There are always multiple ways to view history – even as it is occurring before our very eyes.
When the US was in its last economic depression, we had the roll-out the new government in Germany back in the 1930’s.
To follow up on my Sunday post about the new [global] Caliphate, I’ve been eyeing a timeline of Germany in the 30’s (try here) to see if the ISIS/ISIL people are somehow (perhaps unwittingly) falling into an historical rhyme with Hitler’s rise to power?
As long-time readers know, I’ve been debating for some months now, whether the economy peaked (for good) in 2000 (the Internet Bubble) and whether the present illusion of recovery is simply due to massively dislocated economic resources.
In 2000, the high Dow was around 11,723. And, when we put that into the Minneapolis Fed Inflation calculator, we infer that the Dow would only need to be at 16,080 in order to have held onto parity on a purchasing power basis.
Since the Dow closed Friday at 16,851, an initial argument could be made that investing in the Dow would have netted a person a 4.8% return since 2000.
Frankly, holding on to the Dow stocks for 14.5 years for a real return of 4.8% doesn’t exactly get me excited, but maybe you have a lower threshold than I do.
But just “buying the Dow” was an incredibly risky thing: The Dow gets jiggered because of the changing economy and when companies run into bad sledding:
AT&T Corporation, Eastman Kodak Company, and International Paper Company were replaced by American International Group Inc., Pfizer Incorporated, and Verizon Communications Inc..
SBC Communications Inc. was renamed AT&T Inc. after it acquired the original AT&T.
Altria Group Incorporated and Honeywell International Inc. were replaced by Bank of America Corporation and Chevron Corporation.
American International Group Inc. was replaced by Kraft Foods Inc.
Citigroup Inc. and General Motors Corporation were replaced by Cisco Systems, Inc. and The Travelers Companies, Inc.
Kraft Foods Inc. was replaced by UnitedHealth Group. (See comments on healthcare in this morning’s Coping section)
Alcoa Incorporated, Bank of America Corporation, and Hewlett Packard Company were replaced by Goldman Sachs, Nike, and Visa.
If you held onto any of the turkey’s in the 2000 “Dow” you could have accumulated large losses and how much of that 4.8% illusory gain could have been actualized (after commission just to keep up with the jumble of changes) would be far beyond the scope of a one-cup article.
The S&P has a different picture: The high in 2000 was 1,552.87 which would be 2,130.13 on an inflation-adjusted basis today. Since the S&P closed about 1,961 last Friday, if you’d simply traded the S&P since 2000, on an inflation-adjusted (purchasing power) basis, you’d be down about 8% after 14.5-years of worry.
Gold, on the other hand, touched $316 momentarily a couple of times in February of 2000. And, correcting for inflation through present that pencils out to just $433.47.
With the spot price of gold around $1,310 this morning, the return on gold is right around 3-times. Just ever so slightly better than an illusory 4.8% or a –8%, but it’s early in the math day for me.
Still, I’m left wondering this morning if besides bringing in an underclass to pay for Social Security and other soon-to-be-broke promises without compliant (and not tax-savvy) Tech Age Slaves, if maybe another reason for the Pelosi border pomp this weekend wasn’t to welcome new buyers of paper to America.
People without a great deal of financial sophistication ought to be fine grist for the financial shills….and as long as the paper lies hold, the people in the Big Houses on Long Island will make out like what they are: Bandits and nutech slavers.
More after this.
Refugee Money Hype
With Congress unable to commit to reform on the immigration problem (not that the Obama administration bothers following the letter of the law anyway, telling CBP to stand down from the laws on the books) there’s a full court press on to get the government printing press to crank up money to pay for more services and deal with the illegal flow over the border which congress is unwilling to stem.
Sheriff Joe over in Arizona, which has been particularly dumped on (by Obama administration political operatives dumping illegals in local bus stations there) suggests calling out the military to hold the border.
The logic of a secure border aside (Chinese are coming in that way now), he’ll no doubt be branded a racist for trying to stem the influx of OTMs and MS-13 members, which is about the damnedest twist-up of logic you’ll find lately.
The end game: This will be an excuse to print money and to manufacture another “holding action” to keep the economy from collapsing in a long wave economic heap.
The cynical believer in longwave economics note how many of the 1930’s management tools have already been pulled:
Record low interest rates
The Fed ballooning its balance sheet by $4 trillion to keep any of the big players from feeling loss
The Civilian Conservation Corp II is alive in the governments low-profile AmeriCorps program (same strategy, different marketing profile, and totally missed by the complicit corporate media.
So, yes, the government needs a reason to print more in order for the phat cats to remain fat.
Markets
The Dow and S&P look to open about flat this morning. There are scads of minor economic reports due out this week, but on Thursday the one to watch is the unemployment rate.
I trust you’ve found places on the web like this one where the Center for Immigration Studies says “All employment growth since 2000 when to immigrants”? Can I pass the salt?
New [global] Caliphate Rollout…
..Was covered in Peoplenomics on the 18th ahead of events and in a special UrbanSurv. update on Sunday here.
If you’re not satisfied with taking the longer view of history unfolding, you can catch the BBC play-by-play action over here under the heading “Isis rebels declare ‘Islamic state” in Iraq and Syria…”
If you need more to worry about, I have a list of other worries I could share…
Cynicism Dept.
You know the summer news doldrums are here: There isn’t a feeding frenzy on MH370 this morning (thank God!) but we’re back to the (no one cares about) Pistorius trial.
In terms of hits – Google news is just under 100,000 URLs for Pistorius and about 150,000 for tax reform.
If that’s not a clue to how to cloud and confuse people…speaking of which…
Face is Sorry
Their mid-control experiments are getting them some blowback. The NY times has a great article about how FB tinkered with headlines and discovered that when flooded with bummer news, people would write downer posts.
Gee, who would have thought, huh?
Oh…wait. if it’s it the name of science, it must be OK, isn’t it? I mean Josef Mengele aside, o’ course.
Here in the land of correctness and do-overs, it won’t mean a thing. Except about a break of the public trust, but who cares about useless old-school values like that anymore?