It’s a math problem…although it sure looks like a meth problem, as the US markets continue to “put on the beans” as we are living through the financial analogy to “Going to Mars.” The Moon-shot point was passed a long time ago.
Let’s begin with the breaking financial developments:
The first is Housing Starts just out from the Census Bureau:
The next “bigly” to come along will be industrial production and utilization from the Fed.
Speak of the Fed
The “Mars Shot” bankster class just keeps piling on the made-up money: As of the H.6 Money Stocks report out last night we see money creation is still bumping up against that 10% per annum rate.
As you can read, over the past year. money was being “made-up” at a 6.6 percent rate which MIGHT have been justifiable. But this recent binge printing??? Justifiable moneycide?
Or, perhaps it’s nothing more than Mugabenomics sprung to life, since there is an uncomfortable parallel to be found amongst the Zimbabwe Trillionaire class, and those people during the Weimar Republic who bought groceries with wheelbarrows loaded with paper. Marks and Marx, anyone?
After Housing, Dow futures up 90,, and the Fed only put in $52,.640 -billion via the repo resuccitastor… BTC’s $8,827 this morning.
Big Picture – Important
On an extraordinarily serious [for us] side note, the Ben Bernanke call last year (Lower for Longer! L4L) still makes sense to us, because the U.S. is undergoing what will – in the longer-term – be a potential nation-saving write-down of old, higher-priced debt instruments like the 30-year Treasury.
The mechanics of this might look like this on a high-precision cocktail napkin, which we keep handy for such discussions:
You’ll notice that there’s an offset between the present market interest rate and the aggregated average interest rate of 30-year paper. Dr. Bernanke’s call was that if you don’t really “wash out a bit along the bottoming process” (to paraphrase) then you don’t get the benefit of the restructured lower rate accumulated debt in the future. IoW there’s no “crossing.”
So, during the time that rates are low (and coming down) the longer-term rates has a kind of “over-hang” and it seems like inflation will be coming along to end us all. but,. what Dr. Bernanke knows (though the public doesn’t grok this stuff easily) is that when we finally wash out all the deflation (which will take a while!) and growth begins to recover, then the relationship of the long-term (like the 30-year) will lag (and by what could be a good amount) and that, goes the thinking, will recover or fix the present soaring over-head with the growing national debt. Which as of this morning is? Well, lots…
But you get the idea: Looks like when rates are coming down, this restructure of U.S. long-term debt is painful, but when inflation (driving by wage demands which are already in the pipeline, and being promoted by some of the more socialist city councils in big tech cities, that will press prevailing prices up, but the restructured debt will then tend to underwhelm, rather than overwhelm. It’s just that most reporters don’t have an economic brain in their heads so they miss the coming underwhelming part.
Oddly – and this will piss off the conservatives – the drive by the local Digital Mob Rule – Online Socialists actually sets the ground for the wage-driven inflation to come and the nascent move in precious metals and energies is very much analogous to what would be expected at the start of a macro Sixth Kondratieff long wave.
OK, which gets us to a difficult question (and now we get into the really deep discussion of what’s ahead. Well, it depends who you ask.
Look, if you’re really going to “see future right” you need to spend some time reading something more useful than the bullsh*t social media postings of the mee-tew;’s. You might get something useful from Leo Nefiodow’s grand book The Sixth Kondratieff: A New Long Wave in the Global Economy, for example. Doesn’t cost much more than a first-run streaming flick, either, and definitely more useful!.
Let me show you what’s going on (even if you’re not a Peoplenomics subscriber – or haven’t read Nefiodow’s book – think of this as a freebie, right?)
The Nefiodow’s book exactly lays out the roots of our Kondratieff reality. That is, successive technological waves that each bring a major upturn, and then a major decline (read: Depression) and it’s worth every second of reading (depending on brain size or the amount of “RAM between your ears…”
The one disagreement -critique is more like it – is that since I’ve been brain-deep in everything computery since we did the first wireless data broadcast to the home market back in 1983 – it’s that Nefiodow’s labeling of the 6th Wave with a questionmark, is not how we’d call it.
Instead, “Information technologies” being a class label for computery-stuff is (in Ure’s view) too general. Being immersed in it so deeply, I see a succession of over-lapping breakthroughs beginning with the first chips (processor revolution) followed by the A.X25 protocol and the start of the (network revolution) and then the (workflow/ERP revolution). Far as I can figure it, there were no analogs in “overlap of buggy whip technology” for example. “This time is different” is really true, at least in part.
What I think is coming is “AIR” – A.I./Robotics. Which is why the headlong rush to get our Peoplenomics.com readers up to speed on all of our blooming 3D printer and CNC equipment our here which is in our local build cue. And why it’s going onto the new (thanks, Peoplenomics readers!) website: https://ultra-make.com
Following this? OK, regardless of this minor labeling nit with Nefiodow, the HUGE lesson from my friend Cesare Marchetti (inventor of successive S-curves and much more) is to understand that during the periods of overlap between K-waves, you get this HUMUNGOUS period of prosperity because everyone who is working is already into the mix and more jobs exist than workers to fill.
Which gets us to the blue lines and the yellow box I’ve added to expand on the point of Kondratieff waves in the first place. As you can see in the Nefiodow’s work, the petrochemical industry was coming along in the 1870’s, but there was not an especially big ramp on the tech of that, the real growth would be more a “diffusion of innovation” (after Everett Rogers’ Diffusion of Innovations, 5th Edition) but read the Nefiodow’s book first, OK?).
In the end, a technology can come in a single big wave (like trailroads) OR the wave may be segmenting as successive tech overlaps now arise as the world becomes a more complicated place. Which is where my bets run.
Enough of this – and tomorrow we will take a “day off” from the deep econ thinking on the subscriber site and deep with some “deep psychology” research. Like we don’t have enough to keep the brain engaged, right?
The hard-core liberalista sock-puppets of the Global Socialists don’t have a clue. As revealed in UN Warns Of Slowbalisation As Economic Growth In 2019 Plunged To Lowest In Decade. They need to get a f*cking grip and read more. Yin and Yang hold office at the same time. Except Yang’s a sub right now and Yin’s the dom. So as an add-on for the stoops, toss in a bit of Chinese cultural heritage and save a place for the Favorite Uncle at the Chinese dinner table. Which is all a rew-write of Uncle Sam at the Thanksgiving table, which most people have no clue about.
Ecclesiates: “No New Think under the Sun,” or what?
In the Shorts
Compared to this much more useful, longer-term view, the daily news flow doesn’t even “move the meter” in terms of what’s really important in Life. Still, a few things look useful (after last week’s Peoplenomics on personally useful information – and toss the rest…)
Useless news includes a report that Parnas says Trump tried to fire Yovanovitch “at least four” times. Ex-squeeze me? Don’t ambassadors serve at the pleasure or leisure of the President?
Put another Log on your cereal since Human ancestors may have eaten hard plant tissues without damaging teeth.
We suspect the “can’t read the Constitution” left in Virginia is moving toward Russian-style government arms seizure’s, as we noticed that three Alleged white supremacists arrested ahead of Virginia gun rights rally. We don’t support neo-Nazi hate, on the one hand, but we’re deeply troubled when the Surveillance State usrupts the right to privacy. Dept. of Pre-Crime is here, if you hadn’t noticed. Not sure where this all comes out in the wash.
Having scrambled my brain, off to scramble to eggs, next…
Write when you get rich,