No, I’m not being over-dramatic. It is time to buckle the heck up. The resonant disconnect between reality and the pumping that is going on in the media and among supposed “experts” is at an all time historic, never been here before, Economic Mass Psychosis, HIGH.
To Quote John Kenneth Galbraith, “The majority is always wrong.” Right now the majority believe we are exiting the crisis. They are just plain old fashioned WRONG – again.
To prove my point, I’m going to show you the week in charts courtesy of the St. Louis Fed. This week, however, I’m issuing a WARNING. The evidence in these charts points to the beginning of a DEFLATIONARY SPIRAL. The PPI data comes out next week and will be a key piece of evidence in this regard. The results of a deflationary spiral will be UGLY if entered. You will see another round of deleveraging to go with locked credit markets. Equities will get hammered and the real cleansing of the economy will accelerate. This process will be PAINFUL but necessary to end the malinvestment. It will be the phase where more businesses who were hanging on HOPING for recovery will simply run out of cashflow to maintain operations. The same thing is necessary to cleanse a way over-bloated government and military.
The fallout will affect everyone. These charts are HISTORIC, they are NOT indicative of a short recession. As you view these charts, pay attention to the negative trends and look at them from a historic perspective. Many market callers are looking for immediate inflation due to the money pumping. I challenge them to point out inflation anywhere in these charts besides the money aggregates, which, by the way, are not growing at the rate they were. Those who look solely at the money aggregates are not seeing the destruction of credit which is very real and has hobbled the consumer. Never ending growth was a fantasy and is over for the time being, there is simply too much debt/credit in the system.
The pundits of green shoots will say that the economy is getting better and that the leading indicators are pointing to a dramatic recovery. THEY ARE WRONG. They were wrong in 2007 and they are wrong now. The one and only TRUE LEADING ECONOMIC INDICATOR in a debt riddled society is DEBT to INCOME. That ratio has not improved, it is worse than ever, especially at the governmental level.
Link
Yikes.
ReplyDeleteI've never been a PayPal type, as I seem to have gremlins in my computer (despite my antivirus efforts). I'd like to contribute to the blog, do we have a PO box or other snail mail thingy? That would enable those of us who are "oh so 1990's" to help pull the wagon instead of ride the wagon!
or...you can email me at squeezebunt at hotmail.com for further instructions!
Btw, for you Obama lovers, that is my account to screen out Obama spam. LOL
I know the 90% are wrong, but I wish they were right.
ReplyDeleteI guess we can't decide whether it will be inflation or deflation. No one really knows. But if history serves as an example it's usually inflation, in the end, when governments fail to honor their debts and the validity of their monetary systems come into question. Let's wait and see though. Pass the popcorn and the remote control.
ReplyDeleteI don't know of any 'majority' that beleives we are exiting the crisis. I do know of a 'majority' that believes the TV is spouting bullshit.
ReplyDeleteMaybe you should pay more attention to the level of gun sales in America, fool.
Based on my personal experience with my current friends and family, some of whom are millionaires, I would say 75% of them go by what their tv tells them, or newspaper. This group will have nothing to do with any outside sources, such as this blog or the many other blogs I follow on a daily basis.
ReplyDeleteWatching TV and believing what they hear on TV is called "perceived reality", and they are told what to think. That being said, this group mostly believes the economy is going to recover and everything will be ok. I am constantly amazed, as many of them claim to be conservative, though they do not appear to believe in any of the traditional conservative beliefs. Their beliefs parallel what the TV tells them, "War is good", govt spending is good etc.
There is going to be an awakening pretty soon, as when the SHTF, these people have made no preparations for it, they will loose almost everything as many still have big stock portfolios (they will not even consider getting into gold or silver) and I will be curious to see how they handle themselves when they have no money, food etc. and how they will make their expensive home, boat and car payments.
I am assuming this group, I am describing, is pretty much standard across the US.That would mean 75% of the population is NOT awake to what is really going on are NOT prepared for what is to come.
I suppose they will end up in FEMA camps? Or dead...
Most refuse to even consider the possibility of collapse. I talk to many during the course of the day and probably 90%+ say I am wrong or a fool to believe in such nonsense. All we can do is tell everyone what we know to be true and pray that they listen. Beyond that, regarding warning, we have fulfilled our obligations to others. We can't cure invincible ignorance.
ReplyDeleteA lot of people have bought guns, to be sure. But, how many have spent as much on food or other preparations for the coming collapse. I suppose that in the end all they will have accomplished is thinning out the ranks through war. No one that I talk to has given any serious thought to learning how to survive this. They just seem to be hoping that it will all work out. They've been trained to look to the government or someone else to always be there. This time, it will have to be us. The minority that has tried to prepare. It will be our doors on which they will be knocking. We have hard choices ahead of us, something for which we need to give deep thought. In the end, we will be held responsible for how we treat others.
It is be deflation against gold and silver but inflation against the FIAT currencies. Gold and silver will gain more buying power (deflation) but FIAT currencies will lose purchasing power (inflation). There are some countries where their FIAT currency will have minimal inflation (Canada) but they too will be hit on some level as the financial crisis will hit all countries.
ReplyDeleteCompletely agree Catawissa. I sometimes feel like Cassandra from Greek mythology -- crying a warning that no one will heed. Today will be spent updating food storage and building additional raised garden beds.
ReplyDeleteIt is too bad people cannot be fearful of the things they should really be fearful of - starvation, banking/structure collapse. Instead, the media tells us we should tremble in fear over what brown people 2500m away may be thinking about us.
ReplyDelete"Brown people"..? What the hell?
ReplyDeleteTheir just leveling the playingfield for their "new world order" eh? Gotta bring down that supereconomy, even our military will be brought notches lower in the end, make the people poor so's they'll except what their given, all in orderly fashion : ))
ReplyDeleteI saw where FASB is bringing back marktoMarket again this NOV>-that'll crash the markets huh! Exciting times we live in if u've seen it coming and already prepped
"the media tells us we should tremble in fear over what brown people 2500m away may be thinking about us." is a complete mystery to me. You explanation for the statement doesn't make any sense. Are you talking about Hilary Clinton's trip to Africa?
ReplyDeleteprepare
ReplyDeleteHere we are again everyone...
ReplyDeletegetting off track to the many images others are dishing out for us...to distract us
i want the F@#$(*&^ing blank truth about
how we got here and who's running this
show because NONE of us can make rational wise decisions for our presents and our futures, if we are slow cooking in a soup base of lies that have built upon lies.
And entire generations of this human SPECIES of liars not knowing their even lieing, or even caring about what’s coming back to them like a boomerang.
We are all in this mess because we made choices that brought us here...regardless of whether we are black brown yellow red or white, or even purple for god's sake!
and until we wake up and realize WHO WE REALLY ARE and what WE ARE DOING
and take personal responsibility for the ffects of our actions upon other beings and stop pointing the finger at each other blaming and threatening one another, we will NEVER climb out of this downward spiral of human existence. And generations to come for the rest of our eternities will relive this HISTORY over and over and over, OUR CHILDREN,
OUR SELVES.