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2015: The Last Christmas In America
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
The game of enabling more debt by lowering interest rates and loosening lending standards is coming to an end.
If we define Christmas as consumer spending going up while earnings are going down, 2015 will be the last Christmas in America for a long time to come. In broad brush, Christmas (along with all other consumer spending) has been funded by financialization, i.e. debt and leverage, not by increased earnings.
The primary financial trick that's propped up the "recovery" for seven years is piling more debt on stagnating incomes. How does this magic work? Lower interest rates.
In a healthy economy, households earn more money (after adjusting for inflation, a.k.a. loss of purchasing power), and the increased earnings enable households to save, spend and borrow more.
In an unhealthy, doomed-to-implode economy, earnings are declining, and central banks enable more borrowing by lowering interest rates to zero and loosening lending standards so anyone who can fog a mirror can buy a new pickup truck with a subprime auto loan.
The problem with financialization is that it eventually runs out of oxygen. As earnings decline, eventually there's no more income to support more debt. And once debt stops expanding, the economy doesn't just stagnate, it implodes, because the entire ramshackle con game of financialization requires a steady increase in debt and leverage to keep from crashing.
The trickery of substituting financialization for earned income--the trickery that fueled the last seven years of "recovery"--is exhausted.
The incomes of even the most educated workers are going nowhere, while the earnings of the bottom 90% are sliding:
Wages as a percentage of gross domestic product (GDP) have been declining for decades. Note the diminishing returns on financialization and asset bubbles that always bust: wages blip up in the bubble and then crash to new lows when the bubble bursts:
Look at how debt has soared while GDP has essentially flatlined. This is diminishing returns writ large: we have to pile on ever-increasing mountains of debt just to keep GDP from going negative.
This dependence on debt for "growth" leaves the economy exquisitely sensitive to any decline in debt growth. The slightest drop in debt growth in the Global Financial Meltdown almost collapsed the entire global economy:
The essential fuel of "growth"--credit expansion--is rolling over:
Even the vaunted prop under a soaring stock market, corporate profits, are rolling over as the stronger dollar and stagnating sales pressure profits:
The game of enabling more debt by lowering interest rates and loosening lending standards is coming to an end. Debt is not a sustainable substitute for income, and households are increasingly finding themselves in two camps: those who can no longer afford to borrow and spend, and those who recognize that going in to debt to support spending is a fool's path to poverty and insolvency.
Say good-bye to Christmas, America, and debt-based spending in general--except, of course, for the federal government, which can always borrow another couple trillion dollars on the backs of our grandchildren.
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Fractional reserve banking at its finest!
KRAMPUS (is coming to town)
pretty sure we read similar articles to this last year, and the year before that, and yet here we are. the debt just keeps rising. This is not to say that this is in anyway sustainable in the long term, or that this is a sign of a healthy economy, far from it. I am only saying that many of us would have said the same thing last year, and the year before that, and we would have been wrong. This can go on longer than most of us think. See Japan, for instance.
M-m-m-m-m-m-m-mmmmmmm....
Doom Porn.
Good Stuff.
Christmas isn't going anywhere.
It's the winter solstice consumerpalooza that's leaving.
This will definitely be the year to grease the Festivus Pole.
Spit on it coz the lube is pricey.
Festivus for the AllofUS !
http://goo.gl/kUAOEy
@ Greenskeeper Carl:
As Hemingway wrote this exchange in The Sun Also Rises:
"How did you go bankrupt?"
"Gradually. Then suddenly."
Take heed accordingly.
Anyone remember Christmas Club accounts? Where you actually saved a little bit each week so you didn't go in debt for Christmas? I think there may still be some around.
Ha I think they are. It's called a jar you keep in your closet and stick a few dollars in there every week....
Back in the 60's, my mom would put a jacket for me on layaway in September so I could have it for Christmas and the 4.7 days of cold weather during the winter in Houston, TX. (Ah, the memories of playing outside wearing t-shirts and jeans on Christmas day.) Anyway, mom didn't have a credit card back then and our only debt was on the 3 bedroom/1 bath single storey home my parents bought for $12,000.
And the bank gave you a free toaster for opening one. They had the same thing for vacations. The banks got smart, instead of paying YOU interest and a gift- you put it on a their card and you pay THEM 23 percent- componded monthly.
The last christmas anywhere......
http://beforeitsnews.com/conspiracy-theories/2015/11/us-gives-their-prox...
I think the guts of it is in Charts 3 and 4. The economy is so ladden with debt, it can not even withstand slow growth, let alone a recession (God forbid!). Negative growth should not necessarily be an issue, it is not abnormal for any system to "shrink" temporarily. But given the underlying debt at all levels of the economy, that is a fatal heart attack.
Not good.....
As interest is attached to our currency, and that interest is always compounding, somebody must borrow for "money" to be created for the usury to be serviced. There is no economic Iron Law requiring interest be attached to a circulating currency, but as Lincoln, Hitler, JFK, and Qaddafi all learned, they will kill you should you offer a usury-free alternative.
Debt saturation = system failure. Their control system crashes.
But never worry, the International Credit Cartel has planned ahead: War. So long as their ability to create credit out of thin air and attach interest to the currency is not impeded, they'll loan you the "money" you need to rebuild. Call it the Marshall Plan II, or somesuch.
How does that line from the Matrix go? "This is the sixth time we have reset the Matrix, and we have gotten quite efficient at it."
Yes, and yet more charts showing the ramp in insanity and pain and suffering since the end of the Gold Standard in 1972.
Of course the real insanity started in 1913 on Jekyll island, but '72 is a key point in the ramp of madness.
The serfs can win this one. Just avoid debt.
The whole system comes crashing down. Then, you just have to fight tooth and nail to stop the next version of the ponzi proposed by the banksters.
Our time is coming.
pods
i sometimes wonder - what percentage of the population has to be in debt for it all to be considered "too big to collect"?
Better to run up debt now, the entire world has so why not?
The more credit you create, the more credit the system has to feed.
That is what went on in 2008, the debt curve started to roll over. In stepped the government.
Now the government is tapped out and rates are stuck to the floor. It is coming.
pods
Tooo easy brother. Will 10% survive to the other side. Hope we see more years and figure a way out from the debt burden. No Exit. Most every one a sinner. End of Matrix.
Down Sauropods!
Up Mammalia!
Pray for an asteroid!
Even better, buy Gold and Silver with debt!
Those standing in line to by the China goods don't take it that way. Black Friday shoppers at their best performance.
wasnt black friday pretty disappointing though? But cyber monday looks to be record breaking so I get your point. Maybe its easier to spend all your money on the internet.
And people wont last long considering the following:
Median liquid assets by household income (age 35 to 50)
($ in checking, money market, or saving account)
under $55k = $1,950
$55k to $91k = $4,500
$91k to $145k = $10,200
more than $145k = $53,000
vq1, do you have a source on this? I would like to see what it is for 25-35 year olds....
probably $0.00 + iphone + negligible.
Here is were I got the data but doesnt include 25-35 year olds.
http://www.federalreserve.gov/pubs/bulletin/2014/pdf/scf14.pdf
page 21
http://infogr.am/household_net_worth_by_age
^net worth by age (census bureau)
they only list <35
70th percentile = 33k
50th percentile =6k
30th percentile = 0?
This next crash is going to be bad...The worst thing about it , is i belive they will blame it on war, instead of pricking it by raising rates or letting the market crash....Will the fucker in charge keep his hand off the "nuke" button? I doubt it.
Last Christmas!? Time to sell my Chia Pet stock.
yes out of chia and into sq and race! space travel is also a great investment i hear.
I bought my girl a new 1911 for xmas along with 2000 rounds, gold bars, silver bars, water filtration system and 1 years worth of freeze dried food. She will thank me in the next year or so
Tis the season
The M1911 is a lot of gun.
She must be quite a gal.
Hey Bob, have you had any happy little accidents lately?
Grandchildren? I'm pretty sure we're working on 9 or 10 generations out by now. That's why they are all fussy about the low family formation rates. Fucking bastards.
Ha, ha, the fucking Muslims will be stuck with all of the debt since they are the only ones procreating like rabbits.....
Muslims won't pay. Don't like usury.
According to Sharia law, Muslims are forbidden to pay interest on loans, thus making it impossible for most of them to buy a house. The leftist Marxist mayor of Seattle, Ed Murray, is searching for ways to help them buy houses. His plan includes the usual recommendations, such as "increasing the city's housing levy and implementing new rules and regulations to foster development of market-rate and lower-income housing." For Muslims, a committee recommended the city explore "options for increasing Sharia-compliant loan products." Mayor Murray wants to meet with lenders to solve this “problem”, and possibly put the rest of the taxpaying public on the hook for the debt.
http://freedomoutpost.com/2015/07/seattle-mayor-proposes-sharia-complian...
immigration solved that problem. How many kids you want to have? 0? reject, next: 10? make sure you buy 2 houses each and 4 cars per child, ok. stamp, here's your cheque and coupon books, next...
I never have liked Christmas anyway......
Most people don't like it. I'm always glad when it's over.
This is the only period where it's almost demanded of you to spend as much money as possible.
Thus far in the history of money no grandchildren have had to pay their grandparents debt (except in Iceland where they have some really strage debt arrangements).
Excess borrowing is ALWAYS defaulted upon...always always always....
It will be defaulted upon again by the only mechanism that makes sense in the fiat realm...hyperinflation.
The idea that a government, that prints the currency in which its debt is held, might suffer the least embarrassment or even inconvenience is silly. The USA will pay every penny of debt owed and will completely demolish the dollar in the process. Anyone with any knowledge of monetary history can see this.
This whining about grandchildren is purely for the naive. Our grandchildren will be fine...they will be poorer of course but not in debt.
You're right. Anyone who thinks the next generation of Mexicans, Chinese, and Muslims will pay off the $200 trillion or so in debt so the baby boomers and gen-x can retire comfortably is insane.
you may want to rethink gen-x. Except the entitled fucks that are the scourge of my generation.
I said good-bye to Christmas years ago, for the most part. I won my own, personal war against the holiday in which we celebrate child molestation - er, I mean, a holy virgin birth.
Most young Americans are just future Debt Slaves awaiting their miserable lives of peonage to Federal Reserve members and their corrupt cronies! They've been brainwashed to believe government is the solution to all life's problems. And the little spineless sheeple wussies will follow their every word.
Many of those young Americans you mention may die prematurely due to the coming conflicts, but the survivors won't spend their entire lives as debt slaves. There is a change in store for this country, but not the hopey/feeley kind.
Would love to see the figures of total taxes + total interest paid by the average person. Not much left over I'm guessing. And add to the tax figure the gov't deficit incurred per person, because if it is getting spent, it should be getting paid for.
Your statement will be labeled "racisssssst" by those younger American sheeple (even though you said absolutely nothing about any race).
Last Christmas i gave you my Heart, and
The very next day you threw it away,
This year i'll save you the tears, and
Tell you that i won't be SPENDING.
Nah... Cyber Monday will be the best ever.
The great Amerikan consumer, will spend money they don't have on crap they don't need, same as always.
Just wait until drone delivery, the dumb asses will order shit just to watch it fly in.
While they go into more debt to do it, of course.
WHEN??? DAMMIT WHEN is the END???
"american decline, not with a bang but a whimper"
'
'
'
We've drained the well, folks.
Every used a sump to drain a wet hol? Runs just great until the very end and suddenly, you get that…
"Sluu-uu-uuu-uurrrrrp!"
And it stops and keeps sucking okay.
Then…
"Sluuu-uuu-uuu-uurrrp!"
And then it starts stucking okay, again…
But then, if you're observant, you notice that a far shorter time went by, as the next
"Sluuu-uuuuu-uuuuu-uuuu-uuuuu-uuuuuu-uuuuurrrrrrp" happens.
And it lasts longer.
But then it picks up and suddenly…
Yup!
Done.
6 million positive trade in 1984 and 400 billion in the whole with the filthy Chinese this year.
That's the slurping sound.
•?•
V-V
Why should I care if my neighbor spends money he doesn't have? What am I supposed to do about it? All of these articles about debt but no one has any control over others - so in reality, what's the point?
The point is, you'll have the satisfaction of watching him go broke, while you continue on. It's a feel-good thing. Get out the popcorn!
i dont like the idea of more people going broke because that means they are desperate. desperation leads to violence. violence leads to overreaction from gov, military and police.
Ok, that's all good but still - what can I (or we) do about what others do about how they spend their 'money'? You can't very well go into someone's house - ask for their pay stub and ask them how much they're spending or ask them if they have a household budget. I have to live my own life and be accountable for my own actions - not someone elses. I had super neighbors living across the street a couple of years ago - just the best. However - they insisted on taking 2 vacations a year - just in their small RV. He was unemployeed for quite a long time. Bottom line, they ended up having their house foreclosed on. It broke my heart. It could have been prevented - but by them, not me.
sounds kinda like a Yoda quote
I'll repeat my line from a few weeks ago, when I see charts or hear stories like this:
This is what deflation looks like.
When things unwind, big surprise, the prices of everything deflate. And they won't be stopping this without deflation's child, hyperinflation.
Financial anti-viagra in action.
Or naked pictures of Hillary Clinton should have the same effect on the economy.
And the suicide rate.
Where's that union guy, who bitched about no pay raise for the last few years?
The game of enabling more debt by lowering interest rates and loosening lending standards is coming to an end.
the fuck if it is
I have to agree with Maltese Falcon down at the start of the thread.
Far from this being the "Last Christmas", I see it as more likely to be the rebirth of Christmas coupled with the death of the cynical panderers who wish to profit from it but not acknowledge the true reason for the season.
Okay, just this once, I'll share an old joke I used to hear about Christmas as a sort of holiday present to the ZWO brigade...
Do you know what the Jews favorite Christmas Carol is?
"What a friend we have in Jesus."
Although personally, I'm partial to "The First Noel".
Don't say I never did nothing for ya.
I only have to finance two more of Obama's Christmas trips to Hawaii. I'm a happy man. And only one more Martha's Vineyard trip. How good is that?
Wtf. We're recovering. Yea vote for Hilochio she says we're doing great!! Yea we're recovering, yea that's the ticket, Hilochio. Or maybe Trump? Yea he'll fix everything yea get rid of the beaners and everything is good we'll recover. Yea lets vote for Trump and get some recovery. Yea it's all good nothing to see here we're in recovery.
Our grandchildren? R u kidding? I wish so because I don't have any..but my son is paying 1400 a month for a one bedroom apartment, food and utilities thru the roof, taxes, auto insurance etc. facing WW3, Police state, etc etc etc...fuck off with this grandchildren stuff its already here...wake up
I personally look forward to the end of crass commercialism of Christmas, CCCCHHH-anukah, and Kwanzaa, not that it will happen in my lifetime by most people's choice.
I'd much prefer to celebrate the winter solstice in a marathon bourbon- or scotch-drinking binge in a favorite, dimly lighted drinking establishment with similarly maladjusted losers who appreciate the irony and rebellion against the darkside from drinking oneself to oblivion in the dark.
A live band playing classic rock covers from Hendricks, The Doors, Zep, Deep Purple, AC/DC, ZZ Top, Bad Company, et al., would only add to the celebratory atmosphere.
I suspect were the impoverished, revolutionary, rabble-rousing rabbi from Nazareth here today, he wouldn't be hangin' out in churches, temples, or the halls of power but rather with the losers turnin' water into hooch and appreciatin' some good tunes with us losers.
There has been an article like this every christmas since 2009. I think we're getting close.
I had to go back to work and got my first check, it was a debt obligation. Turns out I am costing my employer more than my time is worth, what with health benefits, heating the building, utilities, taxes, insurance, losses due to shop lifting, bank fees, credit card defaults, returns on merchandise. The business is losing money and so am I.
I said to the boss, well what about the customers? well he said, they get stuck with a debt obligation as well. But they get a large screen TV at least! Yes but you get all sorts of benefits, better than a crappy TV. You do this for a while and draw unemployment. I pay for that too, he said. Well can I sleep in the break room? He said that's full, and I would have to charge you more. Well that does it, I said, I quit! Not so fast he said, there's a matter of your obligation. I said, well maybe I can work it off??
Last Christmas?
If so, I hope everyone did well with BLACK FRIDAY GUN AND AMMO SALES.
Well..we still have Jesus to help us celebrate Christmas..I can say that cause I got no money for Christmas...I even got caught for taking money out of the collection plate at church..now I am banned and called a backslider...guess I will go back to the farm and build a new barn and stable and try again...
Uh-huh-huh, He said, 'stronger dollar'... Uh-huh-huh...
I'm generally considered an extreme materialist. Nonetheless, by not giving or receiving gifts, I always enjoyed holiday season more than others.
Very strange, huh?
Or maybe not.
No we won't lose Christmas. Just the gaudy, commercialization by the greedsters.