On Economy

     

 

 

Past the Point of No Return

Adventures in depravity are nearly always confronted with the unpleasant reality that stopping the degeneracy is much more difficult than starting it.  This realization, and the unsettling feeling that comes with it, usually surfaces just after passing the point of no return.  That’s when the cucumber has pickled over and the prospect of turning back is no longer an option.

 

Depravity and bedlam through the ages. The blue barge of perdition in the lower middle ferries the depraved and degenerate to their final destination, a small slice of which can be glimpsed above… [PT]

 

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Recapitulation (Part XVI, the Last)

Since the announcement of demonetization of Indian currency on 8th November 2016, I have written a large number of articles. The issue is not so much that the Indian Prime Minister, Narendra Modi, is a tyrant and extremely simplistic in his thinking (which he is), or that demonetization and the new sales tax system were horribly ill-conceived (which they were). Time erases all tyrants from the map, and eventually from people’s memory.

 

According to the Global Slavery Index, an estimated 18 million Indians, equivalent to half the total population of Canada, are bonded, modern slaves.

Photo via patrika.com

 

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No-one Cares…

“No one really cares about the U.S. federal debt,” remarked a colleague and Economic Prism reader earlier in the week.  “You keep writing about it as if anyone gives a lick.”

We could tell he was just warming up.  So, we settled back into our chair and made ourselves comfortable.

 

The federal debtberg, which no-one cares about (yet). We have added the most recent bar manually, as the charts published by the Fed will only be updated at the end of the quarter. The devastation wrought by the recent hurricanes in Texas and Florida gave Congress a convenient excuse to postpone the debt ceiling debate by until at least December and to wave through a more than $300 billion jump in total federal debt without much ado. It is worth noting that while the growth of the debtberg has accelerated over time, growth in US economic output has concurrently slowed down rather dramatically. The main obstacle to maintaining this state of affairs is that it will sooner or later become mathematically impossible. Perhaps the fact that people don’t care reflects a decline in mathematical literacy? Per experience, throwing more money at public education won’t help – and soon it may no longer even be possible anyway. [PT] – click to enlarge.

 

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Improving the World, One Death at a Time

If anyone should have any questions about whether the United States of America is not the most aggressive, warlike, and terrorist nation on the face of the earth, its latest proposed action against the supposed rogue state of North Korea should allay any such doubts.

 

Throughout history, the problem with empires has always been the same: no matter how stable and invincible they appeared, eventually they ran into “imperial overstretch”. At some point, the exercise of maintaining an empire simply becomes unaffordable. The deterioration usually happens very gradually, so the ruling elites will always be reluctant to admit that something needs to change. Students of history always observe with astonishment that no-one seems to be learning from history, but one’s contemporaries are always driven by  the particular pressures and exigencies of the times they live in, and trapped in their own bubble of delusions. The first sign that things are beginning to go haywire is when the frequency with which the printing press is resorted to as a means to obtain funding increases noticeably (the functional equivalent of the surreptitious reduction of the precious metals content of coins used in the more distant past). [PT]

 

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Lasting Debt

“Rule one: Never allow a crisis to go to waste,” said President Obama’s Chief of Staff Rahm Emanuel in November of 2008.  “They are opportunities to do big things.”

 

Rahm Emanuel looks happy. He should be – he is the mayor of Chicago, which is best described as crisis incarnate. Or maybe the proper term is perma-crisis? Anyway, it undoubtedly looks like a giant opportunity from his perspective, a gift that keeps on giving, so to speak. [PT]

Photo credit: Ashlee Rezin / Sun-Times

 

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Preventing the Last Crisis

Clear thinking and discerning rigor when it comes to the twisted state of present economic policy matters brings with it many physical ailments.  A permanent state of disbelief, for instance, manifests in dry eyes and droopy shoulders.  So, too, a curious skepticism produces etched forehead lines and nighttime bruxism.

 

The terrible scourge of bruxism and its potentially terrifying consequences. Curious skepticism can lead to the darnedest things, which is why Big Brother strongly recommends that citizens remain in a medication and cable TV-induced apathetic stupor. To make this happy outcome easier to achieve, stagnation in real wages was successfully introduced a number of moons ago; forced to work to exhaustion just to keep their heads above water, citizens tend to be more docile in their shrinking free time. [PT]

 

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Broken Promises

POITOU, FRANCE – “We live in a slow-growth world,” summarized a canny friend, “but with high-growth debt and high-growth asset prices.” Today, we turn to a report on Zero Hedge for further precision.

But we’ll get to that in a minute. First, let’s begin with less precision. The promise of the Trump administration was, in a nutshell, that it would look ahead and improve the future before we got there. How?

 

President Trump: so far the future proves more resistant to MAGA-type improvements than originally expected. That is not necessarily the Donald’s fault, but so far it is definitely a fact. [PT]

Illustration by  Les Lea Ellison

 

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Waiting for the Flood

We have noticed a proliferation of pundits, newsletter hawkers, and even mainstream market analysts focusing on one aspect of the bitcoin market. Big money, institutional money, public markets money, is soon to flood into bitcoin. Or so they say.

 

A weekly chart of bitcoin – it actually looks pretty “flooded” to us already. [PT] – click to enlarge.

 

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Sotto Voce Declarations

Senate Majority Leader Mitch McConnell woke up on the wrong side of the bed on Monday.  Who could blame him?  His summer vacation’s been ruined.  President Trump’s been riding him all month like a pack mule.

 

 

The spoiler of Mitch’s summer vacation. People should generally avoid finding themselves on the receiving end of the master Tweeter’s fire and fury mode if they suffer from conditions such as geographic distance insufficiency or complete lack of nuclear deterrent syndrome. [PT]

 

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Lighting a Candle

POITOU, FRANCE – On Tuesday, Donald Trump, president of all the Americans, said his country would spend more blood and money trying to force the Afghans to do what it wants them to do, whatever that is.

 

If you are destined to stay on the Afghan plantation forever, might as well plant something. [PT]

Cartoon by Steve Bell

 

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Decolonization

The British Empire was the largest in history. At the end of World War II Britain had to start pulling out from its colonies. A major part of the reason was, ironically, the economic prosperity that had come through industrialization, massive improvements in transportation, and the advent of telecommunications, ethnic and religious respect, freedom of speech, and other liberties offered by the empire.

 

The colors represent the colonies of various nations in 1945, and the colonial borders of that time – click to enlarge.

 

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Milestones in the Pursuit of Insolvency

A new milestone on the American populaces’ collective pursuit of insolvency was reached this week. According to a report published on Tuesday by the Federal Reserve Bank of New York, total U.S. household debt jumped to a new record high of $12.84 trillion during the second quarter. This included an increase of $552 billion from a year ago.

 

US consumer debt is making new all time highs – while this post GFC surge is actually relatively tame, corporate and government debt have in the meantime exploded into the blue yonder. Nevertheless, this means consumers are also highly vulnerable to the coming crisis (which will look different from the last one, but will be perceived as just as, if not more devastating). [PT] – click to enlarge.

 

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