The Great Wealth Migration

Make sure you’re on the right side [Morning Reckoning] August 31, 2023 [WEBSITE]( | [UNSUBSCRIBE]( The Great Wealth Migration - Western demographics are a disaster because no one can afford to have kids. - Decades of low interest rates have made houses, cars, and children too expensive. - So, politicians think the answer is mass migration when the honest answer is higher interest rates. [Tiny AI Stock Targeted For Buyout Deal?]( [A massive buyout alert has just been issued]( on a tiny AI company that could skyrocket in the coming months, weeks, even days. And according to James Altucher, a man who has made millions of dollars on these kinds of deals… This could be a once in a lifetime opportunity for you to make a fortune. He’s revealing all of the details in the video below (including a leaked memo from Google). [Click here to learn more]( You can watch it by [clicking here](. [LEARN MORE]( Asti, Northern Italy August 31, 2023 [Sean Ring] SEAN RING Good morning Reader, Greetings from a gorgeously cool and autumnal Asti. We’ve only had a six-week summer here in Italy. It was cool until mid-June, and as I stand here typing, it’s a mere 69F (20C). The global warming nuts are having a tough time with this. The weather maps are blue and green, even in environMENTAL Germany. Though we’re still three weeks away, autumn is my favorite time of year. I get to cool down and think again. As David Landes wrote in The Wealth and Poverty of Nations: In India and other tropical countries, I have noticed farmers, industrial laborers, and in fact, all kinds of manual and office workers working in slow rhythm with long and frequent rest pauses. But in the temperate zone, I have noticed the same classes of people working in quick rhythm with great vigor and energy, and with very few rest pauses. I have known from personal experience and the experience of other tropical peoples in the temperate zone that this spectacular difference in working energy and efficiency could not be due entirely or even mainly to different levels of nutrition. Weather matters. It really matters. I noticed this when I lived in Southeast Asia's sweltering, humid air. In fact, it was one of the main reasons I wanted to get back to the West. I needed cool air to regain my intellectual and physical vigor. After a long train trip through Europe over the past two weeks, I feel I’ve finally “returned” to the West. A long walk through the Louvre will help that out. Walking through seaside Barcelona, the canals of Amsterdam, pristine Brussels, and the tight alleys of medieval Antwerp will erase the rest of the Eastern residue. Kipling once wrote: Oh, East is East, and West is West, and never the twain shall meet, Till Earth and Sky stand presently at God's great Judgment Seat; But there is neither East nor West, Border, nor Breed, nor Birth, When two strong men stand face to face, though they come from the ends of the earth! What I love about this passage is that the first two lines don’t deny the immense difference between Eastern and Western cultures. But the third and fourth lines of the poem contradict the first two, allowing that individuals of diverse cultures can easily get along, no matter where they’re from. Unfortunately, no one reads Kipling anymore, as he was an unabashed Empire lover. For if they had, they’d know he was no racist. Kipling was a realist. With this in mind, let’s tie together economics and politics to explain why governments, even Italy’s, opt for the intellectually lazy open borders strategy. [9/20: The Beginning Of A Brand-New Inflation Surge?]( Inflation officially peaked in June 2022 at 9.1% -- and ever since, it’s come back down to just 3.2%. But if you think the worst of this crisis is over, think again… Will Sept. 20 mark the beginning of a new – and far more serious – inflation surge? [Click here now to see my urgent warning.]( [LEARN MORE]( Ultra-Low Rates and Ultra-High Asset Prices: Ethically Offensive I’ve written about this many times and am sorry to keep beating a dead horse. But sooner or later, we’ve got to learn that a central bank can’t keep its foot on the yield curve for years and expect good outcomes. Even if we allow for the argument that a certain amount of money-printing enables the economy to restart itself, there’s simply no excuse for keeping the spigot open for multi-year periods or, in the case of 2008-2021, over a decade. In his masterpiece, The Ethics of Money Production, Jörg Guido Hülsmann writes: The characteristic feature of fiat inflation is that it is done openly and legally. However, official approval does not diminish the pernicious effects of inflation; and it is far from removing its ethical offensiveness. Hmmm… “ethical offensiveness.” Yes, depriving prospective families of the means to have children is ethically offensive. And by that, I mean the ability to have a family in a well-priced house on a single income. I genuinely don’t think that’s too much to ask. In the old days, Dad bought a house for $50,000, Mom stayed at home until at least the third kid was in grammar school, and the family wasn’t left wanting. How people try to say we’ve “progressed” on that front is beyond me. You simply can’t progress when a couple needs both people to work and still can’t afford a down payment, let alone a house, because they’re still paying off their student loans. This is because central banks hold rates on the floor far after their stimulating effects have been extinguished. And it transfers wealth from the poor to the already wealthy in the stealthiest way possible. As a result, demographics are disastrous. Not Mass Migration, But Forced Integration And what’s the answer to this demographic disaster? Politicians think it’s mass migration. Unfortunately, politicians also think these migrants will easily fit into their new societies. This clearly isn’t the case. And while France has a terrible integration problem because they were horrific colonial overlords — see Niger and Gabon (currently) — the UK has had similar issues integrating its immigrants. This “forced integration,” as Hans-Hermann Hoppe calls it, is where the demographic project falls. As Sean Gabb writes in [Property, Freedom, & Society]( [Hoppe] regards the mass immigration of the past half-century into Western countries as an instance, not of libertarian open borders, but of “forced integration.” It is different from free trade in goods and services so far as it is not a free choice of individuals to associate as they please. Instead, it is a product of anti-discrimination laws and state welfare policies. In a democracy, politicians will have an interest in importing those most likely to vote for big government, or those most likely to lend themselves to an electoral balkanization that puts an end to the accountability of rulers to ruled. Given enough pressure by the majority, these politicians will make immigration laws that look tough. But these will lead, at best, to random acts of oppression against the sorts of immigrant who, in any rational order, might be welcomed. The policies of indiscriminate welfare that attract paupers into the country, and of political correctness and multiculturalism that prevent the majority from resisting, will continue unchecked. Hoppe wrote about this in 1999 in his now-famous essay, [On Free Immigration and Forced Integration](. Despite all this, the latest country to fall for this codswallop is my very own Italy. They Like Me! They Really Like Me! Once upon a time, Giorgia Meloni was one of the most ardent anti-migration voices in the European Union. As an opposition politician, she warned the New World Order would substitute native Italians with ethnic minorities. She even promised to put in place a naval blockade to stop migrants crossing the Mediterranean. Someone’s pants are on fire. Now that her EU colleagues have shown her some respect, Meloni has presided over a spike in irregular arrivals. She also introduced legislation that could see as many as 1.5 million new migrants arrive through legal channels. From [Politico]( Meloni is presiding over a country that is economically stagnant and in demographic decline. Over the last decade, Italy has shrunk by some 1.5 million people (more than the population of Milan). In 39 of its 107 provinces, there are more retirees than workers. It’s numbers like these that prompted Italy’s Economy Minister Giancarlo Giorgetti to warn earlier this month that no reform of the pension system would “hold up in the medium-to-long term with the birth rate numbers we have today in this country.” Meloni’s legal migration decree estimates Italy needs 833,000 new migrants over the next three years to fill in the gap in its labor force. It opens the door to 452,000 workers over the same period to fill seasonal jobs in sectors like agriculture and tourism as well as long-term positions like plumbers, electricians, care workers, and mechanics. Meet the new boss. Same as the old boss. Wrap Up It’s the same story all over the developed world. Central banks stomped on the yield curve, lowering interest rates to artificial levels. That goosed the asset market for far too long, which made housing, cars, and children too expensive. To clean up the mess, governments didn’t interfere with central banks’ stupid decisions but opened the borders to mass migration and forced integration. In a few years, Italy may be experiencing the same problems France, the UK, and the rest of the developed world face now. Where’s Kipling when you need him? All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( [The #1 Crypto SECRET No One’s Telling You]( This ordinary package hides a surprising crypto secret… [Click here to learn more]( [CLICK HERE to See What’s In the Box]( It’s a little-known device with the power to deliver you FREE crypto income… Every day, with ZERO work! In fact, Stacy H. reportedly made a staggering $10,000 in just ONE YEAR thanks to this device! [Click here now]( to discover what it is, and how YOU can get your hands on one yourself. [LEARN MORE]( In Case You Missed It… Nvidia’s Dog-Day Disaster Greg Guenthner, Editor [Greg Guenthner] GREG GUENTHNER Good Morning Reader, Summer trading is sometimes a slow, tedious affair — especially toward the end of August. Luckily, NVIDIA Corp. (NVDA) earnings gave investors something to talk about late last week. The semiconductor superstar was one of the only interesting mega-cap earnings announcements left on the Q2 docket. And since most of the chip stocks lost their first-half momentum weeks ago, the buy-and-hold crowd was hoping strong results would help encourage a decent bounce heading into fall trading. Valuation concerns also thrust this particular earnings announcement into the spotlight. It’s clear that NVDA shares are expensive by just about every imaginable metric. Shares have soared more than 220% year-to-date – and it was becoming clear NVDA management would need to report a huge beat and strong guidance to keep the party going. Somehow, that’s exactly what happened. Not only did NVDA smash top- and bottom-line expectations, it also raised guidance for the third quarter due to strong chip demand. Analysts tripped over each other to raise price targets, while speculators swooped in to bid the stock higher after-hours. The circus continued through early Thursday morning as NVDA shares broke above $500, posting an 8% gain from the previous day’s close. The financial media was already running victory laps, proclaiming NVDA shares would open at all-time highs and ignite a fresh rally that would spread throughout the tech sector. This is where the situation takes a turn. Almost immediately after Thursday’s opening bell, NVDA began to wobble. Shares quickly retreated back below $500. Then, they dropped some more. By midday, there wasn’t much left of the huge after-hours gain. Unfortunately, the also-rans in the semiconductor space fared much worse. Semiconductors not named NVDA began to break down, dragging the rest of the tech space lower. A Tired Trend This is the type of action you see when a rally is getting a little long in the tooth. Typically, these exhaustion moves are preceded by good news. In this case, strong earnings were first regarded as a bullish catalyst. The only trouble was there were no sidelined buyers left to take the plunge. NVDA’s year-to-date dominance was no secret. It leads its mega-cap peers (and the entire tech space) by a wide margin. Jim Cramer’s pumping the stock on TV and social media on a daily basis. When the dust cleared Thursday afternoon, we were left with some ugly exhaustion moves – big reversal candles that opened above the previous session’s highs that gave up most or all of their gains before the end of the day. [chart] You can clearly see the attempted move above the July consolidation highs toward $500 and subsequent flameout. NVDA continues to retreat from these highs, closing lower on Friday and trapping any late bulls who piled in following the strong earnings announcement. While I don’t believe this is a death blow to NVDA, it will probably take some time before it gets back on its feet again. In fact, it could easily drop back to $375 and retest the gap from May. More importantly, the NVDA debacle is telling us that the tech bulls are a little too eager to get the party started again. Don’t Anticipate — React! Outsized rallies usually need adequate time to digest the gains before posting a new leg higher. As evidenced by today’s chart, NVDA marched higher with virtually no interruption until the stock dipped in early August. The timing of this consolidation makes perfect sense. Remember, we’re still experiencing the dog days of summer trading. Choppy, sideways action could stick around for weeks — or even into the fourth quarter. Only a total lunatic (or Wall Street analyst) would believe NVDA could post another uninterrupted 200% gain into 2024, especially without a hard reset or lengthy consolidation. Putting the move into context with the market, NVDA could also be acting as a tech bellwether. The entire sector could require more consolidation or downside action heading into the fall. This would also line up with seasonal trends and rotation plays we’ve been tracking this summer (energy and industrials, for example). Speculators will likely try to force long-side tech trades and front run any potential bounce over the next several weeks. I don’t think that’s a viable strategy. Attempting to anticipate bounces in these tech names is a great way to get stopped out and chopped up in a sideways market. From a swing-trading perspective, you’re probably better off shorting these tech rallies. Save your longs for other sectors that could begin to stand out heading into September. Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Sean Ring] [Sean Ring, CAIA, FRM and CMT]( is a former banker and financial educator and is the editor of the Rude Awakening. Sean has trained interns and graduates from Goldman Sachs, Morgan Stanley, Citi, Bank of America, Standard Chartered Bank, DBS (Singapore), the Abu Dhabi Investment Authority (ADIA), Bank Indonesia (the central bank), HSBC, Barclays, RBS, and BlackRock. He knows the global economy is being corrupted by forces that most people can't understand and has used his unique and worldly experiences to help people navigate the markets. 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