Here's why: Do you know what a financial ticking time bomb looks like? It's that chart above. No one in a position of power will say it publicly. That's why you're so blase about it. This chart is old... we are now well over 375% of GDP. This is total credit - gov't and private. Can you spot the secular bull market? I'll give you a hint. It was debt driven. And like the monster it is, it needs more and more debt to live and grow. Feed Me!! is what it screams at every politician. And they comply and they feed the beast. Yeah, I'm being a little over the top. But please explain to me how this thing can continue to grow when production/income does not? Look at this chart and you will see something staring right back at you... In 1944 there was a need for a new global monetary regime. Same in 1971. Guess what will be needed soon? Yes, a new global monetary regime. It's inescapable. But this time, it won't be peaceful and there will be much global turmoil. It's inescapable. Aside from that, I take it day by day and trade this volatile market. As long as it moves, it's all good. But when the SHTF, well, that system of mine won't be working too good.
Are you blind? California, Arizona and Nevada have official unemployment rates at 12% or near it (meaning real U6 type unemployment is probably close to 18% or more). The country is getting decimated. National unemployment is higher, in real terms, than at any point since the 30s. California is technically BK. Seattle, formerly immune, is laying off hundreds of teachers, and closing dozens of schools. This has never been about whining or me - I'm in great shape; thanks for your concern, and ease your mind. No one here has even come close to attempting to set forth any specifics as to where jobs for the 30 million unemployed Americans are going to come from; not a sector, an industry, a business - nada. Long-term unemployment is at historically record levels. The real unemployment rate is 19% and growing in the U.S. Tax revenues of all types, income, capital gains, property, have fallen at the greatest pace since records have been kept. Many states are technically insolvent, and the federal government is floating debt at the highest postwar level (closing in on 14% as a % of GDP). Bank assets are toxic waste, and getting worse with time - not better. Just look at YoY asset valuations on residential and commercial properties which securitizes much of their loan base. And the real shit storm is yet to come, as a dam of REOs is still waiting in the wings. These banks are being kept alive by changes in accounting rules, taxpayers dollars to replenish their losses Q to Q, and a nice spread thanks to artificially low interest rates (which is pounding savers). Unlike 1980-1983, the people laid off are NOT finding replacement jobs, LET ALONE replacement jobs at anywhere near their former salaries and benefits. You are drinking the Bernanke Kool-Aid. Keep drinking it, as the government keeps scrambling for more time, in the hopes that some reflation of the economy helps asset values, and the millions of now broke Baby Boomers now retiring with little to show for their careers. You are clueless in a way unfathomable if you possibly compare this to the early 80s. We were in far better shape then, as interest rates and inflation were the problem, rectified by Volcker, and not permanent, systemic job losses running close to 7 million (of the high wage variety) in just the last 9 years - 30 million total.
You don't participate in the arena. And you whine too much. And you just missed a 50% share market rally. So Boo-fucking-hoo. The headlines are bad. Yawn.
Fantastic chart, outstanding points. It simply amazes me that some people resist the simple reality that we will need another paradigm event to take place, exactly in line with the examples you provided (Bretton Woods & Nixon taking us off the Gold Standard) before anyone knows what the 'new world' will look like, or that a paradigm event is necessary given the incredible economic and monetary distortions that exist. We are still in the midst of deleveraging a 70 trillion USD global real estate bubble, and they think a return to normalcy is in the offing. Wait till they get a taste of the credit market implosion.
That is actually good data, and is the reason we're now in an era of instability. But that doesn't preclude periods of calm, as I said. Also, it doesn't mean we're never going to be prosperous again, or that it will necessarily take as long as it did in the Thirties to get back to prosperity. It might, but we don't know, and acting like we do doesn't really get anyone anywhere. I am sure we'll have a new monetary regime before all this is over, but once again, that's not exactly the end of the world. The dollar standard has gone through two iterations so far. The next shift may be to a non-dollar standard, but that, once again, is not necessarily a bad thing.
This is what you fail to grasp. If and when this market (any market) turns most of us will be short before you can post another whine bag article. Until then you are missing out while we make money.
.................................................................................. These comments are getting closer.... One has to rescue VALUATION ON BANK'S BOOKS.... So there are at least two approaches.... 1) Attempt to replace with "the old".... or 2) Attempt to replace with "the new".... The "old" propels and reinstates the same problems as before..... The "new" eliminates the old problems with sustainable solutions.... How ? Via new corporate equity whereby earnings are used to value ....and with the exceptionally low interest rates ....thus propels valuation....yet but from a sustainable base.... What is the solution ? Two fold.... 1) A defragmented nongameable direct access exchange whereby all instruments have zero tax consequences.....dividends.....st,lt gains.... 2) A 10/5 C tax only via state mandate..... The valuations would dwarf all previous cumulative high side numbers.....and would be from sustainable companies ....making things that people all over the world need.... And no....I am not joking.... .............................................................................. What does 1, 2) do ? Eliminates..... Lobbyist system Gamed exchanges IRS SEC ........................................................ and.... Forces govt. to downsize.... Offers the baby boomers another solid chance to build assets.... Rescues the 18 to 35 year old 35% unemployment rate with real jobs....not makeshift.... Establishes needed individual freedoms Establishes a US manufacturing base The list gets longer and longer....
Libertad... Every time you mention the 10/5 Consumption Tax only (which is a death to the IRS mandate) I just tingle all ova... I hope in my life time i see the IRS choke to death... in agony...