OK, corporate wage slave, up at an ‘em: Time to jump on the treadmill like a good little hamster and press your nose toward the cheese for another week…all so we can pay interest which will accrue to the Uber Klassen so they, in turn, won’t have to work and can reinvest their money in continuing to buy corrupt politicians who don’t listen to the people, preferring instead the poison lies of the lobbyists instead.
Boy, am I ever a motivator, or what?
The good news, such as it is, holds that we are likely to see a 25% decline in the Dow and other major indices when people figure out how bad the economy really is.
If you didn’t catch it, the UK Telegraph article “Europe repeating all the errors of Japan as deflation draws closer” is a real eye-opener.
What people don’t remember is that the Japanese Nikkei 225 index (roughly the Japanese equivalent of our Dow Jones average) was up nearing 40,000 points (yen) back in 1989. Overnight, the Nikkei had a huge rally (2.29%) but even so, it’s been stuck in this area (closing at 15,650) seemingly forever.
“Wait! You mean the Japanese market was 2 1/2 times higher 25-years ago?”
Well, yeah, duh. Welcome to Depression economics.
That’s evident when you look at the “max timeline” chart of the ^N225 over here at Yahoo Finance, dude. It also shows the problem that Europe is running into and where the US is going, as well. The only thing we’re missing is the killer radiation levels, but give it time.
Crude Lingo Alert: [Remember SBD – silent but deadly – farts? Fukushima’s like that…]
One of our readers asked this morning if I could explain the robust growth in GDP. Well, one way to look at it is “channel stuffing” by manufacturers, who are desperate to hit year-end sales targets so they are pushing crap into the warehouses of retailers. No target hit? No bonus…
The retailers, in turn, because of the collapsing cost of money (read: zero percent interest rates effectively) can lock in goods cheap today (they believe) on the theory that prices will come zooming upward as soon as the “recovery” kicks in.
“Rut Roh” Scooby. Lil’ tardy on that one…
This is all quite circular, don’t you see? Channel-stuffing makes jobs which makes demand, which creates jobs, which creates spending, which creates channel “sell-through” which is why Ures truly expects some hellacious deals to be had on everything under the Sun in January. Someone in retail is going to wake the ‘f up in January and start to dump.
Check this out: A chart (through November) of the total business inventories…got it?
Now, let’s look at inventories in 2009 because that was a pretty good indicator of how these things work. Back then we had…um….call it $1.33 trillion in business inventories.
What would the equivalent level be today? It would be about $1.447 trillion, using the Minneapolis Fed inflation calculator over here. But, as you can see, inventories are at about $1.68 trillion (plus or minus a can of soup) today, which means inventory levels are 16% higher, on an inflation-adjusted basis, in the last four 1/2 years.
That’s a mighty big swing.
So: Here’s what I’m speculating will happen:
a. The Fed will hint at increasing rates when they meet in late January.
b. People in retailing will look at their inventories (up 16% on a real basis, remember?) and scream “Holy shit! How are we going to afford all this inventory if we actually have to pay interest on it?” Free money was such a nice ride….
c. Inventory dumping will begin…
d. Which means profits will fall…
e. Which means stocks will fall….(*because earnings will fall)
f. Which means the Fed is now locked into permanent money printing in order to keep the whole financial system from going KA-BLOOEY! We become like the Japanese!
g. Which will set off another round of job cuts…
h. Which will set off a further decline in real estate prices… (Also due in part to the prospect of those real estate-binging venture groups facing the prospect of actually paying someone back with interest, which is why housing prices are about to level off and maybe head face down…Banks being under pressure to unload their REO (read estate owned) too…
i. As soon as this dynamic is realized, then what’s left of commercial real estate falls on its butt (again) since with home office automation, what’s the point of paying big bucks for an office? Everyone has Skpe, Broadband, and Starbucks! Toss in online banking and who needs a building? Ever use Quickbooks Online? Your accounting department can be in Bozeman.
I could, of course go on, but it would make a mighty messy and depressing report. So I decided to keep it really light and uplifting this morning (and this is the best I could come up with?):
OK, corporate wage slave, up at an ‘em: Time to jump on the treadmill like a good little hamster and press your nose toward the cheese for another week…all so we can pay interest which will accrue to the Uber Klassen so they, in turn, won’t have to work and can reinvest their money in buying corrupt politicians who don’t listen to the people, preferring instead the poison lies of the lobbyists instead.
If you’re not saving money hand over fist, you’re screwed.
And even if you are saving money, you’re screwed anyway, because when all this begins to roll (it’s the Debtberg, remember? 90 percent of the Debtberg is invisible…) you’re going to be subject to a “wealth tax” which will roll globally in order for the PowersThatScrewedThingsUp (PTSTU) will take one last turn at the global citizens financial gang-bang before the global version of the French Revolution comes around.
I expect America, unlike other countries (think Iceland) will call BS on what’s coming, but we could roll over Cyprus and Greece-like. Depends on the marketing. But if Healthcare is a template, there is no alternative to becoming a Prepper.
The realities were Friday (and still are, Monday) that:
- You can’t have more people getting free money than paying taxes
- You need REAL jobs in order to pay taxes. Flipping burgers is counted as a “manufacturing job now” notes a similarly cynical reader.
- You don’t have jobs because of automation and robotics and 10-an-hour foreigners.
- Until robotics are taxed on parity with humans, and the lie of job-wrecking imports is dispensed with, this is a one way ride to the financial slaughterhouse.
You see why I love getting up and writing on Monday? Things are just so crisp and clear…
See Dr. Marc Faber’s comments along the same line, too: “World Center Bankers are going to Bankrupt the World.” Yeah, we noticed…
In spite of reality, the markets looked flat this morning because the 7% unemployment figure is all based on free money which is unsustainable and as some point the markets will think that part through, too. I sense one more blow off to the upside and new all time highs.
Then duck.
More after this…
Obamacare: The latest nightmares
…is the report that “New affordable Care US health plans will exclude top hospitals.”
I don’t know as I’d go so far as to write something like “Shock Claim: Obama worse than a communist.”
The Russian people brought the Soviet Empire down. But here in ‘Merica, the People can’t bring down the Lobbyist Empire…far most entrenched. Which is why the Russian peeps had a leg up on us…
Making the rounds on discussion boards are posts like this one which claims “Obamacare seeks to segregate patients/doctors by ethnic races…” Is this “giving the customers what they want” or something more sinister? I look forward to my liberal pals to arguing both sides of this one…
Madness on Bordering
Over on the “Tea Party Command Center” site, we see “Texas defies feds: We shut the border down ourselves, said Lt. gov…”
NK: The Urge to Purge
Morning seems like a fine time to cover this: A purge in the ranks of the North Koreans as the kid at the helm has kicked out the party old-line power broker (uncle) who was not playing nicey nice with the People’s resources…
Clearly Kim Jong Un “gets it” – namely you have to feed the People…and feed them an occasional scapegoat to hold hunger at bay. And Uncle will do, nicely. Shows that no one is above the “law”.
Good management. But what about Auntie? Remember, she (and her hubby) defected to the West, had plastic surgery and are in hiding…
Just a guess: These North Korean leader/people have some serious unresolved family problems! Poster family for dysfunctional.
Global Warming Joke
The joke’s on Al. It was the Sun, all along.,…d’oh!
Here’s the latest just out this morning from the Solar Weather Prediction Center which has been counting the extreme lack of sunspots in what I’m selling as Ure’s Minimum…
Australia is getting snow in their summer.
Record snowfalls around Texas from the storm this weekend. None here, thanks, but colder’n hell.
Cold snap in Oregon.
Point for Gore: Record cold temperature in the Antarctic is being disputed.
I run hot and cold on this climate thing…(wink-wink, budge-nudge)
Laughable Headlines & Stories Department:
“Congress Readies a Year-End Dash” flashes the Wall St. Journal. That’s as believable as Ures truly joining the Bolshoi.
Blah, blah blah, Kardashian, blah,blah, yada, yada…
“US Tech companies call for more controls on surveillance.” Yes! But who invented this shit?
So as it turns out, my dear cheese-hamster, YOU are not crazy.
The world really is…for another day… got a light?