Guest Post: Economic Megatrends That Will Drive Our Future

Tyler Durden's picture

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Anonymous's picture

All of this makes sense. Its just that most people don;t realize it and are in for a rude awakening, the kind that occurs after a really really long slumber.

Spartacus's picture

By postponing companies’ debts today, European banks may simply delay a more drastic debt restructuring in two to three years’ time, said Craig Abouchar, who helps manage $2.2 billion of high-yield debt at Axial Investment Management Ltd. in London.

“Everybody continues to close their eyes because it’s too painful to address the problem today,” Abouchar said. “A lot of these lender-led restructurings are going to be zombies; the companies won’t have the cash or flexibility to invest in the business.”

McGriffen's picture

That's what I'd call a steak & potatoes posting...lots of good & wholesome information contained therein.  Good stuff to chew on at dinner time..

Sqworl's picture

Brilliant..TD + Infinity...

molecool's picture

TD didn't write this - the author is Jeff Harding.

Anonymous's picture

No shit.

Anonymous's picture

Think Locally,

Fuck Globally

Anonymous's picture

I live in Argentina and let me tell you, that is the plan.

Anonymous's picture

The problem is fraud. The system requires fraud to run. The proles will never have anything and always be poor even when rich. Regardless of depression or boom, the vast majority of people have negative equity and those that do not, do not have enough savings to survive more than a month. Megatrend 2, is not true and is absurd. At no time in history, have even a small percentage of people in old age, been self sufficient. This will not change. The rest of the article suffers from similar problems. But, the premise of economic doom is very enjoyable.

The real key for the proles, is not to realise their strength in numbers, but limit their purchase of land to what's needed. This, will force the crown to be unable to control the proles through numbers and paper.

cougar_w's picture

[The problem is fraud]

It's a fraud that's been running for 90 years. It really took off in the last 20 years because anyone who still remembered pre-fraud days was finally dead.

It's like living in the "matrix"; you don't even know you are inside something, you have no reference for "outside". You don't even know what anything real looks like.

You won't educate people out of this nightmare. I think that people will wake up when they are starving, or wracked with disease. The fraud has gone far enough now that "negative equity" is going to mean "one meal a day" for a lot of people, and measuring the future in months, not years. Then measuring it in weeks.

Then, the game will be over. Then, we'll see.


Anonymous's picture

OP here.

By the time people have one meal a day, if that happens, it is too late. They will not learn a thing and just think, ‘that’s the way it is.’ Also, given time, history will be re-written or re- represented or shown differently (including omissions) to make it seem like things have always been such. In that way, it is like a matrix but it’s not that matrix which hold the proles, it’s the submission of the proles to the matrix due to perception and the forever changing but constant ‘that’s the way it is,’ mentality. Proles can’t free themselves because they cannot accept non-submission ‘to the system.’

Anarchy is organisation, thus there is no freedom. Even the question of free choice can be seriously debated. Thus, an intelligent question (in the free choice tense) is if society will reconstruct itself to be peaceful and beneficial to ourselves.

loki's picture

It's like living in the "matrix"

This is *exactly* what I wrote in a different post/different article.

I keep praying we'll find a "Neo"  who can figure it out but I doubt it.  Worker drones just too busy working to understand it.

We truly are fucked.

Anonymous's picture

we may be fucked but it isn't because we are
loaded down with too many worker drones....

it is because the small number who may have
better light on the subject refuse to act....

change does not require the masses - only the
enlightened self interest of the few....

Anonymous's picture

One of the best articles I have read in months.


Anonymous's picture

This sure took a long time to be made public!

NRGTDR's picture

Megatrend No. 8: Scarcity of Resources pressure nations to compete for survival

Food, water, energy.


Speaking of food, The autos I get and not sure about chemicals, but I found this jump in rail traffic for food very interesting

(any ideas?):


PS. Don’t see much of a “recovery is likely over” in this data either

Silver Bullet's picture

Mega trend no. 8 is bad fucking news.

cougar_w's picture

I nearly made this same post, then backed out.

That kind of observation is like seeing the other side of the moon; folks here won't recognize it.

The myth is that we cleverly built up this economy for 100 years. We didn't, at least not cleverly. The economy was fueled by cheap oil, lax environmental regulations, cheap labor, and corruption. Cleverness had little to do with it.

The economy is like a wolf wrapped around a nightmare encompassing a demon. We've sown our seeds on the wind, now we're reaping the whirlwind.

My main worry is that we added over 5 billion people in the last 40 years, and over the next 20 years we will likely lose them. How they will leave the world I cannot guess, but not one will go out as easily as they came in.

The demon is coming for us. Be nimble.


MsCreant's picture

While we scurry around crying about how dishonest they have been, mother earth has her own ideas about how to balance this mess, eh? She is not biased but I do so hope she gets a couple of these bastards, good.

I am a Man I am Forty's picture

If 5 billion people leave this planet it will be for one reason and one reason only, and that reason is governments.  Here in the US, we have plenty of food, water, and land.  A ton of untapped oil resources and so much natural gas it is at an 8 year low.  Not to mention wind and solar energy.  

Just looked out my window, didn't see any demons, but thanks for the heads up.

Cursive's picture

What are you saying?  Red except for chemicals and food and that positive change was year over year.  These two are basics for households.  Nothing I saw supports a recovery.

Anonymous's picture

"I found this jump in rail traffic for food very interesting

(any ideas?)"

Possibly seasonal and/or restocking - Christmas? Note also that it's down 1.5% over 2007.

Interesting also is the increase in chemicals up 10.1% on 2008; but does the fact that its off 1.2% on 2007 indicate that it is restocking?

So I think further analysis would conclude seasonal<->restocking as the explanation in both cases.

Anonymous's picture

Very much agree: specifically the author's statement that "growth always resumes" is not realistic. All modern economic "growth" has been fueled by increasingly cheap energy - you can't get something for nothing. Soon, when it is no longer economically feasible to get oil out of the ground at the rate it's desired, "growth" will cease, since it's only one side of the equation.

Daedal's picture

'Home as an investment' has not  yet been shaken off as a pillar, which is why people are still seeking to get 'deals' on houses. Once these people see that their returns are paltry and/or negative on their 'investment' only then will their lesson be learned. There are still many people that didn't get burned in the past 10 years that will try to capitalize, but they don't realize that the bubble won't get re-inflated. I see the same people seeking new mortgages and re-entering their 401k only now. Many kids whose parents are still employed continue to shop for pointless clothing at the mall. Point being, there's still many people out there who have not learned from others, and will be re-taught this valuable lesson soon.

There's a saying, it takes a smart person to learn from his mistakes. But it takes a wise person to learn from other people's mistakes. Few people are smart, but far less are wise. I agree with your premise, but disagree that many people have learned their lesson... only first hand experience will solidify these trends in a large part of the remaining frivolous spenders and borrowers.

percolator's picture

Daedal, I agree about "Home as an investment has not yet been shaken off as a pillar". 

I'm renting a condo in Vegas which were apartments converted at the peak, most of the units were bought as investments and a good percentage have since been foreclosed on.  Now there is a new wave of investors buying up all the units thinking that at 75% off the peak they're getting a great deal and will make a killing.  I just wish them luck!  

Anonymous's picture

"There's a saying, it takes a smart person to learn from his mistakes. But it takes a wise person to learn from other people's mistakes. Few people are smart, but far less are wise."

I stole this for my FB status lol

Zippyin Annapolis's picture

Throw in demographics and you have a very good view of the future--

Anonymous's picture

your tax dollars hard at work to save our economy. Aspen gets $4million for their private jet parking lot to be smoother.

Anonymous's picture

your tax dollars hard at work to save our economy. Aspen gets $4million for their private jet parking lot to be smoother.

Anonymous's picture

Great post, kind of lays to rest the relentless posting about Inflation V Deflation on so many blogs etc

cougar_w's picture

"We are plunged deep into the biggest credit-business cycle in world history. Most everyone is boned, or will be. After that, who knows?"

Is that better?  ;)


Anonymous's picture

Faulty basic assumption that the system will survive.

It is too far corrupted, it is too far saddled with debt, it is overpromised and underfunded.

There will be higher taxes, until taxes don't suffice. There will be currency devaluation until a crisis or collapse. There will be cascading defaults at sovereign levels.

Whether nations slip to protectionism and autarky, or can recreate a better, more lawful, less corrupt system remains to be seen.

Failure inevitably leads to war.

The USA is in its empire's decline. Empires are bloodiest in their inception and demise. Revolution occurs at both endpoints.

Anonymous's picture

1. Not quite true. Consumption culture is driven by the confluence of advertising and information immersion, a trend that will continue to grow as technology is developed and the Internet becomes more immersive. Consumption in aggregate (not the culture of consumption) will of course languish until new wealth redistribution mechanisms arise (if ever).

2. Yes, in the short term, but as a megatrend, as if American consumers will be frugal for the next several decades? Yeah right.

3. True, except for the few developing countries who understand how to manage an economy. On paper, overcapacity is a simple problem for a government to intervene in the economy and solve.

4. Yes, probably, but for how long?

5. Yes, maybe even less.

6. Yes, but not for the reasons the author thinks. When the government inevitably engages with another "Keynesian" stimulus plan, it will overwhelmingly benefit those who have bought and paid for our legislators, or those at the top of the economy, when what is needed is to concentrate massively on the bottom of the economy. But when the author starts off a paragraph with "There has never been an example where Keynesian government spending created real growth in an economy, anywhere," that's your cue that the rest isn't worth reading.

7. Maybe, but it won't necessarily act as a "permanent drag" on the economy. The government isn't some kind of black hole that sucks up wealth. Rather, it's a part of the economic whole.

Overall, I give the article a C-. Next time cut out the unintellectual market-worshipping cyclic fatalism drivel.

Anonymous's picture

Excellent review. I give the original author a D-.

E pluribus unum's picture

The suthor lost me when he said that "The culture of consumption is dead" yet millions of unemployed people stand for hours in line to get the latest i-Phone.



loki's picture

zero sum

Buy iphone.

Cut back elsewhere.

Sardonicus's picture

I still use a rotary phone.



I am a Man I am Forty's picture

So you have like a physical phone list and an address book?  No way.  Stop it.  You are having fun with us.  The fact that you are on a computer gives yourself away.


defender's picture

1.  Way off on that.  Consumption culture is driven by lack of consequences for the consumer and enabling by the corporations.  While corporations, being by definition lawful evil, will continue to hand out debt like candy, the consumer will be much more leery of the fire once they have been burned.

2. Same conclusion as 1.  The children of today that suddenly find themselves homeless, jobless, and foodless won't ever get over it.

3.  I am undecided on this one

4. & 5. Completely agree with you.

6.  I think that both you and the author have valid points on this one.  The proles will be told to bend over, and then they will be told that they have to pay for the experience.  Discouragingly typical of our current system.

7.  The US population is about 300 million.  The US debt is somewhere north of $11 trillion.  At 3% interest this works out to each person having to pay $1100.  Or to look at it in a more reasonable light, since there are about 132 million jobs, americans will have to pay $2500 per job.  On interest.  This year.

This is one sixth of the total income of a minimum wage earner that goes to interest alone ($7.25/hr or $15K per year).  And this is supposed to double?  What happens when the interest rates go up?  Once again, Nero fiddles while Rome burns.

If anyone has more accurate numbers, Please post them. 

Anonymous's picture

We do not need to borrow to finance government spending. We should not be borrowing to finance government spending. At some point economists will take macro econ 202 seriously and they will remember that private savings = public debt by definition.

Anonymous's picture

Brilliant rebuttal dude.. I too am sick of the free market is god crowd who frowns upon someone at the lower end of the economy getting a few months of unemployment assistance yet turn their eyes away from the favor they gain from politicians

Anonymous's picture

you really don't need that many words to say what you need to say.

We the people borrow and spend too much, and we cannot pay for it (housing, credit cards and cars and all the shit like that). The banks lent out the money to the people, and cannot collect the money back. That's why they fucked themselves up. Our beloved government borrow more to pay the debt we the people cannot pay. There is too much borrowing. Eventually, our beloved government will fuck itself up.

The real shitty thing is that when I get to collect my social security and medicare, they may not have anything left for me. I have been paying the shit for all my life.

as for the healthcare, go to a local hospital and ask for a visit in the floor, see how many 20 yo patients there. How can you cut the waste when everyone there needs medical help? The country is getting older by days, and they get sick when they get old.

Anonymous's picture

It depends on how old you are, but if you are < 45, you WILL be paying for this shit without anything to show for it. Unfortunately, best case, if we get someone in office who can sort this mess out, it will be a multi-generational timeframe to clear ...

Virginian's picture

With all the currency debasement Ben Wa has been able to accomplish over such a short period of time, the dramatic effects of a tanked dollar will show up on our doorstep as a hyperinflationary hurricane.  The Weimar Republic of the 21st century is being born as we speak!

The only chance for deflation is the abolition of the Fed and a return to sound money.  Period.