Founder’s Afternoon Notes – 3/4/2022

Good Afternoon:

• My dominant thoughts continue to center around the risks and unintended consequences of Putin’s invasion and our response. I am also trying to understand how our attempts to “cancel” Putin and Russia don’t constitute acts of war with all attendant consequences.
• Our elites designed the sanctions to destroy the Russian Central Bank and Economy. It mystifies me how we can take down the Russian economy without finishing off ours. I don’t know the road rules, but how can we even contemplate such serious actions against a fellow nuclear superpower? Sanctioning Russia is not the same as sanctioning Iran.
• By the way, the Biden administration is about to rekindle the Iran nuclear scam. What is it like to do a deal with the devil? Oh, and by the way, Russia is mediating the negotiations. Things that make you go hmmm…
• Our economy is already weak with $30 trillion in debt, runaway inflation, dubious leadership, etc. Are we attacking the Russian financial system while standing in quicksand? It gives me a pit in my stomach.
• The current predicament reminds me how much the Boomers (my generation) have f’d things up. The Greatest Generation handed us the best country in the world, and we ran it into the ground.
• Maybe the radical boomers now running our country just did too many drugs while their brains were still developing. This bunch of hippies running the country is a disturbing thought. The behavior of these radicals with the nation we inherited is a classic example of unearned wealth in undisciplined hands. Those who ignore the lessons of history are doomed to repeat it.
• I wonder whether the U.S. Dollar will survive Modern Monetary Theory‘s (“MMT”) unlimited money printing assault. MMT is this era’s version of the four most dangerous words in economics “this time it’s different.” It is never different.
• Will the dollar survive having been weaponized against Russia? That old law of unintended consequences is likely to rear its ugly head – it is called De-Dollarization or Dollar Destruction. If you force China and Russia into alternatives – there will be alternatives. We are playing into their hands. China believes that they are at the dawn of a new 500 years of reign.
• I am not merely griping all the time. I am analyzing whether the market is getting ready to rally or puke in the short term.
• The problems and risks at hand also impact our thesis that a generational bear market is underway that eventually takes the S&P 500 to the middle of its long-term channel (2500 at this writing) – maybe even more than once.
• Remember that we have been dipping into monthly options expiration for months now (the third Friday of the month – March 18th). This month, options expiration follows the pivotal Fed meeting and announcement on March 16th. That doesn’t give us a lot of runway for a rally, though rallies can be swift and parabolically profitable in the circumstances.