Paradigm Shift!

Live From Las Vegas [The Daily Reckoning] October 11, 2022 [WEBSITE]( | [UNSUBSCRIBE]( Paradigm Shift! - Live from Las Vegas… - Thank God for the Bible… - Then Jeffrey Tucker shows you why he believes we are undergoing an economic paradigm shift few are prepared for… [Urgent Announcement From James Altucher…]( [Click here for more...]( Get Out Of Bitcoin Now! “I’ve just made a shocking move: I sold all of my Bitcoin… and I’m urging you to do the same. Watch my short video ASAP to see why (and what I recommend instead.)” WARNING! You Only Have Until Wednesday To Take Action… [Click here for more...]( [Click Here To Learn More]( Las Vegas, Nevada October 11, 2022 [Brian Maher] BRIAN MAHER Dear Reader , Today we reckon from the viceful and sinful city of Las Vegas, Nevada. It is here that worldly temptation tugs from all sides. Devils perch on every shoulder and the most atrocious carnalities besiege the delicate senses. How a man of virtue can escape the place’s remorseless gravity we do not know. We have observed repeated violations — at times egregious and unrepeatable violations — of Commandments one, three, four, seven, eight, nine and 10. In one person alone we witnessed the bonfire of all commandments just cited, save perhaps one. This witnessing so shocked our sensibilities we cannot in good conscience report the details. It is for the best — believe it. The very hotel in which we lodge lands blows against Commandment seven and perhaps Commandments nine and 10: [IMG 1] Our immortal soul is nonetheless grateful that the same hotel dangling intimacy kits before us recalls us to Christian virtue… and provides us an anchor against the flesh's temptations. [IMG 2] But we are not in Las Vegas to try our immortal soul or anyone else’s. We are here instead to attend the Paradigm Shift Summit… [IMG 3] The room was packed to suffocation, and beyond. Here our market crackerjacks set out not to preserve the assembled’s heavenly souls — only their earthly dollars… Not only to preserve these dollars, moreover… but to multiply them. These fellows include James Altucher… Zach Scheidt… George Gilder… Alan Knuckman… Ray Blanco… Byron King… and of course Jim Rickards. Each is offering attendees his highly educated market perspective. Each peers beyond the passing market transiences and trivialities. The “bigger picture” is their concern — the glimpse of the far horizon. Do they see easy waters ahead? Or heavy weather? And does the conventional meteorology give a true forecast of approaching weather? Or is a new, deeper meteorology — new paradigms, that is — required to navigate today’s treacherous ocean? We concede the question is a leading question. Many of today’s speakers believe new paradigms are indeed required. Hence the title Paradigm Shift Summit. The old rules have lost their luster, their majesty. Inflation, for example, has made mockeries of them. How might you invest around it? Our “gurus” give their take. Yet today’s topics of discussion ranged far beyond inflation. In tomorrow’s reckoning we will draw a comprehensive sketch of today’s proceedings. In the meantime, read on. Below, Jeffrey Tucker shows you why he believes we have entered a new economic paradigm — and “one we will not recognize.” Regards, [Brian Maher] Brian Maher Managing Editor, The Daily Reckoning Editor’s note: [Is this the end for Bitcoin?]( James Altucher spoke at today’s Paradigm Shift Summit. James is the man who first recommended Bitcoin all the way back in 2013 at just $61. But now he’s sounding the alarms… He says we could be looking at Bitcoin’s demise in the weeks and months ahead. If you own any Bitcoin… or if you’ve ever thought about buying it… or even if you simply know someone else who is invested, take a moment and [watch this short clip now.]( Otherwise, you could be completely blindsided by what comes next. [Click here right away for James’ urgent warning.]( [Attention! Before You Read Any Further…]( Before you read any further in today’s issue, an urgent situation needs your immediate attention. If you don’t plan on claiming this new upgrade to your Strategic Intelligence subscription, you’re missing out on a huge opportunity. Right now is your chance to grab one of the biggest (and most valuable) upgrades our company has ever made to a newsletter. I’m taking Strategic Intelligence to an entirely new level and I’d hate to see you left behind. Claim your subscription upgrade… [Click Here Now]( The Daily Reckoning Presents: “We are entering into a new economic environment, one we will not recognize”… ****************************** We’re Entering a New Economic Paradigm By Jeffrey Tucker [Jeffrey Tucker] JEFFREY TUCKER Wouldn’t it be nice to live in a world in which our leaders learned from history? Alas, that dream seems elusive. And we aren’t just talking about reading deep treatises in the history of European wars in the Middle Ages. We are talking about learning from events only 12 years ago. For some reason, in our go-go culture of everything new and everything now, even simple lessons from the past elude the people entrusted with the management of public life. Mortgages are a great example. Back in 2007, the driving ethos was that the housing market could never, under any circumstances, go down in total. Prices are entirely local and determined by supply and demand. This is why so many top minds in that year were very hard core: There was no bubble. All fundamentals were strong, they said. Then of course, everything fell apart, dragging financials down too. From which one might assume that we would learn. If the liabilities are bundled without regard to risk profiles, and traded as securities, then the housing market also becomes as vulnerable as any paper financial product. These days, however, it seems like this lesson wasn’t a lesson at all. The Buyer of Last Resort After the epic crash, the Fed became the buyer and holder of trillions in refuse from the calamity. It has worked for a decade to clean up its balance sheet but never really succeeded for fear of causing recession. In February 2020, the Fed owned $1.4 trillion in mortgage-backed securities. It had every intention of dumping these out of its portfolio, thus dialing back market liquidity it was providing to market. Then suddenly, the great virus arrived and Congress went wild with spending. Next thing you know, the Fed’s portfolio of mortgage-backed securities ballooned to $2.7 trillion. They had gone shopping, paying with newly printed money. Wonder of wonders, the housing boom started all over again. It was history on repeat. Here we are, more than two years later, with a vastly more complicated problem. Inflation is soaring due mainly to the trillions in hot money dumped all over the country to subsidize lockdowns. Supply chain breakages make that worse. The forced recession of March and April 2020 never really went away. All that has changed is the ability of the federal government to cover it up. Now the numbers are starting to reflect reality, and a recession is upon us. In the middle of this mix of inflation plus recession, we could experience something new: a housing demand-based bust in the middle of a period of high inflation! Thirty-year rates rose above 5% in April for the first time in 10 years. Here is a 10-year chart: [IMG 4] This small change (there is nothing at all unreasonable about 5% in 30 years) has caused a huge and sudden change in mortgage applications and the drive to build more and more. Here is the same chart in the context of 1970 to the present. If we really are going back to the 1970s, there is a long way to go before reaching a historically justified equilibrium. [IMG 5] [Click here for more...]( James Altucher has been helping people make a fortune with cryptocurrencies for several years. The whole internet laughed at him when Bitcoin crashed from its high of over $19,000… … but the laughing stopped when Bitcoin rocketed even higher, just as James predicted… … hitting over $60,000 in value. Now it has crashed again… and James is back with a NEW prediction about how to make a fortune with cryptocurrencies. And it’s NOT with Bitcoin. Find out what James is predicting now… and how to make up to an 8,788% return with crypto by 2025. [Click Here ASAP]( Mortgage applications have already declined 12%. They are 15% lower than the same time last year. Keep in mind, too, that housing prices are up 20% year over year, which makes small changes in the rate extremely meaningful for financial decisions. Let’s say there is a housing bust, even a dramatic one. How does that play out in an environment of very high inflation for everything else? It all depends on how one weighs the housing sector in the construction of the index. It could drag it down for sure but not eliminate it. In any case, we are nowhere near that point: Housing plus utilities inflation is right now still running 12.1%. It’s likely that the next housing bust will take a different form: dramatically declining demand in the context of ever higher prices. Housing: The Paradigmatic Case It’s been so long since we’ve experienced “stagflation” that we’ve lost a picture of what it feels like. Normally, a depressed economic environment comes with lower prices. Higher prices we’ve tended to associate with economic booms sector by sector. We almost cannot conceptualize an environment that is at once deeply depressed, with limited demand and productivity, plus rising prices. We can see how this plays itself out in the housing market. Let’s say that mortgage demand continues to fall dramatically. People choose to rent, or stay put, or otherwise stay out based on their risk aversion in the face of the high costs of financing at the high costs of the asset itself. The large companies that have been buying in lots also pull back. At the very same time, prices are still rising. What is going on here? And how is this possible? Here is the core of the answer that these days people seem unwilling to accept: The dollar is being systematically devalued. This happens regardless of the supply and demand for goods and services. The phenomenon is entirely traceable to a different form of supply and demand: for money itself. It is too easy to forget that money is a good, like anything else and subject to economic laws. We are being prompted daily to remember this, but we’ve lived so long in a relatively price-stable environment that people have a hard time understanding this. For most of our lives, money has seemed like a neutral thing, something to use for calculation and exchange and nothing more. Now it has taken on a life of its own, moving down in value regardless of changes in the demand for goods and services. In short: This housing bust will not look like the last one. It will be an industry depression, plus inflation. That’s enough to really play with one’s mind. The root cause, however, will be the same: expansionary monetary policy from the Fed enacted to stop the market from responding properly to the conditions of reality. Money Finds a Home While we’ve yet to see any real softening in the pace of increases in housing prices, and may not at all, the real action has shifted over the last month from housing to transportation. If you have booked a plane ticket recently, you know this. Transportation costs in general, including the gas you put in your car, are rising 20.5% right now. That’s the fastest sector in the index that is still rising 11.6%. And by the way, while the overall index dropped in its rate of increase last month, that direction of change has stalled. It is now rising again. Here is the one-month rate of change: [IMG 6] We are entering into a new economic environment, one we will not recognize. The old rules will not apply. We’ll see and experience things as never before. They will be extremely disorienting. And vast swaths of the population will not know enough to understand what is to blame. That’s exactly what the Fed wants. These people will hide as long as possible. Regards, Jeffrey Tucker for The Daily Reckoning Ed. note: [Is this the end for Bitcoin?]( James Altucher spoke at today’s Paradigm Shift Summit. James is the man who first recommended Bitcoin all the way back in 2013 at just $61. But now he’s sounding the alarms… He says we could be looking at Bitcoin’s demise in the weeks and months ahead. If you own any Bitcoin… or if you’ve ever thought about buying it… or even if you simply know someone else who is invested, take a moment and [watch this short clip now.]( Otherwise, you could be completely blindsided by what comes next. [Click here right away for James’ urgent warning.]( Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Jeffrey Tucker] [Jeffrey Tucker]( is an independent editorial consultant who served as Editorial Director for the American Institute for Economic Research. He is the author of many thousands of articles in the scholarly and popular press and eight books in 5 languages, most recently Liberty or Lockdown. He speaks widely on topics of economics, technology, social philosophy, and culture. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please read our [Privacy Statement](. For any further comments or concerns please [contact us.]( If you are having trouble receiving your The Daily Reckoning subscription, you can ensure its arrival in your mailbox [by whitelisting The Daily Reckoning.]( © 2022 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. 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