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When A Soaring Dollar "Reflects Loss Of Investor Confidence And Is Potentially Devastating"

Tyler Durden's picture




 

For all those following the relentless rise in the USD and assuming this is a great thing for global markets, here is a must read take from SocGen's Kit Juckes.

* * *

GOOD DOLLAR, BAD DOLLAR

The ECB is buying more bonds than expected, and from longer maturities. ECB President Mario Draghi was almost scornful of concerns about the lack of burden-sharing in the event of losses. Equities rallied, credit spreads tightened, and both yields and spreads fell across European government bonds. The Euro has fallen against every major currency except for the Danish Krone today and every major currency except for the Canadian dollar and Czech Koruna this year. It has further to fall, even if it is long overdue some kind of correction. The CEEFX currencies in particular are likely to see gains (PLN to the fore). But as outsized moves repeatedly surprise asset markets, there is a need for caution – A strong dollar has a Jekyll and Hyde personality – a ‘good dollar’ that reflects economic and monetary policy divergence and whose rally is orderly and limited. And a ‘bad dollar’ which de-couples from monetary policy and reflects instead a loss of investor in the face of higher volatility. That dollar rises faster, much further, and is potentially devastating.

The danger of disorderly moves

The Ruble has fallen by 50% in a year. The price of oil has halved, the price of copper, iron ore and many other commodities has tumbled. The Swiss franc has been  de-floored and the uproar was huge. All random events, all part of a pattern. Financial markets are feeling the effects of a pick-up in volatility that has followed the end of Fed QE. While zero rates were augmented with Fed bond-buying, investors went around the world in search of higher yields, in all sorts or assets and currencies. Traders and investors of one kind or another resorted to leverage to reach the yield targets they needed to match their required investment returns. All of which was fine while the party went on forever, but now that it’s ending, the outcome is anything but fine.

It’s only when the tide goes back out you see who is naked, and it’s only when volatility picks up that we can start to place markets on a scale between ‘fundamentally-driven trend’ and ‘bubble’. And we have been busy learning a few home truths;

1) The commodity/resources boom, was a bubble. A lot of the increase in demand came from just one country which is bad enough but that was exacerbated by traders and investors as commodities became an 'asset class'. We’re going to find new clearing levels (perhaps not far from here, but a lot lower than they were) for natural resources which re-balanced global wealth from developed to developing economies, and are now re-re-balancing wealth (and growth) back the other way.

2) USD 100/barrel oil was also partly down to investor behaviour. We could all see the boom in alternative sources of supply and we all watched as crisis erupted in Iraq, but oil prices just didn’t get the kind of lift we were fearing a year ago. Again, I don’t pretend to know where the clearing price for oil (ie, the bottom of this move) is, but we’ll end up in a new lower range.

3) EM currencies were overvalued. I have sent out countless charts over the last 18 months of real effective exchange rates that show by just how much a range of  emerging market currencies have appreciated in real terms since the last time the Fed started a rate-hiking cycle. Many of these have now corrected, savagely. Not all though - the CNY for one, stands out like a sore thumb.

4) There was more leverage in the Swiss franc short than any of us imagined. Going short Swiss francs relied on the assumption that there was no way the SNB would  allow the EUR/CHF floor to break, given that they could intervene to hold the CHF down and infinitum. Clearly, a wrong assumption but the common trading/investment tactic was to see low volatility as a reason why it was OK to take large leveraged positions that made money if EUR/CHF drifted modestly higher.

On the surface, these trends are largely unrelated. But what they have in common is that leveraged trades facilitated by easy Fed policy and low volatility, have become crowded and corrected more than expected. These are certainly not the only such examples of this kind of move that we will see in 2015. The end of Fed QE is only a small move - certainly small compared to say, an actual Fed rate hike. When that happens, we’ll turn the volatility up another notch or three.

Leaving rates too low relative to the underlying growth of the economy for too long, was/is dangerous. There’s no precise science to monetary policy, but you can see the unintended consequences of rates being too low for too long in these moves. There’s a danger that from here, we see more volatility, more capital repatriation into the dollar (and perhaps, temporarily, into the yen too). If that happens in a disorderly fashion, we’ll move from a reasonably benign dollar rally, to a disorderly and dangerous one. If the dollar appreciates in line with monetary policy divergence, and reflecting relative economic performance, then we are in for a period of volatility but nothing disastrous. The Fed is not going to be able to raise rates by as much as in past cycles, starting this late in the cycle and against this backdrop. So the dollar  ‘should’ rise moderately. But the omens from these recent moves are not good. The more leveraged trades are unwound and the more we see out-sized moves in commodities, and other assets, the greater the risk that we end up with a ‘bad dollar rally’ which has the same global effects as we saw in the mid/late 1990s, when emerging market economies were knocked over like dominoes as capital fled back to the US. Worse still, after another 20 years of globalisation and the idea that the developed economies could withstand a multi-year period of much higher asset market and EM economic volatility, is absurd.

The ‘bad dollar rally’ is not a central case in forecasts but the cascade of large FX moves are a sharp warning sign. But then it never is until after it has happened and it’s a big enough risk to suggest that the dollar has more upside than would be assumed by simply plugging in recent historical correlations between currency pairs and interest rate moves, either in nominal or real terms. The central case, for the global economic outlook, and for the dollar, may be for an orderly move. But the ‘tail risk’ of an outsized currency move and a worse economic outcome, is growing.

The cascade of large FX moves is accelerating, a repeat of past crisis

Periods of USD strength typically lead to a cascade of larger USD moves across crosses. The last major example was the Asian crisis in 1997 with an accelerating series of dominoes (Thailand, South Korea...). At that time, Asia was heavily linked to the USD leading it to borrow in USD but crucially hold little in FX reserves.

Sometimes large FX moves are simply a result of plain mismanagement exacerbated often enough by a degree of pegging to the USD. The latam crisis of the 1980s fits into this category with Brazil only stabilizing in the 1990s. Another example of severe economic mismanagement was the break up of the Soviet Union in 1991 leading to the emergence of multiple collapsing currencies versus the USD. The last significant wave of USD strength came with the collapse of Lehman as banks and many other actors were caught short USD and long risk often enough in EM. This trade was quickly reloaded but has started to once again collapse with BRL leading the move as it was left massively over expensive. This was just a sign that EM FX had overshot versus fair value and commodities related currencies far more so. Since then the reversal in terms of trade gains made since 2002 has sharply accelerated the number of large FX moves (BRL, Copper/China trade, Oil with RUB, NOK, CAD…).

The number of currencies with 10% moves of the last 12 months is now close to historical highs. The number of currencies collapsing by 40% is slowly growing higher as happened in previous waves of USD strength. As oil prices fall leaving system built on high prices unsustainable or extreme FX valuation create unbearable deflationary shocks, the number of large FX moves may surprise once again to the upside in a world with a dearth of safe havens. The US Treasury market, the USD and for a while the CHF are one of the few places left.

 

 

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Mon, 01/26/2015 - 13:11 | 5706748 Buckaroo Banzai
Buckaroo Banzai's picture

KING DOLLAR!!!

Mon, 01/26/2015 - 13:14 | 5706761 Soul Glow
Soul Glow's picture

KING RAHRAH!

[waves hands emphatically]

Mon, 01/26/2015 - 13:31 | 5706833 Doubleguns
Doubleguns's picture

The king has no clothes. 

Mon, 01/26/2015 - 13:32 | 5706842 SWRichmond
SWRichmond's picture

Feeling bad about feeling good about feeling bad?

I'm so confused...

Mon, 01/26/2015 - 13:31 | 5706849 knukles
knukles's picture

Schadenfreude

Mon, 01/26/2015 - 14:05 | 5706963 me again
me again's picture

The article is about trading and markets so maybe this is an okay place to say the Ruble is having a down day; but it hasn't quite touched my zero position; I"m long the Ruble; because I'm rutin for Putin; but not jjust with my mouth.

Mon, 01/26/2015 - 14:39 | 5707125 new game
new game's picture

i think the king has aids and is still sexually active...

Mon, 01/26/2015 - 13:29 | 5706835 knukles
knukles's picture

This shows the world's confidence in my policies.
    - Abraham Pajamas

Mon, 01/26/2015 - 13:17 | 5706782 1000yrdstare
1000yrdstare's picture

I'll take gold for 800, Alex...

 

 

(No really, I WOULD take GOLD for 800!)

Mon, 01/26/2015 - 13:40 | 5706881 El Oregonian
El Oregonian's picture

Forget the rubbish, keep on stack'in... Regardless of price.

Mon, 01/26/2015 - 14:08 | 5706972 me again
me again's picture

My chart reading shows Silver may back up to $17.50 sometime in the next week; that would be a buy signal; for traders. My statement from months ago that the bottom for 2014-15 is in at $15.50; remains good; of course. I don't regard todays back down as a buy' there should be at least one other down day. But that's just my opinion. I'll be buying @17.50.  Last time I traded Dec.'15 Silver I took out $14,400. Cheers.

Mon, 01/26/2015 - 15:28 | 5707352 T-NUTZ
T-NUTZ's picture

Oh geezus!

Mon, 01/26/2015 - 13:49 | 5706905 ZH Snob
ZH Snob's picture

the bad dollar skyrocket is similar to what kirby and willie predicted.  they said the dollar rise will be like a super nova, then will ultimately blow itself out.

Mon, 01/26/2015 - 14:13 | 5707002 KnuckleDragger-X
KnuckleDragger-X's picture

The FX trade has become like juggling vials of warm nitroglycerin, you don't even have to drop one for it to go off and the EM's are throwing more vials into the mix. Sooner or later there will be a big explosion and the CHF was just a warning.

Mon, 01/26/2015 - 14:41 | 5707136 new game
new game's picture

i'm seeing shadows...

 

 

Mon, 01/26/2015 - 13:13 | 5706749 Soul Glow
Soul Glow's picture

Try to realize the truth.  There is no dollar.

https://www.youtube.com/watch?v=dzm8kTIj_0M

Mon, 01/26/2015 - 13:12 | 5706755 LawsofPhysics
LawsofPhysics's picture

Technically, the "dollar" is long dead.  What part of all fiat will go to zero don't people understand?

Mon, 01/26/2015 - 13:15 | 5706766 Buckaroo Banzai
Buckaroo Banzai's picture

It's an irredeemable promise to pay. And yet nobody cares.

Mon, 01/26/2015 - 13:19 | 5706789 kaiserhoff
kaiserhoff's picture

Just so,

  but as long as Sam's Club takes them, I will too;)

Mon, 01/26/2015 - 13:27 | 5706811 falak pema
falak pema's picture

You mean the 70 trillion derivative gamble on JPM's book and the 300 Trillion derivative gamble on big 4 books is all holy smoke?

Well if its ALL holy smoke and the FED prints holy smoke just like all those others CBs, a debt jubilee just gets rid of the fog of speculation.

Whats the problem with that. AN irredeemable promise to pay holy smoke is not our problem but that of the Vatican. I'm sure the Pope is sick of holy black smoke too.

Jubilee hot air, and create real money for real economy and NEVAH let those skunks back into the pantry. 

Cover them in Glass-Steagall jello to freeze for the ages to come in the Antarctic.

Mon, 01/26/2015 - 14:18 | 5707033 KnuckleDragger-X
KnuckleDragger-X's picture

For a jubilee to happen the big players, especially the CB's , have to admit they screwed up big time and that won't happen. The real jubilee will be nobody excepts paper promises any more and we go back to trading value for value.

Mon, 01/26/2015 - 14:24 | 5707061 falak pema
falak pema's picture

holy black smoke, we don't have a new pope! 

Mon, 01/26/2015 - 14:45 | 5707151 new game
new game's picture

holy black smoke; is that river in china, a f-16, or an ipo currency burn?

 

Mon, 01/26/2015 - 16:25 | 5707497 falak pema
falak pema's picture

its the sign in the Vatican that we don't have a new Pope.

To come back to real History :  Michael Angelo when he painted the Last judgement changed the style of the Renaissance by going "manieriste"...

It changed the History of art and of Christianity. The last judgement broke from Michael's previous tradition of heroic paintings/sculptures  where Man was the immaculate conception of perfection.

Not so the last Judgement painted 22 years after his first effort in the Sixtine chapel, as in the meantime Charles V had raped Rome in 1527 and destroyed Michael's dreams of a republican Florence by sacking it.

So he painted the Last judgement in a fit of profound indignation, creating in the process : Manierism.

As Manierism expressed by christianty's greatest artist said : "there was something rotten in the realm of the Vatican and Christianty".

To make his point all his characters including Christ are naked and have their peckers in front of their noses.

This so aggrieved the Popes, they ORDERED Micheal Angelo to put a cover on their genitalia. Michael was so incensed that the Symbol of nudity of God's creation should become a "casus belli" in the Holy Chapel, he told THREE successive Popes to FUCK OFF.

He said he would never cover their loins to please these false and corrupt Vicars of Christ who had betrayed him; his ART was purer than the spirit of the Popes!

Those paintings were altered after his death (no POPE DARED  excommunicate Michael A for his defiance of Popes. He was Immortal as artist and they feared him). That just shows how empty are the hearts of Vicars of religion (in our day the CBs of of FED, the Vicars of God Greenback). 

Our fiat construct has all the similitudes in the dogma of pure capitalism, a false mantra, just like the Popes of the Renaissance.

And Michael ANgelo, Raphael and Leonard da Vinci changed all that, by making Art the new vector of Humanism. 

We need a new triumverate to create a new paradigm. Michael Angelo was of that vein; like Leonard; they invented the Renaissance.

Mon, 01/26/2015 - 13:27 | 5706821 El Vaquero
El Vaquero's picture

Physical FRNs will have value as trinkits to remind us of the insanity, as a heating medium and toilet paper.  Not quite zero value.  Now the digital FRNs...

Mon, 01/26/2015 - 14:35 | 5707113 Row Well Number 41
Row Well Number 41's picture

I don't know that I have ever understood the digital FRN.  Does it have a serial number, can it be tracked, destroyed.  A paper FRN has a record of it's creation, and you can have it's authenticity verified, can't do that with a digital FRN.  Digital FRNs are created as a result of interest on loans, derivitives and leverage, essentially out of thin air, and seem to be created at a rate fast then the physical FRNs even accounting for 100X leverage.  In some ways it reminds me of the physical vs paper PM issues.  I wonder how much of a spread could develop between the physical and digital FRN.

 

Say what you will about Bitcoin, but as digital currency at least I understand the creation, lifecycle, and authentication of it.

 

#41

Mon, 01/26/2015 - 14:49 | 5707169 new game
new game's picture

put some of those digitals in my bank account-i'll withdraw them out as frns and gooooo speeeeeennnnnnnddddddddd like its 1999. no generators this time-hehe...

Mon, 01/26/2015 - 15:35 | 5707339 Row Well Number 41
Row Well Number 41's picture

You miss the point, if/when the split happens, everybody one Gods green earths that holds digital dollars, and assets denominated in digital dollars will try to do the same thing.

Are you the type to panic easily?

#41

Mon, 01/26/2015 - 15:11 | 5707272 El Vaquero
El Vaquero's picture

While not touching on shadow banking, digital FRNs, or FRNs in a paper ledger back in the day, were nothing more than a claim on physical FRNs, which are nothing more than a claim on future resources backed by debt.

 

(Kinda smells like a Ponzi)

Mon, 01/26/2015 - 15:39 | 5707409 Row Well Number 41
Row Well Number 41's picture

Is that what that smell is?

 

I don't think that split would last long, in fact my thought experiment says an inablitiy to convert a digital FRN into a paper FRN defines a banking collapse.

 

#41

Mon, 01/26/2015 - 16:08 | 5707582 RabbitChow
RabbitChow's picture

If you really want your digital FRN's to have a serial number, what serial number would you like?  There's still lots of time to pick out the ones you want, and they'll print them up right away!

Mon, 01/26/2015 - 13:14 | 5706769 Greenspazm
Greenspazm's picture

""The US Treasury market, the USD and for a while the CHF are one of the few places left."

Places for what - safety or volatility? Would you care to enlighten us?

Mon, 01/26/2015 - 13:17 | 5706775 Alea Iactaest
Alea Iactaest's picture

Anybody want to hazard a guess about the "assets" the Fed will purchase under QE4?

Mon, 01/26/2015 - 13:32 | 5706843 knukles
knukles's picture

All the gay porn sites on the web?

Mon, 01/26/2015 - 16:22 | 5707644 Mongoose
Mongoose's picture

There's porn on the interweb?

Mon, 01/26/2015 - 13:31 | 5706844 El Vaquero
El Vaquero's picture

Who says they're locked into purchasing assets?  If they do, they'll have to focus on the energy sector first and foremost, but there is no requirement that they stay locked into financial assets.  They could do a helicopter drop to the masses if deflation was really setting in.  They could also probably come up with some other hairbrained manipulative scheme that none of us would think of, not being insiders and all.  But if it's like past QEs, look at where the troubled assets and sectors are.  Energy and possibly other commodities.  Maybe some other corporate debt that was used to jack stock prices up too. 

Mon, 01/26/2015 - 16:05 | 5707570 RabbitChow
RabbitChow's picture

If I get a 'helicopter drop' I'm turning straight to my phyzz supplier.  As Kyle Bass said a year or two ago, 'just give us the gold'.

Mon, 01/26/2015 - 16:07 | 5707571 RabbitChow
RabbitChow's picture

If I get a 'helicopter drop' I'm turning straight to my phyzz supplier.  As Kyle Bass said a year or two ago, 'just give us the gold'.

Mon, 01/26/2015 - 13:35 | 5706865 it aint paranoi...
it aint paranoia if they really are out too harm you's picture

Oil, if it falls below $30/ barrel.

Mon, 01/26/2015 - 14:51 | 5707180 new game
new game's picture

oil aint goin to 30, even the marginalist producers will say whooo doogie...

low 40's unless a swan and/or shadows emerge. da boogie man lurks. fx blowjobs too...

Mon, 01/26/2015 - 17:10 | 5707858 GleekerFeet
GleekerFeet's picture

That "whooo doogie" is *damn* funny.  Or maybe I just needed to laugh...

Mon, 01/26/2015 - 13:14 | 5706771 buzzsaw99
buzzsaw99's picture

warning: hackneyed cliche alert

Mon, 01/26/2015 - 13:17 | 5706777 Greenspazm
Greenspazm's picture

Kuato speaks!

Mon, 01/26/2015 - 13:17 | 5706772 observer007
observer007's picture

Malaysia Airlines Website Hacked

"404 No Plane Found"

Hackers defaced the website of Malaysia Airlines on Monday and threatened to dump stolen information online after posting a glimpse of customer data obtained in the attack.

promised new facts - latest:

http://tersee.com/#!q=Malaysia+Airlines&t=text

Mon, 01/26/2015 - 13:21 | 5706790 KansasCrude
KansasCrude's picture

Why do these folks continue to pontificate that the Dollar Ponzi will continue to rule and trading valuable commodities for ass wipe unbacked paper will continue to persist?    Well we know why its all part of the Bankster BS.  It needs to end now....

Mon, 01/26/2015 - 13:26 | 5706812 hotrod
hotrod's picture

No, BOE says the Financial World needs to get ready for USD interest rate increase.  The Dollar and US are indispensible

Mon, 01/26/2015 - 13:22 | 5706800 Bay of Pigs
Bay of Pigs's picture

SocGen? Gee thanks for the heads up.

King Doelarr is anything but. Fact is, the USD itself is the biggest bubble of all.

 

Mon, 01/26/2015 - 13:33 | 5706857 ZoroAustrian
ZoroAustrian's picture

Precisely.  This is the supernova explosion phase of the dollar as all the termites (financial playas) crawl back into the dollar den from whence they were spawned, and where they can all be obliterated when the USD system finaly implodes from supernova to black hole.

(Too many analogies?  Sorry, there are just so many parables in today's insanity.  Anyway, file this post under more bankster garbage)

 

Mon, 01/26/2015 - 14:12 | 5706992 Consuelo
Consuelo's picture

What was it that Jim Willie said - "It will keep going up and up and up - until it dies..."    And I don't think he meant a nice, slow and steady weening off the drip. 

Mon, 01/26/2015 - 13:27 | 5706819 CHX
CHX's picture

Just know where the puck will go and you'll be really off fine, eventually (with the caveat that you gotta hold it)...

Mon, 01/26/2015 - 13:27 | 5706822 RaceToTheBottom
RaceToTheBottom's picture

The dollar will do damn well anything the derivatives want it to do.

Mon, 01/26/2015 - 13:33 | 5706854 ebworthen
ebworthen's picture

"There’s no precise science to monetary policy, but you can see the unintended consequences of rates being too low for too long in these moves."

Well, there is mad science to monetary policy, and mischief and criminal intent.

Mon, 01/26/2015 - 13:34 | 5706859 wmbz
wmbz's picture

Once the entire load shifts to one side of the ship...Capsizing is inevitable, and there are never enough lifeboats!

Mon, 01/26/2015 - 13:35 | 5706860 eddiebe
eddiebe's picture

For most the choice is clear: Follow the herd. For 6 years it's worked beautifully.

Mon, 01/26/2015 - 13:36 | 5706868 El Vaquero
El Vaquero's picture

Before Europeans introduced things like horses and other European inventions to the Americas, one of the hunting tactics sometimes used by the natives was to run the whole herd towards a cliff.  It worked beautifully.

Mon, 01/26/2015 - 13:35 | 5706864 FreeShitter
FreeShitter's picture

As long as QE is injected into the fiends' accounts, investors are still euphoric.

Mon, 01/26/2015 - 13:49 | 5706912 Son of Captain Nemo
Son of Captain Nemo's picture

It's like the last and most expensive bottle of "Dom" with the cork being popped and all that fine champagne running out with it!

Chin!... Chin!!!....

Mon, 01/26/2015 - 14:01 | 5706936 pine_marten
pine_marten's picture

These global speculators would walk into any business and destroy it for 10% of it's worth.  Given the chance they will do it to countries full of human beings.  They are enabled by those we elect who sell themselves cheaply and somehow come to terms with their transformations into corporate pimps.

Mon, 01/26/2015 - 14:08 | 5706971 Consuelo
Consuelo's picture

To quote Jim Willie: "The $USD is like a rocket..."

Mon, 01/26/2015 - 16:10 | 5707595 Farmer Joe in B...
Farmer Joe in Brooklyn's picture

Your name reminds me of a joke....  something like "What do you call a short mexican chick?"

Mon, 01/26/2015 - 14:11 | 5706996 Jack Burton
Jack Burton's picture

The commodity/resources boom, was a bubble

This fact has big blowback for Canada and Australia who were giddy with prospects of endless resource sales, at high valuations, to China and even the vast EU. Then the traders stepped in an gave an extra boost to commodities as they piled in and even hoarded them, like the great Chinese copper warehouses!

I live in resource country. We mine America's Iron Ore. We also have large Copper Nickle deposits not yet exploited. BUT, there is the planned "World's Largest Underground Mine" right in it's start up phase, with huge investment capital already put up for the project. Along with 2 other open pit copper, nickle operations already funded and waiting permits. The investor class called us the new Sudbury Ontario, a vast copper nickle and Iron Ore complex. Of course it was the commodities bubble that fueled corporate interests in coming here and levering up to develop these mines, and their profits were to come from the China play and the investor commodities mania.

I have been trying to get information from our public officials and corporate managers of these companies. What next I ask? Are you ready to live in a world where commodities are pricing to reality again, and the bubble is well over? Nobody responds, all I get is silence. Even the local news papers, once full of stories of 500 high paying jobs at the underground mine, are now silent. No comment. We expected around 3-4K high paying jobs at start up of these mines, with nothing but growth going forward.

Like Canada and Australia, my part of the USA is going to face a new reality. Those jobs are not coming! I expect the 3 new mines to falter and stop right where they are, before the first real production day takes place. No jobs, no boom times. Back to decay and Rust Belt stagnation! Expect North Dakota to blow up in 6 months. Expect financial blow back in banking and bond markets. Commodites were in a massive bubble, at peak it was insane.

Worse still, our public officials were planning on a hiring binge of public employees, using Mining Tax and Property Tax on the new workers. Sorry! Notice public officials rush to hire more public workers to manage, as soon as they even sniff new tax revenues!

Mon, 01/26/2015 - 15:26 | 5707344 kevinearick
kevinearick's picture

Forward Guidance

Feudal contract prices include the cost of managing consumer herd perception, profit on artificial variability, so the market-makers require a preferred position in the FILO bankruptcy queue, at the Fed window, which you can easily discount if you immediately exchange the toilet paper for something useful in your private life, while maintaining a stupid identity for the stupid technology to track, with a fraction of your time. Knowing oil was $45, you could have made a withdrawal at the time and place of your choosing.

Of course the markets are fixed in mythology. The ‘founding fathers’ were slave owners, feudal systems are a function of the natural resource burn rate relative to demographics, and the pontiff always proposes that only a god savior can withstand the irrational empire. Derivative technology merely replaces physical prisons with psychological prisons of peer pressure. Bill B plays in the grey area of the rules, just as he was trained to do.

Every majority, including its elite, complies with or rebels against a human wave of History, proposing ever more laws to ensure that everyone else does the same, affirmative action strangling itself with consumption while hoarding productive assets. That cloud is simply gathering psychographic data for categorization, hunting down those that remain unidentified. Give it an identity that you like to do anyway and otherwise get on with your life.

The middle class built its entitlement rights on the Foundation of Family Law, and now finds itself subject to the same upon demographic deceleration, embedded in the assumptions of its own technology, with pensions driving legacy asset inflation, putting themselves out of make-work with automation. Labor didn’t move those factories to China or short nuclear back to oil, to build a global spy network with stupid technology, in a system that depends upon growth which can only contract. No privacy, no economy.

“We, the People” choose fascism as a matter of course, printing debt with every new purchase, whether Republican or Democrat, American, Asian, European or Martian. Lawful public education is everywhere and always an automaton sh-show, investing the future in the past with ever-more efficiency. As a parent, you are the bad guy, in a soap opera staged for the purpose, with critters herding up to kill each other trying to prove that they are the good guys. Whether that pyramid is inverted depends upon whether you view trickle-down commodity inflation as devaluation or wealth.

Don’t talk to labor about God, politics or war and expect a response. The planet, like the universe, is making land all the time. Climate variability is a function of human stupidity, not oil, CO2 or God. The only people that can see forward and make decisions accordingly are parents who love their children, capable of climbing the consumption wall, and there aren’t many of those remaining, in this country or any other.

Labor isn’t going to show up in the cloud because Europe is printing inflation again. Look at Europe’s relative population rate, economic size and social compliance welfare spending. No one capable cares what European politicians/bankers think, say or do, because all they do is employ real estate inflation to launder money. Something-for-nothing doesn’t fly, but that never stops the Germans from putting wings on a pig and throwing it off a building.

If the critters currently in the empire economy could make it work, it would be working, but keep inflation US GDP expecting a different result. Fire another non-complying parent to hire two more make-workers to serve the homeless, rent inflation. I know many of you have not gotten back your licenses yet, and many of those who have aren’t using them.

Surprise, ISIS makes the Suadi monarchy look benevolent.

 

Mon, 01/26/2015 - 21:18 | 5708740 Herdee
Herdee's picture

Here's how you measure.Technical indicators are just playing in time with the following:

http://fx.sauder.ubc.ca/PPP.html

Do NOT follow this link or you will be banned from the site!