Archive for the “L” Shaped Economy Category

Venturing A Few Unfounded And Unwarranted Predictions (July 13, 2015)

Posted in "L" Shaped Economy, Bankruptcy, Banks and Banking System, Collapse, Depression, Elections, Foreign Policy, Gold, Gold Standard, Kleptocracy, Money, Pensions, Quantitative Easing, Recession, SDR - Special Drawing Rights, Security State, Silver, Silver Standard, Supernova Dollar, Zero Interest Rate Policy on July 13, 2015 by

. . .

3          “Pensions will be even more problematic.”

4          “When the stock markets reset catastrophically, pensions will need to be reset correspondingly.”

3          “We will need to muster the collective intellect and imagination to craft a provision allowing states to file bankruptcy.”

. . .

3          “Interest rates cannot be allowed to rise and will not be allowed to rise beyond a nominal .25 percent.  Any greater rise would result in devastating financial and economic consequences.  Some nominal rise will be imposed to proclaim that interest rates can indeed rise above zero without negative consequence.  Those citizens who planned to fund a retirement with interest-bearing instruments have been sacrificed and will continue to be sacrificed without even a vote or even a debate on the policy.”

4          “Sacrifices have to be made.  Few folks are concerned or even aware that the Federal Reserve rather than the market sets interest rates.  The way I see it the Petrodollar will continue to rise as other currencies decline and those with the wherewithal seek the safety of the Petrodollar.  At this time.  The Petrodollar’s status as the world’s reserve currency and fundamentally weak foreign economies are a double magnet for money.  When the world establishes its own world currency such as a system of Special Drawing Rights (SDR) and circumvents the Petrodollar, the Petrodollar will explode and decline precipitously in value.  As I describe it, the ‘Supernova Dollar.’  The last American export – the Petrodollar and resulting inflation – will not be imported by the world.”

3          “Along those lines, the physical dollar will disappear from circulation in the United States before it disappears from the world stage.  The U.S. government and large corporations are slowly discouraging and will ultimately outlaw the use of dollars as ‘legal tender’ and as a medium of exchange.  Possession of gold and silver bullion by private citizens also will be outlawed.  The government will outsource to large corporations the issuance and control of the Universal Electronic Benefit Transfer (UEBT) cards to its subjects.  Current credit and debit cards will be re-purposed seamlessly.  The IRS will send a statement each year or even each month dictating one’s tax obligation and deducting the amount owed directly from one’s government controlled account.  As a consequence, everyone’s inclinations, transactions, and movements will be monitored and manipulated as necessary.”

4          “On the other hand, possession of gold and silver in any form by foreign citizens and governments will be the law and settled practice.  The West has readily abandoned gold and silver to an East that has eagerly absorbed the precious metals at rates that have been manipulated down by the West.  And gold and silver will be a component of the Special Drawing Rights.”

3          “The West will no longer be able to use paper and electronic transactions to manipulate the prices of physical gold and silver.”

4          “If the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system and the Petrodollar are circumvented, the West will be less able to use paper and electronic transactions to manipulate prices.”

. . .

3          “The nations in the oil-producing regions will not fight over the oil they have but over the water they do not have with far less involvement of and intervention by the United States.”

4          “Nation-States will also disappear as thriving and functioning communities and be replaced by Corporation-States that dictate policy.  The United States Congress took the lead and sold out to become the ‘Citigroup-Congress’ recently.  More than just naming rights are involved.  Current nations are just entities that can be manipulated and maneuvered to go to war with each other when necessary.”

3          “Along those lines, shares in United States Senators will be sold more openly akin to shares in corporations.  The news will announce that shares in ‘Senator Larry Jenkins, Inc.’ are up 3.1 percent today on news that he will sell his vote for the Big Project.  The John Roberts Supreme Court has endorsed the two-step business plan.  If you pay a politician directly for a vote, you are in trouble; if you pay an intermediary that pays a politician for a vote, you are blessed.”

4          “Notions of freely-established supply and demand for goods, services and commodities will yield to quotas per subject each month.  Without functioning markets and with regular and systematic market manipulation and intervention, notions of inflation and deflation will be antiquated.  World population will continue to grow and resources will continue to be more precious which under the old paradigm would fuel inflation.  However, people will simply do without.”

3          “Along those lines, capitalism is a system that socializes the costs of activities and privatizes the profits.  The end stage is the emergence of a very small cabal who control all resources and allow the subjects access to just enough resources to subsist in a police state that throttles any debate or dissent.”

4           “The treatment of Cyprus and Greece are intermediate stages in the process.”

3          “The future is not unpredictable.”

. . .

[See the efforts to eliminate cash at

[See the e-commentary at Monitoring The Masses: The Card And The Chip (January 12, 2015).]

Bumper stickers of the week:

If you do predict a definite event, do not pick a definite date.  If you do pick a definite date, do not predict a definite event.  Unless you want to.

In the past, if you could predict the future accurately, you could make a fortune.  In the present, you can predict the future astutely, but you cannot do much to protect your fortune or your future.  Even if you want to.

“The best way to predict your future is to help create it.”  Attributed to Abraham Lincoln

There are few warning signs on the off ramp down the road to serfdom.

What about global climate change?

O’Bama Revisited (January 17, 2011)

Posted in "L" Shaped Economy, Bailout/Bribe, Economics, Federal Reserve, Military, O'Bama on January 17, 2011 by

. . .

F          “Cold day on the Mall two years ago.  Can’t say that things will be much warmer this week.”

G          “It’s still cold and is getting colder.  The day will live in infamy.  Neville Chamberlin O’Bama.”

F          “Not going to throw in Hussein for good measure.”

G          “That’s silly.  His first name was Arthur.  He gets a C-.”

F          “Arthur?”

G          “Neville C. O’Bama.  After the tax sell-out, I called the White House and the delegation and told them that I have had it.  I unsubscribed from seven political e-mail lists.  My contributions are too miniscule to matter, yet I told them that I am not making any more contributions.  No bumper stickers, no canvassing, no money, no more.”

F          “No one subscribes to my political views, so I can’t even unsubscribe from e-mail lists.  We confronted a Hobson’s choice in 2008.  O’Bama was and is a centrist.  He’s the better we could do.”

G          “He hasn’t challenged the massive continuing transfer of wealth to a small elite who do not contribute to the economy.  It is almost as if he got into office and discovered that there are certain unwritten overriding rules that cannot be undermined or even challenged by anyone in the office.  The cabal of trolls in the basement of the White House call the shots.”

F          “He hasn’t.  And you may be right.  The economic fundamentals are worse than they were in September, 2008.  The poison is still flowing in the financial system.  The banksters know that they will be bailed out by both the Republicans and the Democrats and will never need to make bail for their crimes.  The recent bailouts have been detailed and delegated to the Fed.”

G          “When is someone going to realize that the aggregation of wealth in the hands of a very small group is actually an impediment to economic growth?”

F          “When the Nobel Prize Committee signals that it will give a Nobel in Economics for the conclusion.”

G          “The expenditures employ yacht builders and polo saddle makers, but not ordinary unemployed butchers, bakers and brick makers.”

F          “Yacht builders and polo saddle makers need jobs.  Politics is about compromise.  Compromise is not pretty.”

G          “Compromise is different than capitulation.  He has capitulated.  Someone said that the country may need a war to pull us out of the economic depression.  He and we have two of them going that have not done much positive.”

F          “Is the third war a charm.”

G          “Just watch.  America can be broken.”

. . .

[President Dwight D. Eisenhower delivered his “Military-Industrial Complex” farewell speech/warning 50 years ago about the “unwarranted influence, whether sought or unsought, by the military industrial complex.”]

[MLK Day]

Bumper sticker of the week:

Hope (I hope, hopefully)

Rational Fear: Still “Unusually Uncertain” (November 8, 2010)

Posted in "L" Shaped Economy, Bailout/Bribe, Banks and Banking System, Bernanke, Depression, Federal Reserve, Greenspan, Kleptocracy, Technology, Unemployment, Volker with tags on November 8, 2010 by

. . .

K         “Think about it.  Some maintain the blind conviction that the business cycle is ordained by nature like the tides to rise after it falls.”

J          “Faith in nature.  This season is bad so that the next season will be good because that is the way it is.  Good luck.”

K         “Some desire to return to unrestrained personal consumption and unbridled economic growth.  Even if it is attainable at this time it is not sustainable over time.”

J          “Faith in unchecked consumption.  With oil peaking and a world population that has not peaked, the prospects are not promising.  America had its opportunity to consume.  Other countries, particularly China and India, now want and have earned their opportunity to consume.  If the oil holds out.  And if the coal does not kill us.”

K         “Some believe that new technology will be pulled out of the hat and pull us out of this mess.”

J          “Faith in technological salvation.  The technology sector likely will continue to grow but not enough to propel the entire economy.  The tech world is producing some sexy developments and neat gadgets.”

K         “I’ve always supported free trade when it is truly free.  Decades ago, I could see that globalization would shift massive numbers of American jobs overseas.  They said the solution is to train and retool the America workforce.  The workforce is not retrained and retooled and may not be retrainable and retoolable.  Not many commentators in academic economics or in the financial press have a clue.”

J          “It is one thing to listen to Greenspan and know that everything he says is wrong, yet who is getting it right.  Knowing which way not to go in a maze is not the same as knowing which way to go.  Volker has a clue, yet he is on the sidelines.”

K         “Bernanke* has a clue.  Now that monetary policy has effectively failed, he is enacting what is effectively fiscal policy.  Fiscal policy is the province of the legislature, the Congress.  But Congress is broken.  The Humphrey-Hawkins Full Employment Act, an act of Congress, requires the Fed to promote full employment.  Perhaps he is actually trying to stimulate employment.”

J          “But there are no jobs, now or in the future.  Quantitative Easing II is nothing more and nothing less than TARP II implemented by the Fed rather than Congress.  The Fed’s purchase of bonds is nothing more and nothing less than a slick way to provide another bribe and bailout to Wall Street.”

K          “That is hard to dispute unless there are a few random hires here and there.  And he continues a tradition at the Fed of lying or at least deceiving the public.  He can do something.  He and the Fed regularly issue ‘Remarks’ and ‘Speeches’ on all manner of topics.  He should direct the Fed to issue a finding that a single bank with deposits and assets of more than 100 billion is a clear and present danger to the American economy and to the security and well-being of the Republic.  If a bank or other financial institution does not enter into an Enforcement Action with the Fed, close the resources of the Federal Reserve to the bank or financial institution.  In effect, require banks to downsize to manageable sizes.  They must be small enough to fail and to play well with others.”

J          “Won’t happen.  Our democracy is now a kleptocracy.”

K         “That won’t help employment, however.  But he could pull it off.  He can be bold.  He would have to play all his capital.  But for us citizens, however, the only things we have to fear are so many very real fears.”

. . .

Bumper stickers of the week:

The only things we have to fear are so many very real fears.

Don’t end the Fed, mend the Fed.

“And as things fell apart/Nobody paid much attention.”  “(Nothing But) Flowers” – Talking Heads

“This country’s hard on people, you can’t stop what’s coming.”  No Country for Old Men movie (2007)

The Depression is Over!? (September 20, 2010)

Posted in "L" Shaped Economy, Depression, Economics, Recession on September 20, 2010 by

. . .

E     “The Depression is over.  So they say.  In fact, it was only a recession and has been over since June 2009.  So says the National Bureau of Economic Research, the NBER.”

U     “How does that work?  Can I get a job, go back to work and collect a paycheck retroactive to June, 2009?  That is my benchmark.”

E     “Call them.  The NBER is generally respected as institutions go.  They pegged it as just a recession that was over in June 2009.”

U     “Praise the Lord and pass the paycheck.”

E     “A well-informed citizen should understand the NBER economic model; I don’t.  There may not be enough time even late on Saturday night to analyze the economic model.  However, I follow every fundamental economic factor.  The economic fundamentals are worse than they were two years ago.  The NBER conclusion seems wrong.”

U     “I don’t understand the economic model, but I know the conclusion is wrong.”

. . .

Bumper stickers of the week:

Recessions are so overrated.

2 + 2 = 5

V, W, U, S or . . . L: The Shape of Things to Come (Nov. 16, 2009)

Posted in "L" Shaped Economy, Economics on November 16, 2009 by

Everything that goes down must go up, they say.  It is one of Newton’s or Van Braun’s laws.  Some are saying that the performance of the economy will resemble the letter “V.”  Down then up.  Some say a “W.”  Down then up then down then up.  Some say a “U” with perhaps a long trough then up.  Some say an “S” because the fundamentals are so squirrelly. The logic undergirding the arguments is that the economy will recover because it has always recovered; that is what economies do.

What if the economic performance will be reflected by the letter “L?”  Lima.  Loser.  Down then flat then flat then flat.  What if the economy never recovers or only partially recovers?  Past economic recoveries are explained by scrutinizing the economic fundamentals at the time.  The problem now is that the American economy is fundamentally broken.  None of the optimists can posit a model that reflects the actual fundamentals in the economy.  Everyone would like to see a recovery, yet there does not seem to be anything that will drive and sustain the economy in the intermediate run.

The federal government owes staggering sums to the Chinese, etc.; corporations owe staggering sums to their bond holders; Americans owe and owe and owe staggering sums.  The threats to the economy are far greater than they were in the Fall of 2008 when everyone got apoplectic.  Uncollectable credit card debt, growing housing foreclosures, vacant commercial real estate and hollow corporations obligated for trillions in debt are among the coming economic tsunamis.

Invest in a wheelbarrow.  To haul your bread (money) from your banker to your baker to buy a $100 loaf of bread.

[See the “e-ssay” dated Oct. 22, 2007 entitled “Greed on Steroids” that discusses among other matters the looming intermediate term problems with leveraged buyouts and the consequences for the economy in particular employment.]

Bumper sticker of the week:

“Everything that goes up must come down.  But there comes a time when not everything that’s down can come up.”      George Burns