On a long enough timeline: Decade Scale Economic Trends

Here is a good primer of where we are based on what I have to say below.

It is my theory that we, as a nation, are just now experiencing the decline that began in the mid 1960’s. This decline was subverted using currency manipulation, global military intervention, and various ‘extend & pretend’ tactics employed by the state and international banking interests.

Do not get me wrong here. I’m not putting on the tinfoil hat and saying there is a grand cabal of Rothsscarries & Ubersteins lurking in the shadows. Not at all. This is complex, long term, and very large scale maneuvers that shape the course of history.

Post World War II, America found itself in a unique and powerful position. With Europe and Asia in ruin, America possessed an industrial capacity that quickly came to dominate the world. This made her wealthy beyond anything that had come before her. This industrial might led to a litteral global domination of economic markets and political influence.

And, like all other massive centers of power and influence, an inevitable shift in that power began to unravel.

As time marched on, regional & global powers came into being. Not necessarily through military might, but through natural resources, manufacturing, trade, etc. America defended her economic interested by going to war. To quote someone, “It’s all about the cost of labor.” America used military power, like all empires before her to secure trade and markets by which to sell her goods and services, as well as, to protect sources of her raw materials to feed her industrial might.

When this eventual unrest came home in many different forms, her leaders sought an extension of this power.

Sources of cheaper labor were opened up, currencies were fundamentally changed, and a different market, as well as, world emerged.

Perceived prosperity through credit became the norm, and that decline was halted as her people prospered through decadence. Though they perceived themselves wealthy, they were not – they were merely in more and more debt.

As this is written, America is coming to the end of an almost 100 year cycle of prosperity. Boom and bust cycles.

I personally believe that this the last of those. An organized source of cheaper labor does not exist anywhere on this planet. That scheme of moving and shifting markets globally to find the next center of profit is over. Some new paradigm will take it’s place, and that will be the environment with which Americans (or whatever they will be called in the future) will have to operate in.

My thoughts. I welcome yours.

Good Macro Finance Discussion

Via Zerohedge. Fantastic as usual:

David Rosenberg, of Gluskin Sheff, notes that the multi-decade debt boom will take years to mean revert and agrees with our views that we are still in the early stages of the global deleveraging cycle. He adds that while many believe last year’s extreme volatility was an aberration, he wonders if in fact the opposite is true and that what we saw in 2009-2010 – a double in the S&P 500 from the low to nearby high – was the aberration and market’s demands for more and more QE/easing becomes the volatility-inducing swings of dysphoric reality mixed with euphoric money printing salvation. In his words, perhaps the entire three years of angst turned to euphoria turned to angst (and back to euphoria in the first three weeks of 2012?) is the new normal. After all we had angst from 1929 to 1932 then ebullience from 1933 to 1936 and then back to despair in 1937-1938. Without the central banks of the world constantly teasing markets with more and more liquidity, the new baseline normal is dramatically lower than many believe and as such the former’s impacts will need to be greater and greater to maintain the mirage of the old normal.

Further pull quote (emphasis mine):

“He adds that while many believe last year’s extreme volatility was an aberration, he wonders if in fact the opposite is true and that what we saw in 2009-2010 – a double in the S&P 500 from the low to nearby high – was the aberration and market’s demands for more and more QE/easing becomes the volatility-inducing swings of dysphoric reality mixed with euphoric money printing salvation.”

Back in 2005 I was part of a techno-security summit that featured the likes of John Dvorak, Marcus Ranum, a few of the l0pht boys, and various three letter agency spook types talking about cyber security and macro economic trends.

During the keynote, Dvorak in passing mentioned that around 2013 we will be deep into a global depression that will likely last a decade or more. When asked by a panel member what he meant, he said this (paraphrased):

“Oh yeah. The cycle will swing back and we are about to pay for all of this perceived prosperity. We will go through a period of down turn, and then the economy will super heat. When the Dow gets to 20,000, run for the hills.”

I will await that very ominous day. Dvorak’s predictions have been spot on so far. Who would have thought right? Based on that, and the last pull out from the Zerohedge piece, 2012 and beyond will at the very least prove to be interesting.

Big. Macro. Moves.

They will impact you and yours. The battlespace changes and exists not in a vacuum, but in a fluid filled suspension that is constantly morphing into something different.

and the band played on

Once again, we are treated to the same excrement, different day:

Just when one thinks American crony capitalism couldn’t hit new lows, here comes Warren Buffett and his personal puppet, the president, proving everyone wrong once more. Because if one thinks there is no (s)quid pro quo for all that “sage” advice that Buffett has been giving to Obama on extracting as much wealth as possible from future wealthy Americans (before they decide they have had enough with this crony shit and leave the country for good), one would be fatally wrong. As it turns out, it is not just natural resources and aquifer purity that Obama had in mind when sealing the fate of the Keystone XL pipeline. No – it appears there were far more relevant numerial metrics that determined Obama’s decisions. Such as the bottom line number of Buffett’s Burlington Northern, which according to Bloomberg, is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp.’s Keystone XL oil pipeline permit. ‘“Whatever people bring to us, we’re ready to haul,” Krista York-Wooley, a spokeswoman for Burlington Northern, a unit of Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc. (BRK/A), said in an interview. If Keystone XL “doesn’t happen, we’re here to haul.” And quite delighted to reap the windfalls of unfounded populist fears she forgot to add. Because while the whole “carbon-credit” multi-trillion top line expansion scheme for Goldman under the pretense of actually caring for the environment may have collapsed, it is not preventing others from trying and succeeding where even Goldman has failed.

Proving the author’s continuing mantra: “Watch the other hand.”

The chess board is bigger than you or I dear readers. Plan accordingly.

Global Movements: Iran

Arctic Patriot outlines a few things that if go into effect, will impact you greatly down the road.

Forget Iran.  Forget Israel.  Forget Iraq, Saudi, Libya, Egypt, Afghanistan, Pakistan…Forget the entire Middle East.  


Not our world, not our culture, not our business.

Our own tribe is sick and dysfunctional enough.

Should we be attacked by a hostile state, then it’s total war until the threat is gone.  Otherwise, it’s not a fight worth fighting.  I am applying my MHG logic here.  If failure is not an option, win.  If failure is a livable option, do not fight.

“Failure”, that is, a nuclear Iran, clearly is an option.  Why do I say this?  We watched idly as North Korea screamed for attention over its nukes.  Really, is a nuclear North Korea less dangerous than a nuclear Iran?

Why is Israel more valuable to us as an ally than South Korea?  Why is it allowable for South Korea’s aggressive neighbor to have nukes, but not Israel’s?  What is Israel to the US, other than a place to sink billions of dollars in “foreign aid”, stolen from you and I?

I realize this post may make many of you uncomfortable, or even angry.  So be it; it is truth as I see it.

A war with Iran and its unintended consequences in not in the interests of the united States, or their citizens.

It is, however, in the interest of the “US” national government, and their crony-capitalist bedfellows.

A war is exactly the type of band-aid solution the US government traditionally reaches for in desperation.

Good commentary as usual.


How will this affect you?

Charles Hughes Smith’s post.

Since the Shanghai market tends to lead the U.S. and other global markets, a breakdown in China’s market can be seen as a predictor of what lies ahead in the U.S. and other global stock markets.

The wheels are falling off the China story. A massive wave of malinvestment since 2008 is cresting, and the stupendous stimulus provided by gargantuan local government and private lending is expiring.

That’s what the chart is telling us if we “read between the lines.”

Like global petroleum, this will have an impact on your daily life. Got preps?