Terrible as the killer rampage in Las Vegas was Sunday night, there is often a tendency when a “big event” has just shocked the nation to ignore a lot of other stories going on in background. It’s like a “flash-in-the-pan” that arrests the national attention.
So instead of a list of videos, eyewitness accounts, and such, we’ve already made out look-ahead Monday (on the future of public gatherings) so today we’re scanning for what is usually a bigger story going on in background.
There are bigger stories, in our view, that shouldn’t be missed: The Spanish government’s crackdown on Catalonia which voted to withdraw from Spanish rule; the coming pension collapse crisis in the USA and worldwide. Plus, it goes without saying, the ongoing super bubble in the stock market fed by a Federal Reserve that orchestrates printing without end.
So while America mourns, the outlook scans the horizon for what’s to come next.
Catalonia vote: Spain’s biggest crisis for a generation says the BBC.
The real questions are a) what will Spain do to acknowledge the vote, b) what will the EU do to Spain for failure to acknowledge the vote and c) what will the US do to the EU and Spain for failing to free the Catalans?
Seems simple enough; we hope our worst-case outcome (another Spanish revolution) doesn’t come to pass. But it’s axiomatic that those in power don’t easily share power.
The old fire-house term was, I believe, “overly in charge.” Which is how Spain is playing it. Badly.
The next economy (the PAYG Economy) is up for Peoplenomics subscribers tomorrow. But one of the baseline concepts that will drive is the coming (worldwide) collapse of pension funds. Check out some of these headlines:
- Hundreds gather at pension rally in Perry County
- Philly Pension Board considers divesting from private prisons
- Cliffwater: US state pension plans returned a median annualized 5.9% over 10 years
This last is pretty interesting – and here’s why: Know what the 10-year note was yielding 10 years ago? April Fools Day 2007 the 10-year was pumping out 5.03%.
The real problem is not looking in the rearview and going off on a self-congratulatory spin. Rather, it is looking steely-eyed toward the future.
In the meantime, as the markets come to terms with last weekend’s Peoplenomics perspective (“What’s left to buy?”) we expect that the pension collapse will be a worldwide affair that may be the leading edge of the DDA – the Digital Dark Ages.
That’s what to expect when there are disappearing jobs, disappearing energy (depletion never sleeps, OM2 reminds us), and robots are there to take up everything that isn’t nailed down.
There are snips of the dark side of sci-fi coming if you look for it. Venture Beat has this little gem: Robots can kill, but can they murder? Sorry, but to us it’s one of those oh-d’uh headlines. But shocking for the masses I suppose.
One of the reasons both the Internet Bubble Collapse (2002-2003) and the Housing bubble collapse (2008-2009) didn’t result in the descent into the New Dark Age was simply that the damage was confined to mostly one country – ours.
This pension mess, though, is a global deal. Again, when pension payouts are based on long-term average returns (historically) in the 7 percent range, when the real returns are sinking below five (and the 10 year T-note closed yesterday at 2.337%), it’s only a matter of time until the worse-case pension outlooks of the Pension Benefit Guarantee Corporation come to pass.
The key difference is that there will not be pools of “hot money” coming in from offshore to help with the bounce back to profitability. Because this time, when the global pensions go bust, it will suck up the money that’s out there (and then some) so that we will have no choice but to hyper-inflate our way out of it, just as Mexico did way back when with the Nuevo Peso.
Forgot about the New Peso, did we?
“Throughout most of the 20th century, the Mexican peso remained one of the more stable currencies in Latin America, since the economy did not experience periods of hyperinflation common to other countries in the region. However, after the Oil Crisis of the late 1970s, Mexico defaulted on its external debt in 1982, and as a result the country suffered a severe case of capital flight, followed by several years of inflation and devaluation, until a government economic strategy called the “Stability and Economic Growth Pact” (Pacto de estabilidad y crecimiento económico, PECE) was adopted under President Carlos Salinas. On January 1, 1993 the Bank of Mexico introduced a new currency, the nuevo peso (“new peso”, or MXN), written “N$” followed by the numerical amount. One new peso, or N$1.00, was equal to 1000 of the obsolete MXP pesos.
On January 1, 1996, the modifier nuevo was dropped from the name and new coins and banknotes – identical in every respect to the 1993 issue, with the exception of the now absent word “nuevo” – were put into circulation. The ISO 4217 code, however, remained unchanged as MXN.
Thanks to the stability of the Mexican economy and the growth in foreign investment, the Mexican peso is now among the 15 most traded currency units in recent years.
At the uber-macro level, we should have a nice decline for an ultra longwave IV in the 2018 timeframe and then the final wave V into the war in 2024.
In this last bubble, oil will go to the moon (because we are in a hold to new drilling because of price now – that will go the other way as we work through the glut and then we will get the squeeze until new resource is found, though at a much higher price) and so will gold, silver, farm land, and such because only those things with genuine value will be meaningful in a hyper inflating world.
By the way, it would be an instructive economic forecast to look at 2025 pension problems of China, Europe, and Russia because we know the U.S. pensions will be blowing up by then. Why, the glory of a world of blown-up pensions is just a marvel.
Lots of people won’t see it – 7-8 years is admittedly a long way up the track, but you can hear the train coming from here.
And as far-sighted pensions begin to scale back bennies, there goes a major engine of the over-played economy which then collapses demand and as that goes, so does everything else, especially services which is what, 95% of the American economy now?
We will get fresh data at the end of the week but as of last month 153,439,000 people were employed in ‘Mercia (not counting government).
104-million and change were in services while 20-million and change were making goods and of these just 12.5-million were in manufacturing. So about one person in 8 makes a thing in the factory sense.
Meanwhile the Fed is pumping money out fast as they can – and the result as we explained recently would be markets going to the moon – while the pumping and the cleanup of their balance sheet at the Fed continues.
So how did we do that prediction?
What can I say?
Tom Petty Is Dead: Let’s Monetize Tom Petty
Which is how Ure favorite cynic views stories like.
Yep: Reacting to a death is, once again, arguably the famous trying to monetize.
Confidence in U.S. Economy Dips to +4 in September says the new Gallup data out this morning.
BTC’s are running $4,290’ish.
And the Dow futures are looking for +35 at the open, so another day of records may be coming…wouldn’t surprise us in the least.
Peoplenomics tomorrow “The PAYG Economy” and more here on the free side of things Thursday. Ne well and don’t be long for long, lol.