Graduate macroeconomic theory; How to sterilize fiscal deficit spending

Speaking of spending, it appears Gaza will have a lot of money thrown at it for reconstruction. I was calling this conflict a redevelopment project from the beginning so this news does not surprise me.


A most effective way to sterilize fiscal deficit spending is for the federal government to spend the money outside the nation’s borders. This strategy has at least three benefits.

First, by spending money overseas, the money is not retained within its borders and will not affect domestic price inflation.

Second, by spending dollars overseas, it helps to reinforce the USD as the global reserve and global transaction currency. Every instance that involves spending and accepting dollars outside the country helps the dollar’s standing around the world. This is especially true with war.

Third, by sending dollars overseas, the government facilitates the running of large fiscal deficits. As we can see, not every dollar is the same. COVID stimulus was a foolish form of deficit spending as all those dollars were largely spent within the nation’s borders, driving up price inflation. Most of the money spent overseas stays overseas.

As we can see from this logic, spending money on overseas fighting and detonating bombs is more effective for facilitating fiscal deficit spending and QE than building out domestic infrastructure. Under this method of fiscal deficit spending the world’s collective oligarch, the synagogue of Satan, can more effectively retain its grip on power, while simultaneously consolidating its wealth over the helpless and ignorant populace.

In George Orwell’s 1984, we indirectly see this logic explained by Emmanuel Goldstein who authored The Theory and Practice of Oligarchical Collectivism (The Book), a treasonous counter-history of the revolution that installed INGSOC and The Party as the government of Oceania and which slanders Big Brother as traitor of the revolution.

(Notice how this current collective oligarch employs a similar strategy with their purposeful injection of Donald Trump into the political debate. The “liberals” and Democrats blame Trump for every problem plaguing society, while Trump’s behavior concomitantly destroys any legitimate opposition to the multicultural Marxism that comprises the so-called left).

In Goldstein’s manifesto, he observes that a country that is productive will eventually become prosperous, unless something is done to destroy the fruits of that productivity. War is the ultimate solution to this problem.

According to Goldstein, war is a way of shattering to pieces, or pouring into the stratosphere, or sinking in the depths of the sea, materials which might otherwise be used to make the masses too comfortable with plenty of idle time, and hence, in the long run, too intelligent.

Moreover, all of this overseas spending will eventually be retained by the largest international corporations as profit. It doesn’t matter whether this profit is earned overseas or within the United States. The results are largely the same. Moreover, wealth and power consolidation can continue behind the scenes, largely unchecked.

The most effective way for the world’s collective oligarch to maintain its grip on control is to fight a series of costly and everlasting wars that never truly end. By fighting one overseas war after another, whether the war is real or imagined, the ruling powers keep the population under a state of constant fear and duress, while effectively controlling most domestic inflationary pressures and minimizing the chances for any true societal advancement.

Under our current monetary system, war and overseas spending are absolute necessities. The domestic population cannot advance.

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39 thoughts on “Graduate macroeconomic theory; How to sterilize fiscal deficit spending

  1. Thanks Stone and Andrei for your analyses. The negative effects of the vaccine are what I suspected and you both confirmed that. I also wonder, from your perspective, what would happen if the Fed drops overnight rates? Wouldn’t that action accelerate inflation and make things worse? Could it also freeze or limit credit? I bet the SOS/Fed wants to keep it all sounding copacetic until after the next (s)election and then let it rip.
    The WSJ also had a glib article on today’s numbers, headlined: “Hiring and Wages are Up, Reinforcing the Economy’s Resilience”
    “The U.S. posted surprisingly large gains in both jobs and pay, even though the unemployment rate ticked up to 4%”

    1. It seems that a huge chunk of the fiscal deficit spending is geared toward domestic matters. It’s difficult to rein in inflation when so much of this spending is devoted to the green economy and social justice. Moreover, when we have so many people coming across the border and the government is rolling out the types of benefits that they are extending, the spigots have to remain open.

      Honestly, it’s fiscal suicide to take on so many objectives at once. I just don’t see how they can put the toothpaste back in the tube. Thus, any drop in overnight rates will have an immediate impact on many sectors, especially housing. If we think house prices are expensive now imagine if the FED drops interest rates 100 plus basis points. Look out. (And these fiscal and monetary authorities all know exactly what I am articulating here.)

      This green economy and those trillion dollar subsidies with LGBTQ and black justice, open borders, etc., are just excuses to spend.

      As an investor, I profit from this. If we see the trajectory of UST debt levels diminish, then I would worry about asset prices.

      Of course, knowing what I know about fiscal matters, the only conclusion I can make is that this all has to be intentional. There’s a lot less care about the spending being sterilized, so I assume this is intentional and the cost of living crisis will get much worse. People will be jumping out of windows by the time the solution is proffered.

      This is why I have been begging for those who would listen to buy the assets. SFR housing, owner occupied housing, and stocks for the average person. Of course, this is opposite of what the alt-media recommends. We are to own the income generating assets.

      Indeed, owner occupied housing generates income; there’s an implied opportunity cost and that’s equivalent to the rent we would be paying a landlord. Mark my words, rents will be going up much higher than our mortgages over time.

      Within 3-4 years, if all is well enough, I plan on turning over my rental portfolio to a professional property manager and traveling the country. By then, all my tenants will be white and so will my property manager. I want to buy a house in remote Wyoming and one in Florida (for my profane wife). Maybe a third house in Shenandoah County. Who knows…

      All I know is that I cannot turn over rental properties to professional management in minority majority area like black PG County in MD, as the quality of tenant and rental agent would not be high enough. The rules and regulations in black areas are onerous and definitely favor the tenant over the landlord. Stay away from the blue areas for owning SFRs. You’ll be the enemy.

        1. What you write is hard to read sometimes. But your economic analysis has been spot on for the last 4 years.

        2. Speaking the truth never won anyone popularity contests in this age of deceit. Just ask Jesus about that. Your readers appreciate you. Thank you for having no fear and saying the hard things. The only one we should fear is God anyway.

      1. Business and economic reasons require being racist especially if the colored people hate you because you’re white. It is justified to be racist to protect yourself.

        1. That is correct, sir. That is my advice to the reader. I know how most people think we can all live together in harmony, but human history and nature say otherwise, especially for those who are advantaged and are more effective at growing wealth.

  2. Oh oh… Numbers are very hot on the Establishment survey. Government payrolls huge increase… Bond yields bottoming on a trade.

    Nonfarm Payrolls (May)
    Act: 272K Cons: 182K Prev: 165K

    Unemployment Rate (May)
    Act: 4.0% Cons: 3.9% Prev: 3.9%

    Average Hourly Earnings (MoM) (May)
    Act: 0.4% Cons: 0.3% Prev: 0.2%

    Average Hourly Earnings (YoY) (YoY) (May)
    Act: 4.1% Cons: 3.9% Prev: 4.0%

    Average Weekly Hours (May)
    Act: 34.3 Cons: 34.3 Prev: 34.3

    Government Payrolls (May)
    Act: 43.0K Cons: Prev: 7.0K

    Manufacturing Payrolls (May)
    Act: 8K Cons: 5K Prev: 6K

    Participation Rate (May)
    Act: 62.5% Cons: Prev: 62.7%

    Private Nonfarm Payrolls (May)
    Act: 229K Cons: 170K Prev: 158K

    U6 Unemployment Rate (May)
    Act: 7.4% Cons: Prev: 7.4%

    1. The Household survey looks so much weaker than the Establishment survey…

      The civilian labor force DROPPED by 250,000

      The number of employed DROPPED by 408,000.

      The number of Unemployed ROSE by 157,000

      This is why the unemployment rate rose to 4.0%…

      …And this is why the Participation Rate dropped by 0.2% to 62.5%..

      1. would you attribute these numbers to the effects of the vaccine (both in the increase of gov’t payouts in the first, and the dropping of labor participation in the second)? Would you be able to give us more of your analysis of these numbers, as they appear significant, and I thought this time of year we would generally see an increase of labor participation, not a decrease. Thanks.

        1. I think Andrei’s explanation sums it up fairly well. His reasoning is the only explanation I can come away with, especially since the US Census data continue to show slight increases in the population year over year. I ask why does the labor force in the aggregate continue to struggle? Why the big drop in the number of employed this month? Why the big increase in the number of UNemployed, too? These are statistically significant head scratchers.

          These are questions in which we won’t find answers from the mainstream. I was watching CNBC this morning in the wake of the employment data announcement and it was clear that there was partisanized analysis. The liberal people or those who look like they were Democrats (the ones with an arrogance and gayness in their eyes) downplay the household survey, while more objective analysis noted the discrepancies.

          This is becoming a fairly routine process each and every month. I’m guessing that 9 or 10 months of the past 12 exhibited similar trends. This month was a definite outlier, more than I remember any other time. I do know that despite the establishment survey showing a huge uptick in job creation, the unemployment rate ticked up to 4.0%. A lot of the unwashed were scratching their heads on that one. I think that raised a red flag in the minds of some on the street.

          I wouldn’t necessarily take the large uptick in treasury yields as an indication of the street being naive per se. Rather, the short term drop in longer dated treasury yields was overdone and the headline jobs numbers was just an excuse for yields to pop back up into that cloud.

          My conclusion on this data; I think we on this blog all agree that the sicknesses and illnesses are continuing to drag the household numbers down. I watch it first hand in my inner circles. Andrei is right again in this regard, The Establishment survey is being used to statistically sweep the more true numbers under the carpet. I also observed that we didn’t get a large statistical adjustment several months ago when we should have. This is an election year after all and the show must go on.

      2. It is interesting that the household survey jobs report comes in much weaker than the establishment survey. It is obvious that the establishment is fudging the jobs report to make it look much better than the reality. They are covering up a declining economy so Bidet can look better for election, but I think there is a more nefarious reason why they are concealing the declining labor market.

        The household survey is droopy because sick and dying people drop out of the labor force. In addition, bosses lay off sick and dying people as they are no longer productive. Sick and dead people also do not participate in the labor force. The household survey looks really sick and is getting worse.

        I see the effects of this on the street as customer service has gotten much slower and sloppier.
        I see work effort being more careless. People who don’t feel well don’t care. Those who do feel well enough to work are not motivated as their real wages decline where their bills exceed their income due to inflation. Why get up in the morning when you cannot get ahead.

        1. In addition, those who are well enough to work like myself have to take time off to care for the vaccinated sick family members around us. That also decreases productivity and adds stress to those who do feel like working.

          1. Thinking a little more about the recent jobs data over the past several months, I have to believe there is an agenda to keep the Fed from dropping overnight rates. Almost every month, the establishment data come in relatively hot, while the household release paints another picture entirely. Here’s a blurb from Bloomberg’s Evening Wrap…

            US job growth surged in May and wages accelerated, prompting traders to yet again push back their expected timing of Federal Reserve interest-rate cuts. Nonfarm payrolls advanced 272,000 last month, beating all projections in a Bloomberg survey of economists. Average hourly earnings climbed 0.4% from April and 4.1% from a year ago, both picking up from the prior report. However, the unemployment rate—which is derived from a separate survey—increased to 4% from 3.9%, rising to that level for the first time in over two years. Still, the immediate news on Friday was generally good for American workers, though not entirely for Wall Street. “It’s a very Fed-unfriendly report–an easing-unfriendly report,” said Jay Bryson, Wells Fargo’s chief economist. “Taking this piece of data by itself means the Fed is likely to remain on hold for the next several months.” —

  3. First quarter second read of Productivity is slightly lower then initial reading, but unit labor costs have definitely come back down. They’re still elevated at 4.0%, lower than the 4.7% first read and consensus.

    Initial Jobless Claims
    Act: 229K Cons: 220K Prev: 221K

    Jobless Claims 4-Week Avg.
    Act: 222.25K Cons: Prev: 223.00K

    Continuing Jobless Claims
    Act: 1,792K Cons: 1,790K Prev: 1,790K

    Exports (Apr)
    Act: 263.70B Cons: Prev: 257.60B

    Imports (Apr)
    Act: 338.20B Cons: Prev: 327.00B

    Nonfarm Productivity (QoQ) (Q1)
    Act: 0.2% Cons: 0.3% Prev: 3.2%

    Trade Balance (Apr)
    Act: -74.60B Cons: -76.20B Prev: -68.60B

    Unit Labor Costs (QoQ) (Q1)
    Act: 4.0% Cons: 4.7% Prev: 0.4%

  4. Remember, for maximum financial return with less risk and better landlording experience, any SFR investment must be in Caucasian areas.

    Strasburg VA is on fire! Prices up over 50% since 2020, and keep rising. Almost 90% Caucasian. Conservative investors like I am, seek these areas… Hispanic crime is about 4x higher, black crime is almost 10x higher. Avoid them as neighbors. Your net worth balance sheet will be higher, too. Leave your doors unlocked….

    Why ‘white fortress’ cities are rising up across the South as wealthy residents breakaway from poorer black neighborhoods

    1. I purchased a home in Strasburg in the fall of 2022 for $248,000, and that was fair market value. The current market value right now is about $370,000. I purchased a town home last September for $258,000 and that was fair market value, right now fair market value is at least $300,000. When it comes to real estate investing, white is right.

      I now own five houses in that area. I am closing on another one next week within the city limits. It’s like paradise out there.

      1. The property appreciation in the last few years really is amazing. How are you valuing the properties and determining what makes sense with the elevated pricing or are you able to get into these properties due to 1031 exchanges? From where I’m standing it seems like a small pool of property available and very high price in that area.

        1. Shoot me an email at and I will explain the specifics with the property address. The rent on the property over the past five years has risen by about 50%. I will show the implied cap rates, comps, and why I bought this property. It is a 1031 exchange, all cash, represented myself to reduce my ask by 2% off full ask. There was multiple offers, but I waived all contingencies and accepted the property as is. Be prepared and determined. I only correspondence with the listing agent. He shows me and drafts up the contract as a customer, not a client.

  5. The real reason why people don’t want to work anymore

    I feel bad for the younger folk trying to look for a job and raise a family and buy a house. That’s not happening anymore. Even this mainstream commentator throws in Klaus Schwab’s comments regarding not owning anything. In another few years, home ownership will be a thing of the past.

    I think of the >100 million people that have flooded the borders since 1980 and have driven down the wage base. I marvel at how little people earn at their jobs. The people who lived here have been demoralized and decimated. But don’t say anything, that’s racist and xenophobic.

    Slavery is still alive and well. At least with traditional slavery, slaves were well taken care of, with roofs over their heads, food, medical care, and clothing.. Owning slaves was very expensive and slave owners rarely abused their slaves.

    Today, most people don’t make nearly enough money to accumulate those necessities that were given to the slaves. The majority of workers now don’t make enough money to afford the basic necessities, and with the massive open border immigration of the past 40 years, large employers can pay next to nothing. All the while, workers are now left twisting in the wind.

    Employers today save a lot of money hiring people at today’s low wages, rather than owning them as slaves.

    1. ” At least with traditional slavery, slaves were well taken care of, with roofs over their heads, food, medical care, and clothing.. Owning slaves was very expensive and slave owners rarely abused their slaves.”

      Not that anyone alive today has first hand knowledge, but I have heard this stated by a brilliant man older than me and believe it’s factually correct.

      Dare not say this in public today – and in no way is slavery a moral concept according to Christian values – but thinking about slavery strictly from a business perspective, the statement above makes complete sense. A farm business owner does not buy a tractor and abuse it. He takes care of it so that it can continue to provide years of trouble free service. That I believe is how slave owners looked at slaves. They were also considered subhuman, but that is a moral issue, which is not the scope of my point.

      Today all we hear is how blacks were abused as slaves but never the truth. That long told story has a larger agenda behind it (as we know). Institutions of public education are very valuable to those who benefit from class and race division. Those in politics pander to massive groups of people who are programmed to vote a certain direction based on the decades of falsehoods. It’s nothing more than sports team mentality. Put on your hats and shirts and go act like an angry ape in public. As Mr. Stone has stated, the money flows in favorable directions based on such fables and falsehoods.

      And speaking of Fables and Falsehoods – that is, if I may jump off topic and recommend something for your listening enjoyment. This is an amazingly good album of some of the best original music I ever heard. I had them play at my last car show BBQ about 10 years ago. Give it a listen

      1. Many people today are what the Bible would consider being a slave. These slaves actually think they are free. They are debt slaves and mind slaves, not quite comprehending who’s enslaving them. These slaves populate social media and cry about how they have no money and no hope. They cry, because they have mountains of debt and can only gain menial employment. They cry, because they think they are doing everything they’ve been told was correct, but keep falling further into the abyss. These are the last day slaves.

        Revelation 18:11-13 KJV
        And the merchants of the earth shall weep and mourn over her; for no man buyeth their merchandise any more:
        [12] The merchandise of gold, and silver, and precious stones, and of pearls, and fine linen, and purple, and silk, and scarlet, and all thyine wood, and all manner vessels of ivory, and all manner vessels of most precious wood, and of brass, and iron, and marble,
        [13] And cinnamon, and odours, and ointments, and frankincense, and wine, and oil, and fine flour, and wheat, and beasts, and sheep, and horses, and chariots, AND SLAVES, and souls of men.

        The synagogue media wants us to conflate slavery with Kunta kinte and Roots, lest the people figure out they are the suckers at the poker table. The synagogue wants us to conflate evil governments with Nazism, meanwhile the US Federal government is even much more evil in its deeds and what it has done to its own citizens.

        The synagogue media has convinced us that as long as our leaders aren’t goose stepping and screaming hail Feuhrer or whipping us then we are free.

  6. Good luck, Mexico. The people in Mexico elect the only Jew living there….🤣🤣🤣 LGBTQ and Central Bank wealth consolidation coming to Mexico, too. If you complain, your anti-Semitic.

    Mexico elects a Jewish climate scientist, Claudia Sheinbaum, as president

    What happened

    Mexicans on Sunday elected Claudia Sheinbaum, a climate scientist, former Mexico City mayor and protégé of outgoing President Andrés Manuel López Obrador, as president. Sheinbaum, 61, will be the first woman to lead Mexico and the country’s first Jewish president.

    From what the Laodicean Christians tell me, the Jews are God’s chosen.

    1. This is quite a surprise considering that Mexico is 80% Catholic and Mexicans in general are more traditional anti LBGTQ.

      Also keep in mind that Mexico is notorious for election fraud and vote rigging. That said, then the election of a Jewish woman comes as no surprise. The SoS owns Mexico like the USA and Canada.

      1. Most of that 80% fell for the liberation theology lie that the Jesuits and the LGBTQ synagogue proffer. Hispanics prefer far left socialism.

        1. That is true. Most of the Latin American countries trend toward socialism and communism. They like the promise of free handouts as most are destitute.

          It is a small wonder why Democrats in the US are all for open borders to these Latinos and fast track them to voter status. They are easy votes to keep the Democrats in power. All part of the plan. Trust the plan.

    2. After covid, a lot of people moved to Mexico because apparently it was not as totalitarian as other countries with lockdowns and covid protocol, just like a lot of people moved to Florida for the same reason. I heard so much good at the time about the (now outgoing) Mexican president, like we did with DeSantis; the later showed his true allegiance to Isreal recently, and like most other prominent politicians, has hailed the wailing wall. The election of this new Mexican president makes we wonder if Mexico has become a honey trap as well.

      1. There’s no escape. I recommend just staying put or moving to a rural area with like minded people. Americans anywhere outside the US will be the first ones sacrificed.

        1. I think Americans overseas will be thrown to the wolves when the rising anti-American sentiment around the world boils over. These overseas Americans will be attacked and the U.S. Government will leave them in the wind just like they do with domestic Americans. The U.S. Government does not care for their own citizens.

          1. Already happening. It used to be a big deal for a white American to be killed in another country, but the US government does nothing and the synagogue’s anti- Caucasian propaganda is working well… Stay with like kind for safety.

  7. Thank you for your post here. Excellent analysis and you make it easy to understand. Armchair quarterbacks are know it alls, but make the worst financial and investment choices. You say this in a way that makes it sound ironclad and definitive. I have been listening to you for several years and have done very well, as I think you have, too.

    Don’t listen to family members and people who send hate mail. They hate what you say, because they know you’re right.

  8. UST debt outstanding just punched through its ATH at $34,667 billion. Own the assets. So much of this Democrat generated debt spending is directed domestically. Think about the $15k per EV subsidy. My oh my… Price inflation to remain elevated forever! The Feds already burned through its tax receipts.

    I enjoy reading the MSM articles about how rents are coming down. These are articles out of the Minitrue in Arlington VA DoD. They read like the articles in 1984 about how the reduction in chocolate rations was spun as an increase.

    My rents keep going higher and higher. 50% increases in four years allows me to build out my portfolio and achieve a much higher quality of property.

  9. This hits the nail on the head. I read 1984 and it seems to be playing out in real time today. Donald Trump is playing the role of Emmanuel Goldstein. The Democrats are the INGSOC party.

    War is a convenient racket to keep the masses distracted in constant fear so they cannot see the bigger picture. War also impoverishes those caught in the middle like Ukraine and Gaza as their property and lives get shattered. It also impoverishes those not directly involved as resources that could be used to elevate living standards for the region instead get mis allocated to wars overseas that destroy the resources used in that war.

    War is satanic in many ways as it promotes killing of innocent people and widens the gap between haves and have nots.

    1. Indeed, in this instance, Trump is Goldstein; Just better trained like a top notch kayfabe pro wrestling promoter. Rothschild picked and groomed him for a reason. Ask CIA asset, Alex Jones, what he thinks of Trump.

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