That? We are in an interesting space – or will be in coming weeks.
We have an outlook for the market suggesting it’s possible, in late May, we may begin a nice rally. From lower levels than now. Problem is that the rally will end. In fact, Zeus the Cat has a pool going for where it might stop late this summer.
While he expects the Dow to fall below 20,000 in the fall decline (Dow 19.855, write it down and remember this forecast is from a cat), the summer rally from the May lows, around Dow 22,870 should be enjoyable for bulls. But that just “opens the box” on the pending American decline. Globalism is ending.
This won’t be the first reference we’ve made to Richard Heinberg’s book Peak Everything: Waking Up to the Century of Declines, and I expect it won’t be the last.
But there is an evolving case in our financial models around here (not touched by feline paws) that says, in so many words) that “If we drop under 20,000 on the Dow this Fall, it could just be an uber-macro Wave 1 down.
I know that’s hard to fathom. Just imagine what the Elliott wave implications are, for a moment.
For the sake of discussion, let’s say the cat is right about the projected fall lows.
That allows us to run an Elliott wave model that says “What if uber-wave 1 down (from 26,616.71) down to the low forecast by the cat were used as wave 1 down bounds?”
That would put the bottom of the Fifth Macro Down as high case at 11,387.09 (like the .09 would matter?) and the mostly likely landing zone Dow 8,006.23.
People who insist on “buying the dips” on the way down will lose not only their shirts, but a lot more.
We kick around cheery outlooks like this generally on the Peoplenomics side. Because to speak of such things publicly could scare a large number of sheep. Makes us look alarmist, too.
But, one of the ideas that peeks out from a rescan of Heinberg’s book is there may be no place to hide.
For example, he gets into the problems ahead for fisheries resource a bit (pg 91-92) and it’s remarkable for a nearly 10-year old book to be so useful in present-times.
The theme End of the Line is rattling around in my head a lot, here lately. Try The End of the Line: How Overfishing Is Changing the World and What We Eat, a 2006 book that is equally prescient (and this was before Fukushima!
Then load up on Barry C. Lynn’s tomb End of the Line: The Rise and Coming Fall of the Global Corporation.
What our models are suggesting is that the “new decline” – one that will be the super-grand-daddy of ’em all – may not come as a one-day affair.
The “Peak Everything” process is slow.
I brought up fishing because it’s easy to track the stairsteps down to into financial oblivion.
Imagine that on our next trip to Seattle, Elaine and I eat that last (or final tipping-point) order of fish & chips.
The following years would be marked with declines in the cod harvest (my order) and halibut (Elaine’s order).
Two or three bad years on the fishing grounds and the world begins to change.
High energy-consumption commercial fishing boat prices begin to fall. Which no licensing is required on the “high seas” at the moment, we expect that international negotiations will be started in places like the UN.
Desperate global interests will duke it out, but with no “international navies” it will become a Super Powers issue. China, having a serious interest will expand it’s influence – and that’s why they are island-building.
Ignoring the run for fish and chips, another year goes by with poor results. The marine suppliers who have served the fleets will begin to close up shop and blow away. The process has been slow, but unrelenting.
After that, maybe as little as two years, there will be layoffs by the gear makers. Everything from foul weather gear to hydraulic winches to marine diesel engines and gear boxes. Electronics will dwindle and more boats will be put on the market.
Noting the collapse, regulators will step in, though too late. There’s no way to make enough fish for 8-billion people, which we’ll be sooner than later.
As the fisheries peak rolls forward and downhill, the nature of America’s waterfronts will begin to change. You can already see it in places like Seattle.
Old-school restaurants, like Ivar’s Acres of Clams, will be among the few to survival. North along the waterfront from there, all that will remain will be a nostalgic motif of imagery – more than substance.
You can count the fishing boats at Fisherman’s Wharf, too. All around, the “monetizers” have sprung up, anxious to capitalize on people’s interest in health, good-eating fish. But the appetite is more than that. In fact, it’s about selling a memory as much as a meal.
And this is only one small segment of society. The crews will decline, and their ranks will shrink. With smaller crews, the Coast Guard might eventually have to lay off seaman licensing staff…you see how it propagates.
The main thing to keep in mind is that while Depressions have been fast-onset events in the past, much of that volatility has been the direct result of information asymmetry.
The Internet, it will turn out, is not likely to save us for any human economic folly. But, because the information is so widely-spread and so quickly, people will react more quickly. Paradoxically, this evens out the rate of decline.
Lynn and Heinberg are like touchstones around the office. I look at the macro picture and the only question is “Will there be a sudden collapse, or does the world just ‘bleed out?'”
As it does, what it the right/proper roll of heads of families?
I think it’s to be putting together an “all hands” survival plan for the slow collapse scenario.
It’s one thing to have an earthquake, social disorder, EMP kind of plan, but the slow collapse model really seems to make the most sense.
A couple of articles I haven’t mentioned: “Robots could take over 38% of U.S. jobs within about 15 years, report says.” Please note that this was a 2017 report, so down to 14-years.
Whack38% off the U.S. workforce and we have less than 100-million working to support services for 335-million. Only way to do that is tax the bejezus out of everything.
Sure, we like tax cuts as much as the next family. But it will come at the horrible cost of eroding the Nation’s money, even more. Prices will go up, a version of Weimar “Hyperinflation Lite” becomes likely. With that? The gulf between the 1% and 99% will become even more stark. And contentious.
This is likely to leave in much the same way as fishery declines have worked to decimate small coastal communities. A few big machines, then the downsizing that leads to increased “excess workers.”
You know, it’s hard to demand a higher wage when robotics and AI begin to move in. There will be a definite deflationary impact as robots replace humans.
Done slowly? I will save some of that for the subscriber side. But please, think about the last fish and chips and then begin thinking about how to save your family if we really are on the edge of a century-long decline which will include a large population reduction.
It’s not a happy thought, but do kick it around. Then ponder deeply the ramifications of what happens to “profit-based economics” when there’s none to be made. Which is why the headlong rush is on right now to monetize everything.
It’s why gender, sexual orientation, political affiliation, weather, and even rain water run-off are being seized-upon for control and dominance of others.
The simple fact is, when the End of Expansion-Only Economics arrives, it will be a time of mass devastation. Not just at the personal level, but for families, cities, states, and even whole nations.
Hell on Earth.
Heinberg and Lynn fall into that rarified class of “look-ahead” books that were seriously ahead of the times. (I think of my own efforts in Broken Web).
It’s fairly common to be way right, but also way early. 1979 THE COMING REAL ESTATE CRASH Hardcover Book by CARDIFF & ENGLISH, for example, came how long ahead of the 2007-2009 event?
While it wasn’t a perfect outlook – in that they didn’t see the role of the serial-bubble Fed, and looked more at the eventual collapse of suburbs as unsupportable (and unaffordable) due to costs of things like energy and the intergenerational decline in purchasing power) they nevertheless got the Big Picture elements right.
Spend some time, now and then, reading books that look ahead a decade, or longer. In them, you will find some very useful information on structuring your life (and those of the ones you love) to be Urban Survivors in the longer-term.
(Cheery today, huh?)
Ham Radio Note
Best ham radio operating guide I’ve seen in a while and one that most hams have somewhere on their to-do list, but somehow you never take take (or have) the time to actually ‘git’er done.’
It’s a list of all the two meter and 440 repeaters around the area – up to two counties away, or so.
I’m pretty sure that it will show up on the http://www.pacarc.org/ website. (It may be there and I’m just half-blind…) But, in the meantime, if you have a local ham club, local member Tom’s project is one of the most useful yet that can be cloned with local data everywhere.
It gives 10 counties worth of popular repeater frequencies. In an emergency, it’d be a godsend. Especially which printed and laminated so it would be useful in an emergency communications setting.
Also great to have in the car and for programming a new radio. Fine job, and a sincere “Atta-boy” to Tom for all the work on it.
There are far more detailed resources (like the ARRL National Repeater Directory) but the print in that is pretty small and as for outdoor use in the rain with heavy weather? Uh…no thanks!
Great club project if your club doesn’t have a lot of useful information on it’s website.
Write when you get rich,