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Now That U.S. & China Have Picked The Low-Hanging Fruit, Peak Everything Looms

Tyler Durden's picture




 

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

With no plan to manage an economy in which expanding credit no longer generates growth, the two nations are rapidly reaching Peak Everything.

Let's call the strategy of picking all the low-hanging fruit in an economy Plan A: you know, expanding credit, lowering interest rates, building infrastructure, fueling speculative frenzies, all the good stuff that fans the flames of "growth."

Now that the central banks and political leadership of the U.S. and China have plucked all the low-hanging fruit, they have no Plan B. With no plan to manage an economy in which expanding credit no longer generates growth, the two nations are rapidly reaching Peak Everything:

 

  • Peak Leverage
  • Peak Phantom Collateral
  • Peak Mal-Investment
  • Peak Ghost Malls
  • Peak Doing More of What's Failed Spectacularly
  • Peak Propaganda
  • Peak Smog
  • Peak Housing Bubble
  • Peak Keynesian Cargo Cult
  • Peak Clueless Leadership
  • Peak Central Bank Manipulation
  • Peak Phony Statistics
  • Peak Debt-Serfdom
  • Peak Crony-Capitalism
  • Peak Group-Think
  •  
  • You get the idea.

Gordon T. Long and I discuss the ramifications of the low-hanging fruit having been plucked in this 26-minute slide presentation:

Of related interest:

What Happens After the Low-Hanging Fruit Has Been Picked? (April 2, 2014)

 

 

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Thu, 04/10/2014 - 17:02 | 4644898 buzzsaw99
buzzsaw99's picture

sure they do. keep stealing everything that isn't nailed down then give themselves another bonus.

Thu, 04/10/2014 - 17:10 | 4644933 john39
john39's picture

Plan B? of course they have Plan B...  false flag followed by war so as to blame some other guy.

Thu, 04/10/2014 - 17:12 | 4644938 buzzsaw99
buzzsaw99's picture

step 1) pick scapegoat

step 2) kill kennedy

 

those bastards always have a plan

Thu, 04/10/2014 - 17:20 | 4644955 TaperProof
TaperProof's picture

You can bet your ass war is their Plan B.   I'd even bet mine.

Thu, 04/10/2014 - 17:42 | 4645038 cro_maat
cro_maat's picture

I am not sure they can pull a war off if Russia and China dump $ / treasuries and cut off energy supplies to Europe.

Thu, 04/10/2014 - 19:30 | 4645538 TaperProof
TaperProof's picture

Wounded animals are the most dangerous.

Thu, 04/10/2014 - 20:39 | 4645753 neidermeyer
neidermeyer's picture

A short war anyway ... with China's muppet NK having demo'd EMP capability. I'm going to build a small faraday cage and keep some vital equipment safe. 

Thu, 04/10/2014 - 17:19 | 4644956 Charles The Ham...
Charles The Hammer Martel's picture

You know you wish those bonuses were still available man. I would be collecting commissions with a fishing net. January 2017 first agency to go is the CFPB. We will probably execute Rob Cordray and no one will ever find Elizabeth Warren's body.

Thu, 04/10/2014 - 17:03 | 4644899 seek
seek's picture

"Peak Doing More of What's Failed Spectacularly"

If only this were true.

Thu, 04/10/2014 - 17:38 | 4645025 CH1
CH1's picture

Peak....

The real peak issue: Peak Obedience.

Thu, 04/10/2014 - 17:03 | 4644903 SmilinJoeFizzion
SmilinJoeFizzion's picture

the real fun comes July 4th-  Yellen / Chestnut  ---Coney Island, Brooklyn NY- The hotdog eating contest to end all hotdog eating contests

Thu, 04/10/2014 - 17:04 | 4644904 economessed
economessed's picture

From the gnome school of central planning, we identify this as the uncomfortable space in time between "Steal all the underwear" and "Profit!"  

Thu, 04/10/2014 - 17:05 | 4644910 LawsofPhysics
LawsofPhysics's picture

Damn,  oh well, those preppers really doon't look so stupid now...

(unless they published all their information of course)

Thu, 04/10/2014 - 17:06 | 4644912 Peter Pan
Peter Pan's picture

Take heart everyone.......we still have some distance to go before reaching peak stupidity.

Thu, 04/10/2014 - 17:06 | 4644913 Son of Captain Nemo
Son of Captain Nemo's picture

Speaking of ghost malls... Here's your stroll down the American memory hole of the once more prosperous dayz.

http://www.buzzfeed.com/mjs538/completely-surreal-pictures-of-americas-abandoned-malls?bffb

Thu, 04/10/2014 - 17:07 | 4644916 NOTaREALmerican
NOTaREALmerican's picture

What a load of crap from a "Keynesian" infadal.   Repent you heathen, and repeat the "Keynesian" prayer of perpetual prosperity!

We must borrow more money,
To stimulate demand,
So that jobs are created,
And prosperity ensues,
Then we pay off our loans.

If you don't have prosperity, it's because you didn't believe while you were praying, and must keep praying until you have propserity!

AMEN!!!

Thu, 04/10/2014 - 17:08 | 4644922 Z_End
Z_End's picture

Peak Peak?

Thu, 04/10/2014 - 17:12 | 4644937 NOTaREALmerican
NOTaREALmerican's picture

With one exception: there will never be Peak Bullshit. 

Thu, 04/10/2014 - 17:16 | 4644949 john39
john39's picture

>>peak bullshit

this comes pretty close:

"A White House climate initiative has boosted a quixotic search for the “cow of the future”, a next-generation creature whose greenhouse gas emissions would be cut by anti-methane pills, burp scanners and gas backpacks."

http://www.ft.com/cms/s/2/70637ed6-bece-11e3-a1bf-00144feabdc0.html

Thu, 04/10/2014 - 17:25 | 4644977 Shad_ow
Shad_ow's picture

Does human methane expulsion pollute less than bovine fkatulence?

If not, what do they plan to do about eliminating the human problem?  Or don't I wan't to know?

Thu, 04/10/2014 - 20:45 | 4645773 neidermeyer
neidermeyer's picture

First off it doesn't matter because we are in a lull in a little ice age. Second ... it's a matter of quantity ,, methane is methane no matter whether it comes out of a cows butt or a Hollywood starlets.. Cows have 4 stomachs for a reason ,, their digestion is abysmally inefficient.. they fart nearly continuously and in great quantity.

 

Methane doesn't matter because simple water vapor is also a "warming gas" and it's quantity dwarfs all other gases.

Thu, 04/10/2014 - 19:30 | 4645542 fattail
fattail's picture

I don't see peak cheap oil or peak water on the list.  Those are the substances that war will be fought over.

Thu, 04/10/2014 - 17:10 | 4644927 Powder
Powder's picture

That banging noise you hear is related to the pain you are feeling....said the convict to the Britany. 

Thu, 04/10/2014 - 17:10 | 4644932 Cupid Stunt
Cupid Stunt's picture

Oh ..and peak shipping......... the BDI is only a blip........right.........RIGHT...........??

Thu, 04/10/2014 - 17:14 | 4644945 Spungo
Spungo's picture

You went peak retard. Never go peak retard.

Thu, 04/10/2014 - 17:15 | 4644946 debtor of last ...
debtor of last resort's picture

Give mrs. Debtfire a cock on the taxpayer, raise rates to, let's say, 18% and get it over with.

Thu, 04/10/2014 - 17:16 | 4644950 Let them eat iPads
Let them eat iPads's picture

This planet isn't big enough for both the US and China.

One of them needs to go.

Thu, 04/10/2014 - 18:07 | 4645182 Peter Pan
Peter Pan's picture

Preferably both.

Fri, 04/11/2014 - 01:34 | 4646449 Tompooz
Tompooz's picture

One of them will.  In the worst case, both will.  That's how the meek inherit the earth

Thu, 04/10/2014 - 17:21 | 4644966 813kml
813kml's picture

On the bright side, if the world survives at least the Obama "administration" will have provided Hollywood with some good material.  Working titles include:

 

"Apocalypse Right Now"

"Stinkburger Hill"

"McCain's Sunken Navy"

"All Quiet on What Used to be the Western Front"

"The Thin Red Dotted Line"

"Saving Private Reserve Banking"

"Full Metal Straitjacket"

"Dr. Reggie Love or: How I Learned to Stop Denying and Embrace the Love That Dare Not Speak Its Name"

 

That last one is Oscar bait aimed at the LGBT crowd, assuming a nuclear winter hasn't transformed surviving humans into hermaphrodites.

Thu, 04/10/2014 - 17:37 | 4645016 Pareto
Pareto's picture

Can't forget, "You didn't build that.....they won't come!"  

Thu, 04/10/2014 - 17:23 | 4644972 Smegley Wanxalot
Smegley Wanxalot's picture

Peak Economic Collapse ... on the way

Thu, 04/10/2014 - 17:30 | 4644991 max2205
max2205's picture

Plan B: keep rates low and continue QE....duh

Thu, 04/10/2014 - 17:35 | 4645007 malek
malek's picture

Nope, we're far off still from:

- Peak lies
- Peak stupidity
- Peak despair

Thu, 04/10/2014 - 17:36 | 4645012 SmittyinLA
SmittyinLA's picture

All of Africa is low hanging fruit, its the worlds largest, dumbest, consumer debter economies and it doesn't even know it.

The African debt orgy hasn't even started yet.

 

 

Thu, 04/10/2014 - 17:38 | 4645020 joego1
joego1's picture

Here Califuckya the taxing authority is called "The State Board of Equalization". It's a low frequency trading algo that eventually takes everyone to Zero.

Thu, 04/10/2014 - 17:43 | 4645044 syntaxterror
syntaxterror's picture

Plan B: Sell everyone electric cars that can travel a miraculous 80 miles on a single charge!

Thu, 04/10/2014 - 17:49 | 4645079 NOTaREALmerican
NOTaREALmerican's picture

That might work: Big-CAR,  and, rebuild all the freeways to include recharging tracks.  Kinda like slot-car tracks. 

Thu, 04/10/2014 - 19:21 | 4645499 AdvancingTime
AdvancingTime's picture

Never before has mankind diverted such a large percentage of wealth into intangible products or goods and made the claim this is the primary reason that inflation has not raised its ugly head. Bottom-line much of what happens in our economic future depends on inflation or deflation. The modern economy that has evolved over the last several decades is loaded with interwoven contracts reeking of contagion. I contend that if faith drops in these intangible "promises" and money suddenly flows into tangible goods seeking a safe haven inflation will soar.

Like many of those who study the economy I worry about the massive debt being accumulated by governments and the rate that central banks have expanded the money supply. The timetable on which events unfold is often quite uneven and this fact supports the possibility of the following bizarre scenario. A key issue is one of timing. If the price of gas jumps to $8 a gallon overnight do you buy gas and not make your car payment? Answer, it could be months before your car is repossessed so you buy gas. It is important to remember that debts can go unpaid and promises be left unfilled. The article below delves into how and why inflation may bring economic chaos.

http://brucewilds.blogspot.com/2014/04/inflation-seed-of-economic-chaos....

Thu, 04/10/2014 - 21:38 | 4645897 Radical Marijuana
Radical Marijuana's picture

High-grading ourselves to hell will result in Peak Insanities, as the most important consequence of Peak Everything Else.

Fri, 04/11/2014 - 07:09 | 4646677 Reader1
Reader1's picture

Peak Oil -> Peak development -> Peak employment -> Peak economy -> Peak credit -> Peak food -> Peak people -> Peak anarchy...

The economy has a ton of unsustainable bad credit to swallow and digest. 

The planet has a ton of unsustainable people to swallow and digest, too.

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