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The Economics Of Decline

Tyler Durden's picture





 

Submitted by Mark J. Grant, author of Out of the Box,

I have long stated that one of the ways our current party might end is by an “Event.” The most likely suspect here has long been in Europe. An uprising, a change in the democratic political climate, a refusal to accept more funding with onerous terms, a refusal to fund as cash runs out. There are a host of possibilities here.
 
It is more than likely that Portugal will be back at the trough soon and then there is Slovenia and more money for Greece and there is quite a list of upcoming traumas. It is also likely that Italy and Spain may be forced to the window and then the calls on capital will be enormous.
 
Leaving some “Event” aside however we are surely facing an economic decline both in Europe and in America. The reason is simple enough; it is the consequence of what the central banks are doing. The lowering of interest rates to miniscule levels has a cost and while the cost is not immediately paid or apparent; it is there and now, after some time has passed, right in front of our noses.
 
Consumers and investors and the people with money are what keep any economy growing. As each month passes and as months turn into years since the central banks began their actions; disposable income has been declining. If you got 5.00% on a ten year Treasury and now you are getting less than 2.00% then possible purchasing power has declined by 60%. This is true for all classes of fixed income assets. While bond compression has helped with portfolios; maturities and calls are causing havoc with available funds that can be spent. Those with money have significantly less to spend.
 
The other side of this coin, no doubt, is the equity markets but with the bond market approximately five times larger than the stock markets the decline in yields has the same leverage factor of five times for disposable income. Those with money are growing poorer.
 
We are a scant thirty basis points off the low yield for the 10 year Treasury. As the Fed buys, with calls and maturities, some $100 billion a month of securities it is now quite likely, with no inflation, that absolute yields will keep declining. Also as people and institutions stretch for yield they are also taking on increasingly more credit risk and at yield levels that do not adequately reflect the risk that is being assumed. Consequently the demand for goods and services is being impaired and, at some point, we will cross the line where consumers can no longer provide growth for the economy and the American economy will begin to shrink just exactly like what is happening in Europe. The wealth effect created in the equity markets will eventually get overrun by the bond markets and then even equities will begin to decline as revenues begin to fall off. This is also why I believe that the possibilities of Deflation are much greater than for Inflation.
 
Europe has already entered a Japanese sort of existence and America will be coming next in my opinion. We are caught in a trap of our own making and this will be the price for the printing of all of this money. As China has reached its apex and begun a gradual grinding down in their economy, as Japan wrestles with insolvency, as Europe falls further into its sinkhole; America will follow.
 
Make hay while you can but you may also wish to notice that the fields are shrinking and that less hay may be forthcoming. Borrowers have reaped the benefits. Those with money have paid the price. Wealth that can be redeployed is evaporating. Buying power is in decline. There is always a price.

 


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Fri, 05/03/2013 - 11:26 | Link to Comment observer007
observer007's picture

Dow Record and Food Stamps Record: 48 Millions Americans

 

During the fiscal year 2011, nearly 20 million children – a quarter of all US children – were being fed with food stamps. - 15% of all Americans receive now  food stamps.

 

http://homment.com/food-stamps

Fri, 05/03/2013 - 11:32 | Link to Comment ebworthen
ebworthen's picture

WalMart, Kroger, and Yum Brands are happy!

You can get a large pizza and 2 liters of coke at Papa Murphy's with your EBT card.

Forward!

Fri, 05/03/2013 - 11:32 | Link to Comment BLOTTO
BLOTTO's picture

You mean 'X-factor' event.

.

-War in the MENA region

-Faked Alien invasion

-Natural 'Man-made' disaster

-Some pandemic disease

.

or mostly likely something we can't predict, chart or analyze...

Fri, 05/03/2013 - 11:45 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

If a star a million light years away goes nova, you can always get fried by gamma rays.

A brilliant burst of gamma rays may have caused a mass extinction event on Earth 440 million years ago—and a similar celestial catastrophe could happen again, according to a new study.[source]

The bottom line is life is short, rare and we're lucky in this vast cold Universe. And yet we don't seem to be enjoying it, nor making it fun. 

 

Free your mind and your ass will follow. Damn... the 1970's looks so much fun compared to our Corporate FutureTM and if that didn't raise a smile, go outside for a walk. [unrepentingly stolen via Metafilter]

Fri, 05/03/2013 - 12:15 | Link to Comment Jean Valjean
Jean Valjean's picture

Sounds like grist for a new George Washington post.  If only he could find a photo of Bush french kissing an alien...

Fri, 05/03/2013 - 12:51 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

You know this is the internet, right?

 

[Note: Rule 34 applies, and I couldn't use most of them]

Fri, 05/03/2013 - 17:58 | Link to Comment ebworthen
ebworthen's picture

Does shaking hands with an alien count?

http://weeklyworldnews.files.wordpress.com/2008/09/bushjralien.jpg?w=300&h=250

(and be nice to George)

Fri, 05/03/2013 - 12:31 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

"If a star a million light years away goes nova, you can always get fried by gamma rays."

Actually, the atmosphere protects us from those gamma rays.  It's what those gamma rays do to the atmosphere on the one side of the Earth that gets hit by that gamma ray burst that causes the huge problems.  The ozone layer is destroyed worldwide due to nitrogen oxides generated during the burst that migrate around the planet and the intense UV from the sun then kills most land plants.  The base of the food chain is thus destroyed with a hugely negative cascade effect to all life.

Fri, 05/03/2013 - 12:52 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

The new computer model shows that a gamma-ray burst aimed at Earth could deplete the ozone layer, cause acid rain, and initiate a round of global cooling from as far as 6,500 light-years away.

Such a disaster may have been responsible for the mass die-off of 70 percent of the marine creatures that thrived during the Ordovician period (488 to 443 million years ago), suggests study leader Brian Thomas, an astrophysicist at Washburn University in Kansas.


From the source link. Please excuse my flippant non-scientific use of the word "fried". The use of 'million light years' was also hyperbole, and not accurate, it should have been 'thousands of light years'. The intent was to show that worrying about things beyond your control does little for your mental well being, and could even lead to you over-controlling the stuff you can control as a psychological coping mechanism. CF: Indoctrination / Power / Domination, a hundred thousand books & papers on the topic.

Fri, 05/03/2013 - 14:35 | Link to Comment Jean Valjean
Jean Valjean's picture

which is why it took a woman to invent credit default swaps

Fri, 05/03/2013 - 18:23 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

There's no need to be mean, just because a woman did it better.

Fri, 05/03/2013 - 13:47 | Link to Comment More_sellers_th...
More_sellers_than_buyers's picture

I just printed this out and put it on my desk. Now I'm going for a walk

Fri, 05/03/2013 - 11:47 | Link to Comment McMolotov
McMolotov's picture

I didn't get the warm fuzzies yesterday when I read about the Chinese conjuring up some new kind of super flu in a lab.

Fri, 05/03/2013 - 12:00 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Lab?  What lab?  Their rivers are one giant lab, with shit and critters dumped in them.

Fri, 05/03/2013 - 12:47 | Link to Comment MassOpiate
MassOpiate's picture

War or disease, they want to keep their options open on population/mind control . . .

Fri, 05/03/2013 - 11:33 | Link to Comment IPA
IPA's picture

You can't expect people to give up their latest igadget and service contract just to feed their kids. 

Fri, 05/03/2013 - 11:46 | Link to Comment Vashta Nerada
Vashta Nerada's picture

Was in the grocery a few weeks ago, and saw a woman with a fancy $300 phone, a full cart and an EBT card.  A gentleman with a sense of decorum just like mine loudly pointed out: "I wish I could afford a phone like that."  I noted just as loudly that the reason he could not afford one was because he had to pay for her groceries (and perhaps service contract)  with his tax dollars.

Fri, 05/03/2013 - 12:17 | Link to Comment Jean Valjean
Jean Valjean's picture

racist

Fri, 05/03/2013 - 12:35 | Link to Comment Vashta Nerada
Vashta Nerada's picture

Actually, she was a rather large caucasian woman.  What made you jump to the conclusion she was a minority?

Fri, 05/03/2013 - 13:11 | Link to Comment OS2010
OS2010's picture

I suspect the /sarc flag was forgotten.

Fri, 05/03/2013 - 13:56 | Link to Comment gtb
gtb's picture

Or he knows she has a black boyfriend.

Fri, 05/03/2013 - 14:37 | Link to Comment Jean Valjean
Jean Valjean's picture

Good stuff.

Yes, sorry, forgot the /sarc.  Was going to go back but then we would not have this fine tidbit.

Fri, 05/03/2013 - 12:22 | Link to Comment Lendo
Lendo's picture

LOL, that's great.

A woman shopping at Whole Foods paid with a Link card in a wealthy IL suburb.  She then had the gual to ask the cashier how much was left on the card.  I told the cashier to ignore the request as this taxpayer has to get back to work when I pointed to me.

The stare that the Link card cunt gave me was priceless.  I shrugged and said "seriously, I have to get back to work, I don't have time for this".  Check it on your own time.

Fri, 05/03/2013 - 12:38 | Link to Comment Vashta Nerada
Vashta Nerada's picture

People used to be ashamed to take government assistance, which in turn led to people bettering themselves and getting off the dole.  EBT cards have helped to hide the source of funds, and thus some of the impetus to become a productive member of society again.  I like to try and restore some of that opprobrium whenever I can.

Fri, 05/03/2013 - 13:24 | Link to Comment noless
noless's picture

People think I'm am asshole for things like that, but i honestly believe that when you provide for yourself, with no one else to answer to it provides a better mental atmosphere in which you respect yourself more, and are more able to enjoy life. I don't want to kick people down, i just want them to realise that taking responsibility for your own life is true freedom, something which ironically cannot be bought.

Fri, 05/03/2013 - 14:37 | Link to Comment Joe Davola
Joe Davola's picture

You need to get your mind right, the commander in chief has spoken and he said:  You didn't build that.

Now run along to the gulag.

Fri, 05/03/2013 - 15:48 | Link to Comment The Clever Guy
The Clever Guy's picture

With over 100 million people unemployed, it's no longer an effect of laziness or irresponsibility. It is the result of the government devaluing the currency and big business buying every politician (who in turn, passes legislation that essentially makes it nearly impossible to compete with those same businesses) then shipping every job they can, overseas. When the price of food skyrockets (which it will), you may soon be listening to a presumptuous, arrogant, sanctimonious asshat make snarky comments to you about having the unmitigated audacity to eat food that YOU didn't pay for. Fact is, all food is subsidized by gov't (whethor or not food stamps are used). I know many folks who are solid citizens and they have been unemployed through no fault of their own. Wake up and develop a sense of humility or God will humble your ass.

Fri, 05/03/2013 - 16:13 | Link to Comment noless
noless's picture

I know, i have been homeless and reduced to eating out of the trash.. Dig?

 

If you met me in person you would realize that humility is the last thing i need.

Tue, 05/07/2013 - 21:19 | Link to Comment Mike7.62
Mike7.62's picture

"...Fact is, all food is subsidized by gov't (whethor or not food stamps are used)..."

 

Really? You mean that all the food that I grow on my own land and all the other provender that it provides in the form of game and domestic livestock are subsidized by .gov? Even though I don't take a penny from them or claim any tax exemptions for their production? My ass.

Speak for yourself, but please leave everyone else out of your calculations.There are a few of us out there who eschew .gov as much as is humanly possible, and don't want a damn thing from it, but are increasingly resentful of those whom we support indirectly through our taxes because there are too many who consider themselves as entitled to our income. If God chooses to punish me for my attitude towards freeloaders, then He's part of the problem.

Fri, 05/03/2013 - 14:26 | Link to Comment Anusocracy
Anusocracy's picture

The 'rugged individualism' that developed early America has almost been brought to extinction by reproductive trends and immigration.

Foragers are now undermining the producers.

Fri, 05/03/2013 - 13:33 | Link to Comment Sofa King Confused
Sofa King Confused's picture

Lendo

 

Your comment about  "this taxpayer needs to get back to work" you say that as if you are doing things the way they are meant to be done without taking a govt handout and working for a living.  Let me try to enlighten you a little.  Income taxes are illegal!! Many of the states did not ratify the 16th admendment but were counted as if they did. Also if you think you are being a great American buy working and paying you taxes to fund the govt and all there good deeds you might want to read up on the 1984 Grace Commission Report done during Regan's time as president to see where your tax money REALLY goes.

Fri, 05/03/2013 - 12:41 | Link to Comment Charles Nelson ...
Charles Nelson Reilly's picture

funny you mention this.  About a year ago, my wife and I went into Walmart to buy a couple items (Outside Baltimore).  I fucking hate Walmart, but not because I'm some poser that "shops local".  I hate it because it's fucking depressing to see the slobs that occupy this country now and breed.  Anyway, woman in front of me, a big fat black pile of shit buys her $175 worth of groceries on her EBT card.  I think... whatever, millions more like her.  Then as we're walking out to the parking lot to get to our car, her fat ass slides into the drivers seat of a brand new Escalade.  Unfuckingbelievable!

Fri, 05/03/2013 - 13:06 | Link to Comment marathonman
marathonman's picture

Remember this one from 2008?

http://www.youtube.com/watch?v=P36x8rTb3jI

How about this one from last year - forward to the 2:20 mark.

http://www.youtube.com/watch?v=bavou_SEj1E

Good times my brothers.  Good times.

Fri, 05/03/2013 - 14:46 | Link to Comment Anusocracy
Anusocracy's picture

"it's fucking depressing to see the slobs that occupy this country now and breed."

When those who are more driven to reproduce are given resources to do it, they will. It's called feed and breed. They will often reproduce at an earlier age and in larger numbers, and over a number of generations, start outnumbering those whose interests lie elsewhere.

Successful societies sow the seeds of their own destruction.

Fri, 05/03/2013 - 11:52 | Link to Comment tango
tango's picture

I volunteer occasionally at a food bank.  I am still stunned by many with kids who have no food and the electricity and water shut off yet have a smart phone .  Some sport new "doos", 60 inch tvs, $150 shoes and drive a nicer car than mine.  When I inquire, you find (of course) government help, no savings of any kind - college, personal, rainy day, no insurance, rent "assistance", etc   At least half of them are on food stamps but with 4 or 5 to feed every meal, that won't go far.  BUT THEY SEEM UNCONCERNED at their present state of affairs, as if the gravy train will go on forever.

Fri, 05/03/2013 - 12:05 | Link to Comment IPA
IPA's picture

Spending power on government assistance is already far better than minimum wage, but when it becomes greater than a normal middle class job....

Fri, 05/03/2013 - 13:28 | Link to Comment noless
noless's picture

In many cases it already is.. Depends on how good they are at gaming the game.

Fri, 05/03/2013 - 11:56 | Link to Comment smartstrike
smartstrike's picture

Food stamp participation rate is completely uncorrelated to the official unemployment rate (U3)? It is  also uncorrelated to labor participation rate? It used to be highly correlated to U6, but not anymore as SNAP participation is rising while U6 is falling. So what gives? All job numbers are bogus!

 

SNAP only correlates to growing income disparity---the rich are stealing more and more money and nothing trickles down to the bottom 50%, that's some economic system? This kind of system has a long-term sustainability factor of zero.

Fri, 05/03/2013 - 12:43 | Link to Comment Urban Redneck
Urban Redneck's picture

post hoc ergo propter hoc

SNAP - see eligibility, ease of access, alternatives

(eligibility in the broad sense, which has many components - several of which relate to the economy SUCKING MAJOR ASS INCESSANTLY)

but yes, it is unsustainable over the longer term

Fri, 05/03/2013 - 11:26 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Isn't today's jobs report totally consistent with the forecasts of what is going to happen as Obamacare takes effect?  More jobs of the part-time variety.  I think full time jobs actually dropped in this report.

Fri, 05/03/2013 - 11:37 | Link to Comment smartstrike
smartstrike's picture

No, the job report is consistent with growing income disparity.

Sat, 05/04/2013 - 14:22 | Link to Comment Anusocracy
Anusocracy's picture

The government, and its tool the Fed, have disconnected wealth creation from job creation.

The result is more workers scrabbling for fewer jobs, which drives down wages.

Fri, 05/03/2013 - 11:42 | Link to Comment McMolotov
McMolotov's picture

We're dead in the water and it will only get worse from here. Business has slowly dried up over the last few months where I work, and I don't see how Obamacare could possibly make things better.

The hollowing out of the middle class will continue until we reach full-retard neofeudalism.

Fri, 05/03/2013 - 11:49 | Link to Comment Dr. Engali
Dr. Engali's picture

You mean we're not there yet? 

Fri, 05/03/2013 - 11:54 | Link to Comment Poetic injustice
Poetic injustice's picture

Real feudalism will start when people will turn up at farms and estates and state they are ready to work for food and shelter. That day is coming, though.

Fri, 05/03/2013 - 12:20 | Link to Comment Jean Valjean
Jean Valjean's picture

Not how it works.  They will simply show up at farms at harvest time and take the crop.  At estates they will simply move in.

Fri, 05/03/2013 - 13:31 | Link to Comment noless
noless's picture

I just want to point out that your scenario implies the federal government has fallen or is useless, and most likely a civil war.

Fri, 05/03/2013 - 14:42 | Link to Comment Jean Valjean
Jean Valjean's picture

Well yes, I'm being loose with the rules today.  Actually the "folks" who show up at the harvest will be backed by the federal government.

Fri, 05/03/2013 - 11:55 | Link to Comment McMolotov
McMolotov's picture

Just when you think we've already been screwed as much as we could possibly be screwed, they'll bring out the whips, chains, and industrial dildos.

Fri, 05/03/2013 - 12:45 | Link to Comment RafterManFMJ
RafterManFMJ's picture

So you're saying it won't be all bad news then?

Fri, 05/03/2013 - 12:21 | Link to Comment tarsubil
tarsubil's picture

This isn't feudalism. It is debt slavery.

Fri, 05/03/2013 - 12:31 | Link to Comment prains
prains's picture

slavery doesn't need debt to exist

Fri, 05/03/2013 - 11:28 | Link to Comment Vashta Nerada
Vashta Nerada's picture

Zombienomics

Fri, 05/03/2013 - 11:28 | Link to Comment JJ McApe
JJ McApe's picture

whats mr bernankes favorite drink?

bubble tea... *_* hue hue hue

Fri, 05/03/2013 - 11:29 | Link to Comment RebelDevil
RebelDevil's picture

Time to storm the FED!!

Fri, 05/03/2013 - 11:29 | Link to Comment madbraz
madbraz's picture

Bond market is not five times the stock market, less than 3 times.

 

Treasury yields don't decline because of the central banks, they decline because "money" wants to go home and die via write-offs and debt repayment - asset values naturally have to compress.  Even Tyler knows that when QE was off, treasuries rallied and yields plummeted.  

 

 

Fri, 05/03/2013 - 11:43 | Link to Comment nightshiftsucks
nightshiftsucks's picture

So if i pay a higher price for the house across the street then won't that make all the comparable houses hgher.if the fed pays more for treasuries then doesn't that make them worth more ?

Fri, 05/03/2013 - 11:30 | Link to Comment khakuda
khakuda's picture

I would say stagflation more than deflation.  Prices won't be allowed to go down by the Central banks.  We know what happens when asset prices drop in a levered financial system, so they will pump at ever extreme levels.  However, the more they pump and the longer rates stay low, the longer the economy stays crummy.

Fri, 05/03/2013 - 12:04 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

If you read yesterday's article on wealth distribution, you'd realize that it is and always has been about the Top 1%, who own and control "America".  It's all about protecting their interests and assets.  All else is optional.  Like your health, wealth or jobs -- which are there to serve & enrich them, at levels just above riot/revolution thresholds.

Fri, 05/03/2013 - 13:54 | Link to Comment KnightTakesKing
KnightTakesKing's picture

And that, sadly, can continue for a long time before it finally disintegrates and takes everything down with it.

Fri, 05/03/2013 - 11:30 | Link to Comment ebworthen
ebworthen's picture

Race to debase!

Which nation can destroy it's middle class faster!?!?

Fri, 05/03/2013 - 11:42 | Link to Comment astoriajoe
astoriajoe's picture

We've been training for years.

USA! USA!

Fri, 05/03/2013 - 11:49 | Link to Comment ebworthen
Fri, 05/03/2013 - 11:54 | Link to Comment NoDebt
NoDebt's picture

I would make the argument it's already gone.  It has the fascade of the middle class, but really it's already mostly an historical artifact.  What we have now as a "middle class" is mostly just people who have found a niche for themselves servicing the rich (full disclosure- that's what I do).  Anyone working with their hands is mostly paycheck to paycheck subsistence, aside from government support payments.  And the "service" jobs are mostly the "new poor."  WalMart greeters and such.  And again augmented by government support payments.

Yank those government support payments (or just whittle them back a few percent) and you will see just how poor people have REALLY become, absent that crutch.  They are UTTERLY dependent on government.

My definition of "middle class" always meant you worked for it (do I sound stupid and old fashioned, or what??).  The new middle class definition involves VOTING for people who promise to GIVE it to you out of taxpayer dollars.

Fri, 05/03/2013 - 11:59 | Link to Comment tango
tango's picture

I guess I would be one of those you "service" (lol).  What I notice is that those I talk to work hard, save and have more economic sense than the last three Economic Czars combined.   Electricians, plumbers, AC folks, construction all are doing well - or would be if the price of health care was not on a vertical arrow.  It's the service industry that's being Obamacared - reduced hours, loss of overtime, just enough to get by. 

Fri, 05/03/2013 - 11:32 | Link to Comment Dr. Engali
Dr. Engali's picture

I have banks that were on the verge of collapse now calling preferreds right and left. Thanks to free money from  the fed they will issue new preferreds at 1/2 the previous rates. The savers get screwed and the banks win again.

Fri, 05/03/2013 - 11:45 | Link to Comment fonzannoon
fonzannoon's picture

Amazing.

Fri, 05/03/2013 - 11:33 | Link to Comment W T F II
W T F II's picture

Mark Grant is NUTS....Temp workers and 'hospitality help' WILL lead to a new paradigm of robust discovery, technological advancement and a golden-age of progress.

Fri, 05/03/2013 - 11:42 | Link to Comment ebworthen
ebworthen's picture

+1 for the wry nature of your sarcasm.

"...WILL lead to a new paradigm of robust discovery, technological advancement and a golden-age of progress."

Yes, generations of expert table setters, wine pourers, and floor moppers.

Fri, 05/03/2013 - 11:58 | Link to Comment fonzannoon
fonzannoon's picture

LOL is that what Mark Grant said? When I saw he wrote this I just skipped to the comments section.

Fri, 05/03/2013 - 12:05 | Link to Comment tango
tango's picture

He is right but not for that reason.   Technological change is now self-sustaining, occuring so fast and stealthily that most of us now take it for granted.  The new world is being created as we speak and unfortunately one byproduct is disruptive technologies that replace people.  I'm not sure what the answer is but am confident that as always, we will persevere.  Eventually, we may arrive at the point where a basic standard of living is available for everyone and only those who want more actually "work".  

Fri, 05/03/2013 - 12:25 | Link to Comment Jean Valjean
Jean Valjean's picture

You are correct.  And a "remnent" will persevere.

Fri, 05/03/2013 - 12:41 | Link to Comment BraveSirRobin
BraveSirRobin's picture

"Technological change is now self-sustaining, occuring so fast and stealthily that most of us now take it for granted."

I take issue with this. I do not see any great progress since the 1960's. All this technological marvel you see are just refinements of technologies introduced by the 1960's. I think we have seen a great technological stagnation which is part of the current problem.

Fri, 05/03/2013 - 14:06 | Link to Comment Anusocracy
Anusocracy's picture

I guess you fell victim to the 'stealthily' part of technological change.

 

Fri, 05/03/2013 - 11:34 | Link to Comment LawsofPhysics
LawsofPhysics's picture

So many paper fucking promises, so little collateral or physical assets of real value...

Fri, 05/03/2013 - 11:44 | Link to Comment NoDebt
NoDebt's picture

The problem with zero-bound rates is that it breaks societies.  You only live a certain length of time.  If you want some of my money it has a time-value to me.  I expect to be paid for it (interest rate).  If interest rates are zero, my time value, my life is worth nothing (in financial terms).  Even less with inflation.  That's the kind of shit that breaks a society.  Today, tomorrow, next year- who gives a rat's ass when today, tomorrow, and next year are all the exact same value?  Why save, why plan for the future, why do anything but sit on the couch?

 

Fri, 05/03/2013 - 14:37 | Link to Comment All_Is_Well
All_Is_Well's picture

Great Post....

Fri, 05/03/2013 - 11:54 | Link to Comment CDNX fan
CDNX fan's picture

This resembles the Nikkei circa 1988 - many, many similarities.

Fri, 05/03/2013 - 11:58 | Link to Comment Captain Willard
Captain Willard's picture

Poor Mark Grant has been so consistently wrong about his market calls that I fear for his job.

Sadly, it seems that the time to sell is when he finally gets fired. He is a good man and deserving of a better fate, but as Clint said in "Unforgiven": "Deserving's got nothing to do with it".

Fri, 05/03/2013 - 12:00 | Link to Comment Jack of All Trades
Jack of All Trades's picture

There is reason, there is logic, there is thought verified by experience and then there is central bank planning. . .

 

One thing is certain - this will not end well!!

 

The muppets are being led to slaughter AGAIN

Fri, 05/03/2013 - 12:03 | Link to Comment yrbmegr
yrbmegr's picture

This is gobbledygook.

Fri, 05/03/2013 - 12:04 | Link to Comment therover
therover's picture

The SOP in the future will be, the people that HAVE things ( ie, debt free assets), will be the people who get the 'haircuts'. The people who GET things (ie, govt funded goodies), will be spared.

Pretty obvious they want to continue, slowly, to increase the number of people who get things, so when the 'haircuts' do come, there will be less people revolting.

 

 

 

Fri, 05/03/2013 - 12:12 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

I continue to be amused by the people who advocate debt-free money, but then bitch about zero-interest money printing.  Notice that 'zero-interest' = 'debt-free'.  Krugman must be ROTFL.

Fri, 05/03/2013 - 12:13 | Link to Comment Meat Hammer
Meat Hammer's picture

With the professional anti-capitalism protesters rage in Seattle getting wide msm coverage, me thinks something may be coming sooner rather than later.

Tick...tick...tick

Fri, 05/03/2013 - 12:21 | Link to Comment sschu
sschu's picture

To me the objectives of QE and ZIRP are to finance the exorbitant government deficits and to devalue the currency in order to pay off accumulated debts for virtual pennies on the dollar.  

The benefit to those printing is that they have first call on the free money, have a “special relationship” with the enforcers of the law to allow them to flaunt these laws and hence profit handsomely from the ponzi. 

This is really nothing new, governments have been debasing currency for centuries with corresponding catastrophic social change as a result, although you will not read about this in the NY TimesUSATodayWSJNewsweakTimeLife or hear about it on ABCNBCCBSCNNMSNPBS.  

So it is not difficult to predict how this all ends, the trick is to try and figure out when and how it manifests and to stay out of the way of the angry populace.  Being a Jew in the Weimar, a Christian in 250 Rome a Bourgeoisie in 1917 Russia or a Nobleman in 1793 France are roles to avoid.  

What group is the next target?  Given my personal beliefs, it would seem that a repeat of Rome is likely, but time will tell.  

The history has been already been written, now we get to see how the details play out. 

sschu

Fri, 05/03/2013 - 12:45 | Link to Comment Floodmaster
Floodmaster's picture

Funny, i thought interest rates rise as a result of inflation. Inflation was present during the baby boomers' active years... I’m still waiting about the nasty inflation create by Bernanke’s out-of-control money printing. Zerohedge have something in common with CNBC.

Fri, 05/03/2013 - 12:50 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Now remind me, what was the formula for calculating inflation back then?  Seems like you may have missed that bit about changing the rules.

Fri, 05/03/2013 - 13:32 | Link to Comment Mojeaux18
Mojeaux18's picture

No one expects the Spanish Inquisition...

(wow - actually makes sense here...)

Fri, 05/03/2013 - 14:41 | Link to Comment falak pema
falak pema's picture

the economics of recline... first world in rocking chair ...

Fri, 05/03/2013 - 16:57 | Link to Comment RMolineaux
RMolineaux's picture

Perhaps the time has come for an analysis of the movements of the various money supply numbers.  Some have argued that the Fed money printing has been offset by the shrinkage of normal money supply creation by commercial bank lending.  Admittedly, the velocity variable complicates any conclusions that might be drawn by such analysis, but having the supply information nailed down can be a starter.  Back in the days when money supply numbers were beat to death by the Reaganite "supply siders," we heard a lot about these numbers.  Now we hear very little.

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