Roubini’s Unconventional Truth

imageYou may not be too familiar with Project Syndicate, but it’s a non-profit business model designed to get great content out to the world in news ways – ways ignored by conventional (profit model) business models.

I’ve been sort of following their work and here comes this blow-your-socks-off article Monday by one of my favorite economics, Nouriel Roubini.  The whole piece, over here, is worth your time reading because he gets to the core problem we have been talking about for more than a year now:  Consumer Super-Saturation.  Check out this quote:

“Simply put, we live in a world in which there is too much supply and too little demand. The result is persistent disinflationary, if not deflationary, pressure, despite aggressive monetary easing. “

Well, I’ll be damned:  Someone besides old nutter-in-the-woods is saying it.

What’s more, there’s no simply solution.  What’s more, he’s pretty much in line with our skepticism of central banks, government interveners, and cryptocurrencies, too, as he says:

“This assortment of ‘Austrian’ economists, radical monetarists, gold bugs and bitcoin fanatics has repeatedly warned that such a massive increase in global liquidity would lead to hyperinflation, the U.S. dollar’s collapse, sky-high gold prices, and the eventual demise of fiat currencies at the hands of digital cryptocurrency counterparts. “

I remember all the hate-mail to this day.  People were calling me a government stooge, and worse, because I had outlined four possible outcomes to the Bitcoin bubble and yet here we are, almost exactly a year from the failure of Mt. Gox and my article from the period (*here) still seems like a pretty good assessment.

A single Bitcoin this morning is down from the $1200 range where people were calling it the economic savior of freemen and all kinds of other labels a year ago to the sucking wind $240 area.  Yet here we are, a year later, and I am still watching the charts.

Worth repeating:  Bitcoin may, at some future juncture, along with the other cryptos, but for now the problem is we need a good war.

Not that war is good per se:  It’s dirty, messy, lots of people get dead, and all the rest of it.  But short of a massive West Coast Earthquake (in April, say), the odds of fixing this, or any other major world economic mess is pretty thin.

Unless we can bring in a whole bunch of new consumers.  Hmmm…

Making Up Jobs, Importing Consumers

Meantime, a shocking (or not so shocking, depending on your view of the Obama administration) says the government has issued 5.5 million new work permits to foreigners in the US since 2009.

The first line of the Center for Immigration Studies backgrounder outlines what’s been going on this way:

“Government data reveal that more than 5.5 million new work permits were issued to aliens from 2009 to 2014, above and beyond the number of new green card and temporary worker admissions in those years. This is a huge parallel immigrant work authorization system outside the limits set by Congress that inevitably impacts opportunities for U.S. workers, damages the integrity of the immigration system, and encourages illegal immigration.”

Already, the outrage is building with Breitbart headlining it as a “shadow authorization system” which it notes is outside the legal immigration system.

Critics of the Center for Immigration Studies will be quick to point out that it’s an anti-immigration group, but defenders will point to the laws and definition of the word “border” which Barrack and Eric seem to have missed in law school.

The Senate is due to take up defunding of executive amnesty – yet a further example of trying to rein-in the imperial presidency.

Still, there is some logic to the move, however twisted. 

First, and foremost, breaking down the border with Mexico REMAINS part and parcel of the still-underway North America Union movement, because the plan of globalists is a stepping stone approach to government:  First you have cities, then provinces or states, then national governments, then the regional blocks (like the EU, BRICs and the NAU still to come), and then World Government. Stampede them all with a climate scare and roll out the global taxes.,…

If that doesn’t work, Ebola II.

Secondly, however, is that additional humans from South America will stoke up demand for consumer goods here, add some badly needed jobs to the employment report (the next one is due out on Friday) and can be massaged past the liberal media by wrapping it up with pictures of tearful Hispanic families and hot phrases like “broken homes” and “reuniting families.”

The Holder replacement hearings saw exactly the same script by Ms. Lynch who’s up to replace Holder.

None of which would be a bad thing EXCEPT for this following problem:

When America was young, people immigrating here were willing to be part of the melting pot.  The person coming to the US from Europe dropping their native tongue at Ellis Island if they could and spoke (broken at times) Americanized English at home.

In other words, we were the melting pot and people were willing to die to get here.

Fast-forward to now:  California’s birth rate is (depending on which stats you pick) anywhere from 48% to over 50% Hispanic.  Yet the drive to melt is missing. 

The reason?  Follow the money.

Dual language, or a multiplicity of languages, is a huge business model.  Consider what the impact has been in Canada where all government publications have to be double-printed.

So, too, we see the mass marketing (on the liberal side, anyway) of being part of a subtle but well-orchestrated way to “end the melting pot” and establish a second official language in the USA. 

That’s a huge job program:  It will create ESL departments hiring 10’s of thousands of teachers throughout the country.  Even things like dual language freeway signs.  And a new class of minorities to become a specialization in outfits like the EEOC’s and such.  Move over Blacks.  You still get the taquerias, but look at all the bonus jobs!

However you slice it, it’s more people paying into a terminally ill Social Security System, and it’s a pipeline full of democratic  voters in the wings.

Am I pleased about it? 

No lo sé.

Notwithstanding, as the old surfer said, “It’s the only wave we have, so we ride it.”  Or, as the great Yogi said, “When you come to a fork in the road, take it…”

Besides, Whites are losing the sex race, anyway.  Or did you miss the LBGT movement?

So Why Will the Market Rally Today?

At least for the open?

Well, it’s kinda complicated, but here’s how it seems to roll in the very short term:  First, the interest rates bounced off last week’s lows when you look at the 10-year.

Under conditions where everything else is equal, this should have reduced prices, but with the new car sales figures this morning plus the rate tick, the dollar has fallen a bit relative to other currencies like the Europe.

This takes a little explaining, but follow along:  The money that came over here in advance of the EU’s QE doesn’t have as much reason to hang around now.  What they means is it may see higher returns in Europe where the money printing is on.

That drops the value of the US dollar, meaning it takes more of them to buy the market.  But since that’s really how things work, the Dow and the other indices can move up just based on international money flows without regard to anything else.

Remember:  We in the States only look at the Dow and the other indices as denominated in US dollars.  They look vastly different when viewed from the perspectives of other players in Europe and Asia…and with international market arbing (arbitrage) momma said there’d be days like this.  Tu capisci?  (Capish?)

Ooops.  I mean entender?

But Just In Case…

The Barrackavellian plans don’t work out, there’s at least three wars we can light off, more or less at will, not to mention multiple terrorism hot buttons to push, so it’s going to ride, like it’s going to ride.

The Obama administration looks to be making a play to “normalize” relations with North Korea next, since one of the longest-standing military nightmares has been facing off against Russia over something like Ukraine, trying to contain China which is eyeing the South China Sea oil, while North Korea could use any conflict to simply walk south and there goes a major center for US home appliances since we exported all those jobs from Ohio, you see.

Neutralize the NK’s, hold China hostage to all that Treasury debt they’re holding and then keep Russia confined in EUkraine.  Take the Donetsk petroleum basin, give China part of Africa…yeah…done deal.

Yo Dennis? Wanna prize, dude?

Or so it works in the mind of the Prince and his advisors.

S&P is Just Fine

So the States lawsuit against S&P over mortgage bond ratings is over with a $1.5 billion fine and no admission of guilt.

Yeah right.  I’m the Easter Bunny, too.

More after this…

Comments

Roubini’s Unconventional Truth — 4 Comments

  1. How does that help the economy if the Dow Jones goes to 40,000 who cares if the money goes in the US corporations all the jobs are job Jack across the world that’s not going to help anybody here working hell 20 percent of our population makes less than $15,000 a year that are working I’m done with my rant

  2. Let me repeat myself – again – I’m certainly glad I have lived when I lived – at the true HI point of the Constitutional Republic of the United States of America – and I am only sad that I shall perhaps – maybe – see the end of it – but then – I probably won’t live quite that long.

  3. How do you balance your big market crash w/ Armstrong’s call for DJIA 40K once capital starts to flood to the US?