Your Not In Woodstock Anymore, Dorothy (Part 1)

If you don’t think the world has become unhinged, consider just a few of the top ticks from today’s madness:

• Gold broke the $2,000 per ounce barrier and closed at an all-time high of $2036;
• The 10-year treasury yield swooned yet again and closed at an all-time low of 0.508%;
• The stock market was open—so the NASDAQ posted another all-time high of 10,941, meaning that it is up 22% for the year—the Covid and the 33% GDP collapse be damned;
• The bond market was open, so the US Treasury announced its borrowing plans for 2020 will now weigh-in at $4.5 trillion—-a debt amount that originally took the Federal government its first 212 years to accumulate;
• The Fab Five tech stocks (Apple, Amazon, Microsoft, Google and Facebook) remain in the nosebleed section of history with combined market cap gains of $1.9 trillion or 35% for the year to date;
  
• The Donald’s dufus Treasury Secretary, Stevie Mnuchin, went up to the Hill to negotiate with get fleeced by the Dems, so he announced that the Senate GOP’s $1.1 trillion line in the sand—-on top of the $3.3 trillion already spent on the Everything Bailouts—could be upped to get a deal;
• Nancy Pelosi announced she would be happy to make a deal, after upping the House Dem ask from $3.0 trillion to $3.3 trillion;
• With average monthly temperatures at 90 F and a 30% reduction in Covid hospitalizations, the Mayor of Houston decreed that anyone not wearing a mask in public will be promptly fined $250;
• On the other side of the earth, the Mayor of Melbourne Australia literally put the entire population under house arrest, although the mortality rate there is just one-half of one percent of that which occurred in the Bronx. 

There’s much more where those came from, but the trail of each leads back to a common cause. Namely, that the central banks of the world led by the Fed have enabled an outbreak of irrational, destructive behavior by virtually every segment of the public and private sector that would have been unthinkable before the era of massive asset price falsification and monetization of the public debt.

Let’s start with the Virus Patrol and lockdowns. Back in 1968-1969, the Hong Kong flu struck, hitting the US in two waves in the spring of 1969 and again in the fall. By CDC estimates the mortality rate attributable to the H3N2 strain of the virus was about 50 per 100,000.

As of yesterday, the CDC’s more expansive and inclusive count of WITH-Covid deaths in the US was 45 per 100,000. Except today much of America is still huddled behind lockdown orders, masks and the near complete elimination of large scale social gatherings such as sporting events or even political conventions.

By contrast, here is what was happening in the summer of 1969 smack dab between the two waves: Woodstock!

Nobody dreamed of Lockdown Nation during 1968-1969 for one simple reason: The society-crushing impact of one-fifth of the labor force unemployed like at present (there are currently 31 million receiving Federal and state UI benefits out of 160 million workers) would have been unthinkable because nothing remotely resembling today’s Everything Bailouts would have been conceivable.