This page has been archived and commenting is disabled.
The World No Longer Needs Raw Materials To Grow
It would appear from the chart below, that the world, in its infinitely capable manner, has not only managed to create 'wealth' from thin air, but can 'expect' growth in the future with no apparent impact on the price of the raw materials that will be needed to create that growth. Unless, of course, the growth that equities are discounting is central bank assets and joblessness...
For 14 months, the growth being priced in to stocks has had no pricing impact on all those wonderful raw materials... It seems LTRO was a game changer and hope is indeed a strategy once again...
Source: Bloomberg
(h/t @Not_Jim_Cramer)
»
- 17652 reads
- Printer-friendly version
- Send to friend
- advertisements -
Makes sense, we don't even need paper or linen to print fiat.
Bingo.
Ben Bernanke is a quadruple triple agent for the WWF and/or Greenpeace.
Either CRB is going up, or S&P is coming down. My guess is both.
Why not? I haven't seen Reality's face for a long time. I don't think it exists anymore.
They meet in the middle, make up & kiss again.
benjamin button bernanke.
strange, sounds a lot like another movie from the mid 2000s--housing not needing personal income to rise
Dow Dropping to 5000 Starting This Year: Nenner
http://www.bloomberg.com/video/dow-dropping-to-5-000-starting-this-year-...
I was hoping for 2,000, but I'll take 5,000.
Thanks, I like the doctor's work.
Im going to spoil the doomer party here, which is strange cos I'm an great doomer myself
But most of my discretionary spending this year has been on online services, and I'm not just talking about porn! Lol. I'm talking about software and media. I buy lots of music but I can't remember the last time I bought a cd, used to buy software at the store but now its all online. So maybe just maybe this ain't as weird as it looks
Thank god people there are people like Ben Bernanke to turn this boring, uneventful world into an exciting fairy tale unicorn ranch
.
...and what makes it even better is the ranch has two types of unicorns: the type that shits skittles and the type that shits 24k solid gold nuggets.
And they fly!
Long Skittles.
Central Planners have discovered that all one needs to do is debase currency and you will create growth. Just look at Japan, USA, and Argentina. Three wonderful examples of debt creating wealth and prosperity.
not disagreeing with you but we MIGHT...and i stress MIGHT be discovering "debasing a currency is not nearly as easy as people think." (ah Europe talking about the collapse of the dollar..was it just three years ago?) the 90's was not that long ago and as i recall them "that CRB was smellin' the glove" for damn near a decade...if not thirty. with labor basically "free" in the USA there's a lot of "ruthless cost cutting" already done...but not priced in. (God forbid if suddenly there's some job growth.) when you factor in the bulk of commodities rely on the American consumer for support...well, let's just say "Wall Street not only stole the world's lunch money but now they're eating ours and the world's lunch too." i'm trying out the whole "deflation thing" (with real money...MY money) right now even though it seems PURELY theoretical. (i'm into that kind of stuff sometimes.) forget when I see it...when YOU see it is "when a deflation is happening." it is possible that the economy suddenly gets on a solid growth trajectory here. "it should be growing 10-12% a year" with trillion dollar deficits. needless to say "it's a problem of not spending enough" according the media clowns...and amazingly the Chairman of the Fed. trust me when i tell you "Government does not disagree with that." at least...not the FEDERAL Government.
LOL smell the glove.
I see a compression trade here--or maybe not.
Men, flush your Viagra down the toilet...hooray for unicorn growth!
it's a broken correlation
That's why gold and silver will crash in the coming weeks. Jim Sinclair will be proven a shill and pumper and dumper once and for all. $4000 gold? It won't happen! Gold will never see $1800 again let alone $4000.
I agree with you. I think the market needs to crash and gold needs to fall in order to return some reality to this market. Gold at $1800/oz suggests a doubling of the money supply since 2008 when in reality it has gone up by about 50% per the debt. Eventually, all money will flow back into gold and silver as currencies collapse, but I think that collapse will be onset by a market crash and a commodity crash. In other words, temporay deflation followed by rapid inflation
I hope your right about gold and silver. I would load up on some of both. It has floated around some but I keep hoping it continues to go down. Shuckster is closer on the fact but who knows. The other commenter is just a troll who owns neither gold or silver. Probably doesn't own anything
In the above scenario, which very well could happen, there will be NO physical supply available. Don't plan on loading up on anything. It will be GONE.
It all depends on Fed policy. If the Fed takes a breath, I think gold could conceivably crash back to the mean. Keep in mind gold was what, $400 an ounce in 2004... that doesn't strike anyone as odd that it would go from that to $1800 in ten years. I suppose since gas was $1.50 back then, and everything else was about half as much, its possible. But I still believe that bubbles can form anywhere, even so called bubble proof assets like gold
eigenvalue said:
If I follow you correctly, you're saying that the dollar will become totally worthless virtually overnight, and fairly soon. Logically, I suppose you're correct, since nothing would be priced in dollars anymore.
I don't understand why you think it would happen so quickly, though. I mean, anyone owing a debt denominated in dollars would find at least some utilitarian value in enough dollars to settle their debt. Aside from that, though, nobody really needs the dollar.
The dollar could drop that quickly if there were a global instant debt jubilee. For such a thing to happen fairly soon, though, is a rather extreme prediction. Sure, it's not nearly as extreme as someone saying that the current dollar system has a long term future and, within that context, gold would never see $1800. Nevertheless, predicting a total debt jubilee so soon, before every attempt at kicking the can was tried, is, at the very least, moderately extreme.
ummm.. I'm guessing the point here is where is the "raw materials" growth to justify all that S&P 500 growth?
...yet another nice chart exposing the Massive Manipulated Market (alliteration intended) Fraud And Ponzi that is The United States Equities Markets.
When they can pull oil, water, and food from their ass, I'll take back all the disparaging comments i ever made.
sounds like a good night in Tijuana
It is, stay loose my friends.
Yep; or an upstairs bar in Patpong.
But, the sun comes up the next morning and you discover you have a whole new set of problems.
When the globalists initiate their plan to depopulate the 99% they can have plenty of growth without using up an excessive amount of raw materials
Sung to the tune of "Lucy in the Sky with Diamonds"
Bennie at the Fed with Printers
Picture yourself in markets in chaos
With infinite fiat and hopium pipes
Somebody calls Goldman, he answers intensely
They Guy with the Printing Machines
Fiat currency of promises and dreams
Debt towering over your head
Look for the man with his ink stained hands
And the dollar’s is done
Bennie at the Fed with Printers
Bennie at the Fed with Printers
Bennie at the Fed with Printers
Follow him down to an ocean of debt
Where the next generation is told to eat shit and die
Bennie, he smiles and you drift past the debt
That grow so incredibly high
CNBS pumpers appear on the screen
Waiting to bullshit away
Bend over and get ready for a shaft
You future’s gone
Bennie at the Fed with Printers
Bennie at the Fed with Printers
Bennie at the Fed with Printers
Picture yourself in an insolvent country,
With worthless bonds and treasury bills
Suddenly someone is there with the bill
The next generation with homicidal eyes
Bennie at the Fed with Printers
Bennie at the Fed with Printers
Bennie at the Fed with Printers
I've not heard of a narcotic called BFP though? Am I missing something?
"Buy the Fucking Pump"
Place your bets.
CRB up
or
S&P down
I'm guessing S&P down. This is similar to 1929. The precursor to the big crash was a crash in commodity prices...
You gotta see that the S&P is going down. That will be a good thing for gold/silvers next major leg up. With a "correction" in the DOW/S&P catching down to the materials, we will see gold hit an then go clean through the last major gold price low of $1527.00. .
Gold hitting $1425.00 or so? Definitely a good possibility. So It is something to watch. Thankfully, for me, it is the only thing I need to watch. Bond rates will sink a little again, so if you are just waiting in short term bonds, then we have nothing to worry about there. I see this joke of a market surge finally breaking soon and then watch the $1527 gold level, and it should drop another $100 from there after the cautious buyers are rinsed out and then we have a great opportunity to buy. We know the big boys have finished selling for now so the support at 1527 is something to keep an eye on.
Make no mistake about it. Silver and gold will be hurtin' for the next few months.
Dear Reality,
I miss you.
http://youtu.be/yfAeMtcURg0
Sooo....it's the "Red Pill" for you?
Roll up your sleeves and plant something, doomsday be damned!
Now that all the workers in America have been laid off, corporations need an aditional margin tailwind from cheaper commodity inputs.
There's an interesting disparity between the market and the dollar - usually when the market goes up, the dollar goes down. However, recently, the dollar has been moving up with the market. This to me suggests that the market needs to move down, and quickly in order to get back to its proper trajectory. This has nothing to do with being bearish or bullish
One more thing to remember: FOOD.
Food cannot, I repeat CANNOT, grow abundantly if there's a an artificial scarcity of crude oil. Diezel is needed for the machineries and crude is itself needed for the production of fertilizers.
FOOD is becoming a problem. That's when you get riots at grocery stores.
We don't need no stinking food. We got Jenny Craig!
That reminds me of a terrible joke that I will share with you.
Q: Why do lesbian women find it so difficult to go on a diet?
A: You can't eat Jenny Craig when you have Mary Kay of your face.
I can promise you, they won't be eating out as much when TSHTF.
Many will fluff for food. Simple reality, not 'misogyny'.
Fixed. I suggest looking into permaculture methods, etc. There are alternatives.
then why am I able to eat lobster and hopefully ( non horse) steak at red lobster for $10 after my coupon
productivity and low demand is deflationary in this case but it won't last if red lobster goes bankrupt
The world no longer needs many things in these new uncharted waters:
We don't need people out working to in turn be "consumers"
We don't need consumers for corporate profits and stock prices to rise
We don't need revenue to be in line with our expenses
We don't need to eat food (see CPI)
We also don't need heating or transportation (also see CPI).
We don't need to be concerned with what passes for law for some of us in society and what its passes for the rest of us.
We don't need college graduates entering the work force to service their student loans.
And we certainly don't need paper to print (see this article).
Recently we learned:
We don't need food labeling to represent what we're really eating
We don't need to worry about insiders selling-to-buying ratios at historical levels
Most of all, we don't need reality or honesty
VIRTUAL WEALTH...CYBER WEALTH...ALGO WEALTH....PAPER WEALTH...FIRE ECONOMY WEALTH.....BROKERAGE ACCOUNT WEALTH
WEE DON NEE NO STINKIN THINGS
How does the Fed do this? They print money and the banks only buy equities. The power of the Wizard of Oz Banks!
I believe the same thing happened in 2007 starting in April and ending in August....
Bernake got a boner when he heard about 3d printing..
Another divergence from reality. Go figure. As with Europe, delusion is the only thing left. Those who depend on the illusion will do all that is possible to keep it going, but it will end and it will end badly.
This kinda reminds me of the Tower of Babel story. Remember that? The tower got so tall that communications broke down from top to bottom on bottom to top.
It's just like that now. Up is down and down is up. This can't go on.
More so a speculative stock bubble that is all Wall Street and the banks. The suppressed commodity trade is China's train wreak reveling it's self to the world. We could, could, be at the cusp of a total deflationary collapse with oil inflation on top for good measure. If China blows up, it will drag the whole world into it, 100% setting off a war with Japan to get that cheap juicy nat gas under the South China Sea
This is where we are at, history cycling through stupidity again.
All starting with inflation then deflation collpase:
http://listverse.com/2012/12/26/10-fascinating-economic-collapses-throug...
origami world.
At some point our markets will become real. CRB, gold, silver. This will not continue much longer. Patience and 0 margin are the key now.
commodities and robots. Automation (robots) eliminate millions of good paying jobs everyear worldwide. Central bankers, JPM, GS attempt to partially offset the deflationary impact. But the standard of living for billions of folks is declining, hence little need for more base commodities. Iron Ore sold at about $190/ton at its peak and now is forcast to decline to $70/ton by Sept. Mines will be shutin and millions will lose their jobs as companies are restructured. Hence more need for central bank stimulus. As will happen in the past, shortages and higher prices will materialize, but the next cycle starts no earlier than 2016 IMO. Lots of paper, then lots of pain, but no one can stop automation and the damn robots mega trend.
Comment reflections .."commodities and robots. Automation (robots) eliminate millions of good paying jobs everyear worldwide."
The latest update on the robot scene from one who fixes and directs them.
Last Monday I was assigned two developers to help me on a new project assignment.
I was on the spot about 7 weeks ahead of them so when they hit the ground my intel met their skill and we started building our new robots of IT processing.
We understood that to complete our project humans may have to sit behind a keyboard and monitors; see what's on the screen, follow a decision tree, click through.
Then we decided to write a program to do the processes, faster and better than humans, and drop a few thousand hours of human activity with a computer program and process over a few days time expenditure of 20 hrs.
I take responsibility for the idea and motivating the people who have the technology skills to make it happen.
I take responsibility for the Idea that the people whose work was taken away because we have an exponential growth of computing ability and are learning how to use it should be of human value because us humans invented machines.
I’m a getting, I’m a Armageddon, used to the idea that things are changing so fast that nobody, even the 1% know their ass from a hole in the ground.
Consequently so many people feel they are getting screwed.
Central bankss included as people per US Constitution.
Rightfully so.
Reality often times..
Is real.
But but, what about sweat and brow and all dat?
What would really throw things off is when I start DEMANDING "work" be automated.
Gawd forbid I ever come to EXPECT work be automated. What's a human to do???
Vale just reported its first loss in years, and large mining expansions in down under have been cancelled. There are others as a result of supply and capacity exceeding demand.
Remind me of the above chart when gasoline is $8 a gallon, and a loaf of bread is $6 in 4 years. (If we make it that far)?
Not directed at you, but for those loudmouths who chest-beat about how 'soft' Europeans have become, here's some cognitive dissonance:
Europeans have been dealing with $8-9 per gal. gas prices quite nicely. Americans? Why, we KNOW how they'd handle it.
I know, sometimes the truth hurts. Start down-arrowing!
Yeah, we do know. They will just take it. Just a bunch of Neville Chamberlains. Plus they have do have the option of abundant public transporation to rely on. Other than a few areas like the east coast public transportation is nonexistent and I don't see many in the US just taking 8 bucks per gallon, especially in a contracting economy. So in a sense you make a case for Europeans being soft in this instance. However one could make a case that the rioting you see is some of the Europeans have had enough and is probably a template for what would happen with $8 per gallon gas in the US which is why you don't see it. We all know free market forces have nothing to do with the price of a gallon of gas with the latest evidence being what price per gallon was paid leading up to the election and what it is just a few months later for apparently no reason.
You will never see a $6 dollar loaf of bread however a stealth change in the definintion of "loaf" will take place as it will mean only 3 slices of bread and the heels. But it will be the same price you pay now. See, no inflation.
That is my goo
Living in a large metro area and working in the heart of a great city that puts ancient Rome to shame in terms of decadence of material wealth.
Everywhere I look there is an abundance of materials and skills.
When I take a break from my New Centurion duties of supporting the empire, and contemplate what a significant post human population crash my be like were it to materialize over the next hundred years, I realize some next generation could really hit the jack pot of material.
With a little gumption and the proper Ponzi management scheme everything will be reconfigured to good purpose and advancement of life support.
The buildings I work in, framed and strung with best metals on the planet, finest glass, granite and marble of such great beauty everywhere a ubiquitous context, so familiar few notice.
If systems and supply chains crash it is reasonable to assume a corresponding crash in human population.
On the alter of the human interface to the physical world, Pay or die, this is the coin of the realm of the mindset.
Thriveal is a word under used, the emergent attitude of cross generational networks, and bridging survival through capability.
Everywhere I look there is an abundance of materials and those eager to take advantage of them.
If a whole lot soon goes to hell in a devils hand basket.
But some are left.
Resources will not be a problem.
Good cheer!
Yes Sir, that's about the extent of my optimism as well. However all this ends up, we are undoubtedly jumping headfirst into a brave new world.
Reminds me of how many of the great architectural works dating back from the peak times of Ancient Empires like the Roman one, were destroyed as the local peasents stone-by-stone took down roads, bridges and building to use the high quality stone to strengthen their houses or to make walls to divide their fields. Those parts that the peasents could not use were left to crumble under the relentless pounding of the elements.
Thus so many of the materials in the great works of the ancients, painstakenly assembled into buildings, bridges and roads, ended up as walls divinding the cow pasture from the sheep pasture.
This is what you can expect will happen to those "resources" you see all around you after a collapse.
Mexican Visigoths inbound.....
First of all, Wall Street does not need the Fed to invent money to prop up its own market. The Street needs the Fed to bail it out when it gets into trouble.
That being said, asset price inflation is an energy hedge. Let's see how long the current stock bubble ... and the China property bubble ... lasts.
when the economy was growing, even during the bubble, I saw a gas station on every corner. Since bout 2007ish I see gas stations closing down, property being cleaned up and new buildings appearing. Bank branches. If few are working they need less gas, so fewer gas stations. But, with unemployment, food stamps, refinancing car loans, home loans, taking out extra lines of credit I guess you need more and more bank branches. I also see lots of cash for gold places opening like a nasty infection. To vacuum up the poor people's gold, silver, diamonds?
sometimes the simpler the 'message' is the more effective.
Yup, all time USA equity highs as industrial commodities slump into the immense liquidity swamp.
Financial Times, Economist, Fortune, WSJ, NYTimes Biz Section ....... this is the biggest 'liquidity' experiment of all-time ....... is there no interest in the magnitude or ballsiness of this all? Are you journalists, or jornolists or propagandists (or just more co-opted promoters)? Are we just all hamsters running to the proverbial liquidity drum to make elites and overpaid, underachieving uncapitalistic financial leaders and their captive politicians comfortable?
The Chinese year of the Snake .... may you live in interesting times
Looks like the Fed & TBTF banks prefer to manipulate stocks over commodities.
Propping up stocks casues less inflation while still enriching the 1%.
The Fed, try as it might, cannot create real growth for real commodities.
Trade wars and protectionism are the only things that will bring back manufacturing job to the US. Devaluing the currency seems like an impossibility at this point.
Trade wars and protectionism are the only things that will bring back manufacturing job to the US. Devaluing the currency seems like an impossibility at this point.
***********
Trade wars are a negative for manufacturing-no matter what country industry sets up in and jobs become even more scarce as supply and demand is stymied
Devaluing a currency is no problem as long as no one else is competing-but today everyone is devaluing so they all remain competitive--so maintaining the cheapest currency is impossible-as they are all more or less devaluing together-what will matter eventually is when one of them starts selling off real fast and then the next ugliest in line falls-
The US needs to manufacture for it's domestic market to produce jobs but there are 2 major obstacles: the world is awash in cheap labor and devaluing the USD seems impossible. The US will not win the devaluing race to the bottom.
So how do you get around those obstacles?
So how do you get around those obstacles?
**********
High labor costs in NA are a big obstacle and the Fed/Central banks feeding cash to hot money investment banks in order to keep prices high is the biggest reason that labor/union/entitlement costs remain high in comparison to China-
On the other hand the US has a big advantage in that it can supply the resources much cheaper (transportation) to industries-
There is also another major obstacle and that is competing with lax environmental standards-in for instance China and at this point i think that even out trumps cheap labor-
I don't think that can continue much longer by looking at the air pollution and contamination of water ways-China will be forced to ask/tax industry for clean up costs and there will be a mass exodus of industry to "somewhere" else-there's cheap labor all over Asia but-they don't have the infrastructure to support big industrial projects-
At some point the devaluing game will end and likely not well-
It's official-the markets have finally turned into the worlds largest online fantasy role playing game, move over World of Warcraft...
welcom to virtual reality.
Zero Hedge, meet hollywood .....
who gives a fuck about the real economy! S&P 500 is the only thing that matters
do i have to quote Greenspan everytime ..
Looking back 30 years reveals the correlation between the two is relatively non-existent.
The fact the correlation is breaking down now is what?
Important
Not Important (read: going back to normal)
Okay, for all you guys out there who seem to be a little slow, I'm gonna' run through this one more time for you all: PAPER commodities have been SUBSTITUTED for REAL commodities! We DON'T need no freakin' real commodities for growth!
Now, can everyone repeat that after me?
Its the Dual Mandate in pictures, pump stocks as a symbol for growth and employment. Suppress Metals and Materials to reinforce lower expectations of inflation. The Fed and TBTF are big enough to rig enough to paint any picture you like.