Understandably since 1776 Americans have had mixed feelings about the British monarchy. In reality, most of the legal basis of our freedom and wealth stems from the examples and processes created by the royal courts, inheritance and the Magna Carta. 

However, something all American's will love about the Magna Carta: "with regard to the case of James Somerset, and enslaved African, came before Lord Mansfield in 1772, one of Somerset’s supporters, Granville Sharp, argued that Magna Carta prohibited slavery. Mansfield ruled that there was no basis for slavery in the common law of England and Wales, common law that was underpinned by Magna Carta. Any person in slavery in that jurisdiction must therefore be free. In establishing the rights for some, the English barons inadvertently established the rights for more." 

The British monarchy represents a reality greater than the dreary dread of politics & infinitely greater than the false promise of revolution. An institution devoted to the strength of nation and state, a triumph of civilization over the godless chaos of anarchy and barbarism.

An American cannot appreciate the inheritance we have without acknowledging the influence of the UK's laws and liberties.

Chadwick Hagan
May 06, 2023

Magna Carta Antislavery Reference - https://www.antislavery.org/magna-carta-slavery/

The economy outperformed market expectations in Q1, with annual GDP growth accelerating to 4.5% from 2.9% in Q4. The lifting of Covid-19 restrictions, fading virus cases and government measures to support the property sector more than offset mild external demand. Looking at sectors, a pickup in services activity drove the reading, while industrial output growth slowed slightly despite the normalization of supply chains. Moreover, the real estate market saw a partial recovery; while housing investment continued to decline, home sales rose year on year in Q1. The economy appeared to end the quarter on a strong footing, with retail sales, credit and merchandise exports readings surprising on the upside in March. The first quarter’s GDP outturn puts the government’s cautious target of around 5% growth for 2023 comfortably within reach. 

2023 GDP forecasts have been upgraded for the fourth straight publication. Economic reopening and looser housing restrictions will boost activity. However, slowdowns in developed economies and trade tensions with the West will cap momentum. A further deterioration in relations with the West and renewed regulatory pressure on domestic private-sector firms are key risks. FocusEconomics panelists expect GDP to expand 5.3% in 2023, which is up 0.2 percentage points from last month’s forecast. In 2024, the panel foresees GDP expanding 5.0%. 

Consumer inflation eased to 0.7% in March from February’s 1.0%. Producer prices fell 2.5% annually in March, following February’s 1.4% drop. Price pressures should rise later this year as domestic demand and tourism recover, although the upturn will be checked by car retailer discounts, a stronger yuan, reduced supply disruptions and milder external price pressures. Our panelists forecast that consumer inflation will average 2.3% in 2023, which is down 0.1 percentage points from last month’s estimate. In 2024, our panel sees inflation averaging 2.3%. 

New yuan loans beat market expectations in March, supported by strong growth in loans to both households and corporates. Meanwhile, the People’s Bank of China (PBOC) cut the reserve requirement ratio by 25 basis points in mid-March. The Consensus is for policy rates to be fairly stable ahead, with the ongoing economic recovery reducing the need for further easing. Panelists project the 1-Year Loan Prime Rate to end 2023 at 3.60% and 2024 at 3.60%. • The PBOC allows the yuan to trade within 2.0% of a reference rate which is updated daily. On 21 April, the yuan was down 0.1% month on month at CNY 6.89 per USD. The yuan is seen gaining ground by end-2023 thanks to China’s economic recovery and the likely end of the Fed’s tightening cycle. The rate differential between the Fed and the PBOC will be key to watch. Our panelists see the yuan ending 2023 at CNY 6.78 per USD and 2024 at 6.66 per USD.

https://www.focus-economics.com/

On Jan. 10, 2023, Rep. Buddy Carter (R-Ga.) introduced H.R. 25, the Fair Tax Act, to replace the current tax code with a national consumption tax known as the FAIRtax. “Each household will receive a monthly prebate based on federal poverty levels and household size that will allow families to purchase necessary goods, such as food, shelter, and medicine, essentially tax-free.

This is similar to our current individual exemption and refundable tax credit system,” said Rep. Carter Reps. Andrew Clyde (R-Ga.), Jeff Duncan (R-S.C.), Kat Cammack (R-Fla.), Scott Perry (R-Pa.), Bob Good (R-Va.), Thomas Massie (R-Ky.), Ralph Norman (R-S.C.), Bill Posey (R-Fla.), Gary Palmer (R-Ala.), Jim Banks (R-In.), and Barry Loudermilk (R-Ga.) joined Rep. Carter as sponsors of the bill.

The beginnings of the Fair Tax originated in the 1990s. In 1995 and 1996, a number of tax reforms attempting to move away from the present income tax were proposed by Republicans.

Steve Forbes promoted the idea of a 17 percent flat tax, and then the first iteration of a fair tax / flat tax bill was introduced in 1999 by Georgia congressman John Linder.

Since then the “FAIRtax” has become the leading tax reform movement in the country. The bill eliminates all personal and corporate income taxes, the death tax, gift taxes, and the payroll tax, and replaces them with a national retail sales tax.

Further, the Fair Tax would eliminate the need for the Internal Revenue Service and the filing of forms and keeping of receipts. Each of taxpayer gets their entire paycheck and the prebate for their family’s size.

Therefore, a taxpayer pays their federal taxes each time there is a purchase of “new” retail goods and retail services.

At the moment, the FAIRtax Act has a good amount of support, but it needs more. Democrats and certain GOP members in Congress are rolling up their sleeves to fight the fight against dismantling our current income tax system. So are special interest groups.

While it’s not surprising that the politicians who oppose the FAIRtax Act may be misguided, or influenced by lobbyists, the irony is that the FAIRtax Act hits tax policy where it matters most, and offers up a worthwhile solution.

Read more of Chad's article at The Epoch Times

Economy, Inflation Continue Hot Streak in January as New Home Sales Receive Boost from Temporarily Lower Mortgage Rates

Key Takeaways:

Gross domestic product (GDP), adjusted for inflation, increased at a 2.7 percent annualized rate in Q4 2022, according to the second estimate from the Bureau of Economic Analysis (BEA), a downgrade of two-tenths from the advance estimate. The update was due largely to a downward revision to consumer spending that was partially offset by an upward revision to business fixed investment.

Personal income, adjusted for inflation, was flat in January, according to the BEA. However, due to updated inflation-adjusted tax brackets at the beginning of the year causing a lower effective tax rate compared to December, real disposable personal income rose 1.4 percent. Real personal consumption expenditures were up 1.1 percent. The saving rate moved up two-tenths to 4.7 percent, its highest level in a year, though it remains suppressed compared to pre-COVID levels. The PCE price index rose 0.6 percent in January, a sharp acceleration from the upwardly revised 0.2 percent gain in December. Core PCE and core services less housing also increased 0.6 percent over the month and were up 4.7 percent and 4.6 percent over the year, respectively.

Existing home sales declined 0.7 percent in January to a seasonally adjusted annualized rate (SAAR) of 4.0 million, the lowest level since 2010, according to the National Association of REALTORS®. The inventory of existing homes for sale rose 2.1 percent to 980,000. The months’ supply was flat at 2.9 and the median sales price of existing homes sold was up 0.7 percent from a year ago, the slowest annual growth rate since 2012.

New single-family home sales rose 7.2 percent to a seasonally adjusted annualized rate of 670,000, the highest rate since March 2022, according to the Census Bureau. We believe the jump likely reflects the temporary decline in mortgage rates and general volatility in the series. New homes for sales dipped 2.9 percent to 439,000, though the number of new homes for sale that are completed rose slightly. The months’ supply declined eight-tenths to 7.9.

The minutes from the Federal Open Market Committee (FOMC) January 31-February 1 meeting showed that committee members viewed economic conditions as generally slowing, and inflationary pressures as moderating but remaining too high. As such, “almost all” participants supported slowing the pace of rate hikes to 25 basis points, though a few participants favored a larger rate hike.

Read the full research release at Fannie Mae

Article by Chadwick Hagan

The Epoch Times

Will the European Union or certain countries in the EU ban meat production in order to meet emission regulations? In short, the answer is yes. There is a very real possibility in the near future that a member country (probably Sweden, Denmark, or the Netherlands) will impose a tax or an outright ban on meat production.

Why Sweden, Denmark, or the Netherlands? While this sounds absolutely crazy, part of the rationale is to avoid legal issues with the EU. A handful of European countries have legally binding net-zero plans for emissions and climate metrics, and the Netherlands, Sweden, and Denmark are small countries with large agricultural footprints. Small landmass with heavy agriculture industry makes for an easy target.

I wrote about such conflicting issues last month with the Netherlands closing down farms. The Dutch, like the Swedes and the Danes, are very serious about reducing emissions, as well as limiting meat consumption. The problem is they consume and produce lots of meat.

Read the full article at The Epoch Times

Predictions from Saxo Bank:

A country agrees to ban all meat production by 2030
In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.


Widespread price controls are introduced to cap official inflation
History tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.

UK holds UnBrexit referendum
Following a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.


USDJPY fixed to the USD at 200 as Japan overhauls financial system
Following the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.


Tax haven ban kills private equity
With the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.

Read more at Saxo Bank

HOW TO MAKE A MINT: THE CRYPTOGRAPHY OF ANONYMOUS ELECTRONIC CASH

Laurie Law, Susan Sabett, Jerry Solinas

National Security Agency Office of Information Security Research and Technology

Cryptology Division

18 June 1996

With the onset of the Information Age, our nation is becoming increasingly dependent upon network communications. Computer-based technology is significantly impacting our ability to access, store, and distribute information. Among the most important uses of this technology is electronic commerce: performing financial transactions via electronic information exchanged over telecommunications lines. A key requirement for electronic commerce is the development of secure and efficient electronic payment systems. The need for security is highlighted by the rise of the Internet, which promises to be a leading medium for future electronic commerce.

Electronic payment systems come in many forms including digital checks, debit cards, credit cards, and stored value cards. The usual security features for such systems are privacy (protection from eavesdropping), authenticity (provides user identification and message integrity), and nonrepudiation (prevention of later denying having performed a transaction) .

The type of electronic payment system focused on in this paper is electronic cash. As the name implies, electronic cash is an attempt to construct an electronic payment system modelled after our paper cash system. Paper cash has such features as being: portable (easily carried), recognizable (as legal tender) hence readily acceptable, transferable (without involvement of the financial network), untraceable (no record of where money is spent), anonymous (no record of who spent the money) and has the ability to make "change." The designers of electronic cash focused on preserving the features of untraceability and anonymity. Thus, electronic cash is defined to be an electronic payment system that provides, in addition to the above security features, the properties of user anonymity and payment untraceability..

In general, electronic cash schemes achieve these security goals via digital signatures. They can be considered the digital analog to a handwritten signature. Digital signatures are based on public key cryptography. In such a cryptosystem, each user has a secret key and a public key. The secret key is used to create a digital signature and the public key is needed to verify the digital signature. To tell who has signed the information (also called the message), one must be certain one knows who owns a given public key. This is the problem of key management, and its solution requires some kind of authentication infrastructure. In addition, the system must have adequate network and physical security to safeguard the secrecy of the secret keys.

This report has surveyed the academic literature for cryptographic techniques for implementing secure electronic cash systems. Several innovative payment schemes providing user anonymity and payment untraceability have been found. Although no particular payment system has been thoroughly analyzed, the cryptography itself appears to be sound and to deliver the promised anonymity.

These schemes are far less satisfactory, however, from a law enforcement point of view. In particular, the dangers of money laundering and counterfeiting are potentially far more serious than with paper cash. These problems exist in any electronic payment system, but they are made much worse by the presence of anonymity. Indeed, the widespread use of electronic cash would increase the vulnerability of the national financial system to Information Warfare attacks. We discuss measures to manage these risks; these steps, however, would have the effect of limiting the users' anonymity.

This report is organized in the following manner. Chapter 1 defines the basic concepts surrounding electronic payment systems and electronic cash. Chapter 2 provides the reader with a high level cryptographic description of electronic cash protocols in terms of basic authentication mechanisms. Chapter 3 technically describes specific implementations that have been proposed in the academic literature. In Chapter 4, the optional features of transferability and divisibility for off-line electronic cash are presented. Finally, in Chapter 5 the security issues associated with electronic cash are discussed.

To read the full transcript, click here. 

The S&P 500 jumped Thursday in one of the last trading sessions of the year but remained on track to close out its worst year since the 2008 financial crisis. broad-based stock index added 66.06 points, or 1.7%, to 3849.28The pulled backbroad-based stock index added 66.06 points, or 1.7%, to 3849.28, its largest one-day gain of the month. The technology-focused Nasdaq Composite gained 264.80 points, or 2.6%, to 10478.09. The Dow Jones Industrial Average added 345.09 points, or 1%, to 33220.80. U.S. stock benchmarks had pulled back Wednesday.The gains stretched across industries Thursday, with all 11 of the S&P 500's sectors advancing for the day. Tech stocks were among the best performers, with some recent stock-market losers outperforming the broader market. Tesla shares, for example, shot up $9.11, or 8.1%, to $121.82. They remain down 65% for the year. Shares of Apple, Alphabet and Meta Platforms, which are headed for one of their worst years on record, also outperformed the broader market, adding at least 2.8% each. to end the yearWith just one trading session left in 2022, many investors are likely to end the year nursing heavy losses.

- Caitlin Ostroff and Gunjan Banerji from WSJ

December 27, 2022

FocusEconomics Consensus Forecast Major Economies - January 2023

Economic Outlook 

The economy will come close to stagnation next year on elevated interest rates and slowdowns abroad. Fairly stable government spending growth and strong oil exports should support activity somewhat. A prolonged housing market correction, sticky inflation, and more-aggressive-than-expected rate hikes domestically and in the U.S. are downside risks. 

After returning to sequential growth in Q3 following two consecutive quarterly contractions, the economy should have expanded at a mild pace in Q4. Consumer spending has likely been supported by easing inflation and a robust labor market, while fixed investment is seen shrinking at a softer rate than in Q3. However, government spending growth is forecast to have eased, while exports are projected to fall into contraction as external demand ebbs. Looking at available data, personal consumption expenditure rose 0.8% month on month in October, while job gains beat market expectations in October and November. 

Less positively, retail sales were weaker than expected in November, while the private-sector composite PMI fell throughout the quarter. Moreover, the real estate sector is feeling the pinch from higher interest rates, with housing starts falling for the third straight month in November. After this year’s slowdown, the economy is forecast to barely grow in 2023, as tighter monetary policy and a downturn abroad weigh on activity. That said, strong energy exports will continue to provide support. Faster-than-expected Fed tightening is the key downside risk. Potential difficulty raising the debt ceiling and heightened tensions with China also cloud the outlook. 

FocusEconomics panelists see GDP growing 0.3% in 2023, which is unchanged from the previous month’s forecast. In 2024, our panel sees the economy expanding 1.3%. Inflation came in at 7.1% in November, down from October’s 7.7% and undershooting market expectations. November’s figure marked the lowest inflation rate since December 2021. Price pressures should continue to decline going forward, aided by further interest rate hikes, a tough base effect and the gradual easing of external price pressures. 

FocusEconomics panelists see inflation averaging 4.1% in 2023, which is unchanged from last month. In 2024, our panel expects inflation to average 2.6%. At its mid-December meeting, the Fed raised the target range for the federal funds rate by 50 basis points to 4.00–4.50%, following four successive 75 basis point hikes. Our panelists see interest rates peaking at close to 5% in the middle of next year before declining by end-2023. The discrepancy among panelists is large, with an end-2023 forecast spread of 225 basis points. Our panelists project the upper bound of the federal funds target range to end 2023 at 4.68% and 2024 at 3.40%. 

The dollar index traded at 104 on 20 December, down 2.9% month on month due to lower-than-expected inflation data spurring market hopes of a more dovish Fed. However, the dollar index is still up around 8% so far this year. Looking ahead, geopolitical tensions, the health of the global economy and monetary tightening will be the key determinants of dollar strength. Composite PMI: The dollar index traded at 104 on 20 December, down 2.9% month on month due to lower-than-expected inflation data spurring market hopes of a more dovish Fed. However, the dollar index is still up around 8% so far this year. Looking ahead, geopolitical tensions, the health of the global economy and monetary tightening will be the key determinants of dollar strength.

The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) decreased 4.1 points in October to 56.7, its eighth consecutive monthly decline and lowest reading since the inception of the index in 2011. Five of the six index components decreased month over month, including those associated with home buying and selling conditions, as persistently high home prices and unfavorable mortgage rates continue to fuel consumers’ housing affordability concerns. Only 16% of respondents indicated that now is a good time to buy a home – a new survey low – while the percentage who believe now is a good time to sell a home decreased sharply from 59% to 51% in October.

Hurry if you’re selling, halt if you’re buying, stay if you’ve borrowed, finance experts advise.

The Office for National Statistics announced on August 17th that UK inflation rose to 10.1%, from 9.4% two months earlier. The Bank of England expects it to further increase, peaking at 13.3% in October. The accompanying higher interest rates, currently at 1.75%, and bleak two-year economic outlook generally means bad news for homebuyers, landlords and renters across the UK.

Top market analysts at CMC Markets expect interest rates to further rise to 2.25% in September. This directly impacts mortgages on variable rates – around 1 in 5 households in the UK – and another 3.1 million whose fixed-rate periods expire in 2022-2023, according to UK Finance estimates. Borrowers whose repayments are directly linked to the base rate, as set by the Bank of England, will now face mortgage repayments at rates between 3% and 4%, up from 1.75% and 2.75% only five months earlier. This will inevitably spill into rent prices.

CMC Markets analysed the latest data for June 2022 from HM Land Registry, published on August 17th, and concluded that the likely tendency for house prices is in a temporary slowdown, which is good news for those waiting a little longer to buy a home.

Michael Hewson, Chief Market Analyst at CMC Markets comments: “Houses sold in June 2022 only increased in price by 1% compared to May, whereas, last year, this constituted a much more generous 5.7% surge. This is only the first month this year for prices to slow down at such a fast rate, so some caution before jumping to conclusions is advised. Remember, house prices may be slowing down, but they are not decreasing. Importantly, since this is transactions data processed at the time, it does not take into account the big leap in interest rates that the Bank of England announced later that month, let alone the even bigger hike in August.

“Therefore, despite the soaring inflation and rising consumer prices across the board, UK house prices appear to be trailing behind because demand for homes has generally come to a screeching halt. Most buyers are weathering the storm for a few more months at least, while some are also working out how the cost of living crisis will pan out in the medium term so that the new mortgage is not squeezing their pockets beyond their comfort zone.

“For those still keen to get on the property ladder, there are plenty of fixed-rate banking products that can insulate them from the current spiralling interest rates on mortgages. They should, however, prepare for the possibility of being faced with higher-than-expected repayments once the fixed rate period expires, as the new variable rates are at the lender’s discretion. Fixed rates are not a cure-all either, as they may now be set to a higher level to start with.

“The buy-to-let market is equally volatile. Landlords will either pass the increased mortgage repayments onto tenants by increasing their rent or simply sell fast to lock in a better price. Right now though, those already on the property ladder are generally better off staying put rather than moving or re-mortgaging. They would not get a good deal on their old house in this market and may likely end up losing more money overall.”

What did the Bank of England do earlier in August?

The Bank of England explained that the rise in interest rates was necessary due to external pressures which are expected to persist. This means that British firms and residents will continue to feel this weight reflected on rising domestic prices, wages outpaced by soaring inflation, and even higher mortgage repayments, despite the Bank’s attempt to widen the borrowing pool through less restrictive mortgage rules.

Although historic, the Bank’s decision was not a surprise for trading analysts at CMC Markets, a London-headquartered financial services company, who believe the Bank was expected to raise interest rates higher than 1.25% during the June meeting, as a means to keep import inflation in check. This is on the backdrop of a 10% year-to-date depreciation of the British pound sterling against the US dollar and an indication from the Federal Reserve, the US central bank, of a further interest rate increase by 0.5% or 0.75% in September.

Michael Hewson comments: “The UK currently fares worse than both the EU and the US. This is due to its closer dependence on energy shocks than the States and less government intervention to soften the blow compared to its European counterparts.”

What’s next and when will things calm down?

Other than adjusting the interest rates to the accurate level to keep abreast of import inflation, the economic projections for the UK paint a bleak outlook for the next two years.

The UK is projected to enter a recession in the final quarter of this year, the Bank of England announced. The country’s economy will contract by 1.25% in 2023 and 0.25% in 2024, however, inflation is becoming a much bigger long-term threat, with unrealistic chances of falling back to the desired 2% much before 2024.

The current political race for the Conservative Party leadership and the consequent fiscal policies promoted by the new British government is a major factor to take into account for any inflation, GDP, and unemployment projections and investment decisions.

As it stands with the current measures, inflation is expected to peak at 13.3% in October – a sharper increase than the Bank anticipated in June, originally estimated at 11%. It will continue to rise throughout 2023 only to decline in 2024.

Meanwhile, forecasts for the Consumer Price Index (CPI) are less optimistic now, expected to decrease only to 9.5% in the third quarter of 2023, although the Bank anticipates a sharp fall in prices immediately thereafter.

Selling prices are set to increase to reflect rising costs while real household post-tax income is expected to plunge in 2022 and 2023. The Bank predicted that core prices will peak at 6.5% this year, meaning that, in the following six months, food and energy will constitute more than half of the headline CPI.

The next meeting for the Monetary Policy Committee, where the Bank of England will decide what the new base interest rates might be, is set for September 15th.

This piece has been syndicated by Chaganomics for CMC Markets.

About CMC Markets: CMC Markets is a leading global provider of online financial trading and institutional technology solutions, offering clients the opportunity to trade a broad range of financial instruments through its award-winning spread betting, CFD and share trading platforms*. Established in 1989, headquartered in London and listed on the London Stock Exchange as a constituent of the FTSE 250 index, CMC has offices in Australia, China, Singapore, and across Europe. Over 300,000 active trading and investing clients worldwide trade on the company’s proprietary platforms, native mobile trading apps and MetaTrader 4. Clients can trade on thousands of instruments across forex, indices, commodities, shares, share baskets, ETFs and treasuries. The platform is backed by competitive pricing and dedicated 24-hour customer service, whenever the markets are open.

Just wrapped up an article for a column and I wrote the following: There is a risk that a prolonged slowdown in China could weigh down the rest of the interconnected developed world. There is alot of talk of China’s real estate industry eventually slowing down and mimicking Japan's ten year long “lost decade” that occurred after Japan’s unfathomable price bubble. During that time the paper value of Japan's aggregate real estate was four times that of the United States; the ward Chiyoda-ku was more valuable than Canada and Tokyo’s 280 acre royal palace was considered more valuable than the entire state of California.

That said, I decide to type up a quick blog post about the mother of all property bubbles, Japan 1986-1991. The Japanese asset price bubble (baburu keiki, "bubble economy") was an economic bubble until early 1992, then the price bubble burst and Japan's economy stagnated.

According to HBR:

News reports indicate that in 1988, Japan’s theoretical land value surpassed by four times that of all land in the United States, a country nearly 25 times larger than Japan. Another real estate bulletin: the calculated cash value of a single ward in downtown Tokyo—Chiyoda-ku—could purchase all of Canada. And another: land in Tokyo’s Ginza shopping district is selling for $250,000 a square meter.

Americans who ask themselves how the Japanese managed to buy up a quarter of California’s banking market in such a short time, how they effortlessly outbid all comers for the Rockefeller Group or any of dozens of other major and minor U.S. corporations, or how they are so rapidly and successfully transferring manufacturing onto an international base after decades of insisting that such a thing was impossible, will find large elements of the answer in Tokyo’s real estate listings. The creation of massive amounts of paper assets, the collateralization of them through huge volumes of low-interest lending against such assets, or the realization of cash based on the same assets through the volcanic upwelling of share prices on the Tokyo stock market, and the export of the resulting capital through conversion of the yen into vastly cheapened dollars is a process that defines both how big and far-reaching this new Japanese “money machine” is. It also shows how simply and efficiently it works.

Read the rest of the 1990 article at HBR.