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"We are the first administration in 123 years that achieved a zero deficit after interest payments.

I didn't come here looking for shortcuts, but to turn the page of our decadent history. My task is not to look like a good guy, but to do good. Even if the cost is that they call me cruel.

Today the National Congress is proposing expenses without calling the source to sustain them, and without caring whether it implies issuing money or not.

As Sun Tzu said, 'the coward ruler is able to set his own country on fire, as long as he reigns over its ashes.' It is politically advantageous for politicians to pass off as defenders of the disadvantaged ones, because they don't recognize nor suffer from the direct impact of their inflationary policies destroying the purchasing power of the people."

President Javier Milei (President of Argentina).

Wow, that is a leader; what an inspiration.

On Monday the total government debt in the US crossed $37 trillion, with no end in sight. I added a rolling annual growth subplot, which highlights how the government accelerated spending after the dot-com bust, the global financial crisis, and the COVID pandemic. The compound annual growth of debt since 1993 is 6.93%.

The Treasury General Account, the government’s bank account, was on its way to zero until Congress passed a new debt ceiling. Last week was a big week for Treasury auctions, and tariff revenues helped fill up the coffers. The can has been kicked down the road for the time being, and a crisis has been averted for the short term. It will be interesting to see how Treasury manages the TGA, as it likes to have it sit around $500 - 700 billion. That is less than 5 days of federal cash outflows.

Inflation numbers were released yesterday. The market loved them. I am not sure why; core inflation is still over 3%. I am sticking with my stagflation forecast.

I was discussing with my brother-in-law this morning the prospect of QE infinity² should the need come to bail out any economic fallouts, and this chart came to mind. There is an obvious relationship between the increase in money supply and inflation. If we think civil society is on the precipice at the moment, job losses and inflation will see a break in the fabric of society that will only amplify the nihilist despair and lead to revolution. Don’t think this is far-fetched; we are seeing this play out across the world in real-time in various forms.

I have the flu with a runny nose, and I am feeling very sorry for myself, so if this makes you want to slit your wrists, it's ok; join the club.

This morning the front page of The Australian newspaper reads:

“The union movement will push for next week’s productivity roundtable to support shorter working hours, including a four-day working week, for Australians without any loss of pay.”

Australia already has a productivity crisis. How do you even respond to this? The lucky country needs to start preparing for when luck runs out.

To end off my observations while drowning in self-pity, I thought I would stick with my negative theme.

You can imagine my response to reading an article in today’s WSJ where a 23-year-old let go from Open.ai with no investment experience started an AI-focused hedge fund and raised $1.5 billion. I am sure there are many readers of this letter shaking their heads, as raising that kind of money is friggin hard for a hedge fund manager with pedigree and an exceptional track record.

Leopold Aschenbrenner sounds like an aristocrat. He must give a killer presentation, or he knows the right people. This comment he made last year on a podcast made me want to slap him. “We’re definitely going to do great on investing.”

Ethereum enjoyed a big 8.8% rally yesterday. It's the 92nd time it had a daily move above 8%. Tommy Lee is probably more unbearable these days. Shorts are at a record, which they have been for a few weeks. Each new high is probably slaughtering the shorts, which is helping drive these powerful thrusts.

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