US employment numbers turned up last month with the help of some temporary $20 per hour jobs in the decennial census, at the same time retail sales jumped 1.6%, way outpacing any plausible rise in personal income. “Hooray!” cried the markets, the US consumer is alive and spending again. American trade figures deteriorated sharply as well, even though the oil import bill was down, as other imports grew rapidly while exports languished, making it very clear that the US had reclaimed its old position as the world’s consumer of last resort. The US recovery is now looking more like one of the standard post-World War II exercises with a distinct resemblance to the two “jobless” ones that started in 1992 and 2002. As a result of the very low interest rates, non-existent inflation, and rather weak dollar, the economy is in a sweet spot, a Goldilocks situation for corporations and wealthy families. Unfortunately this positive spell does not cover a significant portion of the country’s economic actors. The losers are the middle and lower-middle classes as well as the state and local governments and those who depend on them for jobs or their largesse. They are the first to lose as a result of the shrinking availability of debt financing – the de-leveraging of America. This economic recovery is different because these groups are already struggling even though liquidity is super-plentiful and riskfree rates are near zero. They are too leveraged to borrow more. Usually those who are going to be the victims don’t begin getting into trouble until Fed tightening starts, but this time they are in bad shape already.
The global risk markets are taking advantage of this excess liquidity and the Goldilocks situation. As the market players, whether in corporate or individual form, are among the blessed, they can and are rebuilding their leverage and playing the game. It’s like 2008 never happened, just a one in a thousand perfect wave, and the market participants have forgotten, just like they did in 1998 and 2003. As there is incredible liquidity available, those who can get their hands on it will use it. The authorities who saved the economy from destruction in 2008 are either busy patting themselves on the back or fighting for their own national interest.
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Taylor says his models are telling him to continue to bet against the dollar. He predicts the dollar might lose about 40 percent of its value in the next three years against the Federal Reserve's trade-weighted currency index, which measures trade with 38 countries including Canada, China, Mexico and members of the European Union. The prediction is partly based on his charts of the U.S. real estate cycle, which he says has a major impact on the dollar and will continue to point south for the next couple of years, dragging down the currency with it. He also says the price of a barrel of crude oil might reach $250 in 2011, further eroding the strength of the U.S. economy and the dollar.
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your first link does not work. it takes you to a page that says "not here"
ReplyDeleteThis is the correct link: http://www.zerohedge.com/article/step-aside-roubini-fx-concepts-john-taylor-new-dr-doom-2011-will-be-worse-2008
ReplyDeleteGoddammit EA! Get the links right or else! LOL
ReplyDeleteI do have a question. Glenn Beck says that we are in the eye of a storm and the other wall is going to hit, just as your article does. So, now I see it. More from what your article reported. This is all without the volcanic ash that is now threatening Europe. What are they in for now? What about the airlines and their layoffs not figured into the coming scenario? What is the financial impact of what has happened so far? I hear that the airlines are down $200 million a day. If this lasts for a prolonged period, what is going to happen to their operations and the companies that service them, or the tourists? Then the new cost of shipping medicines and foods? This is an entire nightmare to Europe!!! There will be a lot of things that we can't get from Europe if that happens, but I don't think that there is anything we really need from them and I think we won't suffer from the volcanic ash as Europe would. I remember the island of Montserrat before their volcano blew. I am beginning to think that the future is going to be a lot rougher all around.
ReplyDeleteThe future's so bright, I gotta wear shades
ReplyDeleteI don't sit around and worry about what could happen, or what might happen........and what probably never happen. Life is too short people, and way too many just sit around day after day, waiting for armageddon.
Can you imagine? We have been saying these things for what....20 years now? There have been many that were gloom and doom that have died since then I can only imagine some of them were sitting there on the death bed thinking "why did I dwell on that crap all those years with all that wasted energy when I could have been living life?"
No, this shit is too depressing for me, and I am sick of using all my energy worrying about what might happen......life is a gift and I am sick of wasting it
5:57am: I do believe in prep. with food, other items for 3 mo. or more (hurricanes, civil unrest, etc). I know of several who died in the past decade, who were really involved in prep. (silver coins, wood stoves, etc). All their preps were apparently in vain as family members tossed all except the PM's. I don't prep. more than 3 mo. now, and I no longer have PM's since y2k was a farce. We have lost this country, and civil war will come soon enough. When you hear that 100,000 troops are being sent to Afgan. then brace yourselves! Martial law and terrorist attacks will happen, and all hope will be gone forever.
ReplyDeleteAnyone with half a brain doesn't sit, worry and waste their lives about armageddon. They prepare, they take advantage of it, they make money on doom. Its just like having an uptick in the economy you make money. In a downturn you do the same. You're just so used to good times, you don't know how to take advantage of the bad times. You're called a sheeple. You follow the crowds.
ReplyDeleteIt will be interesting to watch and see how the situation with disrupted travel due to the volcano in Iceland, has a domino effect on various economic facets, both in Europe and in the States, in the immediate and long range futures. I personally would not want to attempt to fly in a plane right now, given the concerns about safe travel due to the ash cloud. Travellers are being affected in so many ways, while stranded, and unable to get home right away. The emotional toll, financial toll if unable to get back to their jobs; physical toll from exhaustion, to say the least. People living near the volcano are affected as well, that goes without saying.
ReplyDeleteAt the hospital where I work, our CFO told us that while 2010 is 'better' than 2008-09, that 2011 & 2012 does not bode well for the economy. All we can do is live simply, pay down debt, cultivate contentment with what we already have.
5:57,
ReplyDeleteWe are all slaves - slaves who relish their own position in life do not do so because they feel good about it, they do so because of ignorance or fear. One doesn't know they are a slave since they can't read, the other learns it and pretends it isn't so.
Your life quality like everyone else's in this world is nonexistent; to focus on being happy implies one is not happy, why else do you need to focus on it?
and 5:57,
ReplyDeleteWhat probably won't happen? It most likely will happen - very soon. The future looks bright? Most youth in this country are now addicts of either alcohol, narcotics, text messaging or the internet. The average teenager sends over 100 text messages a day... who do you think is going to run anything in the future? Yet alone call it bright?
If you want to say nothing might happen and ignore it, that is fine, but don't out of your own fear (and therefore suppress it) make idiotic statements about the future being bright when it is anything but bright.
Laura and Annette,
ReplyDeleteHow are you preparing in regards to feminine hygiene products? I have been listening to Glenn Beck and he really has me believing. I truly believe the bottom's about to fall out and I want to prepare, but I don't know how to prepare when it comes to feminine hygiene. Let's say a potential crisis lasts a year, or more, and I only have three months supply of feminine hygiene products. What do I do to combat that "not so fresh feeling?" How do I control bold flows and foul odors? We must find a way to naturally mitigate such a hygienic calamity. Any advice or information you have would be greatly appreciated.
11:21 Paula: Fortunately, I'm 65 and don't have a feminine hygiene problem in 13 years. There is a surgical procedure (outpatient) as a friend got it done. The lining of the uterus is destroyed by laser, (endometrial ablation). This was done because so much blood was lost, but I would get it done anyway asap, if I was younger. See your Dr.
ReplyDeleteIf you want to know what you'll be living in in 2 years from now, take a mental trip to Bosnia-Serbia-Croatia in 1996.
ReplyDeleteUrban warfare environments.
Barely functional society of any kind.
Movement of most essential goods abandoned.
Paula - you might want to do a search on Diva Cup or Moon Cup. There's several types out there. I'm just looking into it now. There are also several people who make washable products.
ReplyDeletenovasure , yep stops woman monthly issues, jeezz how this plays into the dropping economy I dunno. this site is sumptin else.
ReplyDeleteI have the linning , novasure done myself,, it's a neat thing, no issues, .... ( gals)
I am always very careful when someone asks about female products. Often it is a man masquerading as a "woman" who just gets his sick sexual kicks out of discussing this with other women. And women fall for it every time. How many of you women on this board fell for this amazes me. America's men are so into porn and perversion, you need to be careful of what you allow yourself to talk about. A real woman has local people to check with...like their doctor? Watch out for the sickos out there masquerading as women who want to know all your personal habits. I've seen it before!!
ReplyDeleteWhat is that guy talking about? Low credit interest--that's only for the banksters. The rest of us are paying 30% on credit cards. Low inflation? You're kidding. Everything is going up in price or is being repackaged. Even the soup I buy has been watered down. And when gasoline goes above $3, it will only get worse.
ReplyDeleteIt is a simply a depression. 1929 all over again. Today the deficit
ReplyDeleteis approaching 100% of the GDP (14 Trillion dollars). 50 million in poverty. The stock market doing well. The real unemployed and under employed numbers are hard to say. During the 1929 Depression the deficit became equal to 125% of the GDP. An undetermined number of people in poverty. It has been said unemployment was at 25%. That depression lasted from 1929 to 1945 (16 years). Just as it was then and as it is today there is an economic disconnect between the average worker and corporate America (also the rich). The latter believes everything is going well. While Mr. and Mrs. America continue to struggle at the expense of corporate profits. Nothing has changed from the 20's, 30's and 40's.
wake up
ReplyDeleteamerica sold its debt through the fraud
fed reserve Iceland told them to suck smoke
other countries bought it up hook line and SINKER
infowars com
henrymakow com
ohcanadamovie com
www.gigisup.net
www.canadafreepress.com
looking at the economy now through eyes of the blue collar,the people that actually support the whole of the economy, government is not doing it anymore,sooner than later all spirilling world economies are going to hit with a mighty crash.
ReplyDelete