When Lara Trump interviewed White House Crypto Czar David Sacks this past week on Fox News, Sacks referred to one of the prevalent paddle signs at Trump’s address to the Joint Session of Congress on March 4, 2025. The sign, held by many Democrats at the address, said “Musk Steals.”
Sacks was confused by this sign given that Elon Musk is taking money from wasteful, fraudulent, or abused programs and returning it to the Treasury. He draws no salary, and benefits from none of the money. Sacks then had the insight that the Democrats consider the money to be theirs, and therefore Musk was stealing their money and putting it out of their reach.
This epiphany highlights a mindset that is quite common among government leaders around the world. Despite the fact that they often impose confiscatory or oppressive policies on their people, they regard themselves as the embodiment of the people’s welfare. Driven by this delusion, they believe that whatever benefits them benefits the people, and whatever harms them harms the people.
The reverse is definitely not true, however. Whatever benefits the people does not necessarily benefit the leaders, and whatever harms the people does not necessarily harm the leaders.
This is the governmental version of privatizing benefits and socializing costs that many businesses seek to obtain through public policy. High level officials—elected, appointed, and hired—use taxpayer money to enact, regulate, or compel programs and actions that directly or indirectly benefit them personally. The leaders enrich and empower themselves while the people pay for it twice—with taxes and reduced freedom.
Hence the crocodile tears shed by Democrats, ostensibly regarding DOGE’s access to Americans’ personal information. This from people who have put in place organizations and programs to record or obtain all telephone conversations and electronic communications, record via CCTV billions of hours of people going about their everyday business, and many other blatant violations of privacy and decency.
However, DOGE has made clear what’s really happening. Governmental agencies have, in the name of doing good as they define it, funneled untold billions of dollars to favored apparatchiks of the far left and prospective Democratic voters. Typically using nonprofit entities through which to offer graft recipients deniability, the agencies have impoverished the nation while enriching their cronies and buying power.
This blog has made clear time and again that many, if not most, Republicans are complicit in such schemes as these. It’s not uncommon to see a Congressperson of either party end their time in Congress or associated work afterwards with a net worth in the multi-millions of dollars—far above what they could have amassed from their salaries. And all the while these corrupt recipients remind us of their lofty motives.
Now of course American leaders don’t use the royal “we” as much as literal royals in European countries have in the past. Such leaders typically meant by that expression the royal “me.” Instead U.S. leaders use “the American people,” by which they don’t mean “the American people including us.” They mean simply “us.” “We.” “The people who really count.” And ultimately, like the royals of old, they simply mean “me.” “The American people” just makes it sound like they care about someone besides themselves.
Try this the next time you hear a Congressperson waxing eloquent about some grandiose matter in whose interest they can invoke the welfare of the American people. Just substitute “I” or “me” for “the American people” every time they utter the phrase. In all but a few cases, their true meaning will become much clearer.
Key Takeaways:
- Of emotion and markets
- When markets use leverage against investors instead of vice versa
- Buy the dip or buy enduring value?
- What to do when growth and inflation are down
The McAlvany Weekly Commentary: Flight To Gold & U.S. Treasuries
David and Kevin began the program this week by comparing events over the past 17 years of the McAlvany Weekly Commentary with what’s happening today. In particular, they look at the demise of Bear Sterns as a historical lesson, and then expand their focus to include many companies that seemed too big to fail until they failed. The hosts then transitioned to the events in Europe, where the longtime status quo is suffering major disruption virtually overnight. With Trump’s focus on America-first foreign policy, European powers, especially Germany, are ramping up their defense spending so sharply they are borrowing money to do so—something the Germans are normally loath to do. The Europeans are doing this because America is doing the exact opposite—decreasing their funding of European defense with borrowed money. Turning to the stock market, Kevin asks David if he thinks there will be a crash. David responds with some important insight: “A serious correction if not a crash, and I think that has begun. Far from over, and you know that by psychology. The psychology of the market is given to extreme excess in both directions. These are what we’ve described as the errors of optimism and the errors of pessimism. You’re overly optimistic at tops, you’re overly pessimistic at market bottoms, which is why mean valuations are a reference point. They’re never a destination. You don’t get to fair market value, you get to undervaluation at the end of a cycle just as you were at overvaluation previously.” The hosts also discuss the Western Smaug (the dragon in The Lord of the Rings books) waking up to find the world’s been accumulating gold while he’s been sleeping. Importantly, however, he is waking up—with immense implications for the gold market.
Credit Bubble Bulletin: Q4 2024 Z.1 and the Start of Deleveraging
Doug’s initial analysis for the week now past is suited for the Joe Fridays among his readership who seek “just the facts.” He combs through the data, presenting numbers that prove the contention inherent in his above title for the week’s summary. If investors inflated this equities bubble with plenty of leveraged bets, it follows that any significant retrograde action in the market would prompt deleveraging by those susceptible to the outsized pain leverage imposes on the way down. In short—if obviously—leverage works both ways. Escaping its immense negative power demands quick action, and we’re beginning to see that in earnest. He notes that, “Acutely unstable markets saw de-risking this week intensify into fledgling Credit market deleveraging.” Excerpts from major financial media outlets then drive the point home. Doug ominously sums it up: “I feel increasingly confident that speculative deleveraging marks the beginning of a major bear market. But a crash scenario is not a low probability event.”
Hard Asset Insights: Signal and Noise
Morgan offers some coffee and an ice pack to those who have overindulged in the equities punch bowl for the past umpteen years. His words are perhaps not pleasant, but are a needed dose of reality. As equities have hit a rough patch, he notes that neither the Fed nor the Trump administration is likely to dash in with a fresh bowl of party cheer. The Fed is increasingly mindful of inflation, and Trump is focused on Main Street rather than Wall Street. These are new rules for a new day, and while “strong hands” investors have gotten the message, “weak hands” are still playing by the old rule book, looking to “buy the dip”—a dip that could look more or less like the Grand Canyon before it’s all over with. Morgan does not offer problems without solutions, however. He notes that, “Market tops are notoriously hard to call, but after a solid retracement bounce, HAI would prepare for this market to roll-over yet again and threaten some real damage on the downside. [However,] it’s not at all bad out there for market participants playing outside the narrowing lane of our record financial asset bubble. Gold is shining, and it seems that both the Western financial media and the Western investor are starting to take note.” Obviously, it is his fervent wish that everyone on Main Street gets this memo, not just the big players.
Golden Rule Radio: Flight to Safety Begins
Miles’s recap of markets shows the precious metals generally up slightly while the dollar and equities markets are down significantly. Transports and the Nasdaq are also down slightly, continuing larger, longer-term down moves down. Miles suggests that these moves suggest a change in trend, given their multi-week, often multi-month nature. Miles points out that while charts tell us what markets are doing, you need to look at macroeconomic and fundamental factors to determine why they’re doing what they’re doing. Tory takes over to take a look at the macro factors affecting markets, including economic growth, inflation, and policy. He focuses in on a situation in which growth is slowing and inflation is going down. This is bad for many equities, and is the situation now in effect. Tory uses data and analysis from a service called Hedgeye, and goes into some detail regarding which investments do well and which do poorly in this type of scenario. This analysis is quite objective and eye-opening, and is not to be missed.
Photo attribution: Department for Culture, Media and Sport, Public domain, via Wikimedia Commons
