The Not So New Newspeak

Orwell reference for those of you who didn’t read the book.

Article which motivated this post.

The timeless paradox of Schrodinger’s Cat, though after reading this, I’m beginning to question Quantum Theory as a whole. Lest we digress…

The bit I’m referring to:

Just spent a record high amount at the gas pump for this time of year? The BLS says you didn’t, and after all when it comes to reality, the BLS has a right of first refusal. The just printed headline CPI came at 0.4%, just in line with expectations of 0.4%, while core CPI of 0.2%, missed expectations of 0.3%. That’s right: not only is inflation meaningless, it is less than expected, leading to surge higher in stocks, bonds and the EURUSD. As for those items which are once again soaring in prices such as food and gas? Luckily, those can be hedonically adjusted by everyone to virtually zero. (wait? You still pay your mortgage or rent? Sucker!) Remember: the iPad is deflationary.

While some of this is like the political numbers game that the news outlets constantly play, there is, as always a shred of truth at the core. That truth is simple: Your currency is decreasing in value, sometimes exponentially, and therefor, commodities you use to, you know, live, are increasing in price.

It is true that economics can get complicated, this however, is not one of those times.

Dear readers, this impacts your way of life. This will impact the battle space going forward, and how your tribe fails or succeeds.

A government that will blatantly lie through one of its functionaries today when things are still pretty good, will magnify that to an order of magnitude when things get worse. Newspeak is the order of the day, and will be the vision of the future.

To clarify something I feel is critical regarding why I post so much econ related content:

  1. There is a wealth of fodder about it.
  2. It will impact you & yours going forward.
  3. It is the biggest picture view I can find.

I believe we are about to go through at least two decades of misery – globally. Life in America is going to radically change. The decadence we have known since we destroyed global industrial production during WWII will end. Life will be harsh, and an entire generation is likely to be decimated.

It is up to us to mitigate that damage by understanding the trajectory we are on and adapting solutions to counter that damage.

The ‘first right of refusal on reality’. Think about that dear readers. Times are still good. I would venture to guess that if you are reading this post in a western nation, you went to sleep in a bed last night with your hunger and thirst satiated. Again, think about what that propaganda would look like when unemployment is at 30% and inflation is spiraling out of control.

 

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What Did You Expect to Happen?

Americans using credit for basic necessities.

The Matson household is not a big proponent of credit. We tend to save, buy used, and whenever possible, save the difference. We are not however, militantly opposed to credit. Sometimes it can be an asset, though like a loaded firearm or chainsaw, you need to be wary, careful, and suspect of it at all times.

Keeping outstanding consumer debt is kinda stupid, but again, sometimes positive cash flow winds out over a giant lump sum purchase on depreciating assets. This is my opinion won long and hard by the school of hard knocks and life’s little lessons – I seriously do not welcome yours. YMMV…

The info in the above article does not surprise me in the slightest. The crack addict will do anything to maintain his supply despite not having resources to get it. There is always a way.

The new poor in America have DVD/Bluray, big screens, notebooks, and various other accoutrements that even western Europeans find excessive in their upper classes. Like and “Democracy” we are decadent beyond any reasonable scope and are about to wake up to a reality that is harsh by the past two generations standards.

 

Inputs/Outputs

I’m late to the party of this one, the post being a few weeks old.

John Robb is smart guy. Check this out. My commentary follows:

My day job consists of being part of the leadership team of a medium sized business. I learned long ago that the industry that the business operate in means very little and that you have to think of the business as an entity that has certain needs and performs certain ways when you manipulate variables. Those B-School exercises that everyone eventually tires of, pulling levers and such for results, are essentially what running a business is. There are of course soft, relational aspects of it, but the care and feeding + exercise regimen affect how it performs more than anything else.

Where I currently spend the majority of my day is a business with certain challenges that reflect the title of this post and reference heavily what Robb says in his post.

In short, due to several reasons, we have issues with what is coming in is less than what is going out. There are of course ways to alleviate this with credit and various other vehicles at the disposal of said business, but in the end, it’s the efficiency that gets you. That equation, like many other universal constants, must balance.

The economy is exactly the same. Credit vehicles are OK when used properly despite what Dave says. But, also to Dave’s credit, they are hardly, if ever, used properly.

We as a nation and as a larger, global community are is a precarious position. Seemingly on the precipice of destruction, always wondering what next black swan will come to push us over the edge.

The shift from what you know today and experience as your reality is about to occur. To survive and prosper, you need to learn how to adapt to that change and profit.

In the meantime…

Got preps?