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Not much has changed since Friday’s Macro Brief. No new economic data. No market-moving news. So since it was a lazy weekend, let’s talk about something a little different for a change.

After many months of putting it off, I finally picked up a copy of “The Creature of Jekyll Island” by G. Edward Griffin. It’s a deep dive into the history of the Federal Reserve, how it was created, who created it, and the real reasons behind its creation. Let’s just say this book will blow your mind.

It’s a mighty brick, an absolute unit, and, unfortunately, there’s no eBook. Plus, you’ll have to shell out $35+ for a copy, but it’s well worth the investment.

Without ruining it for you, here are some tidbits I’ve found after a quick scan-through that might convince you to purchase a copy and investigate further.

Massive Conflicts of Interest

If we look at the six men who visited Jekyll Island, where they conceived the Federal Reserve Act, they all held high-ranking positions in the private banking industry globally, representing Morgan, Kuhn-Loeb, Rockefeller, Rothschild, and Warburg.

“1. Nelson W. Aldrich, Republican "whip" in the Senate, Chairman of the National Monetary Commission, business associate of J.P. Morgan, father-in-law to John D. Rockefeller, Jr.
2. Abraham Piatt Andrew, Assistant Secretary of the U.S. Treasury
3. Frank A. Vanderlip, president of the National City Bank of New York, the most powerful of the banks at that time, representing William Rockefeller and the international investment banking house of Kuhn, Loeb & Company
4. Henry P. Davison, senior partner of the J.P. Morgan Company
5. Benjamin Strong, head of J.P. Morgan's Bankers Trust Company
6. Paul M. Warburg, a partner in Kuhn, Loeb & Company, a representative of the Rothschild banking dynasty in England and France, and brother to Max Warburg who was head of the Warburg banking consortium in Germany and the Netherlands.” — The Creature From Jekyll Island - Pg. 5

Sworn Into Secrecy

The owner of Jekyll Island Mr. Davison snuffed the meeting as a mere get-together; a spot of duck hunting.

The entire staff of Jekyll Island was substituted with carefully chosen replacements to protect the banker’s identities.

On the train to the resort and throughout their stay, they addressed each other by their first names to avoid recognition.

In the years following the Jekyll Island meeting, anyone who raised concern about the meeting was shunned: “only paranoid unsophisticates would try to make anything out of it”. — The Creature From Jekyll Island pg. 9

They Called It the “Federal Reserve” to Disguise The Fact That It Was Really a Cartel

In the author’s words: “A cartel is a group of independent businesses [that] join together to coordinate the production, pricing, and competition and thereby increase profitability”.

Today, it’s clear that the real goal of the Jekyll Island meeting was to create the structure for a dominant banking cartel, so members could maximize profits via minimizing competition.

This could lead the cartel to become so dominant that it would be difficult for new players to enter the market, let alone gain a significant market share. And once they became too big to fail, they could lobby government to enforce new policies benefiting the cartel.

World Wars Couldn’t Have Happened Without It

During World War II, the banking cartel members in America and Britain heavily financed Germany’s industrial capabilities. Most of the funds originated from Wall Street, primarily Rockefeller’s National City Bank.

The biggest German industrial player, I.G. Farben, had its buildings spared by the U.S. War Defense Department. Conveniently, some officials had ties with the firms bankrolling I.G. Farben.

We forget that, behind the scenes, corruption remains rampant, especially when it comes to war.

Because war equals massive profits.

Concoda

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As the reopening trade reaches its peak, we have to consider how long this epic reflation will last until we reach a dreaded blow-off top. What does this mean? It means equities, commodities, and non-dollar currencies plunging, while bonds finally catch a bid.

This will come as a surprise to many but hopefully not to us. We’ll be keeping a close eye out for weaknesses appearing in the economic data and bearish market signals developing. As for our exit strategy, that’s simple: Selling risk assets to prevent a double-digit drawdown when we think the sh*t is about to hit the fan.

Since the financial system is now more levered than ever, the next sell-off will make the 2018 volpocalypse look like a warmup in comparison. We’ll need to get out fast at the first sign of trouble.

This, however, will likely occur sometime in the latter half of the year. For now, the fakest economic expansion in history will continue with bullish data coming out of two of the biggest economic regions. The reflation trade still has legs.

In the United States…

April ISM PMI came in at 64.7 compared to March’s 60.8.

Final Manufacturing PMI came in at 59.1 compared to March’s 59.0.

ISM Prices continue to inflate at 85.6.

March’s Non-Farm Employment Change came in at a whopping +916,000.

Meanwhile in Europe…

Spanish Manufacturing PMI came in at 56.9 compared to March’s 52.9.

Swiss Manufacturing PMI came in at 66.3 compared to March’s 61.3.

Italian Manufacturing PMI came in at 59.8 compared to March’s 56.9.

French Manufacturing came in at 59.3 compared to March’s 58.8.

German Manufacturing PMI came in at 66.6. No increase from March.

United Kingdom Manufacturing PMI came in at 58.9 compared to March’s 57.9

These MoM increases only bolster Q2 GDP and inflation estimates further. Q3 could be where we start to overheat.

As for market signals, they also confirm further reflation.

Perhaps the most bullish signal, though, is the resilience of emerging markets despite constant dollar strength. Ultra-risky EM such as Taiwan ($EWT), Greece ($GREK), and Thailand ($THD) have yet to show weakness.

These will be the first markets to fall when the reflation trade loses steam. But until then, it’s onwards and upwards from here.

Have a great week,

Concoda

This is a public episode. If you’d like to discuss this with other subscribers or get access to bonus episodes, visit concoda.substack.com/subscribe

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Good morning,

First of all, your messages have been very supportive. I can’t thank you enough. They got me through a rough few weeks. The medication and pills my doctor prescribed me failed to cure my anxiety symptoms, so I had to try a more “radical” approach. Since I took a break on March 7th, I have been enduring an elimination diet, which means eating nothing but beef, salt, and drinking water for 30 days. Not fun.

But, after two weeks of rest paired with this “lifestyle change”, my symptoms—panic attacks, heart palpitations, brain fog—have miraculously improved. Before I could only spend 30 mins a day on my computer before getting uncontrollably dizzy. Now, I’m okay to publish again. I’ll be taking it easy at first, sticking with the diet, reintroducing foods back in to find the culprit (it’s not coffee, thank goodness).

But enough about me.

I have some exciting news about the newsletter: it’s about to get a boost. Regular posts will resume as normal alongside a new Macro Brief packed with all the information and data you’ll need to make intelligent investment decisions in financial markets.

After working on it for a month or two before I took a break, I’ve spent the last week finishing it off and making it look presentable. You’ll find the first edition below (future editions will be delivered in separate emails).

Here’s the updated newsletter schedule…

From now on, every reader will receive Monday’s Macro Brief plus all of my articles.

If you become a supporter of the newsletter, however, you’ll receive three a week, all with updated model outputs and changes delivered straight to your inbox. You can also join in future discussion threads and competitions.

Your subscription pays for a nice elimination diet-compatible espresso once a month, data subscriptions that I use in the newsletter, charitable causes, and future giveaways. I have great plans for the future, and I hope you can join me.

To good health,

Concoda

This is a public episode. If you’d like to discuss this with other subscribers or get access to bonus episodes, visit concoda.substack.com/subscribe