Inflation soared to 4,2% in April of 2021, and that`s a big jump from 2,6% in March. The stock market declined while the inflation rate came in well above market forecast of 3,6%, and this is the highest reading since September 2008.
The biggest increases were recorded for gasoline (49,6% vs 22,5% in March), fuel oil (37,3% vs 20,2%) and used car and trucks (21% vs 9,4%). It`s interesting to see the inflation slowed for food (2,4% vs 3,5%).
The jump in inflation is the highest in 13 years, and Wall Street sent the stock down on Wednesday in a broad market sell-off. Tech stock were hit hard as higher interest rates are threatening to undermine the valuations of those companies.
Nasdaq is down about -5% so far this week, but the European markets ended higher on Wednesday as stocks in Europe recovered from a global sell-off sparked by concerns that rising inflation will prompt central banks to tighten monetary policy sooner and more abruptly than expected.
Federal Reserve`s vice chair, Richard Clarida, had some dovish comments, and that helped calm nervous markets. He said that the twin shocks of a disappointing payroll report and higher inflation in April hadn`t changed the central bank`s view on maintaining its current ultra-accomodative policy.
Trump cutted taxes and MSM said he was crazy. It is the republicans job to have as low taxes as possible. It is their policy. The same cannot be said about the democrats.The Biden administration will discuss spending with top lawmakers this week, and republicans think it sounds scary.
Biden wants to increase the taxes and that can have an impact on businesses and money makers. On top of that we also have inflation, which is also a hidden tax. Add higher interest rate on top of that. Bill Clinton did much of the same in the 90`s and as long as I can remember, it went well. But this time is probably different with covid-19 and lockdown.
Investors expected more than 1 million jobs in april, but only 266 thousand is what the Biden administration saw come in. They also expected unemployment rate at 5,8% but it jumped to 6,1% and all this was a big, big, big surprise to the market, and investors sent the market down on Monday.
Things have changed in the White House, and Maria asked Mr Mulvaney when was the last time the government gave $300 to people on a permanent basis. «If you pay people not to work, they are not going to work,» Mulvaney said.
I need to follow up my recent article about tax, GDP, a free lunch and big governments. The Biden administration is calling for a tax hike and a much bigger government. Is the United States on the way to be a socialist country like France? If so, how would that be?
Let`s take a look at France. The biggest welfare state in the world. No other coutries in the world spend more money on welfare than the French government. No other coutries has higher taxes either.
But who is protesting a lot? No other countries in the world are protesting more than the people of France, and the yellow vest protesters showed us that. There were multiple reasons for all the protests in France. What they all had in common is that they were all dissatisfied.
Does the people of the United States really want to be a socialist state like France?
First of all; lets talk about tax. No other countries in the world have higher taxes than France. Personal income tax has dropped to 45%, down from 59,6% about twenty years ago. In other words; half of your hard earned money goes to the government.
Corporate tax rate in France dropped to 28% under president Macron. Do doubt that Macron is doing something right. A Trump strategy that is boosting the economy with lower taxes (but that was before the covid attack).
In the early 80`s, the corporate tax rate in France was at a record high with 50%. All that happened under President Fracois Mitterand who served as a President of France from 1981 to 1995, the longest time in office in the history of France.
Mitterand started political life on the Catholic nationalist right, but joined the resistance and moved to the left. He opposed Charles de Gaulle`s establishment of the Fifth Republic.
He invited the Communist Party into his first government, which was a controversial decision at the time. In the event, the Communists were boxed in as junior partners and, rather than taking advantage, saw their support erode. The left the cabinet in 1984.
Interestingly, right after that, the taxes started to decline. Mitterand followed a radical left-wing economic agenda, including nationalisation of key firms, but after two years, with the economy in crisis, he reversed course.
He pushed a socially liberal agenda with reforms such as the 39-hour week, and the end of a government monopoly in radio and television broadcasting.
His partnership with German Chancellor Hermut Kohl advanced European integration via the Maastricht Treaty, but he reluctantly accepted German reunification. By the way; he was also the only French President to ever have named a female Prime Minister; Edith Cresson.
Beyond making the French left electable, Mitterand presided over the rise of the Socialist Party to dominance of the left, and the decline of the once-mighty Communist Party (as a share of the popular vote in the first presidential round, the Communists shrank from a peak of 21,27% in 1969 to 8,66% in 1995, at the end of Mitterand`s second term).
As you can see, the popularity of the Communist Party declined from about 21% to 8%, but so did the corporate tax rate under Mitterand too.
But taxes need to come from someone, and that is the people. How is that going to work out if millions are unemployed? In France, the unemployment rate has always been high. It dropped to 8% in December of 2020, down from 9,1% in the previous period.
The number of unemployed people decreased by 340 thousand to 2,4 million. That sounds expensive. Someone has to pay for it.
France spend nearly one third of their GDP on social welfare, according to OECD. France are on top of the list (27,5) while the U.S is number 22 with 14,3% (as a percentage of GDP).
If we look at total net social spending, France is still at the top with 31,7%, but interestingly, the U:S is second with 30%. Total net social spending takes into account public and private social expenditure, and also includes the effect of direct taxes (income tax and social security contributions), indirect taxation of consumption on cash benefits, as well as tax breaks for social purposes.
Top 20 list of all the countries with tax revenue as a percent of GDP from 40% to 50% are all from Europe. except one; Cuba, at number 8 on the list. A communist country among all the European countries.
The debt in France is skyrocketing. Under Mitterand, the debt to GDP was about 20. Now, under Macron it has increased to 115,70 percent in 2020 from 97,60 percent in 2019.
At the same time, Government Budget in France decreased to -9,20 percent of GDP in 2020 from -3,10 percent in 2019. In other words; the government spends more money than it takes in from taxes and other fees.
So, socialist welfare state France has more debt than the United States. Devt to GDP in the U.S increased to 107,60 percent in 2020, up from 106,90 percent in 2019.
The unemployment rate is also lower in the U.S. The unemployment rate fell to 6 percent in March of 2021. The U.S government is also spending more money than they have. In 2019, the U.S recorded a government budget deficit equal to 4,60 percent of the GDP, but it`s expected to be about 13 percent in 2020.
On top of all the taxes, people in France also need to pay for the roads. A typical socialist country has toll roads. From Boreaux to Paris, you need to pay 55,60 euros for Classe A and 85,60 euros for Classe B.
All the money you earn from Janury to June goes to the government. The govenment will give the money you give them to sick people who ask for free healthcare. State healthcare insurance is available to everyone staying in France for more than three months.
The French Social Security system runs this insurance (called PUMA), and this insurance covers about 70% of the medical costs, and in some cases, even 100% of the costs. The state also pays for every child`s education from 6 to 16 years old.
So, if you pay nearly half of your hard earned money to your welfare state, and drive a car from Boreaux to Paris often, you have to ask yourself what your real tax actually is?
Let`s face it; Joe Biden is the most popular president in the United States ever. More popular than Barrack Obama. More popular than Bill Clinton. What people actually voted for is bigger government, more government spending and more taxes.
Biden is not talking much to the Media, but after 100 days, he held a speech, and that speech scared the hell out of many people in the United States. One of them is Lindsey Graham. Biden scared the hell out of me tonight, he said.
He look weak as a commandor in chief, and he embraced socialism, Graham said.
The Media Mob attacked Trump for his border policy, but only a few is talking about the border crisis they have now. Biden talked about problems like racism, guns, virus and money, but didn`t say much about the border crisis they`re facing now.
He attacked rich and wealthy people that created the wealth in the United States. He want them to pay more money, so the government can grow bigger. If Biden`s policy works, why are GDP per capita in the U.S better than socialist countries?
Wall Street Journal Editorial Board had this headline earlier this week; «Biden`s Cradle-to-Grave Government.» His latest $1,8 trillion plan rejects the old social contract of work for benefits. Something that have worked under Clinton, Bush and Obama. But now, it seems like it is a new era. A socialist era.
All the people behind Joe Biden assume that the people who voted for him love his tax hikes and bigger government. In November 2022, we will find out if they are right….
The tension in the South China Sea is very high, and the main reason for that is the CCP. They claim it`s their territory. China`s claim to the sea is based both on the law of the Sea Convention and its so-called «nine-dash» line.
This line extends for 2,000 kilometers from the Chinese mainland, encompassing over half of the sea. This consept is important: it means that by definition, the South China Sea is a shared maritime space.
But why is South China Sea so dangerous? The area is poorly charted, making it exceptionally dangerous to navigate. The major Singapore-to-Hong-Kong routes go well to the west and east of the area, and this is one of the reasons why the South China Sea is so important for the U.S, but also for the Global UK.
Maintaining freedom of navigation is a fundamental interest of the U.S. Unhindered navigation by all ships and aircraft in the South China Sea is essential for the peace and prosperity of the entire Asia-Pasific region, including the United States.
Since the two-day clash of arms between China and the former Republic of Vietnam (South) in January 1974, the Paracels have been firmly in Chinese control, while the Philippines, Taiwan, and Vietnam are each holding a part of the Spratlies.
This is a dangerous global conflict, and China`s sweeping claims of soverignty over the sea, and the sea`s estimated 11 billion barrels of untapped oil and 190 trillion cubic feet of natural gas, have antogonized competing claimants Brunei, Indonesia, Malaysia, the Philippines, Taiwan and Vietnam.
Philippine President Rodrigo Duterte is warning; if the the South China Sea dispute with China escalates, «it will be bloody.»
President Duterte has said he is prepared to send military ships to «stake a claim» over oil and mineral resources in the South China Sea, while noting that challenging Beijing in the disputed waters will only lead to violence.
«If we go there to assert our jurisdiction, it will be bloody,» Duterte said in a televised briefing, his first remarks after hundreds of Chinese vessels were spotted at a disputed reef in March.
Not only the U.S marines are one the way to the South China Sea. So are Britain, with a huge naval force. The war-drums is also a wake-up call for Australia.
The largest naval flotilla assembled by Britain in recent years will set sail in May on a months long voyage through tha Pacific, the country`s Defence Ministry said.
«When our Carrier Strike Group (CSG) sets sail next month, it will be flying the flag for Global Britain, projecting our influence, signaling our power, engaging with our friends and reaffirming our commitment to addressing the security challenges of today and tomorrow,» UK Defence Secretary Ben Wallace said on Monday.
«The UK is not stepping back but sailing forth to play an active role in shaping the international system of the 21 century,» Mr Wallace said.