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Between A German Rock And A Global Hard-Place
The terrible trinity of a China harder-than-soft landing, a European depression/crisis, and now a US slowdown are all tied together in a burdensome bow by Punk Economics' David McWilliams in his latest must-watch macro clip. While people apparently still worship at the alter of retail, the Irishman notes that they are missing these three oncoming trucks. From the Politburo paniccing as "since dropping its Maoist fundamentals, the only legitimacy it has is growth" with "prosperity (not equality) for all" the latest slogan as he rhetorically asks "what's the Chinese for 'it's the economy stupid" as he notes that despite two rate cuts in a month, the problem is too much capacity (so building more simply makes things worse) - pushing commodities down. He rotates to the US where Obama's election-critical recovery is fading away noting the current impotence of the Fed to fix things in the real world. As the much-hyped recovery evaporates in the US, the euphoria of the latest EU Summit has vanished and McWilliams dives into the details of the desperate to-and-from between Germany and its neighbors (adding that France is economically all mouth and no trousers) "either Germany pays for everyone or the Euro falls apart" as he explains the dilemma facing massive refinancing needs of Italy and Spain with little to no growth and illiquidity - with German savings the ultimate arbiter (though poltically impossible given Merkel's election next year). "Even if the Germans paid for everything right now... it still wouldn't solve the core competiveness problem" leaving the world indeed stuck between a German rock and a global hard place. Eight minutes well spent for a succinct world view - and its not encouraging.
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There's that growth meme again. Wake the fuck up humans, you have a glut of unproductive labor (paper-pushers and lazy fucks that add nothing real to the economy) and there are many hard-limits to growth. Grow the fuck up, deal with each other directly and recognize that you are at the limits of your current technology. If you really want to advance, end the fucking massive mis-allocation and mal-investment of resources and capital. If you can't figure it out, fine, the system will crash and then we get to find out precisely what the real value of everyone's labor really is. Fucking bring it.
Correct.
Epic. That is the only word for the current status quo in the colossal misallocation of capital and labor.
Absolutely epic.
Teach your children well, give them Austrian study guides. It's the only way. They will never be told the truth at government schools.
@LawsofPhysics: It's actually worse than "a glut of unproductive labor (paper-pushers and lazy fucks that add nothing real to the economy)." (Assume you're referring to government, and the divers private sector positions needed to satisfy government mandates.) I think that we could all survive if all these various individuals simply stayed in their offices talking on Facebook about their promotions, perks, retirements, vacations, etc., and LEFT US THE FUCK ALONE. Problem is ... they don't. Each one has a mission: To destroy any and all entrepenureal efforts by anyone. I was in our city hall a few months back. Small town in the Sierra Foothills. Idly, I picked up their Welcome to Such and Such brochure. Had to have been twenty or thirty (half) pages of all the bullshit one's gotta do to open a business here (every step of which costs money). Fuck that.
I live in Gold Country. There's gold here. Lots. Someone's been trying to open a gold mine here for ten years now.
It will never open. Never. Ever. Not in our lifetimes, anyway. Or at least not until that "glut of unproductive labor" and unreasonable environmentalists are, well, *gone*, shall we say?
Good post LoP. Deserves another +10. The time is LONG overdue for personal accountability and responsibility.
I laugh my ass off when I hear eCONomists talking about making the world as productive and efficient as Germany or China. Ignoring the issue of corruption, I always ask them. If the world was an efficient producer, who would we be selling to? Mars?
Wake the fuck up everyone, the majority of the debt is bogus. Until the bad debt is cleared, nothing changes, period. The world can come to grips with this and move forward or we all will pay a terrible price in blood and treasure. Judging by the fact no-one wants to have an adult conversation, I'd say you know how this will turn out. Prepare accordingly, I'd say "hedge" accordingly, but you really need a free market for that.
We have courts and committees and keynesian economists who don't believe the laws of physics apply to them.
Right on again Laws, but you DO seem a bit more churlish than usual this morning - suggest dialing back the caffine a notch - have a nice glass of milk or bourbon or something instead...
Part of my daily routine is shoveling shit.
I think I'm going to be ok when the shit hits the fan.
Just more to clean up.
should i take a stab at tvix here??? only looking to make a dollar on it..
If your only looking to make a buck on an investment....dont invest.
Short TVIX and XIV, 1:2 ratio dollar amount invested. TVIX down 2.88%, XIV up .5%. Works as long as short term volatility trades are in contago, which is usually the case.
when does europe build a more rational model than this monetarist scam based on cheap labour called tne anglo saxon global model? When does it leave this convoluted ME oil patch umbrella protecting PAx americana and sowing the seeds of sociopolitical global mayhem based on backward looking ideology and MIC blind bullying logic.
We have the smoking gun proof that the Anglo model is just debt servitude to an Oligarchy that is not even entrepreneurial but totally financial, rentier and feudal!
The US oligarchs along with their City, Russian and ME oil kingdom counterparts have built this guilded cage all on hot air, in the belief that the sheeple are too blind to see the emperor has no clothes. "You can lie to all the people ..."
Take heed.
Europe is still in denial as is the case in the US too.
About half way down primary wave 3 is called the point of recognition. This is approximately where the wakeup call occurs.
Im tired of Spain/Italy, can we move on to France now?
Yes, please, but don't stop there. The U.S.S.A. needs to be dealt with. Fucking bring it.
Dear German people, don't try to hang with the cool anglo kids, they will still hate you anyways. Grow some balls, again, and help liberate the other people from the cool kids.
Nah, this Germany is going down with colors flying...on the losing side once again.
WTF do I do .... I'm Anglo and German and other stuff ? Monedas 1929 Comedy Jihad Racial Remix
Just do as the other bastards do in the alleys.
alter of retail, lulz
It would be an awesome metaphor or pun...but ufortunately I think this Tyler just needs an editor. (paniccing?)
alter of reality is more like it. :snark:
Yep. Those who worship at the altar of retail will find that retail is going to alter its sales projections very soon.
Seriously, most people do not draw any line connecting the dots between manufacturing and retail. If you don't have any employment in the first because you offloaded it all to China, etc., where will they get the money to spend on the rest?
A person used to prove his value to society by what he/she produced, not by what he/she bought (and most of that on credit).
Economic war where the weapon of choice is the printing press!
"The terrible trinity of a China harder-than-soft landing, a European depression/crisis, and now a US slowdown"
That's all fine; Japan will save us!
Oh wait.
Only the constant imperative of hunger and the right to seek food in a free market will employ all in productive activity ! Nothing delegates authority like a free market and infuses ever cell of the body with oxygen rich blood ! Capitalism constantly purifies itself and eliminates bottlenecks like a flesh eating virus .... well maybe that's not a good analogy ! Monedas 1929 The slightest deviation from Capitalist orthodoxy is a moral hazard !
Where is this "free market" you speak of?
Your friendly local FEMA kamp. A market where everything is free ... except conversation... or iCrap....
Pre WWI Austria ? Kansas City in the the 1890's ! "Everything's up to date in Kansas City .... they've gone about as far as one can go !"....Rogers and Hammerstein, Oklahoma ? Shanghai during the Opium wars ? Maybe we have never tried it ?
French 3 month treasurys sold at - 0.005. A sign of confidence??? Just who is buying this shit.
Good question. Eventually those questions will have to be answered and believe you me, every carbon based investor with more than two equities of shyte for brains will consider very quickly how to best preserve a large portion of theiir wealth.
When paper is perceived completely worthless, the stampede into real tangible assets will be the equivalent to a cat 5 hurricane devouring all markets.
The key elite players may have sworn themselves to back their paper wealth for the time being but there are many players who are not quite at the top of the food chain and they have something they'd like to protect.
Germans are buying real estate and PMs like there's no tomorrow. The trend to convert paper into tangible assets is accelerating faster in Europe than in North America.
Puts me in mind for some reason of the absurdist plays NO EXIT by John Paul Sarte and ENDGAME by Mc Williams more prescient countryman Samuel Beckett in which Nell and Nagg argue the relative merits of human futility while comfortably ensconced in trash cans.
Remember folks, we would all be speaking German had Germany not invaded the Soviet Union and the ensuing battle of Stalingrad which ended Germany's ambitions and any hope for victory. This time maybe different, especially with China waiting to pick-up the pieces and USA without any manufacturing base.
this is just awful!
Tylers,
How about a story on the bursting ship building bubble? German ship building fonds are all underwater and they're talking about declaring the investments toxic and putting the paper into a bad bank.
We've been talking here for years about the bubble in ships and that it had to burst one day. Now it's bursting. What exactly does this mean for the consumption of materials? How many tonnes of ore went into the ship building process that are now no longer required?
Another major sign of the collapse of the Chinese miracle economy is the building of ghost cities outside of China, for example in Angola. The Chinese contractors built entire villages which are 95% uninhabited in the Angolan desert.
Shit is about to hit the fan.
Can the CBs and their political whores keep holding it together for the November elections?
Add to that the collapse in shipping iron ore and coking coal to China. World trade slowdown underway