A blow-by-blow account of 2026.

 

UNFTR Weekly Roundup

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Watch the video version of this newsletter.   Max Notes

Looking Ahead to 2026 Fair to say that it’s getting easier to be in the prediction business. So I don’t expect any accolades for what I’m about to propose for the year ahead. We were correct to say that Trump would be re-elected and that he would move with ruthless efficiency to dismantle government agencies and destroy the delicate underpinnings of the U.S. economy with giveaways to the corporate class and the 1% and rampant deregulation. And that he would implement draconian immigration measures and create barriers to obtain entitlements that would thrust millions into poverty.   We were able to make these pronouncements by taking them at their world. If you re-read Project 2025 you’ll be pretty impressed by how much they were able to accomplish in such a short amount of time.   By all dystopian measures, Trump’s first year back in the driver’s seat has been a resounding success.   The amazing thing about the United States isn’t its resiliency, it’s the established advantage that comes from 80 years of capital accumulation. To quote Trump’s favorite president, Andrew Jackson, “to the victor, go the spoils.”   As the clear victor of World War II in so many ways, the U.S. Century began in earnest before the war’s end in Bretton Woods, 1944. I know, I know. “He’s fucking talking about Keynes again.” But hang on, there’s a twist.   U.S. geography makes us virtually un-invadable. Two oceans on the sides and allies (for now) on the top and bottom. Our natural resources make us self-sufficient. And our open immigration policy and commitment to higher education for decades made us the most desirable destination for the world’s top talent. But money makes the world go around and thanks to the efforts of a man named Harry Dexter White, the most valuable natural resource the United States came in the form of the U.S. Dollar.   As the world’s foremost authority on economic matters and chief negotiator for the U.K.—i.e. all of Europe—John Maynard Keynes hatched a plan for an international currency that would benchmark all currencies and provide liquidity for struggling nations and prevent industrialized economies from running roughshod over them. He called it the Bancor. But Harry Dexter White, the senior Treasury official representing the United States, beat the aging economist into submission and steered the conference toward a dollar-centered system rather than the supranational “Bancor” unit.   Because of this maneuver, the United States became the banker to the world. If you wanted to do business you needed dollars. But even the Bretton plan limited the supply of dollars, so when Nixon released the tether to gold in 1971, it allowed us to print unlimited amounts of money. And so long as it didn’t all circulate through the U.S. economy, it wouldn’t necessarily be inflationary. Of course, in the early stages it was but over time we learned how to harness the power of dollar supply. And we used our economic and military might to ensure that investments were made around the world wherever and whenever we pleased.   Trump is the beneficiary of rampant deficit spending and capital flows that he had nothing to do with for eight straight decades. The connection here is that the United States is now running on fumes because in the decades since Ronald Reagan took office, we have deliberately sent our production capabilities overseas. Why? Because we wanted cheap labor and Americans were asking for too much. We deliberately built an economy that works for the upper echelon of society by ensuring that accumulated wealth remained in the private sector among wealthy white male individuals and corporations. The Powell Memorandum come to life. And when service workers became too expensive domestically we farmed that out as well.   So now we have an economy built to service the capital needs of the corporate class and an aging population. Which is why healthcare remains one of the only growth areas of the economy. As such, the expense side of this industry is in the crosshairs of the Trump administration as well.   You see, capital is only allowed to accumulate in the pockets of the elite members of society.   So what does this have to do with 2026? Well, you reap what you sow. Now we enter the “find out” phase of Trump’s “fuck around” plan.   The data will show that holiday sales were only up marginally and that it was driven by higher prices, fueled by credit cards and propped up by the top 10%. So volumes will be down and this will lead to a robust round of January layoffs. Those lucky enough to have decent paying jobs will remain in those jobs and cross their fingers that they’re not in future rounds of cuts. Those out of the job market will stay out of it, gig work will increase and the official unemployment rate will continue to increase by a tenth of a percent each month until the markets can’t take it anymore and there’s a correction in the equities market.   On the debt side of the equation, with $9 trillion in debt coming due in 2026, we’ll have more frequency auctions, and despite the Fed’s best attempts to hold rates down, the long end of the yield curve will bleed out and the short end will fall under pressure as well. He’ll get his man at the Fed—maybe one of the Kevins, Hassett or Warsh, or maybe my dark horse Stephen Miran—but it won’t matter because inflation will remain at around 3% as the result of tariffs and corporate America’s last cash grab because they believe Trump and Bessent’s lie that the American consumer is going to be flush with cash from tax refunds.   Only the refunds will go to paying down credit cards, the corporate earnings season will be slower than expected and the Fed will be reluctant to cut rates again because it will be caught dead center of their dual mandate.   We’ll continue to see a flight to physical stores of value like gold and silver, and eventually the stock market will stabilize with the pundit class and Wall Street seizing on any good news or current lie from some big tech company. There will be more mergers. And a ton more personal and corporate bankruptcies.   At some point, a gasket will blow in a particularly hard hit area of the country and unrest will crop up in some form. The Trump administration will use a heavy hand to quell it and perhaps even lean into some Gulf of Tonkin incident to foment a military operation that distracts us. Mini fires will erupt throughout the country and Trump will continue to act out in ways that make even GOP leaders start to distance themselves from the administration in advance of the midterms. By the summer, we will be in a full blown recession even though we all know we’ve been in one since 2008. We never really recovered. But the numbers will be irrefutable.   Around the world, debt yields will climb higher and higher until one or two nations reaches a tipping point and fears of a new global debt crisis take hold. Central banks, including the United States, will release a new round of quantitative easing that reach 2009 levels but not exactly pandemic levels and we’ll have a resurgence of inflation as Trump goes bananas on our foes and allies alike with threats of sanctions and tariffs and even war.   The man himself will unravel before our eyes, even more so than he currently is, and 25th amendment cries will reach a fever pitch by fall. The Democrats will take back the House in the midterms and the GOP will hold the slimmest of majorities in the Senate and we’ll finally reach deadlock but not before Russell Vought goes into overdrive to shutter one or two major federal agencies. This too will spark a constitutional crisis and threats against the Roberts’ Court will turn the country inside out with executive orders from the White House attempting to turn us into a police state.   Wall Street will somehow regain its footing toward the end of the year, even though the AI capital bubble will have deflated long before that because the cheap and easy money coming from the government will have nowhere else to go.   And at some point there will be an event on the world stage that will cause a momentary spike in oil prices. It won’t last long because we’ll still be oversupplied through most of 2026, but this will fuel inflationary fears even though prices will have declined sharply toward the back half of the year because, you know, recession.   Wish I had better news. A happier prediction. We put our hand on the stove and got burned in 2016. And somehow, we forgot the pain and so we did it again. There will be people who make a bloody fortune in the months ahead because they know how to make money from misery. But mostly it will be misery. And the one person who will have prevented the next Great Depression, complete and utter catastrophe, will be Harry Dexter White. The man who gave us the gift of unlimited money. Who gets it and what it’s worth…These will be the central questions of the Trump era.

Other things I’m obsessing over… I love when my favorite things come together. Here’s Zohran celebrating Hanukkah with the legendary Patinkin family. Sensing a new song… Finishing the Challah. NGL. I’ve watched the last two rounds almost as often as I watched the last two rounds of Mayweather v. McGregor. I don’t like when posers think they can dabble in the sweet science. There is so much to love about this clip of lifelong best friends Rob Reiner and Albert Brooks on Conan’s podcast when they were promoting the Brooks documentary (produced by Reiner). Quick story...Years ago I read an interview with Brooks where he talked about how he spent a lifetime perfecting longform comedy, even pushing himself to do an entire set with only one punchline. Brooks became the master of this art. The long setup with the perfect payoff. He was lamenting how this wouldn’t translate into a 140 character world and that his time had passed. Within a matter of months, he had figured out Twitter and became one of its most cherished shortform tweeters. Anyway, this clip is more of the former. Long set up only a best friend could give and a chef’s kiss ending delivered by the GOAT. Aaaaaand ICYMI…Here’s Scott Bessent being heckled in public, then complaining to the manager like the fucking Karen he is. This one comes courtesy of 99 and we are both obsessed. What if the ballroom isn’t a ballroom? Trust us, you’ll want to stick with this one. -Max

Killer Left Take of the Week

KLTW goes to Sean Morrow of More Perfect Union. The evidence is piling up against OpenAI and the prospect of AI generally. The bubble question has basically been answered. We’re in one. So now we can investigate the more important bookends: How did it inflate (who’s to blame) and who will be impacted when it pops? MPU has given a pretty clear and concise answer to the former.   Watch: What Sam Altman Doesn’t Want You To Know

This Week on the UNFTR Podcast

The loss of Rob Reiner was beyond tragic, both in terms of his impact on Hollywood and popular culture and how it unfolded. Of course, the malignant narcissist running the country right now made it worse by making it all about him. Trump’s commentary distracted from a deeper and far more important conversation Reiner deserved about his legacy and what his movies say about popular culture.   From the episode: Rob Reiner films don’t necessarily belong in the prototypical white savior Hollywood camp—more like the saviors just happen to be white, camp. And understand this isn’t a critique of Rob Reiner the filmmaker nor as cultural icon or political activist. And certainly not of the man. By all accounts he was as kind and generous as he was talented. It’s an acknowledgement of what sells in Hollywood. How we like to view ourselves. His films expressed a modern sense of noblesse oblige, filled with sentimentality about process and dignity and character.   This episode will be released later today.

Chart of the Week

Shots Fired From the BOJ Last week we warned that December 18th would be a pivotal day in the global markets. It was.   The Treasury International Capital (TIC) data report was released and the Bank of Japan held their equivalent of our FOMC meeting. I expected the TIC data to show a reversal in official capital investments and a rate hike in Japan, as most did. What I and others didn’t expect was that the capital flow reversal would be seismic, and Japan told the world there are more increases to come.   As a result, the 10 Year Bond Yield in Japan responded immediately.

Source: MacroMicro   Here’s how the two converge. Japan is the largest “official” holder of U.S. debt. (If you don’t count the $1.4 trillion discrepancy between Fed data and Treasury data that no one seems to give a shit about.) Apart from Japan purchasing U.S. treasuries because it’s good business, there is an arbitrage play called the Yen Carry Trade whereby global investors purchase Yen, convert them to dollars and invest in dollar denominated assets. Because of the difference in value between the Yen and the Dollar, there’s margin in the trade alone.   Because Japanese yields are beginning to climb back to normal global rates, it is becoming a safe haven for investors who don’t need to go through all the currency machinations to invest. The Yen is still cheap and the BOJ is paying higher interest rates. If this trend continues, we could see an enormous capital outflow from U.S. treasuries into Japanese treasuries.   Now that we can see U.S. government data again, it seems like this has already begun only it’s not confined to Japan. It’s happening all over the world with nations and private sources moving away from U.S. treasuries.   BUT…and this is a big but...our treasury auctions are still showing strong demand with a high bid-to-cover, which means we’re selling at the price and rate we want. So it begs the question, who is buying all of these short-term notes at auction?   If unmarked bank accounts could talk.

Headlines

The Cautionary Tale to End All Cautionary Tales Assisted dying in Canada is a relatively new idea. It’s one of the more controversial social programs, but most have seen it as humane. It’s one of the more fascinating debates that seems impossible to broach in the United States given the religious conviction of our body of lawmakers. And it seems like Canada is testing the limits of the debate already.   From the article: “In its original form, Canadian law only authorized MAiD for patients whose deaths were ‘reasonably foreseeable.’ However, in 2019 plaintiffs challenged the law in that form, winning a decision from the Québec Superior Court that struck down that provision. As a result, MAiD is currently legal in Canada for patients whose suffering is ‘grievous and irremediable’ even if their lives are not immediately threatened by the source of that suffering.”   Jacobin: Canada’s Assisted Dying Program Is Bad for the Vulnerable   Jeffries Top Constituent Is Jeffries Hakeem Jeffries can’t stop taking Ls. It seems like each passing week reveals a new way for him to suck.   From the article: “The speculation was that Jeffries would rather keep the concept of a trading ban alive for campaigning (and maybe protect Democrats who want to keep trading) than take advantage of the ongoing rebellion against House Speaker Mike Johnson (R-LA) to make tangible progress.”   American Prospect: Jeffries Undercuts Congressional Stock Trading Ban   Facts on the Ground Changing the “facts on the ground.” That has been the mantra of the Zionist movement since inception. No matter what laws or norms or histories exist, they can always be changed by one’s presence. One land is taken, it’s gone. With the world seemingly satisfied that the massacre has ended in Gaza (it hasn’t) the Likud Party can continue with its settlement policy with impunity because the West will see it a less worse option to genocide and people have grown tired of the controversy. Same as it ever was.   From the article: “The move will bring the overall total number of exclusively or overwhelmingly Jewish settlements—which are illegal under international law—to more than 200, up from around 140 just three years ago.”   Common Dreams: Israeli Cabinet Approves 19 New Apartheid Colonies in Occupied West Bank

Resources

Pod Love “In this Short Suck, we dive into the almost-forgotten story of The Business Plot - when a group of powerful bankers and corporate bigwigs allegedly tried to recruit one of America’s most decorated Marines, Smedley Butler, to lead a fascist coup against President Franklin D. Roosevelt. We’ll sift through testimony, shady alliances, and a very convenient death to ask: how close did the U.S. actually come to going full fascist in the 1930s?”   Time Suck Podcast with Dan Cummins: The Business Plot - When Bankers Tried to Topple the White House   Book Love “First published in 1939, Steinbeck’s Pulitzer Prize-winning epic of the Great Depression chronicles the Dust Bowl migration of the 1930s and tells the story of one Oklahoma farm family, the Joads—driven from their homestead and forced to travel west to the promised land of California. Out of their trials and their repeated collisions against the hard realities of an America divided into Haves and Have-Nots evolves a drama that is intensely human yet majestic in its scale and moral vision, elemental yet plainspoken, tragic but ultimately stirring in its human dignity.”   The Grapes of Wrath by John Steinbeck   Unf*cker Comment of the Week From @19595672: “All of my neighbors and friends have stopped spending but for groceries and absolute necessities. I notice the delivery of restaurant food has stopped in my neighborhood. Average age 30 to 35 yo.”

Progressive Corner

Progressive Organization of the Week: Groundwork Collaborative. “This progressive advocacy group fights to change economic policy and narratives in order to build public power, break up concentrations of private power, and deliver true opportunity and prosperity for all.”   Check Out the UNFTR Directory of Progressive Resources for More

UNFTR Member Question of the Week

Question: Do you support universal basic income?

Kastag7: Yes and! I wonder if there’s a way to curb the inevitable price hikes that might ensue. “Everyone has more money? Let’s raise prices!” It might still be worth it overall, but benefits could be limited.   april_in_fl: Yes. I couldn’t believe the difference those Covid $600 UI additional payments made in paying bills and adding to my savings.

natafelen: No, it seems transitional at best.   BluCrayons: For sure. I think if AI is going to do even half of what people expect, we definitely need some form of UBI.   DaveFromHoldFast: I can’t remember if it was in Jacobin or Current Affairs, but I read a much more persuasive argument for the universal job guarantee.

Become a member to participate in this weekly discussion.

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