Swamponomics: Bulls Running Wild on Wall Street

Joe Biden's Wall Street Cabinet

Since he secured the Democratic nomination, conservatives had speculated that the radical left would use Joe Biden as a patsy to advance the progressive agenda. The Office of the President-Elect has paid lip service to the far-left wish list, but it seems to be business as usual in the Swamp, with the revolving door between Wall Street and Washington in full service. Is Biden's Cabinet manufactured on Wall Street?

As Liberty Nation reported earlier this year, one of the biggest financial market trends has been the special purpose acquisition company (SPAC). These are so-called blank check companies that only exist to raise capital through an initial public offering (IPO) and acquire an existing firm. Pine Island Acquisition Company is one of these shell entities, and it is directly affiliated with the investment firm Pine Island Capital Partners.

Pine Island's personnel include two prominent names: Tony Blinken and Retired General Lloyd Austin. Do these names sound familiar? Blinken was tapped to be Biden's Secretary of State, while Austin was chosen to be his Secretary of Defense. Before the 2020 election, Pine Island submitted a prospectus to the Securities and Exchange Commission (SEC).

"We believe that with our access, network and expertise, we are well-suited to take advantage of the current and future opportunities present in the aerospace, defense, and government services industries," the document stated.

Austin's name was identified in the original SPAC proposal, but Blinken's was removed when he took a leave of absence from the firm. Since the initial SPAC pitch, it has raised more than $218 million, and two power players on The Street picked up ownership stakes before Blinken and Austin were officially announced as administration picks. The Biden transition team verified that both men plan to divest from Pine Island, but the foul stench of cronyism has already tainted the countdown to Inauguration Day.

The World is Hungry for Savings

The United States is facing a COVID-19 inflation tsunami. With the Federal Reserve's money-printing go brrr campaign, Washington's multi-trillion-dollar deficits, and the coronavirus dismantling international trade, the cost of what we need is going up. The most notable spike will be in food. It is not only the U.S. enduring food inflation, but it is also the rest of the world.

Canadian families will spend more at the supermarket in 2021, with overall food prices to rise as much as 5%, led by baked goods, meats, and vegetables. An average family of four could spend as much as $700 more next year on groceries.

Food inflation in the United Kingdom has been rising between 0.8% and 2.1% per month in the coronavirus era. But COVID-19 policies are not the only harmful consequence impacting British households' grocery bills -- tariffs, weather-struck harvests, and disruptions to supply chains are forcing supermarket giants to raise prices. The same trends are forming in both developed and developing markets, from Russia to Nigeria to China to Japan. And there is no sign of price inflation slowing down.

The agriculture commodities market is booming as nearly everything is trading at multi-year highs. If you are a commodities trader, whether in the futures market or stocks, you are making a killing. However, if you are struggling to get by, this will hurt your wallet and force more people to choose between rent and groceries. When you factor in food shortages worldwide, you discover the real ramifications of shutting down the global economy over a virus that has a 99.97% survival rate.

Uncle Sam's Hemophilia

The U.S. government's fiscal year just started, and it is already posting a record. In the first two months of FY 2021, the federal deficit ran 25.1% higher than the same time a year ago, totaling $429.3 billion during the October-November period.

According to the Treasury Department, the budget shortfall reflected an 8.9% surge in spending, totaling $886.6 billion, and a 2.9% drop in tax revenues, topping $457 billion.

Outlays will inevitably increase over the next several months, especially with Republicans and Democrats on the cusp of approving another $1 trillion coronavirus stimulus and relief package. Early estimates from the Congressional Budget Office (CBO) suggest Washington will record a budget gap of $1.8 trillion by the time this fiscal year is complete. It also forecasts federal deficits would remain above $1 trillion per year until 2030.

In the budget year ending September 30, the federal government endured a record $3.1 trillion deficit. Congress passed multiple spending measures to fight the historic economic downturn triggered by the COVID-19 public health crisis. How will U.S. policymakers reverse this devastating fiscal trend? Spoiler alert: They will not!

Eat My Shorts

It turns out that 2020 was a victory for those who either want to outlaw short-sellers or burn them to the ground. While the year may have started as celebratory for the bears, 2020 turned into one of the best performances for the financial markets (thanks Jerome Powell). According to data provider Hedge Fund Research, a monthly index of short-selling hedge funds has slumped 32%. Although cinema chains and solar companies added to the bears' woes, two companies have accounted for much of the pain: Tesla Motors and Moderna, with each stock skyrocketing 650% and 700%, respectively. With cheap money flowing through the veins of Wall Street, the bulls are running wild.

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Read more from Andrew Moran.