This page has been archived and commenting is disabled.

As The US CapEx Boom Ends, Is The Fed Now Truly Out Of Ammo?

Tyler Durden's picture


For the past six months we have extensively discussed the topics of asset depletion, aging and encumbrance in Europe - a theme that has become quite poignant in recent days, culminating with the ECB once again been "forced" to expand the universe of eligible collateral confirming that credible, money-good European assets have all but run out. We have also argued that a key culprit for this asset quality deterioration has been none other than central banks, whose ruinous ZIRP policies have forced companies to hoard cash, but not to reinvest in their businesses and renew their asset bases, in the form of CapEx spending, but merely to have dry powder to hand out as dividends in order to retain shareholders who now demand substantial dividend sweeteners in a time when stocks are the new "fixed income." Yet while historically we have focused on Europe whose plight is more than anything a result of dwindling cash inflows from declining assets even as cash outflow producing liabilities stay the same or increase, the "asset" problem is starting to shift to the US. And as everyone who has taken finance knows, when CapEx goes, revenues promptly follow. Needless to say, at a time when still near record corporate revenues and profit margins are all that is supporting the US stock market from joining its global brethren in tumbling, this will soon be a very popular point of discussion in the mainstream media... in about 3-6 months.

As a reminder of just this tension, and following today's weaker than expected durable goods report, Goldman released minutes ago a report titled "What Happened to CapEx" in which, as the name implies, Goldman provides several observations on what may be the biggest threat to corporate earnings of all: declining capital investment.

After a strong start to the recovery, business capital spending has slowed. Growth in real non-residential fixed investment averaged 10.4% (annualized) from Q1 2010 through Q3 2011, reversing about two thirds of the decline during the recession. However, in Q4 2011 and Q1 2012, growth in non-residential investment slowed to an average of just 3.6%, and we estimate growth of just 2% for the current quarter. A similar downshift can be seen in the main monthly measure of capital goods demand: orders for non-defense capital goods excluding aircraft from the monthly durable goods report—also known as “core” durable goods orders. As shown in the exhibit below, growth in core durable goods stalled over the last eleven months. The level of orders in May 2012 was just 0.4% above the level in June 2011. 


Exhibit 1: Little Growth in Core Durable Goods Orders

Among the reasons for the decline in spending Goldman lists less favorable financial conditions, a limited "accelerator effect", and more importantly, reduced pent up demand and diminished policy support.

Specifically, for the last three , Goldman notes:

1. Reduced pent-up demand. During the 2008-09 recession, US firms dramatically cut capital spending, such that the level of investment for equipment and software was running below the rate of depreciation. The most striking example was business investment in transportation equipment, which declined by almost 70% from peak-to-trough. The level of investment for this type of capital good was running so far below deprecation rates that the stock of capital declined by about 8% in 2009 (Exhibit 2)


Exhibit 2: Sharp Pull-back in Investment During Recession


The low level of investment spending was clearly unsustainable, and was bound to recover once the economy stabilized. This “pent-up demand” was probably a major factor behind the strength in capital spending in the early stages of the recovery. Business investment in transportation equipment, for example, has increased 160% since its trough in Q1 2009. There is an analogy to Chairman Bernanke’s explanation for the decline in the unemployment rate earlier this year: firms may have cut too aggressively during the recession, and have been catching up more recently.


Although probably important over the last two years, pent-up demand should provide less support for business investment going forward. Investment spending rebounded strongly, and the capital stock is now growing. Investment in equipment and software is running at 7.5-8.0% of GDP, similar to levels seen in the last expansion. There could be a case for pent-up demand in the commercial real estate sector, where investment spending is still near record lows at about 2% of GDP (commercial real estate defined and business investment in structures less mining-related items). But other factors appear to be holding back spending in this area.


Limited “accelerator” effect. A closely related concept is that of the “accelerator” effect: when economic activity is picking up, firms will tend to increase investment because they expect to produce higher levels of output in the future. This framework for thinking about investment spending works well empirically: most models of investment spending incorporate lags of GDP growth (or a closely related measure).


Accelerator effects have turned less supportive since earlier in the recovery. Year-over-year growth in real GDP has slowed from 3.5% in mid-2011 to 2.0% as of Q1. Growth in real GDI (Gross Domestic Income) slowed from 4.3% to 2.0% over the same period, and industrial production from 7.2% to 4.3%. We can also see evidence of slowing in analysts’ expectations for corporate earnings growth. The chart below—which comes from our equity strategy team—shows changes in 12-month ahead analyst earnings expectations for S&P 500 companies (for background on earnings as a cyclical indicator see our earlier article). While still mildly positive, earnings expectations have increased at a significantly slower pace over the last 3-6 months. If firms' own internal earnings expectations are similarly downbeat, this could be another factor holding back business investment.


Limited “accelerator” effect. A closely related concept is that of the “accelerator” effect: when economic activity is picking up, firms will tend to increase investment because they expect to produce higher levels of output in the future. This framework for thinking about investment spending works well empirically: most models of investment spending incorporate lags of GDP growth (or a closely related measure).


Accelerator effects have turned less supportive since earlier in the recovery. Year-over-year growth in real GDP has slowed from 3.5% in mid-2011 to 2.0% as of Q1. Growth in real GDI (Gross Domestic Income) slowed from 4.3% to 2.0% over the same period, and industrial production from 7.2% to 4.3%. We can also see evidence of slowing in analysts’ expectations for corporate earnings growth. The chart below—which comes from our equity strategy team—shows changes in 12-month ahead analyst earnings expectations for S&P 500 companies (for background on earnings as a cyclical indicator see our earlier article). While still mildly positive, earnings expectations have increased at a significantly slower pace over the last 3-6 months. If firms' own internal earnings expectations are similarly downbeat, this could be another factor holding back business investment.


Diminished policy support. Finally, we see some evidence that reduced policy support may have played a role. First, EPA engine regulations implemented at the start of this year may have temporarily boosted demand for certain types of capital equipment in 2011 (see here for more background). Second, the federal bonus depreciation allowance may have lifted spending by a small amount in Q4, which then faded in Q1. The accelerated depreciation provision allowed firms to write off the full amount of qualified investments put into service before the end of 2011. The provision was allowed to expire, and for 2012 only 50% of qualified investment may be written off in the first year of their service life.


We previously argued that the bonus depreciation allowance was not a major factor for strong investment growth in 2011. In particular, investment growth was strongest for short-lived capital goods, which benefit the least from the provision, and weakest for long-lived capital goods, which should benefit the most. This seemed correct through Q3 of last year, but the pattern reversed in Q4: investment in long-lived capital goods (defined as those with a service life of seven years or greater) increased sharply. Spending for these types of capital goods then fell back in Q1. This pattern suggests some investment spending may have been brought forward into Q4, when the depreciation allowance was still in place.

At the end of the day, regardless which, if any, of the above conditions is true, one thing is certain: absent a rapid renewal of America's aging asset base, American corps are certain to suffer the same fate as not only Japan but Europe, as the chart below of various average asset ages by geography, shows:

The other thing that is also certain, is that without fresh capital investment, corporate top lines will promptly decline as well. And with margins already maxed out, any decline in revenue will result in a magnified decline in corporate bottom lines.

Which brings us to the second point of the night, that from ConvergEx' Nicholas Colas, who looks precisely at what the Wall Street consensus for corporate revenue is.

Our monthly review of Wall Street analysts’ revenue expectations for large multinational companies shows increasing concern that top line growth will diminish considerably over the next few quarters.  For Q2 2012, for example, the average analyst expectation for the Dow 30 Industrials is now just 4% overall and 2.1% for non-financials.  These are the lowest percentage change estimates in the year we’ve been tracking the Street’s financial models for this quarter, and less than half of where they were a year ago.  The third quarter of 2012 skates as close to zero expected growth as we’ve seen since the recession, at just 2-3% expected revenue growth.  Analysts seem to be pushing their top line estimates into Q4 2012 in order to maintain their annual targets, for they still print a rebound to 5% growth in this period despite dramatically reducing their Q2 and Q3 2012 expectations.  Bottom line – earnings season will likely provide analysts the data needed to cut their Q4 2012 numbers. 

Colas goes on:

Looking forward it is revenue growth that will have to keep the U.S. stock market looking healthy.  Every month we take a survey of what Wall Street analysts have baked into the top of their financial models for large multinational companies.  We look at the 30 companies of the Dow Jones Industrial Average for these purposes.  This top-down approach lets us dovetail their estimates with a perspective on the macroeconomic environment, as well as measure their relative levels of optimism about future sales growth. 


Our findings from the most recent cut at the data, based on what the Street is printing right now for Q2-Q4 2012 as well as 2012 and 2014, is pretty cautious.  A few points here:

  • Revenue estimates for Q2 2012 are down to 4.0% from 5.1% for the 30 companies of the Dow, and just 2.1% from 3.0% for the non-financial companies.  Several charts we’ve included following this note highlight that this is the slowest expected revenue growth since Q4 2009, and that analysts have had to cut their expectations for this quarter by over 50% in the past year. 
  • The news from Q3 2012 estimates is equally downbeat.  Analysts expect just 2.1% revenue growth from prior year actuals for the 30 companies, and 2.8% for the non-financial names.  Again, these would be smallest “comps” since the U.S. stock market bottomed in March 2009.  And just as it was with Q2 2012, analysts have had to cut their sales estimates by +40% over the last few months.
  • Wall Street analysts aren’t giving up on 2012 just yet, and they are holding out hope that Q4 2012 will save the year.  They have not yet taken down the final quarter of the year, and an average of their expectations currently comes in at 4.8-5.0% for the total and non-financial names respectively.
  • For next year, analysts have trimmed their models to show an average of 4.5% top line growth for the Dow companies.  That’s not as high as the +5% they were showing their buyside clients back in February, but still solidly in mid-single-digit territory.
  • For 2014, our first amalgamation of the data shows that analysts have a 3.3-3.8% revenue growth rate as a “Placeholder” in their financial models.

A regression between Dow Jones Industrial Average revenue growth and U.S. GDP growth (chart and equation attached) shows a reasonable 46% R-squared over the past four years.  The ratio between sales and GDP growth is essentially 2:1 (2.0932, to be precise).  This means that 2% revenue growth, such as what the analysts expect in Q3 2012, implies just 1% GDP growth.  Obviously, these companies almost all have global businesses so the analysis is imprecise.  But the statistical relationship is good enough that it bears a mention, especially since capital markets are increasingly concerned about a U.S. economic slowdown in the back half of the year.



How you read this data will likely be colored by your view on the market.  Expectations have certainly come in over the past six months, and the U.S. stock market has still managed to rally.  Good news, that.  At the same time, we’d like to see analysts adopt a more conservative posture on Q4 2012 revenue growth before we pronounced the patient entirely healthy.

What does all of this mean? Nothing more than what we have been saying for the past 3 years: the seeds of the central planners' own destruction are sown by none other than the central planners. Recall that earlier today we discussed how it was the ECB's own LTRO that caused the oldest Italian Bank Monte Paschi to demand a bail out for the simple reason that it held too many Italian bonds: something the ECB implicitly ordered demanded it to do!

The CapEx squeeze is merely the other, just as important, side of capital allocation distortion provided by central planners.

Recall that the highest returning capital allocation for corporates is and has always been CapEx, followed by M&A, and finally dividends, as we showed back in April:

And yet, companies now focus almost exclusively on the lowest returning capital investment option. Why? To generate the fastest possible return for shareholders, of course - just another artifact of central planner intervention. Again from April:

What the Fed has done by crushing returns on interest-bearing instruments, is to force companies to pay ever greater dividends (hence push equity investors into the dividend bubble), because companies too realize that for US baby boomer investors/consumers to make up lost purchasing power shortfall, they need to get the cash from somewhere. And since the fascination with capital appreciation is now gone, the only option is dividend return. Recall these two charts from a recent report by David Rosenberg:


Personal Interest Income:



Personal Dividend Income:



All this simply shows merely the most insidious way in which the Fed's ZIRP policy is now bleeding not only the middle class dry, but is forcing companies to reallocate cash in ways that benefit corporate shareholders at the present, at the expense of investing prudently for growth 2 or 3 years down the road.


Then again, with the US debt/GDP expected to hit 120% in 3 years, does anyone even care anymore. The name of the game is right here, right now. Especially with everything now being high frequency this and that. 


Anything that happens even in the medium-term future is no longer anyone's concern. And why should it be: the Fed itself is telegraphing to go and enjoy yourself today, because very soon, everything is becoming unglued.

Ditto. In other words, in addition to the stock market no longer rallying on even promises of easing, the Fed's rate policies in the corporate world are not only no longer benefitting companies, but are starting to backfire.

Intuitively this makes sense: Bernanke and company bought 3 years of time in which companies were supposed to use the cash for the right things: CapEx investment and growth, and the occasional merger or acquisition... Instead they squandered it all on short-term gains.

Which is also understandable: free money comes easy, and goes just as easy. Without having to work hard for the new 'cash', companies never felt compelled to invest it properly and allocate it efficiently. They also expected that the party would continue indefinitely and the free cash would keep coming. Sadly, the party is now ending. And the only thing left is the massive hangover from years of central planning irrational exuberance.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 06/27/2012 - 22:36 | 2567189 The trend is yo...
The trend is your friend's picture

no bullets left bitchez

Wed, 06/27/2012 - 22:39 | 2567194 ACP
ACP's picture

They still have ammo. It's just that Madman Bernanke is starting to realize that there are a lot of angry people out there with ammo too.

Wed, 06/27/2012 - 22:40 | 2567197 SilverTree
SilverTree's picture

"Rednecks White Socks and Blue Ribbon Beer"

Wed, 06/27/2012 - 22:49 | 2567212 knukles
knukles's picture

Hey, listen.
I got some great non-recourse, unsecured, personal paper that I could tender and I'll personally guarantee that I can spend every single last dime ensuring that somewhere along the food chain, some economic activity is sparked.  I mean the kind that's buying real (useless shit I don't need or want) stuff and thingamajigs and if they take enough paper from me, I can ensure that the economy Will Get Moving Again, Without Question.


Wed, 06/27/2012 - 23:24 | 2567277 economics9698
economics9698's picture

I think Bernanke is taking a calculated gamble that lower commodity prices, gas, will be more favorably perceived by the public this fall.  I do not think it is a secret Romney would fire the guy and Bernanke’s best hope is a Obama re-election.  So he has to decide does $4 dollar gas win the election or $2.75 gas?

A big gamble because when the printing dies down so does all the smoke created by the printing presses.  Gas will cost less but the true damage to the economy will become more visible to the public.

Another scenario is to do QE III in August and bump the stock market up for the election. 

Any other scenarios? 

Wed, 06/27/2012 - 23:43 | 2567311 HungrySeagull
HungrySeagull's picture

I don't give a shit about the gas. Let it go to 14 dollars a gallon, we are all unemployed anyway.

Is war material classed as Durable goods?

Thu, 06/28/2012 - 06:51 | 2567631 disabledvet
disabledvet's picture

Not if the war material is you...

Thu, 06/28/2012 - 07:01 | 2567640 markmotive
markmotive's picture

Save us Sarah Palin!

Wed, 06/27/2012 - 23:52 | 2567324 Dr. Engali
Dr. Engali's picture

If he waits too long to print he will have to print at least double if not triple the amount needed now in order to catch a falling knife. He will print and Europe will provide the cover. Gas needs to drop another 25 cents or so.

Thu, 06/28/2012 - 00:01 | 2567347 El Oregonian
El Oregonian's picture

Molotov's become cheaper...

Thu, 06/28/2012 - 03:59 | 2567539 cynicalskeptic
cynicalskeptic's picture

They're counting on insurrection being too expensive for the average prole.

Thu, 06/28/2012 - 01:04 | 2567425 The Monkey
The Monkey's picture

They have a higher bar for QE3 as each round of open ended monetary stimulus defers any impetus for fiscal authorities to act, angers many of our global neighbors, and, has proven to increase nominal rates (QE1 & 2).

Great ZH article. Post-bubble capex is an interesting issue - more from a productivity and bottom line standpoint than top line IMO.

Thu, 06/28/2012 - 01:05 | 2567427 DanDaley
DanDaley's picture

Any other scenarios? 


Yeah, the Democrats are doing a rope-a-dope on the Republicans because they  (dems) don't want to win because they know that the next 4 years are going to be hell-on-earth (it's baked in the cake), and if the world survives, then Billary or some other Dem waltzes back in and voila, a two termer at least.  It's enough to make you sick.  Oh, and 90% chance Obamacare gets upheld tomorrow.  Get (more) used to tyranny.

Thu, 06/28/2012 - 03:59 | 2567538 Michael
Michael's picture

What happens when we get to Peek Debt Saturation?

Thu, 06/28/2012 - 07:00 | 2567639 Withdrawn Sanction
Withdrawn Sanction's picture

People, firms, and govts choke on any new debt.  Instead, they begin liquidating current holdings to pay down debt or default outright.  Sound familiar?

BTW, though we've reached saturation levels already, a debt-based society does not need debt to stop growing for trouble to begin.  The rate of debt accumulation need merely slow and the house of cards begins to collapse as the plans predicated on sustained debt growth fail to pan out.

Thu, 06/28/2012 - 09:58 | 2568151 post turtle saver
post turtle saver's picture

Velocity Of Credit(tm)

Thu, 06/28/2012 - 07:31 | 2567700 prodigious_idea
prodigious_idea's picture

"Any other scenarios?"


Wed, 06/27/2012 - 23:06 | 2567242 dolce vita
dolce vita's picture

americas new secret weapon...the hillbilly patriot


footnote ; cog dis circa 2011

Thu, 06/28/2012 - 04:58 | 2567493 Daily Bail
Daily Bail's picture

Meanwhile in Washington...


HR 459 - Ron Paul's 'Audit The Fed' Bill Is Back


Ron Paul to Bernank: "This isn't a clown bill, bro..."


Thu, 06/28/2012 - 09:42 | 2568090 vast-dom
vast-dom's picture

"All this simply shows merely the most insidious way in which the Fed's ZIRP policy is now bleeding not only the middle class dry, but is forcing companies to reallocate cash in ways that benefit corporate shareholders at the present, at the expense of investing prudently for growth 2 or 3 years down the road."

EXACTLY!  And are up, up and away. SP over 800 at this stage is fake and bullish.

Wed, 06/27/2012 - 23:02 | 2567237 dolce vita
dolce vita's picture

did they just say..."at the end of the day"? you are hereby banned to linguistic vernacular purgatory.


yes, i have several pounds of broken concrete blocks i'd like to use for collateral......yes, 400 billion ought to be enough....for now.


Wed, 06/27/2012 - 23:57 | 2567339 El Oregonian
El Oregonian's picture

Yes, they still have ammo but, they broke the weapon that fires it...

Thu, 06/28/2012 - 00:57 | 2567416 salvadordaly
salvadordaly's picture


Thu, 06/28/2012 - 01:10 | 2567434 Poor Grogman
Poor Grogman's picture

Ammo is free
Just press ctrl p
Now watch and you will see
More sound money flee...

It's very tough being a banker
Especially when you're also a wanker
You have all the tools
To fool all the fools
But the sheeple just never say thank you

Thu, 06/28/2012 - 05:33 | 2567556 Daily Bail
Daily Bail's picture

Looks like we're getting closer to Tyler's worst-case scenario for JPM's loss:


BREAKING NEWS - NYT Reports JPMorgan Prop Trading Loss May Reach $9 Billion




Wed, 06/27/2012 - 22:44 | 2567204 BarreraNorman70
Wed, 06/27/2012 - 23:55 | 2567335 Rich Bagg
Rich Bagg's picture

They can send every household in America a check for $1,000,000 tomorrow.  They have unlimited ammo.



Thu, 06/28/2012 - 05:13 | 2567577 reader2010
reader2010's picture

Before Bernanke does that, he will need to send each 0.001% household at least a few trillion dollars first. 

Thu, 06/28/2012 - 05:24 | 2567580 icanhasbailout
icanhasbailout's picture

IIRC, the last guy who had a bazooka in his pocket, blew his own balls off

Thu, 06/28/2012 - 06:57 | 2567635 gatorengineer
gatorengineer's picture

Infinite bullets left bitchez..... Fed can print to infinity, and crush whats left of the middle class.....  Poor will still get their guberment Iphones, and the rich will ride the equity wave.....  Middle class and retirees game over.

Wed, 06/27/2012 - 22:39 | 2567195 Rastadamus
Rastadamus's picture


Wed, 06/27/2012 - 22:41 | 2567198 Tsar Pointless
Tsar Pointless's picture


Er, bullish!

No, seriously - we're a-screw-ed!

Wed, 06/27/2012 - 22:42 | 2567201 fonzannoon
fonzannoon's picture

as long as they keep rates low and going lower those two charts continue. until something pricks the treasury bubble fundamentals don't matter and dividendsanity goes on.

Wed, 06/27/2012 - 22:51 | 2567216 Tyler Durden
Tyler Durden's picture

What this article says is that the Asset Depreciation/Aging/CapEx cycle, which leads to unsustainable capital misallocation and to asset exhaustion, will be the natural brake that can and will stop the party before any of the complacent vigilantes even wake up. 

Just as the stock market has become conditioned to expect the Fed to bail it out any time there is a 1% downtick, so do companies not feel at all compelled to reinvest cash into replenishing their assets and pursuing proper long-term capital allocation decisions (CapEx and M&A) instead of seeking to reward their shareholders with quick and easy dividend-based gains.

Wed, 06/27/2012 - 22:57 | 2567224 Abraxas
Abraxas's picture

What they have done is too stupid to be stupid.

Thu, 06/28/2012 - 00:12 | 2567359 AlaricBalth
AlaricBalth's picture

From Fitch's Capital Expenditure Survey

Spending Slows in 2012: Fitch forecasts that for this U.S. corporate issuer sample, capital expenditures will decline 2.2% in 2012 compared to 2011. Additionally, capital intensity will retreat to 5.9%. Again, these results are greatly influenced by the energy sector. If the aggregates are recalculated without the energy sector, 2012 capital expenditure growth will slow to 5.9%. These forecasts reflect a continued slow revenue growth environment for companies and careful spending patterns without increased confidence for material demand growth.

2013 Goes Negative: Fitch forecasts that for this issuer sample, capital expenditures will decline 1.3% in 2013 compared to 2012, with spending intensity falling to 5.6%. Additionally, removing the energy sector from the aggregates results in the forecast showing capital expenditures fall 1% in 2013 versus 2012. Again, this forecast reflects a slow growth and careful spending environment for companies.

Thu, 06/28/2012 - 07:01 | 2567641 disabledvet
disabledvet's picture

Why would I as it moderate?...cap ex when there is a disinflation going on? I should invest more should I not since "I have confidence in the soundness of my money" and "I'm killing the competition." Spending less "on the future" strikes me as counter productive.

Wed, 06/27/2012 - 23:14 | 2567253 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

I have come to the conclusion what is driving politics in the US is plain simply the productive vs non-productive elements in society. The Repugicrats are out to destroy anything that resembles production not under their control. Disgusts me to no end!!!!

Thu, 06/28/2012 - 06:58 | 2567637 gatorengineer
gatorengineer's picture

cant believe you got down voted, you nailed it.

Thu, 06/28/2012 - 00:01 | 2567349 ghostfaceinvestah
ghostfaceinvestah's picture

Don't forget stock buybacks, lots of those too.

Misallocation of capital, sponsored by the Fed since 1913.

Thu, 06/28/2012 - 06:56 | 2567634 disabledvet
disabledvet's picture

Well at least now we know why you got fired at Goldman. "spy vs spy" is not a business plan Tylers' Durden.

Thu, 06/28/2012 - 05:32 | 2567524 Daily Bail
Daily Bail's picture

Pretty solid timing on the leak from JPM insiders, as this story will soon to be buried by headlines on Obamacare and Fast and Furious as the House votes on Eric Holder and SCOTUS rules at 10 am EST.


Wed, 06/27/2012 - 22:43 | 2567202 yogibear
yogibear's picture

Bernanke is a money printer. He will help Wall Street and the Banksters by running his balance sheet up. 

He knows he can print to infinity. Just how long the rest of world puts up with a US dollar that keeps devaluing is the question. At some point his printing should cause massive inflation. So much for food stamps because it won't buy much when he's finished trashing the dollar.

Bernanke serves Wall Street and the bankers, not the other 90%.

Wed, 06/27/2012 - 22:44 | 2567205 SilverTree
SilverTree's picture

Right-on, right-on.

Wed, 06/27/2012 - 23:43 | 2567315 HungrySeagull
HungrySeagull's picture

Infinity to the limits of the computer servers.

When that cannot allocate anymore resources to the binary traffic, it's all over.

Oh wait... they cannot withstand the stealing that is going on as we speak.

Thu, 06/28/2012 - 01:53 | 2567450 Solon the Destroyer
Solon the Destroyer's picture

He knows he can print to infinity.

Actually Bernanke knows this is exactly what he cannot do.

Hyperinflation destroys the wealthy, the banks, and the banking system. it puts them on the same footing as the common man: penniless.

When it gets to crunch time, Bernanke, the rich and the banks will choose to crush the poor and the middle class. They will choose deflation. The corporate socialists are making the decisions here, not the labor socialists.

They will print as much as they can in the name of slowing the deflation and softening the landing, when really they are just transferring wealth and power to the elite. Once the common man's debt serfdom can bear no bigger of a yoke, and we are completely squeezed dry... Wham-O! Soul-wrenching deflation. That way they can play the game all over again, slowly inflating for the next 100 years.

No way they ever kill the game by hyperinflating. They want this to go on for perpetuity.

Wed, 06/27/2012 - 22:44 | 2567203 Jam Akin
Jam Akin's picture

Capex shmapex, buy all of your crap while your $ still gets you something and there are going concerns able to produce it at a reasonable price, my friends.

Wed, 06/27/2012 - 22:48 | 2567209 Abraxas
Abraxas's picture

Why can't they just jump to QE of monstruous size right away and speed up through the inevitable agony?

Wed, 06/27/2012 - 22:50 | 2567214 Tsar Pointless
Tsar Pointless's picture

Oh, I think that's a given.

This pointless individual won't be shocked to see a $5-10 trillion QE before all is said and done.

Then, since all will have been said and done, it will be time for bombs and bullets.

Wed, 06/27/2012 - 22:52 | 2567218 Abraxas
Abraxas's picture

I'm having a deja vu.

Wed, 06/27/2012 - 22:55 | 2567221 Tsar Pointless
Tsar Pointless's picture

All over again?

Wed, 06/27/2012 - 23:00 | 2567230 Abraxas
Abraxas's picture

It's because I've been there before, economic instability - political instability - hyper inflation - war

Wed, 06/27/2012 - 23:12 | 2567250 Jena
Jena's picture

Never ends well but most of the country doesn't know it'll happen here.

Wed, 06/27/2012 - 23:16 | 2567264 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

If the money rained from the heavens Zimbabwe style it would admit defeat for the big boys. The golden rule with educated idiots is they are never wrong (well only in their heads). We are going to face crippling deflation before Bennie really fires up the helicopters.

Wed, 06/27/2012 - 23:44 | 2567319 HungrySeagull
HungrySeagull's picture

If every baby was issued a million dollars and all next of kin by blood two million...

this nation will certainly take off like a rocket.

Thu, 06/28/2012 - 02:30 | 2567479 Raul Duke
Raul Duke's picture

is that you ?



One owes respect to the living: To the Dead one owes only the truth. -- VOLTAIRE this is to say that bernanke & co. still think were alive, not much respect anywhere to be found but lies - oh yes. so what do we do ? play dead ? anyways heres an idea, a bit old but quite contemporary Old elephants limp off to the hills to die; old Americans go out to the highway and drive themselves to death with huge cars. -- Hunter S. Thompson

Thu, 06/28/2012 - 07:01 | 2567638 Abraxas
Abraxas's picture

@Raul Duke: I was supposed to be a gnostic god, but here I am, typing on my keyboard ... it's a way to communicate, connect and constantly be misunderstood.

By the way, I like the Thompson's quote.

Thu, 06/28/2012 - 00:08 | 2567355 El Oregonian
El Oregonian's picture

Remmington, Winchester, very bullish...

Wed, 06/27/2012 - 22:56 | 2567225 Spastica Rex
Spastica Rex's picture

I'm wondering if the real point of all of this is to forestall civil unrest for as long as possible. I think Occupy was a back burn.

Wed, 06/27/2012 - 23:06 | 2567238 khakuda
khakuda's picture

Another thoughtful piece of work. Thanks!

Let's hope Bernanke and the Fed's computers pick it up and they read it.

Wed, 06/27/2012 - 23:06 | 2567243 gorillaonyourback
gorillaonyourback's picture

we all getting fucked by the big collateral less homo in the sky....... nobody makes it out un scathed

Wed, 06/27/2012 - 23:13 | 2567255 chump666
chump666's picture

What a great post ZH.


Wed, 06/27/2012 - 23:59 | 2567341 merizobeach
merizobeach's picture

I thought the same thing.

"this will soon be a very popular point of discussion in the mainstream media... in about 3-6 months."

Mark your calendars.  ZH is regularly days or weeks ahead of the MSM on most everything; today, we're one or two quarters ahead of the spin.

Wed, 06/27/2012 - 23:27 | 2567281 blindman
blindman's picture

keyword : relocation again.

Wed, 06/27/2012 - 23:28 | 2567287 world_debt_slave
world_debt_slave's picture

ha, ha, yeah, I'm moving out of Cali in less than a month

Wed, 06/27/2012 - 23:46 | 2567322 HungrySeagull
HungrySeagull's picture

Don't follow all your Kalifornia friends to where they went. Those states are the new californias now.

Thu, 06/28/2012 - 00:53 | 2567407 world_debt_slave
world_debt_slave's picture

yeah, saw some libs moving into Montana and what not, I'll be going to the "mid-west".

Thu, 06/28/2012 - 10:11 | 2568233 post turtle saver
post turtle saver's picture

In Texas, we keep them in the migrant liberal FEMA holding pen known as 'Austin'. Surrounding them on all sides with cowboys, rednecks, roughnecks, and violent drug lords keeps them honest. After about five years of that the Kali is burned out of them and they're too busy suffering from allergies to raise any ruckus of note.

Wed, 06/27/2012 - 23:28 | 2567283 world_debt_slave
world_debt_slave's picture

thus amnesty for the illegals, not just for vote pandering but to renew the aging white race that will be extinct in 50 years or less

Thu, 06/28/2012 - 00:04 | 2567351 merizobeach
merizobeach's picture

"the aging white race that will be extinct in 50 years or less"  We can hope.  A blessing upon the Earth that would be.  :-)

Thu, 06/28/2012 - 00:57 | 2567415 world_debt_slave
world_debt_slave's picture

a good book I read during the early '90's was called "Social Insecurity", basically the younger working class mostly all be minorities and the aged retired class whites. Then the idea will come that why are we the working class working for the white retired class to live? Then you have more minorities in politics that will write laws to favor the minority class.

whites going the way of the buffalo

Ted Nugent - Great White Buffalo

Thu, 06/28/2012 - 00:57 | 2567418 WillyGroper
WillyGroper's picture

don't worry, your time will come to compost.

Thu, 06/28/2012 - 00:58 | 2567419 world_debt_slave
world_debt_slave's picture

the worms win in the end

Wed, 06/27/2012 - 23:32 | 2567294 Snakeeyes
Snakeeyes's picture

In a nutshell, yes. I have posted charts of various money velocities and multipliers and all have crashed and burned.


I was on Fox Business today trying to agree with Peter Schiff.

Wed, 06/27/2012 - 23:32 | 2567296 Bazooka
Bazooka's picture


You offer many critiques, ridicules and insults to the bankster crimials and the political pannetas. Your foder is ingenious and endless.

Show us your genius! What solutions do you have to the fucked up situation in EU? How should they handle their debt? Which politician do you support to actually stand up and say FU to the Greeks and the French and the PIIGS?

What's your solution? How does Greece, Spain, Ireland and Italy and Germany and USA come out of this debt fuck up?

Offer solutions along with your critiques!!! This will be your final validation!

Please don't fucking say buy Gold and Silver!

Wed, 06/27/2012 - 23:49 | 2567301 Dr. Engali
Dr. Engali's picture

You've been around long enough to know what the the Hedge's thoughts are. If your demands are genuine it just means you haven't been paying attention.

Wed, 06/27/2012 - 23:37 | 2567302 Spastica Rex
Spastica Rex's picture

I have a solution: you're a dick!

Wed, 06/27/2012 - 23:38 | 2567303 Dr. Engali
Dr. Engali's picture

I don't know if that's an actual solution. I think that's just a statement of fact.

Thu, 06/28/2012 - 00:01 | 2567346 Hulk
Hulk's picture

A dick is a problem, not a solution, and that's a fact...

Thu, 06/28/2012 - 07:31 | 2567708 Clashfan
Clashfan's picture

Actually, it sounds like an allusion to a hilarious film.

Thu, 06/28/2012 - 07:16 | 2567659 falak pema
falak pema's picture

a dick that asks a question is a dick that's not a prick, it may even be a polite dick!

Depends how the question is asked; not like an offer the other can't refuse! 

Dicks, pricks and quips, words to quibble about when harry meets sally. 

Thu, 06/28/2012 - 00:50 | 2567404 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Solution courtesy of The Burning Platform:

  • The first thing to be done is to abolish the Federal Reserve. It is owned by and operated for the benefit of the biggest banks in the world. Its sole purpose has been to enrich the few at the expense of the many through its insidious use of inflation and debt issuance. It has been around for less than 100 years and has debased the USD by 96%. The U.S. Treasury has the authority to issue the currency of the country. It did so from 1789 until 1913.
  • The 2nd thing to do would be to reinstitute the Glass-Steagall Act because Wall Street cannot be trusted to manage their risk properly. This would separate true banking activities from the high risk gambling that brought the economic system to its knees. Privatizing the profits and socializing the losses is unacceptable.
  • The FASB would be directed to make all banks and financial corporations value their assets at their true market value. This would reveal the mega Wall Street banks and corporations like GE to be insolvent. An orderly bankruptcy of all insolvent financial firms involving the sell-off of their legitimate assets to well-run risk adverse banks that didn’t screw up would ensue. Bondholders and stockholders would realize their losses for awful investment decisions. The economic system would be purged of its bad debt.
  • The currency of the US would be backed by hard assets. A basket of gold, silver, platinum, uranium, and some other limited hard commodities would back the USD. If politicians attempted to spend too much, the price of this basket would reflect their inflationary schemes immediately.
  • The 16th Amendment would be repealed and the income tax would be scrapped. It would be replaced with a national consumption tax. The more you consume, the more taxes you pay. Wages, savings and investment would be untaxed. The tax code is the source for much of politicians’ power. Its demise would further reduce Washington DC control over our lives.
  • A downsizing of the US Military from $1 trillion to $500 billion annually would be initiated through the withdrawal of troops from Afghanistan, Iraq, Germany, Japan and hundreds of other bases throughout the world. Policing the world is bankrupting the empire.
  • All corporate, farm, education, and social engineering subsidies would be eliminated. All Federal employees would have their pay slashed by 10% and the workforce would be reduced by 20% over 5 years. Federal health benefits and pension benefits would be set at average private industry levels.
  • The Social Security System would be completely overhauled. Anyone 50 or older would get exactly what they were promised. The age for collecting SS would be gradually raised to 72 over the next 15 years. Those between 25 and 50 would be given the option to opt out of SS. They would be given their contributions to invest as they see fit if they opt out. Anyone entering the workforce today would not pay in or receive any benefits. The wage limit for SS would be eliminated and the tax rate would be reduced from 6.2% to 3%.
  • The Medicare system is unsustainable. It would be converted from a government program to private market based program. The Federal mandates, rules and regulations would be eliminated. Senior citizens would be given healthcare vouchers which they would be free to use with any insurance company or doctor based on price and quality. Insurance companies would compete for business on a national basis. Doctors would compete for business. The GAO would have their budget doubled and they would audit Medicare fraud & Medicaid fraud and prosecute the criminals without impunity.
  • The healthcare bill would be repealed. Insurance companies would be allowed to compete with each other on a national basis. Tort reform would be implemented so that doctors could do their jobs without fear of being destroyed by slimy personal injury lawyers. Doctors would need to post their costs for various procedures. Price and quality would drive the healthcare market.
  • The entitlement state would be dismantled. The criteria for collecting welfare, SSDI, food stamps and unemployment benefits would be made much stricter. Unemployed people collecting government payments would be required to clean up parks, volunteer at community charity organizations, pick up trash along highways, fix and paint houses in their neighborhoods and generally keep busy in a productive manner for society.
  • A free market method for stabilizing the housing market would be for banks to voluntarily reduce the mortgage balances of underwater homeowners in exchange for a PAR (Property Appreciation Right). The homeowner would agree to pay off the PAR to the Treasury (and administered through the IRS) out of future price appreciation on the existing home or subsequent property. The homeowner would be excluded from taking on any home equity loans or executing any “cash out” refinancing until the PAR was satisfied. The maximum PAR obligation accepted by the Treasury would be based on the value of the home and the income of the homeowner.
Thu, 06/28/2012 - 01:34 | 2567448 Newager23
Newager23's picture

There are lots of solutions, the problem is that none of them are politically feasible. The list above is a good and a good example of why we are totally screwed. None of it is possible.

I have lots of solutions just like what he mentioned. For instance, we could outlaw unions and flatten wages from the top to the bottom (so that unions were not needed). If we did that we could build anything in this country. But are unions going away? No way. Not anytime soon.

We could end globalism and require that nearly everything to be built in this country, so that we no longer had a trade deficit. Is that possible? I don't think so.

We could balance the federal budget and eliminate income and real estate taxes in one year. How? Using consumption taxes. Could that happen? No way.

We could make the national budget 15% of the previous year's GDP and the total government (federal, state, local) workforce 10% of the total workforce. Not happening.

We could require 8th graders to pass a test to get into high school (and to prove they are ready for high school). And require 12th graders to pass a test to prove they graduated from high school. And no more A's for all kids. Only 10% get A's.

The list goes on, but none of them are feasible. I think most on this site are starting to figure this out. So, what is going to happen? I'll just say this, it will be worse than you expect in the near term, and better than you expect in the long term -- if you are fortunate enough to be around to see the outcome. One last tidbit, what's coming is a complete transformation to our culture, society, and economy. And we won't be figuring out a way to "grow" the economy into prosperity. We tried that and it didn't work.




Wed, 06/27/2012 - 23:39 | 2567306 Seasmoke
Seasmoke's picture

Ben is firing blanks

Wed, 06/27/2012 - 23:44 | 2567320 q99x2
q99x2's picture

3 to six months. Damn Soros he said tomorrow we were likely to get some action.

Back to meditation.

Wed, 06/27/2012 - 23:46 | 2567323 HungrySeagull
HungrySeagull's picture

That is the Obama Care.

That too shall pass in time. But tomorrow is gonna be a beitch on the east coast.

Back to wrapping up sold Ebay shit.

Wed, 06/27/2012 - 23:53 | 2567332 mktfizx
mktfizx's picture

Don't know why folks are assuming they are out of bullets.  They still have two.  These steps were spelled out clearly in Bernanke's speech from 2002.

He's used the first three, in order, as appropriate, as described.  Next, they can buy foreign securities.  Then they revalue the dollar relative to certain commodities.  Happened before.  Will happen again.  Only questions left to answer are "how bad does it have to get to make this politically palletable?". and "am I ready".  Proof is in the articles on how the BRICS + Japan + Chile seem to be aware of this eventuality.  Currency, trade, world.

Thu, 06/28/2012 - 00:37 | 2567391 merizobeach
merizobeach's picture

"Currency, trade, world."  ...war.  I know where you were going with that.

Wed, 06/27/2012 - 23:57 | 2567334 Son of Loki
Son of Loki's picture

Ben, please reload and print more.




Thu, 06/28/2012 - 00:13 | 2567361 blindman
blindman's picture

"Ripple" Jerry Garcia & Bob Weir (Bridge School Benefit 1988 in Oakland)
If my words did glow with the gold of sunshine
And my tunes were played on the harp unstrung,
Would you hear my voice , come thru the music,
Would you hold it near as it were your own?

It's a hand-me-down, the thoughts are broken,
Perhaps they're better left unsung?
I don't know, don't really care
Let there be songs to fill the air !

Ripple in still water,
When there is no pebble tossed,
Nor wind to blow.

Reach out your hand if your cup be empty,
If your cup is full may it be again,
Let it be known there is a fountain,
That was not made by the hands of men.

There is a road, no simple highway,
Between the dawn and the dark of night,
And if you go no one may follow,
That path is for your steps alone.

Ripple in still water,
When there is no pebble tossed,
Nor wind to blow.

You who choose to lead must follow
But if you fall you fall alone,
If you should stand then who's to guide you?
If I knew the way I would take you home.

La dee da da da, la da da da da, da da da, da da, da da da da da
La da da da, la da da, da da, la da da da, la da, da da.

Thu, 06/28/2012 - 00:13 | 2567362 GiantVampireSqu...
GiantVampireSquid vs OWS UFC 2012's picture

LOL ZIRP FORCES business to save.

Thu, 06/28/2012 - 00:26 | 2567371 blindman
Thu, 06/28/2012 - 00:40 | 2567393 oldgasII
oldgasII's picture

Well the large companies may still have cash to sit on, but a lot of the medium and small companies have been having to dip into their stash just to stay in business.  I read somewhere something like 38,000 businesses no longer exist.  


Thu, 06/28/2012 - 00:50 | 2567403 TheObsoleteMan
TheObsoleteMan's picture

Geo-political trumps economic/finacial. There is a HUGE paradigm shift underway right now in the Middle East; The new Muslim Brotherhood government of Egypt is discussing scrapping the Camp David Accord, and also re-formalizing diplomatic relations with IRAN. If that is not enough, Iraq is in the begining stages of full blown civil war:

Thu, 06/28/2012 - 00:54 | 2567410 Flakmeister
Flakmeister's picture

The new Muslim Brotherhood is worried about dwindling hard currency reserves in light of Egypt being the worlds larger grain importer...

Now, do you think that since 2009, when Egypt ceased to be a net oil-exporter, that the Egyptian finances have started to be strained?

Thu, 06/28/2012 - 00:50 | 2567405 Flakmeister
Flakmeister's picture

I believe that the old school term for such a development was "Eating your seed corn"....

Thu, 06/28/2012 - 01:10 | 2567430 TheObsoleteMan
TheObsoleteMan's picture

looks like Egypt might be making new friends......

Thu, 06/28/2012 - 01:39 | 2567455 ReactionToClose...
ReactionToClosedMinds's picture

another good ZH post/catch.  makes intuitive sense .... you can only buy so much time .... then intermediate term defenses lose impact

Thu, 06/28/2012 - 01:58 | 2567462 Milton Waddams
Milton Waddams's picture

LOL, Teh Bernank attempts to normalize the growth rate of ( 'disclosed' ) Fed holdings of treasury securities... and the banking sector cries poor.

The old motto: suffocate the government

The new motto:  suffocate the banks


Thu, 06/28/2012 - 02:17 | 2567477 ak_khanna
ak_khanna's picture

This short term approach of first bailing out banks by the governments and central bankers and subsequently weaker governments by better performing countries is likely to continue till the debts become so large that it would not be possible to role them forward.

Then The Game Ends and the System Reboots.

Thu, 06/28/2012 - 03:04 | 2567506 Cthonic
Cthonic's picture

Reboot? Sometimes when an engine loses oil pressure you can keep it running for a while; good luck ever starting it again.

Thu, 06/28/2012 - 03:41 | 2567526 Kaaos
Kaaos's picture

What is the solution? Maybe there is no such a thing. Maybe there is no easy way out. Maybe the situation is fucked up beyond any repair. Although, I think we have one solution, the Great Creative Distruction. Further, consider the name zero hedge, doesn't that simply say all...

Thu, 06/28/2012 - 04:03 | 2567537 blueskies123
blueskies123's picture

Computers (HFT) can move prices up or down on various markets for virtually zero cost.

Now I find out the truth of why HFT makes up more than 95% of all trades especially on low volume trading days like today that was only 100 million shares traded on the DOW in contrast to the record volume of 11.5 billion shares traded in oct 2008.

Markets keep moving up no matter how many banks and countries get downgraded in Europe or around the world and the Eurozone is about to implode. I suspect it is a case of pumping up the markets otherwise without pumping/printing money, the markets will be going down down and down.



Thu, 06/28/2012 - 04:00 | 2567541 Jack Sheet
Jack Sheet's picture

Can someone explain why stocks have to i n c r e a s e dividends to compete with ZIRP for fixed income assets? Excuse my denseness.

Thu, 06/28/2012 - 06:41 | 2567618 disabledvet
disabledvet's picture

They don't. Simple question of relative valuation tho: since Treasuries are so pricey if all I need to do to raise equity (via a higher price for said equity) is to raise my dividend I'd be fool not to. "Capital raising by other means" to paraphrase Clauswitz.

Thu, 06/28/2012 - 07:23 | 2567691 Jack Sheet
Jack Sheet's picture

Thanks for your trouble. So stocks are competing with increasing treasury p r i c e s rather than treasury yields. Or the expectation that Treasury prices will rise further due to decreasing yields.

Thu, 06/28/2012 - 04:15 | 2567550 TheObsoleteMan
TheObsoleteMan's picture

Putin just turned his back on Assad. He blinked first, AGAIN. When push came to shove, he was not willing to go to war over Syria. Wonder what he got in return?











Thu, 06/28/2012 - 05:27 | 2567560 falak pema
falak pema's picture

the JPM craphouse may lose 9 billion due to derivative scams in London according to NY Times :

Banque: JPMorgan pourrait perdre 9 milliards de dollars, selon le New York Times

What will this do to PD confidence in their shadow banking pile up on both sides of the pond?

A banking crisis is in the cards in Eurozone as this summit looks like its going nowhere; ripple effect will not be trickle down effect! Contagion is more like a huge boomerang. 

On Mercantilism and land utilisation read this :2567576

Thu, 06/28/2012 - 06:44 | 2567619 disabledvet
disabledvet's picture

"and the losses in the EuroPeon banks" will be far in excess of this "mere hiccup."

Thu, 06/28/2012 - 06:45 | 2567622 disabledvet
disabledvet's picture

Btw this bank recap will be impossible in the EZ "we will have to recapitalize the countries." ask yourself "how do policy makers do that?"

Thu, 06/28/2012 - 04:55 | 2567565 Catullus
Catullus's picture

The utility and merchant power industries are in this exact situation right now.  There is very little new plant capex and most of the old plants that would need to add scrubbers are just shutting down.  A good number of large power companies are borrowing money and rolling debt so they can continue to pay dividends (now at like +5% yields).  And when a hurricane or ice storm rolls through parts of the country, the top line hit is dramatic.  Management ends up talking at length about how 1 week of no power delivery materially cut into earnings. 

I can easily imagine manufacturing (steel in particular), telecom, and gas distribution companies are all in the same boat right now.

What's worse is the Obama tax increase on dividends.  There's not much more these companies are going to be able to do to keep shareholders.  ... When you're dividends are taxed near normal income, it just makes holding gold and silver that much more attractive.

Thu, 06/28/2012 - 06:15 | 2567599 Tao 4 the Show
Tao 4 the Show's picture

OT: Somebody should have a great time making fun of this article in Business Insider

The thesis is that the government can print money and treasuries can stay high (interest low) at the same time because all the money printed goes into the banks who then buy treasuries. Now that we have a perpetual motion machine, all problems solved!

Thu, 06/28/2012 - 06:48 | 2567625 disabledvet
disabledvet's picture

This is one way to recap a country. But Mr Bond must agree with you. In the EZ "so far so bad."

Thu, 06/28/2012 - 06:36 | 2567612 disabledvet
disabledvet's picture

Ignoring the part where there is no data to either confirm or deny the truth of the assertions presented here...well, let's just call them that: "mere assertions." insofar as the USA is concerned there assertions are totally false as well. But let us...imagine...Europe for a moment where I agree this is assertion is somewhat true. For example "will the lack of cap ex lead to physical shortages of a good"? And let me give you an example: gasoline. And let me provide a fact: oil refineries are shutting down in the EZ. So can shortages happen? Yes. Are shortages happening due to the collapse of the euro? Maybe. Will we know yes or no? Yes. Hence: buy US Railroad stocks as a play on shortages due to the collapse of "cap everything" because the euro is bad money.

Thu, 06/28/2012 - 06:49 | 2567627 Ghordius
Ghordius's picture

disabledvet, I sense some logic there (and I like US Railroad stocks), but at the end you jump you your "...because the euro is bad money". Would you care to explain? How does it come in your opinion that the fiat money of one specific CB among other 110 on this world is worse than others, with the exception of King Dollar? Meanwhile, would you care to explain what you meant here 2561038 ?

Thu, 06/28/2012 - 06:51 | 2567630 Catullus
Catullus's picture

Power plant and ISO reserve margins are monitored years in advance.  The economics are just not there for new plant development.  But shortages can occur.

Thing is: this happened last year and the winter before that and in 2008. 

The California Energy Crisis in 2000-2001 was because of a lack new plant development as well. 

I suppose it depends on the industry and capacity constraints.  Luckily, there are not a lot of industries that are running at full capacity. 

Thu, 06/28/2012 - 06:39 | 2567616 GCT
GCT's picture

My wife owns a small business and I help her for free.  We are holding onto cash and physical for several reasons.  The biggest to be honest is we do not know what this administration or congress will do next.  Uncertainty in business sucks.  You also have to have paying customers coming through the door.  We have customers to keep the business going but it is tough out there right now. 


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