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Steen Jakobsen Warns "The Fiat Economy Is Unsustainable"
Via Saxo Groups' Steen Jakobsen,
- This fiat economy is unsustainable and must change
- The cost of input, capital and labour are all rising
- Output, profit and employment are in poor shape
- We must adjust to slower growth and start producing
On the cusp of a new economic era Steen Jakobsen explores the forces driving the trend.
I've recently put the finishing touches to my new economic theory. Some of you know I have been very disappointed not to have achieved greater acceptance of my "Triangle of Economics" so here comes the new version:
The first model describes the world and its parameters:
We live in a Fiat economy where growth is fuelled by debt, and less and less from productivity and demographics. This takes place in a closed circuit with the US dollar as the reserve currency.
The problem now is that the economy can not get restarted without changes to one or several parameters.
The banking system is moving from 20-30x leverage to maximum 10x.
Input costs are rising, the cost of capital been rising since September last year and the unit labour cost is about to rise significantly due to inequality, social tension and a simple shortage of qualified workers.
Meanwhile, output is falling, profit has been flat to lower and as for the employment situation, relative to the population it's unchanged at best and falling at worst.
The new business model is to adjust to slower if not unchanged growth – getting bigger market share via better products or services, something which has totally been forgotten in the new world of "digitalisation" where the D stands for "dumbing down" in my opinion...
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Thank you captain oblivious. Next topic please.
And the illegal aliens keep flooding into the US - so that they can each pay off over $200,000 of gubmint debt assigned to them.
SUCKERS!!!!
That PowerPoint layout is unsustainable.
Dr. Engali,
I'm getting really sick of hearing it's unsustainable,, since 2008.
If these assholes think it's unsustainable than that begs the next question,, WHEN????? They have no fucking idea. It is until it isn’t,,, how deep.
As long as you can print fiat and necked short in the metals futures market forever with the CFTC's blessings unsustainable is bullshit.
And I'm sick of Graph's that try to predict a manipulated market,, get real.
The switch
( Data overload ) " head explosion "
Actually Ive heaard that NO fiat currency has EVER been successful in history....
Soon not even BitCoin.
Poof!...
But this time, .gov is bettah than evah, i.e. they are ready, willing, and able to tax or confiscate every asset or right its citizens ever had! So WINNING.
It was never made to be a permanent fixture, just a transition tool that operates as methadone for fiat junkies. None of you dumb fuckers know how to share because you don't know the value of anything. You've all lost the ability to use fair trade in any capacity, as a by product you've all become dumb as a bag of hammers and weak as kittens in business, trade and barter. Once things are cleaned up and most of you have grown some of your skin back (pussies) everyone is going to learn a new system, well old system, called Flurzwang.
It's how you trade commercial goods and services globally without money involving community cartels that operate as specialist on a complex barter system of need versus want. It involves a better value chain system that's more efficient than capitalism in deriving true requirements and supplying goods and services. In fact the only reason any of you bozos are here today is because it ran well over many years and many cycles. The benefit today is no one has to walk the silk road to deliver something over 12000 kms, you can instantly send a request or request for trade over the internet and the inventory management systems are all electronic. Best of all it's completely transparent because it follows the principal of don't trade what you don't have or can afford to trade.
It removes Government and replaces it with governance, which is forward looking to answer current or future problems. Versus "government" which attempts to constantly jerry rig past problems into current issues. So yes, it will go 'poof'. Not for a couple of decades though. Believe you don't want to know YOUR future given the other options. Caw caw caw!
They are working on an app for that, and should be ready any day now (waiting for 6000 years or so).
Printing success should be so easy ! (awesome)
I fear idiocracy is around the corner instead.
Just keeping an eye on the beautiful facade for structural failure.
From what I understand, every single fiat currency in history has failed save for two: The British pound and the US dollar.
The pound has lost 99% of it value over the last 200 years or so, and the dollar has lost over 90% since we ditched the gold standard. The makings of some ugly chart porn...
According to MarketWatch.com:
http://www.marketwatch.com/story/panel-of-ex-fed-officials-say-no-rate-h...
Panel of ex-Fed officials say no rate hike will come at September meeting
Published: Sept 3, 2015 1:46 p.m. ET
By Greg Robb
Senior economics reporter
The global economic outlook has worsened since the Federal Reserve’s last meeting in July, which will lead the U.S. central bank to hold off on lifting interest rates in September, a panel of former Fed officials agreed Thursday.
The global economic situation has deteriorated and “not by a trivial amount,” said Joseph Gagnon, a former Fed staffer and now senior fellow at the Peterson Institute for International Economics.
Global stock markets are down 5% to 10% since the Fed last met, and the dollar is up 2% on a broad trade-weighted basis, he noted.
“The Fed has cultivated this recovery so carefully, with such enormous effort, for over the last seven years — are you really going to take the risk in this environment with unstable global financial markets and real macroeconomic questions about the global outlook that are not just about volatility?” asked Julia Coronado, chief economist at Graham Capital Management .
The former Fed officials spoke at a panel discussion sponsored by the Brookings Institution.
Jon Faust, a professor of economist at Johns Hopkins University and a former adviser to Chairwoman Janet Yellen, said Fed officials will delay, awaiting the “macrosignal” behind the recent market turmoil.
Donald Kohn, who served at the Fed for 40 years and ended up as its vice chairman, said two things would make him hesitate to hike rates if he were voting at the September meeting: very low inflation and low market expectations of a September move due to recent market volatility.
Kohn said he would want the Fed statement after its September meeting to stress that rates will rise before the end of the year. “That will help build in the expectation of higher rates later this year and put that in the markets, so when I finally did move it wouldn’t be such a surprise,” he said.
Fed officials have argued that the timing of the first rate hike doesn’t matter as much of the path of interest rates. They have stressed that the rate path is likely to be a gradual one.
Coronado took issue with this, saying it was “not entirely true for the markets that translate Fed policy.” A September move would be a “big surprise” and viewed as a “policy mistake,” she said.
Coronado said there were less than 20% chance of a rate hike in September. Gangnon, Kohn and Faust said the odds were higher but still less than 50%.
Feds carefully cultivated recovery....LMAO
A lot of laughs in Robb's report. Unless you want to call a lie, a lie.
just learnt certain Chinese companies that have stolen intellectual property will be sanctioned next week....that 10y chart may be very interesting in a few weeks time
this post needs moar cowbell
Whoa! Who slipped that last slide in there. Gartman? Gartman? Is that you, Gartman?
"Steen Jakobsen Warns "The Fiat Economy Is Unsustainable"
It is not a "fiat economy," but an economy being plundered with fiat.
Zion is a scheme, not an ethnicity.
If I write you a bad check, did the check rob you, or did I?!
They call it Fiat because it depreciates like a rusty Italian car. Jakobsen just noticed the rods are knocking and smoke is rolling out around the hood.
If he noticed all that, why is his conclusion that the market is going up, up, up?
Who needs all that analysis when most people over the age of fifty have been forecasting the same crash outcome for many years.
Great! No real crisis? Real Bull market in 2016? And the Central Bankers can all breathe a great big sigh of relief...it was all just a bad dream...onwards and upwards for the EU...and the US will finally start to pay down some of that debt...
Thank you.
Looking at all those V shaped hockey sticks charts, ive decided on opening up a 10,000 sq foot selfie stick store.
Any economic analysis that does not begin and end with energy inputs (in particular, of the fossil kinds) is already wrong by default.
Since 8,000 years running it is all about energy. Solar energy, animal energy, slave energy, water and wind energy, coal energy, oil energy, nuclear energy. Just like that, progressing to more and easier and always on and always dragging us along in that virtuous draft. Has always been about energy. Will always be about energy. Lots of energy inputs and it all goes up and you can rationalize that however you want to, but it was always just about the energy running like a faucet, easy and cheap. Energy inputs falling off well of course it all goes down, rationalize that however else you want to but it is all about the energy going away or just becoming too expensive to use for silly things like driving your lazy economy to WalMart.
Think anything else you want, doesn't even matter except that it suggests we don't need more economic analysis what we need now is a better understanding of physics.
I don't agree with some of your posts cougar but are exactly right about the energy.
Thanks for that but you really should just start agreeing with all of my posts.
Seriously.
I was going to post the same thing Cougar. He doesn't address Overshoot at all. Population, Energy depletion,EROEI, Mineral depletion, on and on.
He still thinks if we get the 'Money' system right, everything else is ok.
People sometimes stick to topics like money -- avoiding all else -- because it feels familiar, safe and comfortable. We've always felt like we had a handle on money probably because we invented it. It is the most human of things, like so many other illusions we created to try and make a vritue of our preoccupation with the mirror.
I'm afraid many 'illusions' will fall in the next few years.
Fare Well my friend.
Technically, energy dissipates as heat, for the other stuff, it never really leaves the planet so it can be recycled (yes, you will need energy to do that).
But if you look closely, there's a LOT more energy available than the economics of scarcity makes you believe... in fact it is a miracle that the entire universe doesn't explode in a burst of energy.
Yes, money is not everything (by a long shot). But energy isn't everything either. Nor is liberty (though extremely important).
You are correct, except you are making the same mistake... focus on one and only one important element of "the good life on earth".
To make my point in an admittedly crude way, energy can be applied to both production of valuable, healthy, environmentally benign or beneficial goods... as well as destruction of humans, valuable goods, and a healthy environment capable of further production.
One element that must be eliminated (or vastly reduced) is the notion of "authority". As long as human predators can direct the activities of the entire population, humanity is screwed... totally screwed... and will certainly be mostly or entirely eliminated.
To put this more in your terms, if energy is in the hands of human predators (authorities), that energy will be directed towards massive, widespread, wholesale destruction. If energy is in the hands of free individuals, that energy will mostly be directed towards wildly diverse productive activities. And that makes a huge difference. Thus, if authorities control energy, mankind is better off with as little energy available as possible. Sunlight and torches.
These must be slides for the muppets. Not for bankster consumption.
Note to self: Buy 3x leveraged commodity ETFs in second half of 2016 cuz Steen knows stuff.
If a "real" bull market is coming as soon as 2016, then y'all better fucking buckle up for a very rapid descent to the "blood on the streets" stage.
The only hope is technology... at least the one that could re-animate Steve Jobs. (Who else will turn bad temper and a handfull of stolen ideas into a $1Tn., liquid as diarrhea value?)
What do you know about defaults, historically and currently, Jakobsen? You can't say anything about debt without detailing defaults in comparison to them. A debt is "a promise to complete a trade". A default is "failure to deliver". It is only trading promises that fail to deliver that are a problem. And remember, a rollover is a default.
Another pertinent piece of data you fail to deliver is trading promises rejected by the controlling capitalists. It, along with their manipulation of interest rates, is the major tool of the international banker's farming operation known as the business cycle.
Just what I needed. More bloody charts to look at. _JOHNLGALT. Who is John Galt?