After 5 years of insane malinvestment the world is finally – finally – seeing the fruits of its trillions of dollars of labor. The fruit of the $10 trillion of central bank money used to save the financial system is going to be… wait for it… yes… yet ANOTHER financial crisis.
I envisage the markets today as a spinning top as it beings to slow down, wobbling from side to side, this way and that. The volatility is making everything wobble, causing oil to go up and then down, stocks to go up and then down, until the whole world crashes to a terrifying slump.
This particular generation of humans – living off fractional reserve banking speculation and central bank bailouts – is the economically dumbest and yet most technologically advanced in history. We will have apps on our iPhones and on Google Maps to see in real time the collapse of our food supply, the nuclear radiation spewing from Fukushima, and the destruction of our retirement funds.
We will have the highest of high-end technology to view problems caused by the most basic and fundamental of issues – the global mispricing of assets around the world. This has NEVER happened at the same time all around the world. The swirling and spinning is occurring at an incredible pace because of globalization – but it would not happen if prices were set by something stable. Like… I don’t know… like gold.
This level of paper/government/bankster-induced mispricing hasn’t happened since John Laws France, China’s Cultural Revolution, or the madness of the Soviet Union. Who said communism didn’t win? Free markets have been killed. Strangled without so much as a whimper of protest from the populace.
Communism has in fact won without having to shoot one real bullet. It came slowly, behind the scenes, via central banking and the supposedly “capitalist” bankers – communists in suits.
Global central bankers planning their way to today’s complete and utter disaster. That seems like a communist “win” to me.
You’d think US$10 trillion would buy you a lot. Sadly with today’s inflation it doesn’t buy much. Yes, it might buy you half the annual economic output of the EU or the US. Yes, it might buy you all the real estate – every square inch – of land in Australia and New Zealand (both commercial and residential). But it doesn’t buy you peace of mind.
US$10 trillion has been spent by central banks to resuscitate world economies and move those economies from crisis to growth.
It didn’t work. Unemployment is still shockingly high in Europe, growth is dying everywhere (including China) and nothing – nothing – lasting has been achieved.
As I said, US$10 trillion doesn’t buy you much these days.
Next time let’s spend it on something worthwhile. Diamond encrusted guillotines for every fractional reserve banker in the world today. I reckon that would cost around $50 million, given the repeated use guillotines achieved in the French Revolution. Are you telling me that’s not better value?
Governments around the world are still screaming that economic activity is causing “global warming” and we must consume less or we face a dystopian future full of rising water and blustery gales. But when we actually do what they say we must do, and consume less, that’s suddenly really really bad. They call it “hoarding cash”. This, for some unknown reason, despite being what they wanted to “cure” the global warming menace, is somehow all of a sudden “wrong” – and prompts the government to push us into bizarre wasteful Keynesian policies like cash for clunkers, where perfectly good cars were deliberately destroyed and put in landfill to encourage spending. I wonder how much cash for clunkers contributed to global warming by encouraging wasteful steel production and wasteful economic activity when perfectly good second hand cars were trashed for no reason whatsoever other than to encourage “spending” and excessive consumption to keep “economic activity” (and, presumably, taxes) staggering on a like a zombie.
Now governments around the world are stealing trillions in savings from pensioners, the middle class, the working poor, and putting it directly into the hands of already-rich bankers.
Surprise, surprise: now the bulk of the populace – the working class and middle class – don’t have the money or the incentive to grow families because of these parasitic insane policies. Governments are starting to panic about the collapsing tax base and starting to implement equally crazy policies trying to encouraging people to fornicate and populate.
All these problems – excessive consumption, wasteful misallocation of resources, depressions, impoverishment of the general populace, low birth rates – all these have one common cause: government interfering, government tinkering, government taking over the production of money, government banning competition in currencies (gold and silver have been confiscated by governments since the 1930s).
Hey Mr Politician – You screw me, I kill my own babies so they are not screwed by you in future.
That’s effectively what millions of people are doing in Japan and Western Europe. Through voluntary birth control they are making the active decision not to submit to being financial slaves, and not allowing their unborn children to be corralled into being the next generation of financial slaves.
This is, effectively, “voluntary” financially and economically-induced domestic genocide.
Only in 100 years will people work out what’s happened. By then it will be too late.
Do you doubt me?
See this article here:
The thing that many of these countries have in common, Japan, Denmark, etc., is a rapidly declining birthrate.
A declining birthrate is disastrous for an economy, particularly for an ageing place like Japan.
Ironically, the oldest person in the world turned 117 years old yesterday—and no surprise that she’s Japanese. In fact, Japan is home to one of the oldest populations in the world and has one of the longest life expectancies.
Curiously they also have one of the largest pension programs in the world. You put all that together and you have fewer and fewer young people paying more and more of their income to support a disproportionately large population of retirees who are living for decades after they stop working.
Each one of these governments is trying to find a solution to fix this unsustainable fiscal problem.
In Denmark they seem to think that people aren’t going on vacation enough. In Japan they think it’s a problem of sexual desire. But in actuality it has everything to do with cost of living.
Month to month, year to year, it’s hard to notice the subtle changes in costs of living and standards of living, but after a long period of time it’s easy to look back and remember how things used to be.
You used to be able to support a family on a single income. You used to be able to afford medical care and higher education.
It’s often said that the greatest expense that someone will have in their life is his or her home. That’s total nonsense.
Now, I’m not saying it’s not worth it, but the biggest expense most people will have is family, and particularly children.
And after years and years of suffering through pitiful, destructive policies that have chronically made people less prosperous, it’s no surprise that they’re coming to the conclusion—you know, we can’t really afford to have a child right now.
There are consequences to conjuring money out of thin air. There are consequences to destructive policies.
So destructive in fact that central bankers and politicians even have the power to make a population disappear.
How ironic that they try to fix their own problem by trying to introduce themselves into our bedrooms.
I have been predicting economically-induced food debasement and food contamination problems throughout the Western world for at least three years, on this very blog. Indeed, just in recent months!
And now Australia has been hit – shock horror! – with a major food contamination scare involving Hepatitis A in imported frozen berries from China. Why? Apparently because Chinese businesses are trying to “save money” by putting human faeces directly into soil used for growing food! Yum YUM!
Unsurprisingly this isn’t a good idea from a food hygiene/food contamination perspective.
No one predicted these kinds of issues arising in Australia. No one points out this is inevitable due to perverse incentives embedded within our current monetary and economic system. These things apparently just “fall from the sky” as random events.
That’s complete bullshit. I predicted them here on these pages. There will be more scandals and crises. It is inevitable. It is part of the monetary system. It is part of the perverse incentives inherent in a system that produces paper-pushers and computer desk jockeys trading paper rather than encouraging (and providing reasonable financial returns to) real people producing real stuff (like real food).
David Graeber calls this the glorification of do-nothing paper shuffling and I agree.
When you have this kind of completely screwed up monetary system there will inevitably be created more and more psycho-nerd autistic bankers on the one hand, and fewer and fewer real, caring farmers on the other.
These are economic problems with economic causes and economic solutions, not random events or problems amenable to political solutions.
In the madness that is locked in to the stupidity of the mainstream, no one can hear you scream.
I know correlation isn’t causation, but do these graphs look suspiciously similar to you?
OK this insane QE is completely out of hand.
Stocks and bonds are being bought directly by central banks around the world. The US Fed stops QE only for its colonial slave Japan to take up the task on its behalf on the day US QE ends. This will never end.
The mainstream story is that Europe is in a slump because they didn’t try QE. Rubbish. Most of the “benefit” of QE flowed to European banks if you look at the numbers.
What does this mean for investors? Well, in the short term, stocks and housing are still good bets despite insane valuations and low yields because the monetary mandarins will clearly do everything in their considerable power to prop them up.
Inequality is a major short and long term issue. Food is a major long term issue. Water is a major long term issue.
But who is looking at the long term? Not me!
Just as a quick mental note to myself in relation to this article that I’ve been working on for, well, around 10 years….
1. FRB causes malinvestment in two dimensions. It promotes overinvestment in “higher order” goods (ABCT). And it promotes Ponzi speculation in housing (Minsky).
2. Both forces combine to underprice water and land for farming.
3. The Fed has every major market manipulated so the “truth” doesn’t appear. The truth appeared in 2008. What did it show? Much lower stock and house prices. Much higher oil and commodities prices. To suppress these price signals is to suppress investment in these industries and guarantee future undersupply – all in the name of saving the financial system.
4. If this continues we will NOT have a financial crisis. We will have an environmental or food or water shortage crisis. Note: This will not cause explosive food prices. It will cause increased food contamination and food debasement scandals.
The warning bells have been silenced. So the alarm will go off too late.
Best quote to sum up the end game:
The hint of what comes is seen in the devastating situation in Venezuela, whose tragedy few are paying attention to. They are exporting their essential products (beans, rice, oil) in order to raise hard currency and to prevent a domestic currency collapse. The same will be done in the United States. The early example of exported essentials is of hayfeed for livestock, heading to China from US farms on a growing basis.