Only six more days and residents of Louisiana can start working for themselves this year. Alas, if you’re in Connecticut, it’s six more weeks.
The Tax Foundation is out with its annual report on Tax Freedom Day. As the report explains, this is the day that “represents how long Americans as a whole work into the year before they have earned enough money to pay all federal, state and local taxes for the year.”
The national average is April 21 — almost a week after the federal filing deadline, heh.
Of course, your mileage may vary, even within these state-by-state figures. But you can get a rough idea how you fare against other people…
“Tax Freedom Day rankings square unsurprisingly well with overall measures of state and local tax burden,” comments J.D. Tuccille at Reason. “The five highest taxed states, reports the Tax Foundation, are New York, New Jersey, Connecticut, California and Wisconsin. Wyoming, Alaska, South Dakota, Texas and Louisiana are the least burdensome.
“Business tax climate also corresponds closely with Tax Freedom Day. The states least favorable to business are New Jersey, New York, California, Minnesota and Vermont. By contrast, Wyoming, South Dakota, Nevada, Alaska and Florida hold the top spots.”
[Ed. note: I just received some astounding “inside information” courtesy of Doug Hill, director of the Laissez Faire Club.
There’s one simple way to get tax-free money in retirement that less than three out of 100 Americans could be taking advantage of. But you have only days to access it.
It’s so little-known your accountant probably doesn’t even know it exists. That’s why Doug’s made a deal with the “loophole queen” and tax adviser to Capitol Hill, Diane Kennedy — who charges $250 for 15 minutes — to reveal everything to you in a special webinar.
Get on the seminar waiting list here.]
To the markets… and another snoozer. No major U.S. index has budged more than a quarter percent as we check our screens.
The strongest of the bunch is the Nasdaq, at 5,022. That’s still a good 26 points away from its all-time high notched on March 10, 2000.
The big economic number of the day is inflation. The consumer price index registered a 0.2% increase in February — in line with the “expert consensus.” Year over year, it works out to a decline of 0.1%. As always, any resemblance to your own cost of living is purely coincidental.
The interesting part is the core rate. This is the rate the wonks in government and the Federal Reserve watch closely. It excludes food and energy, because they’re considered “volatile.” Here the monthly increase came in higher than expected, at 0.2%. And the year-over-year rate of increase is starting to pick up again at 1.7%. Remember, the Fed has a 2% inflation target.
Funny how times change. Back in 2007-08, we relentlessly mocked the core rate because it was always lower than the overall rate, enabling Ben Bernanke and the like to say there was no inflation. No, there wasn’t — as long as you didn’t consume food or fuel.
Nowadays, the core rate is running substantially higher than the overall rate… and the Fed can say, “Look, we’re getting closer to getting the inflation we want!”
Sheesh…
This is also a day we get an early read on manufacturing for the month of March with the “flash PMI” numbers. A reading above 50 indicates growth — below 50, contraction.
- China: A downside surprise at 49.2. That’s an 11-month low. Whatever the Chinese government is doing to stimulate, it’s not having the desired effect
- Eurozone: Best number in three years, 51.9. Germany’s rate of growth is accelerating
- United States: Up to 55.3, best reading since October.
All’s quiet in the commodity complex. Gold is little changed from 24 hours ago at $1,189. Crude continues to inch up, now at $47.76.
“One piece of data could signal the major inflection point for the oil market,” says Jody Chudley of our energy team — “one that we’ve been predicting for months.”
Jody directs our attention to the monthly Drilling Productivity Report issued by the U.S. Energy Information Administration. It says the growth in U.S. shale production will flatline next month. The EIA forecasts U.S. shale output of 5,613,000 barrels per day in March… and 5,614,000 barrels per day in April.
“This report tends to be pretty accurate, by and large,” Jody tells us. “That is not something you can say for the EIA’s longer-term forecasts.”
Result? “The shale boom, the shale gale, the American energy renaissance or whatever moniker you’d like to use for our country’s newfound oil supply growth, will screech to a halt.”
It was on Jan. 5 Jody told readers of The 5 that U.S. production would begin to decline around midyear. At the time, it was a gutsy forecast. The industry consensus had growth continuing at least through year-end.
Now it appears Jody’s forecast is playing out even earlier than he thought.
Why does that matter? “Over the last five years, the only significant source of oil production growth in the world has been North America… If there had been no production growth from North America, the world would have been very short of oil, because demand for that oil is a relentless monster.”
Sure enough, the increase in global crude demand keeps marching upward — “roughly a million barrels per day every year,” Jody says.
“If demand keeps growing and North American production growth halts,” Jody explains, “all of a sudden, demand growth is outpacing supply growth (which is zero). And the global supply-and-demand situation comes back into balance.”
A caveat: “If U.S. oil production does flatten in April, I wouldn’t necessarily expect oil prices to fly higher immediately. The market is going to likely need a couple of months of convincing that the stoppage of growth isn’t just a brief pause.
“For oil investors,” Jody concludes, “it would seem that the light at the end of the tunnel is getting much closer.”
“I call it treating cancer with sunshine,” writes our Ray Blanco on the science-and-wealth beat.
“Plants have long been the basis for new drugs,” he says. “Traditional medicine was, in fact, largely plant based. And despite the focus on discovering new drugs in a computer, the plant world still contains a vast trove of potential new therapeutics.”
Ray is keen on a substance called hypericin. It’s one of the active ingredients in the weed St. John’s wort. Maybe you’re familiar with St. John’s wort in herbal form — it’s a common supplement to fight depression.
The synthetic version of hypericin “has other interesting effects on the human body,” says Ray. “One of them is photosensitization. It’s a very powerful photosensitizer that preferentially accumulates in cancer cells. Furthermore, it has also shown the ability to prevent cancer cells from multiplying.
“Bring all of these properties together and you have a therapy that could be used to treat cancer… with light.”
Scientists hope to use it to treat an immune system cancer called cutaneous T-cell lymphoma (CTCL). Take the hypericin, apply it to the skin, follow it up with exposure to a fluorescent light… and in Phase 2 trials, nearly 60% of patients showed a response to the therapy.
Phase 3 trials begin soon. Ray’s premium subscribers are already up 34% in six weeks. Stay tuned…
Stupid intellectual property tricks: Once upon a time, there was a bar owner in New York state’s Adirondack Mountains named John Carr. He developed a home-crafted root beer.
It was a big hit with visitors to the nearby Moose Tooth Grill and the Moose Hillock Campground. To say nothing of the annual Moose Festival.
Thus, the name he would give this root beer almost suggested itself…
You already know where this is going, right?
Then Carr tried to trademark the name and suddenly found himself on the receiving end of a lawsuit by Canada’s Moosehead Breweries.
The complaint is a lawyerly tour de force — and an insult to the intelligence of discerning consumers. As summed up by Canada’s National Post, the suit “alleges that Moose Wizz’s logo and labelling are ‘highly similar’ to Moosehead’s ‘family of trademarks,’ which include the word ‘moose’ and the ‘likeness of the head of a moose.'”
Carr is unimpressed: “I think an 8-year-old knows the difference between soda and alcoholic beverages. I hope their lawyers can figure it out.”
We won’t handicap the outcome of this case, but we’ll note Moose Wizz fans have taken to Twitter with the hashtag #freethemoose.
“You guys talk about special drawing rights as if they are a new thing and have only been ‘issued’ a few times,” a reader takes us to task. “SDRs have been used continuously for years, but principally as a conversion factor.
“For example: If you are flying an aircraft — private or commercial — into European airspace, you are required to carry liability coverage equivalent to a certain number of SDRs. That’s the law. The required SDR limit is determined by the weight of the aircraft and the number of passenger seats. A Canadian aircraft might have a limit of C$600 million to comply.
“The identical aircraft operated by a Yank would need US$500 million. Both are meeting the same SDR requirement. The USD does not have any sort of ‘reserve status’ when it comes to European aviation liability requirements. SDRs have held that position since their conception.”
The 5: We’ve said more than once that SDRs have been in use since 1969… but it’s true, we haven’t played up their use outside the context of financial crises.
But from where we sit, that only further greases the way toward their more widespread use when another crisis rolls around.
Back to a key Jim Rickards’ passage from The Death of Money: “The SDR can be issued in abundance to IMF members and can also be used in the future for a select list of the most important transactions in the world, including balance-of-payments settlements, oil pricing and the financial accounts of the world’s largest corporations, such as Exxon Mobil, Toyota and Royal Dutch Shell.”
But you and I would still transact in dollars or euros or whatever your local currency is… and experience price inflation in dollars or euros or whatever your local currency is.
As a reminder, Jim Rickards’ follow-up book — with a plan of action for when the next crisis hits — is available only through Agora Financial. If you haven’t claimed your copy yet, here’s where you can do so.
“Studied China in college,” writes a reader on the related subject of global power shifting eastward. “As a very young child on a bus, the pretty woman was learning Mandarin.
“What about all the empty apartments built in China? Does anyone care what China does with the copper and steel and cement? The apartments will haunt them, but China has always been it for the long run!
“Sometimes, they bury their head in the sand for no apparent reason. As the boats went to Arabia, they came back, and the new emperor burned them. No more exploring! Of course, every country over there has some Chinese, because when the emperor spoke, those on the outs went elsewhere.”
The 5: Heck, some of them might be coming here — given all the prime American real estate they’re buying. Safety valve…
“I absolutely want to see feral hogs charging at me in an animated GIF in The 5!“ a reader enthuses after yesterday. “Give the sheeple a better idea of how Congress and the D.C. bureaucracy actually operate!”
The 5: We didn’t look very hard yesterday. Ask and ye shall receive…
“Chris’ GIFs are animated?” writes a faithful reader of both The 5 and Laissez Faire Today. “I thought my 75-year-old eyes were acting up!”
The 5: We know better than to say anything after our quip a few weeks ago about people even younger who’d “mentally checked out”…
Best regards,
Dave Gonigam
The 5 Min. Forecast
