%C3%B6nnte-bereits-n%C3%A4chste-woche-kursschwankungen-verzeichnen-sollten-sich-neue-kursspr%C3%BCnge-einstellen_31988?mtm_source=mastodon&mtm_medium=social&mtm_campaign=ma

#Ukraine #Inflation #Nationalbank