This 1929 Chart is Scary!

by

Disinflation is being screamed in commodity prices this morning. Could the Fed Chair be right? Transitory?  Lots to cover to sort this out.

If you feel like (pardon this) your economic nuts are in a vise?  The explanation takes a minute but it’s worth your while.

We do appear to be Replaying 1929 (the premise of this site since 2001) “close-enough for home use.”

This chart is not perfect and does not constitute “financial advice.”

It simply compares the track of the 1929 Dow run-up and collapse from 1920 to about 1937 (in blue).  It then uses our own proprietary Aggregate Index to see where things are in comparison.

Understand that in 1929, the Dow Jones Industrials were a reasonable indicator of how the overall economy was doing.  In modern times, we use a little tech, and a broader industrial sampling because life has moved on from the days of the Radio Trust.

Financial Engineering is in style, however, among the rich and manipulative as ever.

The Role of the Trusts in the 1929 debacle cannot be overstated.  Trusts came in two waves.  With the first being the market trusts (Radio Trust, Steel Trust and so forth).  But after the market collapsed (look around you – present day) we saw a major increase in family Trusts circa 1930 as Big Important Families attempted to protect their remaining assets for future generations.

Here’s one of those “quiet drivers” no one really talks about:  Many of these Depression era trusts had “expiration dates.”  A prescient legal firm website blog here said in 2016:

“Most of the trusts created at that time have mandatory termination dates at which time the trust assets must be distributed to the residual beneficiaries.”

The Depression dynamics have left the Really Rich in a tough spot.  Where do you park the Ruling Class’s Intergenerational Wealth in today’s world?

Again. we have another example of the Biden administration lacking the mental acuity to anticipate and then  govern effectively.  Rollovers and changes in overall investment direction of Big Money is normally something you can follow easily.  However, with Tech in its recent blow-down mode, and with food about to become nonlinear on the demand/pricing curves, we see the error in public policy.

What’s not discussed in economic or policy-wonk (daycare) centers, is that when you have a nearly 90-year hollowing out of money (renunciation of purchasing power done slowly enough…) there are only 3-Major Outcomes.

Here’s how these strategies break down:

  • Option 1:  Hyperinflation.  Most famously, this was done in the 
    Weimar Republic.  This is where civil government merely adds zeros and pretends its money is still worth something.  The problem with this approach is it gives rises to political demagogues (like Hitler in the German case) and eventually leads to war.  Echo:  Trump’s rise.
  • Option 2:  Deflation.  The biggie here was the U.S. hyper-deflation called the Great Depression.  Which also led to war (WW II) but it helps if you have antagonists who are at the extremes for deflation and inflation around the same time. Helps if they hate each other. Echo: Ukriane-Russia.
  • Option 3: America’s Present Delusion.  The champion of this middle ground was Ben Bernanke, who in addition to being a former Fed Chair, is also a brilliant historian of the Great Depression.  His approach was articulated as “helicopters full of money” to drop on the population.  The action path here was an initial deflation followed by a moderate inflation which gets us to the next crossroads for policy where we are right now. I mean like this morning.

Before we talk crossroads, though, we suspiciously observe that the Covid 19 debacle met a large number of economic objectives; enough to be labeled “suspicious in origins.”

  • Covid 19 reduced the aging population a bit.  Reduced pressure on the government’s Social Security Trust Fund (which is a whole other Zenlensky-level joke) but more important, gave the government an excuse to “give away money” (which is cheaper than helicopter fuel when you think about it!).
  • Covid reduced consumption.  There are still fewer people working in America today than in the summer of 2019.
  • Covid made some rich richer:  Quick!  Name two or three pharmaceutical companies that screamed higher.
  • Borders are open. An insurgency has been started on America and Biden is cooperating.  No early – preemptive testing of border jumpers.

The Radio Trust vs. CB Radio Craze

Clearly, the Fed and US government are trying to “thread a needle” in here. Pump so things look normal while your lifestyle falls through the floor!

Which brings us to the crossroads oi of this week:  We are in sea-state change.

  • Prices are going up all over (inflation)
  • While commodity prices have turned disinflationary.

If you click over to FinViz and look at recent commodity pricing, you see lumber is down, most of the food groups are down, while in addition the traditional benchmarks of inflation (gold and silver) are also in decline.

We are today very much in the position of 1929: In our work, last week was equivalent (in pricing) to 10,24, 1929.

Care for a Black Monday?

A thought model to tinker with will likely be useful.  Let’s cobble one up.

Imagine that the 1929 collapse was happening. Companies that were driven to the moon – that made radios – were in freefall.  Commoditization had collapsed retail prices of product. Consumer super-saturation levels had been met. Demand was ready to fall.  (Echo: Tech.  Who doesn’t have a phone and too many apps?)

But to imagine the economic problem, let’s pretend that you could launch a new “radio-based consumption crazy” like the CB Radio Fad of the late 1960s through about 1980. If you’re under 60, read Harvest Gold Memories: CB Radio Fad of the Mid 1970’s for a little deeper sense of it.

The mental picture has the two “immoveable forces” of physics opposing:  The collapse of radio in this thought exercise is one locomotive.  And as we swill the bean, the opposing train would be “lighting up an opposing fad” then standing back and waiting for the problem to “work itself out.”

Thus, to restate: U.S. growth (and consumption) got too high in 2019.  Round 1 Covid came along in a disinflationary way in 2020 to present.  Excess federal spending continued out of control, yet today we see pricing signs of deflation reasserting.

While we wait for the speeding economic trains to collapse the house of cards, we can now cast the Ukraine War as an insurance war.

Because if we can’t walk the line between deflation and hyperinflation without falling over, we will need to coverup the economic debacle with a plausible scapegoat.  War works, right?

Talking Heads, wasn’t it?  “Same as it ever was…”

Today: Trendline Standoff

Which gets us to the futures which were pointing down more than 500 (at times)  as the morning developed.  As you can see in our view of things, a breakdown below trend now would be disastrous:

The decision markets will make today is what to do at the trend line  on the lower open.

Should be interesting as hell to watch,  Because someone at the Fed knows or Jerome Powell would not have tipped (in prior press avails) that the Fed expected the inflation to be transitory.

We’re about to transit.  And as you can see in our first chart, there’s a Big Rally somewhere in the not-too-distant.  But there’s more to life than day-trading.

Remember, money is only a medium of EXCHANGE.  We look to gain more “net worth and enjoyment” from urban farming than in silly notional paper in months to come.

We now return you to your normally scheduled, hyper-drama day.

In the Shorts

No major economic news (other than opening bummer!).  Which, if we get lucky will not turn until tomorrow.  It’s the “How Bad Today?” part that’s hard to gauge.  Which is why we’re not in the Casino.

While we await the arrival of key insight, here’s what the “senior’s sensors” are picking up:

Firefighting Horror Choice:  Use drinking water supplies in a hard drought?  Or use the water to quench fires running wild? Fire officials utilize New Mexico’s water supplies to fight multiple wildfires | KOB 4

Drought will be the BIG STORY in a month, or less.

Yet Another Economic “Helicopter” as Biden gives out more “free lunch” in White House says internet providers to discount fee for poor.

Vote and Vote often!  Factbox-Races to watch in Nebraska, West Virginia primaries on May 10.  Both sides ready to claim victory.  I’m pulling for the R’s on the theory they are the less-wrong party at the moment.

While we wait for the NK nuclear test later this month: North Korea fires likely submarine-launched ballistic missile, South Korea says.

Unable to man-up so he sends his wife instead? Jill Biden pays surprise visit to Ukraine, meets first lady.  Or, is this telling us this is more of a safe “policy staged event” and it’s OK for the wives to have girl’s night in Kyiv?  Seriously (or nearly so) would you send your wife to Kyiv?

Let’s Keyword Famine

Being huge fans of word frequency analysis (with a nod to Grady):

In this last, writers Runge and Johnson lay out how sanctions are bad for everyone:

“Russia and Ukraine combined account for about 30% of global wheat exports, roughly equivalent to the United States and Canada.
Ukraine also accounts for half of global sunflower oil exports, a major source of cooking oil around the world. Russia and Belarus are major global fertilizer exporters, and Black Sea ports are a major source of foods and fertilizers for African, Asian and Middle Eastern destinations.”

They go on to propose that blended fuels requirements to drop mixed-fuels mandates (why force E85 when corn could be used in foodstuffs?) is a clear-headed, data-driven idea.  So is Bidemon’s blocking of expanded drilling (and we’d personally add the Biden war on GOM Oil).

Elsewhere, we are now seeing “the dance” between shortages (and broken  supply chain) with famine.  Take the story Baby formula shortage sends Tennessee mom of 8-month-old into a ‘panic’: ‘I broke down’. for example./  Bab y formula shortage is real, here, and it’s not Ukraine.

It’s Biden’s sanction misjudgment. Damn dems. (Damn GOP loser-lippers, to.  I want action not promises, you feel me?

ATR: Workstation Week

Before I forget, Amazon has a real good price on Hoppe’s #9 gun solvent over here.  One quart sized.  However, use discretion.  I wouldn’t do more than a couple – we don’t like to get on “lists.”

“OK, what does THIS have to do with Workstations?”

I’m hell-bent-for-leather on recentering as much as I can in life around workstations.  Very highly efficient.

One of the “workstations” in the shop that came online this weekend is the “Small Projects and Gun cleaning workstation.

In fact, there’s another whole “mini book” in the works for Peoplenomics on Wednesday (theory and deeper thinking on) while next Sunday’s ShopTalk will take you around our latest shop spree.

Highly productive weekend here – got tons done.  Mow, edge, and shop projects galore!

But Summer is early this year, for sure. 91 yesterday. Good bet on 93 today and no sign of rain in the forecast.  Not climate change, sillt,  Periodic (long wave economics driving) drought.

When I looked at Tyler Texas Weather, the temp at play-time was 74.5 and 90 percent humidity.

Usually, having a productive Monday is in the “no sweat” pile.

Not there today. Plenty or sweat coming…

Write when you get rich,

George@Ure.net

P.S. If you don’t look at the weather before heading out for the day, you are extremely detached from Nature and natural forces.  Might want to have that adjusted while you can do so at your leisure. Weather matters. Food Matters.  To little systems like the food chain, for instance…

28 thoughts on “This 1929 Chart is Scary!”

  1. We must sacrifice – by sharing our production in form of higher prices – to keep Boeing, Amtrak and GM… who hasn’t traveled by plane, train or automobile? The bag touches everyone.

  2. https://www.ebay.com/itm/303811453249?

    https://www.ebay.com/itm/284798406403?hash=item424f4ecf03:g:2-kAAOSwlitiMSTl

    Wow.. that is a nice setup.. take the propane hose off and put the loop and expansion chamber and you have a really nice camp stove.. of course you would have to put a pump and injection tube.. but you can make those for almost nothing..
    I should pick one up just for my stoves.. I was thinking of making a griddle.. and using a gas generator to run the thing.. I totally love the camp chef..
    https://www.vardon.shop/product/blackfriday-camp-chef-deluxe-outdoor-oven-and-2-burner-stove/
    I would buy that one but I alaready know the boss would flip her gourd… not another one.. LOL.. can’t you make one if you want one so bad.. what I have is..
    https://www.amazon.com/Coleman-2000016462-Camp-Oven/dp/B0009PURJA/ref=asc_df_B0009PURJA/?tag=hyprod-20&linkCode=df0&hvadid=167131408724&hvpos=&hvnetw=g&hvrand=8481549538257908466&hvpone=&hvptwo=&hvqmt=&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9020397&hvtargid=pla-276206510065&psc=1
    the one I have I have had for over fifty years..Used it regularly when we were going through a hard patch..mine is green of course..
    What is interesting is.. all gas generation and delivery no matter which method is used.. is all created and manufactured with the same principles of ancient china.. going way back to the first recorded documents .. you can see that even though they maybe didn’t know what they were doing.. they were creating.. even in the old Norse legends..ancient energy production.. I look at the hieroglyphics in egypt and even wonder if they had lights.. they had batteries..

    • Djed Towers – ancient NRG tech we still haven’t caught back too..

      Aether – Qi/Chi – Niama the other forceful side of Prana..Scientific Materialists have blinded society to this ancient tech. They were what kept the waters “at bay ” in early Atlantis. The wreckage, of which, is still giving off strange energies..Bermuda triangle. The “Solari types” dispersed to ancient Egypt and the Yucatan as Atlantis came under multiple attacks – frm enlil/marduke/zeus/setes =malevolent, extremely mean, extremely perverted and violently angry cosmic POS – The “infected one” – The overseer – the great satam – among many whip cracking, slave driving/killing from exhaustion satams, raising food/grains on the ancient plains along tigris and euphrates…all to support the “fallen” reptilians in the “War In Heaven”..some Garden.

    • What pray tell can you do with the used 1 lb propane bottles ????

      You made any plans/drawings for attaching a small pipe and tail fins (flight stability)and loading with something highly energetic ! Like a mini homemade ISIS mortor. What sort of range you getting ?A thousand yards atleast ? What size crater does it make..on average. What about debris/shrapnel field/range ? 50 yards of pretty flimsy metal shards whizzing&snapping on by Ure head.

      Wonder if possible to attach a Demonrat detector-guidance system. Just set guidance on criminally insane-fucking stoopid and launch towards Ure local statehouse/governement building – housing bureaucrats=deepstaters and dicktaters..You the type – the ones that put the art in retarted !

  3. Generally, weather is the first thing I check even before this site! My day planning revolves around it. Today and tomorrow are fire weather with high wind warnings and single digit humidity. I won’t be torching anything outside today, and other than changing a battery in a car, it will probably be mostly an inside work day!

    • PS remember that cast was supposed to be on for almost a month. Happy to see a record recovery. I think the proxy didnt need one LOL.

  5. 38 this morning by the pond.., high yesterday was 59 with light rain all day. But.., the ten-day shows we are starting to warm-up.

  6. “Let’s Keyword Famine
    Being huge fans of word frequency analysis (with a nod to Grady):
    German development minister says world may face worst famine since WW2
    Africa: WFP Appeals for Re-Opening of Ukraine Ports to Avert Looming Famine Threat
    And from Qatar; War Will Bring Famine Unless America Acts.”

    Hmmm… it may just be the semantics of what has been said in the news since february….
    BUT….

    https://www.theguardian.com/global-development/2021/apr/20/millions-at-risk-of-famine-without-urgent-help-governments-warned

    https://farmpolicynews.illinois.edu/2022/03/its-going-to-be-real-president-biden-on-war-related-food-shortages/

    https://thehill.com/homenews/administration/599678-biden-warns-of-food-shortage-from-russias-invasion-into-ukraine/
    https://www.cfr.org/blog/americas-new-challenge-confronting-crisis-food-security

    We knew a few years ago already that the population had outgrown the food production of the planet.. our expansion at what is it fifty seven acres a minute of reduced crop land.. then the weather issues.. with the wind the way it is.. if this is a drought year it could be a replay of the dust bowl days..
    What has my curiosity.. is the Democratic party and the UN etc etc.etc.. all have been saying food shortages famine etc.. then the predictions of Nostradamus .. I can’t locate it on Stu’s site.. I know it is there though.. the famine of famines..
    https://youtu.be/LT5W2jkU99I
    the thing that has me curious is… how much of this has been constructed and planned.. We could have been securing our grid.. doing green scaping to ensure crops.. etc.. I doubt that we will pull back.. in the Ukraine events and the sanctions for food and energy.. the reason that the puppeteers will continue and push the agenda is if they ended this madness. I believe that it would be the straw that breaks the control of the puppeteers absolute control over the human race…. so if this is true then it will not end and will go all out..

    • speaking about gardening.. I have to put together the hydroponic grow tubes today… get that all set up and going..

    • The article links to legislation in the Victoria, Australia House.
      https://www.legislation.vic.gov.au/bills/Agriculture-Legislation-Amendment-Bill-2022.

      This is a piece of work. The entire bill consists of amending twelve different laws covering Agriculture, Dairy, Farm Debt, Drugs, Poisons, Controlled Substances, Plant Biosecurity, Veterinary Practice, Wildlife, Meat Industry, etc. Of course, there’s no way of knowing the final outcome unless you actually complete every ‘insert this’ and ‘substitute that’. The funny part is the final section of the final part.

      Part 13—Repeal of this Act
      Section 207 Repeal of this Act
      This Act is repealed on 5 April 2024.
      Note – The repeal of this Act does not affect the continuing operation of the amendments made by it (see section 15(1) of the
      Interpretation of Legislation Act 1984).

      Since when does repeal not mean repeal?

  8. – Biden’s misjudgment on Russian sanctions is turning into a huge world-wide disaster. Or., if you are cynical – was it a misjudgment? – or…..,
    – Who has benefited from these sanctions? China’s total goods imports and exports expanded 7.9% YoY to 12.58 trillion yuan (about $1.88 trillion) in the first four months of 2022.

  9. There are some investment trusts (mutual funds) from the depression era still in business (Ex.- Fidelity), but for the largest part, most evaporated. The current crop, including money market funds, are untested in a credit deflation environment.
    Leftist takeovers generally are survivor-less, from a financial asset standpoint.

  11. George, the 2022 total worth of the global Asset-Debt macroeconomic system is about 420-480 trillion equivalent dollars. The leading world economies have property, stock market, and debt asset bubbles of historical proportions. China’s collapsing real estate bubble alone accounts for 60 trillion of the world’s 450 trillion. That’s a big percentage.

    The current bubbled world economy well fits into the larger US Hegemonic 1807 36/90/90/54 year asset-debt macroeconomic fractal pattern.

    From the 2009 low month to the current 2022 month: a 46/115 months :: x/2.5x fractal series is observable using average month nadir valuations.
    The 46 month first fractal monthly groupings is composed of two subsets: 5/13/10/7 months a with 10 May 2010 flash crash at x/2.5x of this series followed by 3/7/7 months.
    The 115 month second fractal is composed of three fractal subseries: 8/17/17/10 months; 8/19/16 months, and 8/20 months with the 45/115 month :: x/2.5x first and second fractal series ending in a 8/20 month :: x/2.5x, first and second fractal series. The May 2022 nadir will end with significant second fractal synchronized nonlinearity. The US ten year Note yield and CRB coposite prices will ‘transiently’ decline with the global stockmarket devaluation. The weekly count from the March 2020 low is 33/81 of 81-83 weeks :: x/2.5x.

    The US peak valuation for the Wlshire 5000 compsite was in November 2021 at 36/90/90 years :: x/2.5x/2.5x.

  12. I would suggest Dr. Jill Wilson’s womens weekend summit in eastern Europe could be viewed as a success. According to the “Daily Mail”, daughter Ashley Blazer Biden would have attended save for an unscheduled covid-19 exposure.

    First off, Mrs. Biden was not in Kiev but rather a 10 minute armored suv ride inside the Ukraine border where she met Mrs. Zelenska. The visit to Slovakia included time with president Mrs. Zuzana ?aputová. And apparently it was a hand-holding womens’ working lunch in Bucharest with the First Lady of Romania. Any mention of more big-boy toys for the men to go breaking stuff? Nope, just Mrs. Biden handing out presidential M&M chocolates to the children kind of like Forrest Gump’s Mama might. Maybe Mrs. Nuland got a memo to lay off the sour candy for a spell?

    Okay, let’s get back to DJ Ure with the latest on the global patriarchy according to Pussy Riot.

    • “drenoCHROME” getting scarce , supply chainz dont cha know- got to go to the source, inside a War zone, to get da pure. Like every other Commodity in the world today – If you do not hold it in Ure possession – You own squatta. The swamp creatures – deepstate B&W asshatz, need the re-supply before it goes offline for good, due proliferation of “mini mushrooms” in Nato’s very near future…

  13. Hi George,
    Don’t forget about that little-known US Gov strategy, technically named ‘Financial Repression.’ You can google it for review articles by economists Rogoff and Rhineheart.
    After WWII, the US Government manipulated the interest rates so that the US National Debt was greatly reduced by sucking the purchasing power out of savings. They may try this again…

    Another more ancient strategy was the ‘Jubilee Year’ described in the Bible, but also widely found in Mesopotamian archaeological records–Debt was periodically cancelled, resetting the economies of the day and preventing both hyperinflation and the accumulation of extreme wealth in few hands. It would probably work, but I doubt anyone has enough political clout to try it these days.

    • 2022 is a Shemita (Shmita) year. Interesting concept if you believe there is a small cabal of very powerful men playing Monopoly with the world.

  14. Any word today from the happy bitcoiners and gold dont seem to be acting exactly according to Hoyle.

    • No nothing to remarkable going on to mention – heavy manipulation of everything (inc. BTC) related/associated/linked to USD. But because we bee so happy – I am inclined to schoolz U foolz – again> Please see/click link to Mr Barry Schmelling 2 mins talk regards theSoul of Money and the head of the BIS (bankinternational slavery)

      https://www.youtube.com/watch?v=xjHQtLQj_1Y

      Class has ended – now get out there and back to work – before “breakaway” spacenazi’s (illuminati) decide to use you for a couple of 20 year tourz.

  15. George;
    Your momma made formula,my mom made formula
    mywife made formula for our 3 children.
    At 6 weeks old westarted our kids on rice cereal with breast milk or formula. By6 months old all the kids were on cereal, veggies and by 1 year old off the breast or formula..
    THERE ARE RECIPES ON LINE FOR FORMULA..
    HEY CEREAL AT THE EVENING MEAL AT 6WEEKS OLD WAS A GODSEND.BABY SLEPT FOR 6 OR 8HOURS STRAIGHT…MOM and DAD were happy.Rested.. less crabby..
    Mywife is was an RN,I am a PA-C and we followed our pediatricians advice.She had 25 years experience and had 4 children of her own. Formula shortage is not a real problem unless youhave an infant with a screwed up GI tract. Very few of those.

  16. I had an idea for a new crypto – Zitcoin. It gets really bloated with margin buying from people who have no business buying on the margin, then POP goes the weasels. Oh wait, Satoshi beat me to it. Maybe I could come up with a catchy tune to trade cryptos by – oh, my bad, there already is one.

  17. May 15, 2022 total eclipse with blood moon across entire United States… signs signs signs everywhere

  18. Suspicious economic objectives?? Total increase for Old Age/Retirement, 2019-2020, 2020-2021, still averaging about one million new retiree recipients per year, regardless of U.S. covid deaths:

    https://www.ssa.gov/oact/STATS/OASDIbenies.html

    Of course it’s mandatory for Republicans to bash anything of a Democratic origin (FDR), regardless of facts, feeding old people is a conspiracy from Democrats!!! The wretchedness of sharing the Internet with the poor!! What awful deed will the Democrats do next?

    total u.s. deaths = 1 million
    https://www.worldometers.info/coronavirus/country/us/

    You can listen to Russian military transmissions on unsecured lines at (that’s how bad their communication security is):
    http://websdr.org/

    https://www.washingtonpost.com/national-security/2022/03/27/russian-military-unsecured-communications/

    On Victory Day, all Putin can do is repeat how invading Ukraine is actually destroying the Nazis of WWII, he’s quite a confused leader (it’s 2022, not 1942!), Putin thought it would be over in a few days, it’s now 90+ days, poorly conceived from the beginning:
    https://www.washingtonpost.com/world/2022/04/08/how-russia-botched-ukraine-invasion/

  19. Comrades,

    Whales feed on plankton?

    I think this is the first hockey playoff season since Canadian law started allowing single game betting. Two regulated online betting operators have shown up advertising on the tv hockey broadcasts. One is UK headquartered whose owners apparently rank second in the nation for income taxes paid. The other is owned by a Chicago multi-billionaire. He is said to have hosted the 49th birthday party of someone named Barack Obama.

    This is not investment advice. Too bad there are no more elevator operators to ask for hot tips. Waterfalls ahead?

    https://www.igamingontario.ca/en/news

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