Archive - Aug 2015 - Story

When the words "mothballed", "nuclear", and "never been done before" are seen together with Japan in a sentence, the world should be paying attention...

If GDP growth only averages 2.0% in the Second Half (which I think is likely), then 2015 growth will only be about 1.7% annually. Given that the Fed didn't raise rates in 2012, 2013, and 2014, when growth was well north of 2%, why would they do so now? Yet Wall Street and the media stubbornly cling to the notion that 3% growth and rate hikes are just around the corner. Old notions die hard, and this one has taken on a life of its own.

"This is the big concern because we keep on thinking that lower energy prices are somehow good for the economy. That can't be, because energy prices or commodity prices in general don't drive economic growth. Economic growth drives commodity prices.  So there are a lot of telltales out there that this drop in oil prices, this drop industrial metal prices, this is not good. It's a canary in the coal mine that something is not right in the global economy. And that is a concern for us all."

Coal powered electricity is currently by far the cheapest and one of the most reliable forms of electricity generation known to Man. To suggest that replacing this with intermittent wind and solar or carbon capture generation will somehow reduce American’s electricity bills is either delusional or plain stupid. Or is the intention to deliberately deceive?

"But an increase in the quantity of money and fiduciary media will not enrich the world... Expansion of circulation credit does lead to a boom at first, it is true, but sooner or later this boom is bound to crash and bring about a new depression. Only apparent and temporary relief can be won by tricks of banking and currency. In the long run they must lead to an all the more profound catastrophe."

There are two ways to win, at any game: One is by improving one’s own performance. The other is by weakening the performances by all of one’s competitors. The United States is now relying almost entirely upon the latter type of strategy.

Strangely enough, every easily foreseeable financial crisis is presented in the mainstream media as one that "nobody saw coming." No doubt the crisis visible in these three charts will also fall into the "nobody saw it coming" category.

In April, we brought you the "FAKE-O" score or, as we delicately described it, "banks' brilliant plan to lend to deadbeats." Essentially, the "new score" will determine how creditworthy someone is by asking the utility company if the lights are still on and asking the phone company if the phone is still connected. But because that wasn’t (nearly) absurd enough, Facebook has a better idea...

In a murky world of market fantasy, our first guideposts are the fundamentals themselves. Supply and demand can be misrepresented for a time through manipulated statistics, but the tangible effects of decline cannot be. Our secondary guideposts are the paths that internationalists and central banks bulldoze through the fiscal forest. To anyone with any sense, the endgame is clear: Total centralization is the goal, and economic fear is the tool they hope to use to get there. We have written on numerous solutions to this threat in past articles; but the first and most important action is for each of us to acknowledge, wholeheartedly, that the system we know is ending. It is over. What replaces that system will either be up to us or up to them. Only by admitting that there is an end to the fantasy, a painful end, will we then be able to help determine our future reality.

"It isn’t for nothing that again and again, countries abandoned the gold standard when they went to war. We rarely pause to consider what that tells us. If they needed to abandon the gold standard to go to war, that means the gold standard was a barrier against war. Of course, the ease with which governments could abandon the gold standard serves to remind us of the need to separate money and state altogether, and that the state cannot be trusted to maintain a sound money standard."

The truth hurts... especially permabullish CNBC anchors. But when David Stockman explained why "the top is in," and warned that the world is overdue for an "epochal deflation, like nothing it has ever seen," one should listen. The "debt supernova" of the last decade or two has created massive over-capacity and this commodity deflation "is not temporary, it's the end of the central bank bubble." The catalyst has already happened -"It's China," Stockman exclaims, "China is the most lunatic pyramid of credit and speculation.. and capital is now fleeing the swaying towers of the China ponzi."

August 6th and 9th of 2015 mark the 70th anniversary of the U.S. dropping two atomic bombs on Hiroshima and Nagasaki. This was the first and only time a state used a nuclear device on cities (or civilians) of another state. Some conservative estimates put the immediate death toll of the two bombs at 200,000 people. This is more than the total number of American soldiers killed in the Pacific front of World War II. Since the bombs were dropped, the U.S. government, U.S. high school history texts, and the American public have asserted that dropping the bombs was necessary. But was it?

"You wake up one morning and think 'I’m in prison.' And that’s when it hits you, and you suddenly realize that you are no longer in control of your life."

"I’ve just slogged through all ninety-two pages of Donald Trump’s financial disclosure submission to the Federal Election Commission, and I can’t make heads or tails of it. I cannot tell how much Trump is worth, if anything. His empire, if he has one, is as mysterious as his haircut, and as impervious as his skyscraper in Chicago - a gigantic phallic mirror named after himself."