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| “Either immediately or ultimately, every dollar of government spending must be raised through a dollar of taxation. Once we look at the matter in this way, the supposed miracles of government spending will appear in another light.” - Henry Hazlitt, Economics in One Lesson (from our Read and Grow Rich reading list) |
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Hi Everyone,
Constitutionally speaking, Jan. 6 is the day where Congress ratifies the results of the Nov. 6 elections. It's usually a rather uneventful ceremony, but not this year.
Armed pro-Trump protestors have stormed Capital Hill and have completely overrun local law enforcement agents.
One person has reportedly been shot, and the day's proceedings have been completely disrupted and desecrated. Images on social media show the situation playing out there.
The following photograph is my personal favorite, though runners-up include a barbarian (same one from the photo below) sitting in the seat of power, a protestor commandeering a congressional workstation, a man making off with a congressional podium, a fire extinguisher being inexplicably discharged in the building, and more drama. |
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As extraordinary as this scene may seem, the market doesn't seem the least bit shocked, or even worried for that matter.
Despite how the protestors may feel, and the heat of this moment in time, the law is pretty clear, and there really isn't much risk that any of this will harm corporate profits in any way, shape or form.
Sure, the Nasdaq Composite Index is down by 1% on the day, but the Dow Jones Industrial Average and the S&P 500 are fine.
There's no reason why the tech sector won't recover tomorrow when this nonsense (or entertainment) plays itself through. |
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Help yourself
Something with a more lasting effect has happened in Georgia where Sen. Kelly Loeffler, the former CEO of Bakkt, has lost her seat in Congress. Her Republican counterpart David Perdue is on the ropes as well. |
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At this point, it's still important to know definitively whether Ossoff or his competitor John Perdue will take the final seat, but at least we can understand that even if the Democrats do clinch the majority seat, it will be an extremely thin majority.
Even if they don't take it though, President-elect Joe Biden will still be able to push through smaller initiatives like modest spending bills, but obtaining approval for bills requiring greater congressional buy-in will be more difficult.
That is, unless they find a way to exploit the rift in the Republican party and manage to nab a few members of Congress. |
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Bitcoin = $36,000
Bitcoin hit a new, all-time high today, as it blasted through $35,000 and continued past $36,000 before the end of the day.
Does this have anything to do with either of the two events above? It possibly has something to do with Georgia, but I doubt it has anything to do with the situation playing out on the hill.
Momentum has been building over time, and it's anyone's guess where or when we might eventually top out.
Here's the long-term graph, where we can see the force of this latest leg up from $10,000 to where we are now, with very few retracements. |
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After all the upside bitcoin has experienced over the last several months, it will certainly be interesting to see where the digital currency goes next.
Have a wonderful evening. |
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Mati Greenspan Analysis, Advisory, Money Management |
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