The Market's Getting a Wedgie

The "risk-on" stock market is getting a wedgie, and so is its "risk-off" counterpart, the U.S. dollar.

The U.S. stock market is getting a wedgie, and so is the U.S. dollar. That matters, as wedges tend to break up or down in a big way. Stocks are a "risk-on" trade, the dollar is a "risk-off" trade, so they are riding a see-saw with wedgies. Yes, I realize this is an unpleasant image, so let's turn to the charts.

A wedge is characterized by a compression of price into a narrowing triangle as Bulls and Bears battle over who will lead the next trend. The wedge is clearly visible on a daily chart of the S&P 500 (SPX). Note the loss of momentum in the recent uptrend as RSI, the Bollinger bands and the 20-day moving average (MA) are all trending down.

We see two wedges on this weekly chart of the U.S. dollar index (DXY, or on stockcharts.com, USD). The first wedge was traced out between May and August 2011, and it broke to the upside in early September 2011, resulting in a 10% gain in the next few months.

Now another wedge has been traced out around the key long-term line of support and resistance around 80. The direction of the break may be telegraphed by MACD, which is solidly above the neutral line and the stochastic, which is also trending higher.

Here is a daily chart look at the same wedge. Even the MACD has formed a wedge of consolidation-indecision.

Since the SPX is risk-on and the dollar is risk-off, then any move in one will likely be reflected in the other. These wedges are nearing the point of decision, so next week might be slightly more interesting than the previous three weeks.


Charles Hugh Smith on the Death of the Middle Class (this is my first interview with Kerry Lutz of the Financial Survival Network, and I greatly appreciated Terry's keen questions on the era's key financial topics.)

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Resistance, Revolution, Liberation: A Model for Positive Change will be available in a print edition later in April; buy it now as a Kindle eBook for $9.95.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution, and it combines cultural, technological, financial and political elements in a dynamic flux.History is not fixed; it is in our hands. We cannot await a remote future transition to transform our lives. Revolution begins with our internal understanding and reaches fruition in our coherently directed daily actions in the lived-in world.

---

Thank you, Alan D. ($61), for your superlativelyly generous contribution to this site--I am greatly honored by your support and readership.

Thank you, John H. ($25), for your most excellently generous contribution to this site--I am greatly honored by your support and readership.

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Wages and Consumption Are Both in Long-Term Downtrends

Employment, wages, income and consumption are all in long-term downtrends, and the policy of grandiose stimulus funded by debt has failed spectacularly to reverse these secular trends.

Courtesy of frequent contributor Chartist Friend from Pittsburgh, here are four charts of wages, income and consumption. The charts depict changes from a year ago (also called year-over-year) and the percentage of change from a year ago. These measure rates of change as opposed to absolute changes, and so they are useful in identifying trends.

As I noted in Why the Middle Class Is Doomed (April 17, 2012), advanced economies are caught in the pincers of rising costs of essentials (not just food and energy but education and medical care) and a global oversupply of labor that has been "localized" by the Internet, i.e. previously localized labor can now be performed anywhere on the globe.

The build-out of Internet infrastructure that culminated in the dot-com boom boosted employment, wages and consumption, and the credit-housing bubble of the mid-2000s also boosted income and consumption. Now that these temporary conditions have faded, what's left is the relentless chewing up of traditional industries by the Web as distributed software boosts productivity while slashing the number of people required to create value.

What's remarkable about the first chart is the increase in volatility in recent years: the changes in wages and salaries are increasingly dramatic. This might be reflecting the dynamics of the global economy pulling wages lower while massive financial-stimulus policies of the Central State and bank (the Federal government and the Federal Reserve) act to artificially boost wages with trillions of dollars in borrowed/printed money.

The downtrend is clearly visible in this chart: lower highs, lower lows.

Real disposable personal income includes government transfers such as unemployment, which have soared in the "recovery." Higher taxes reduce disposable income, so we can anticipate lower personal income as bloated government spending is slashed and taxes rise.

Real personal consumption rose on the back of unprecedented Central State/bank stimulus, but the boost provided by this injection of financial sugar is over and the economy is about to suffer glycemic shock as the costs and unintended consequences of this grandiose attempt to restart a virtuous cycle of "growth" with trillions of dollars in borrowed and printed money limit future injections of stimulus.

We can anticipate declining employment, wages, income and consumption as consequences of long-wave global trends, over-indebtedness and failed policy, i.e. doing more of what has already failed spectacularly.


Charles Hugh Smith on the Death of the Middle Class (this is my first interview with Kerry Lutz of the Financial Survival Network, and I greatly appreciated Terry's keen questions on the era's key financial topics.)

---

Resistance, Revolution, Liberation: A Model for Positive Change will be available in a print edition later in April; buy it now as a Kindle eBook for $9.95.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution, and it combines cultural, technological, financial and political elements in a dynamic flux.History is not fixed; it is in our hands. We cannot await a remote future transition to transform our lives. Revolution begins with our internal understanding and reaches fruition in our coherently directed daily actions in the lived-in world.

---

Thank you, Royce M. ($100), for your outrageously generous contribution to this site--I am greatly honored by your support and readership.

Thank you, Kendall H. ($50), for your monumentallyly generous contribution to this site--I am greatly honored by your support and readership.

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Crony Capitalism and the Expansive Central State

Crony Capitalism flourishes in an economy dominated and controlled by a Central State.

Crony capitalism arises when an expansive Central State dominates the economy.The Central State can then protect crony-capitalist perquisites, cartels, quasi-monopolies and financialization skimming operations of the sort which now dominate the U.S. economy's primary profit centers.

If we step back, the larger context is the purpose and role of establishing a State to protect its citizens from foreign and domestic predation and exploition.

The Central State is granted the sole power of coercion by its membership (citizenry) to protect the membership from the predation of individuals, concentrations of wealth and other subgroups seeking monopoly. They grant the State this extraordinary power to insure that no subgroup or individual can gain enough power to dominate the entire membership for their private gain and to protect freedom of faith, movement, expression, enterprise and association.

Granting this power to the State creates a risk that the State itself may become predatory, supplanting the parasitic elements it was designed to limit. To counter this potential, the State has self-limiting mechanisms such as an independent judiciary, armed forces under civilian control, etc., a separation of powers such that no one institution or agency can dominate the State and thus the nation. The goal is to create a stable but flexible equilibrium between comparably powerful institutions, all of which are tasked with enabling and defending the members’ freedom of movement, expression, enterprise and association against the encroachment of powerful subgroups.

In this sense, the State is ultimately an immune system for the nation, a system designed not to dominate but to recognize and limit potentially destructive forces within the ecosystem (nation). To monitor and limit the influence of individuals and subgroups within the State itself, an internal immune system of regulation, auditing and enforcement is built into each institution.

The State is thus designed to be a self-regulating immune system, protected from abuse of power by its own internal immune system.

We can understand the tradeoff of the citizenry in establishing a State as a risk-gain hedge: the risk of granting extraordinary powers to the State is offset by the gain of being freed from local or foreign tyrannies and the predation of criminals and exploitative Elites. This establishment of liberty is worth the risk of a self-regulating State becoming predatory.

The self-regulation mechanisms are supposed to act as a hedge against a runaway parasitic State.

We can properly understand the State as a concentration of risk and gain: its extraordinary powers of coercion render it a great risk to the membership, even as its protective shield of liberty offers the freedom to pursue individual happiness and self-fulfillment.

Since the State is a concentrator of both wealth and power, it also concentrates the risk that ontologically accompanies concentrated power and wealth: with such great power, the abuse, repression, exploitation and predation which the State could unleash on its citizenry are fearsome.

This concentration of wealth and power makes the State the primary attractor in the economy for those seeking to increase their private gain. What better way to enforce a monopoly than to persuade the State to limit your competition? What better way to lower the risk of enterprise than to persuade the State to grant its own contracts to your company? What better way to amass a fortune than to harness the coercive powers of the State to your own self-interest?

The State is thus the ultimate lever within the ecosystem. While $1 million buys little influence within the market, if spent to influence State policy then it will buy more power than $10 million spent in the marketplace.

There is a great irony in this concentration of power in the State: the power is concentrated to protect the citizenry from predation and exploitation, but that concentration becomes an irresistible attractor for all those seeking to increase their private gain via monopoly, cartels, collusion, fraud and other forms of predation.

The wealth that can be concentrated in private hands is not limited or self-regulated, and so private concentrations of wealth inevitably exceed the threat-gain threshold of individuals within the State. This structural imbalance leaves the State ontologically vulnerable to the influence of private wealth. Once this wealth has a foothold of influence within the State, it can then bypass the State’s internal immune system and become the financial equivalent of cancer: a blindly self-interested organism bent solely on growth at the expense of the ecosystem as a whole.

This financial/political cancer of single-minded self-interest creates a self-reinforcing feedback loop within the State: the more power and influence it gathers, the more it can weaken the State’s own immune response to its rising dominance. This erosion of restraint further frees it to increase its influence, which then gives it more power to weaken the State’s immune system, and so on, until private concentrations of wealth, in partnership with self-serving State Elites, bypass the State’s immune response.

At that point, the collusion of private wealth and State Elites comes to dominate the entire ecosystem. The State’s function as the system’s immune system has been subverted by private wealth and the State’s own extraordinary powers have been directed to serve the self-interests of private Elites and their cronies within the State.

Another name for the collusion of private wealth and State Elites is crony capitalism, which has reached its apex in an economy dominated by an expansive Central State (i.e. the Federal government).

This excerpt was drawn from Resistance, Revolution, Liberation: A Model for Positive Change (Kindle edition)


Charles Hugh Smith on the Death of the Middle Class (this is my first interview with Kerry Lutz of the Financial Survival Network, and I greatly appreciated Terry's keen questions on the era's key financial topics.)

---

Resistance, Revolution, Liberation will be available in a print edition later in April; buy it now as a Kindle eBook for $9.95.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution, and it combines cultural, technological, financial and political elements in a dynamic flux.History is not fixed; it is in our hands. We cannot await a remote future transition to transform our lives. Revolution begins with our internal understanding and reaches fruition in our coherently directed daily actions in the lived-in world.

---

Thank you, Dominic V. ($20), for your superbly generous contribution to this site--I am greatly honored by your support and readership.

Thank you, Kendall H. ($5/month), for your splendidly generous subscription to this site--I am greatly honored by your support and readership.

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Why the Middle Class Is Doomed

The dwindling middle class, squeezed by higher taxes and costs, is losing its political voice.

The middle class is doomed by some very basic dynamics. Economic historian David Hackett Fischer laid out the fundamental dynamic in his book The Great Wave: Price Revolutions and the Rhythm of History.

By assembling price and wage data stretching back hundreds of years, Fischer found that cycles of economic growth spawned population growth, an expanding number of workers entering the market economy (as opposed to the non-market subsistence economy) and a demand-driven expansion of essential commodities such as grain and energy (wood, coal, oil, etc.).

In the initial phase, wages rise and commodity prices remain stable as supplies of essential goods expand and the demand for labor pushes up wages.

But this virtuous cycle reverses when the supply of essentials no longer keeps pace with rising population and demand: the price of essentials begin an inexorable rise even as an oversupply of labor drives down wages.

We like to think that modern economies have escaped this cycle, but that is hubris and denial, not reality, for the 20th and early 21st centuries have been characterized by inflation (the U.S. dollar has lost approximately 96% of its value since 1900) and wages have stagnated for the past 40 years: Soaring Poverty Casts Spotlight on ‘Lost Decade’:

According to the Census figures, the median annual income for a male full-time, year-round worker in 2010 — $47,715 — was virtually unchanged, in 2010 dollars, from its level in 1973, when it was $49,065.Overall, median household income adjusted for inflation declined by 2.3 percent in 2010 from the previous year, to $49,445. That was 7 percent less than the peak of $53,252 in 1999.

We can see this steady decline in wages in this chart:

The more recent fall-off is depicted in this chart:

Notice that the only age bracket with rising incomes is the 65 and over cohort; everyone younger than 65 has seen their income slashed. And this is assuming "official" inflation is accurate; if it understates real inflation (loss of purchasing power), then the income declines are actually much more severe than charted here.

As I have observed many times before, the middle class filled this gap between rising costs and stagnating wages with debt. This chart reflects this reality:

Household debt has soared far above wages. (Note that this chart is not adjusted to inflation; in real terms, wages have been flat for decades).

Now that the average household is heavily indebted with student loans, vehicle loans, credit card debt and mortgages, its ability to leverage a declining income into more debt is seriously impaired. So filling the gap between rising costs and declining wages with debt is no longer a possibility.

Living within their means and servicing their mountains of debt removes most families from the middle class. As a rough metric, I define middle class as any household with the following attributes:

1. Meaningful healthcare insurance, either provided by an employer or paid by the household

2. Significant equity in a home or other real estate

3. An income and expense sheet that enables the household to save at least 6% of its income

4. Significant retirement funds, either employer-provided or 401Ks, IRAs, income property, etc.

5. The ability to service all debt and expenses over the medium-term if one of the two primary household wage-earners lose their job, i.e. either the household has significant savings or its debts are modest compared to the household income.

Anything less than this basket of attributes is too precarious to qualify as middle class. These basics of financial security were standard-issue for the middle class in the postwar era.

A household could have all of the above attributes on an annual income of $40,000, or they may not have them with an income of $80,000, as "middle class" means some measure of financial security, i.e. owning assets and carrying a debt load that isn't large enough to crush the household balance sheet if income declines.

We can further understand the precariousness of many American households by examining IRS tax data. The top 25% of taxpayers--34 million workers out of a workforce of 160 million and 140 million wage earners--pay almost 90% of all Federal income taxes. Where Do You Rank as a Taxpayer?

An adjusted gross income (AGI) of $66,193 or more puts you in the top 25% of earners. The top-earning 25% of taxpayers reported 65.81% of all AGI and paid 87.30% of total federal income taxes ( $755.9 billion).How much do you need to make to be in the top 50% of earners? Just $32,396. Fall below that level and you are in the bottom half, along with nearly 70 million of your fellow taxpayers. All told, that group earned just 13% of the income reported on 2009 tax returns. And they coughed up 2.25% of all the income taxes paid.

All these numbers mask the sobering reality that 38 Million Workers Made Less Than $10,000 in 2010-- Equal to California's Population (The Atlantic magazine)

If we dig into the data, we find that the top 25% (34 million workers) is really the top 33%, as only 104 million tax returns actually pay any Federal tax--and as noted above, the bottom 70 million paid a scant 13% of all Federal taxes while the top 34 million paid 87% of all income taxes.

Many Unhappy Returns? (America's aggregate 1040, from IRS tax data).

In 2009, the IRS reported 140.5 Million personal income tax returns were filed. From this starting point, 36.3 Million returns (or, one quarter of the total) are lost to the tax base because of losses, exclusions or deductions. By line 43, taxable income, only 104.2 Million returns survive. In aggregate dollar amounts, total income from all sources falls from $7.7 Trillion to $5.1 Trillion — a decline of more than one-third. This latter amount is what truly constitutes the tax base, since it is the income ultimately subjected to tax.

Of course Social Security taxes are paid by low-income workers, but this amounts to 7.6% of income--not zero, but not too punishing compared to Federal tax rates.

What all this reveals is that the middle class has lost its political power. Roughly 40% of all households receive a check or equivalent from the Federal government, while at the top Power Elite crony capitalists skim capital gains and pay an average of 17% of all income.

The 100 million dependents on the Federal government (Central State) vote to support their share of the largesse, regardless of the consequences to future generations, and the Power Elite crony capitalists buy political protection for their cartels and financialization scams. The dwindling middle class ends up paying most of the taxes even as their percentage of the population falls to the point that their political voice is drowned out by more numerous dependents and Elites that both favor the Status Quo.

The Federal government is supporting its dependents and its crony-capitalist Elites with borrowed money: $1.5 trillion every year, fully 40% of the Federal budget. It is in effect filling the gap between exploding costs and declining income, just like the middle class did until they ran out of collateral to leverage.

The dwindling middle class, now at best perhaps 25% of the workforce, has been reduced to tax donkeys supporting those above and below who are dependent on Federal largesse.

Fisher found that this cycle ends in transformational political upheaval. No wonder; even as the class paying most of the taxes shrinks and is pressured by higher costs, the class of dependents expands as the economy deteriorates and the super-wealthy Power Elites continue to control the levers of Central State power.

I address these dynamics in various ways in all my books:

Resistance, Revolution, Liberation (Kindle edition)
An Unconventional Guide to Investing in Troubled Times (print edition)
An Unconventional Guide (Kindle edition)
Survival+: Structuring Prosperity for Yourself and the Nation
Survival+ (Kindle edition)
Survival+ The Primer
Primer (Kindle edition)
Weblogs & New Media: Marketing in Crisis
Marketing in Crisis (Kindle edition)

---

Resistance, Revolution, Liberation will be available in a print edition later in April; buy it now as a Kindle eBook for $9.95.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution, and it combines cultural, technological, financial and political elements in a dynamic flux.History is not fixed; it is in our hands. We cannot await a remote future transition to transform our lives. Revolution begins with our internal understanding and reaches fruition in our coherently directed daily actions in the lived-in world.

---

Thank you, Dominic V. ($20), for your superbly generous contribution to this site--I am greatly honored by your support and readership.

Thank you, Kendall H. ($5/month), for your splendidly generous subscription to this site--I am greatly honored by your support and readership.

Read more...

When Does This Travesty of a Mockery of a Sham Finally End?

Intersecting global crises cannot be papered over with artifice and propaganda for long.

We all know the Status Quo's response to the global financial meltdown of 2008 has been a travesty of a mockery of a sham--smoke and mirrors, flimsy facades of "recovery," simulacrum "reforms," and serial can-kicking, all based on borrowing and printing trillions of dollars, yen, euros and yuan, quatloos, etc.

So when will the travesty of a mockery of a sham finally come to an end? Probably around 2021-22, with a few global crises and "saves" along the way to break up the monotony of devolution. The foundation of this forecast is this chart I prepared back in 2008:

This is of course only a selection of cycles; many more may be active but these four give us a flavor of the confluence of crises ahead.

Cycles are not laws of Nature, of course; they are only records of previous periods of growth/excess/depletion/collapse, not predictions per se. Nonetheless their repetition reflects the systemic dynamic of growth, crisis and collapse, and so the study of cycles is instructive even though we stipulate they are not predictive.

What is predictable is the way systems tend to follow an S-curve of rapid growth with then tops out in excess, stagnates in depletion and then devolves or implodes. We can see all sorts of things topping out and entering depletion/collapse: debt, financialization, the Savior State, Chinese auto sales, oil production, and so on.

Since each mechanism that burns out or implodes tends to be replaced with some other mechanism, this creates the recurring cycle of growth/excess/depletion/collapse.

I plotted four long-wave cycles in the first chart:

1. The credit expansion/renunciation cycle. a.k.a. the Kondratieff cycle. Credit expands when credit is costly and invested in productive assets. Credit reaches excess when it is cheap and it's dumped into malinvestments, and as collateral vanishes then credit is renunciated/written off.

This is inexact, but obviously the postwar cycle of expansion has ended and is now rolling over into the collapse/renunciation stage.

2. The generational cycle of four generations/80 years described in the seminal book The Fourth Turning. American history uncannily tracks an 80-year cycle of crises and profound transformation: 1860 (Civil War), 1940 (world war and global Empire) and next up to bat, 2020, the implosion of the debt-based Savior State and the financialized economy.

3. The 100-year cycle of inflation-deflation described in the masterful book The Great Wave: Price Revolutions and the Rhythm of History. The price of bread remained almost constant in Britain throughout the 19th century. In contrast, the 20th century has been characterized by inflation--the U.S. dollar has lost approximately 96% of its value since the early 20th century.

Another characteristic of this cycle is wage stagnation: people earn less even as costs of essentials rise, a dynamic that inevitably leads to political crisis and upheaval.

The end-game for inflation is destruction of fiat currencies, i.e. hyper-inflation or complete loss of faith in paper money. This is of course "impossible," just like World War I, the Titanic sinking, the global meltdown of 2008, etc. Impossible things happen with alarming regularity.

4. Peak oil, which does not mean the world runs out of oil, it simply means oil production no longer rises to meet demand and eventually declines even as new fields are brought online.

Many observers are confident that fracking and other technologies will enable current energy proligacy to continue unabated as the U.S. replaces oil and coal with newly abundant natural gas. Not only will this lessen American dependence on non-U.S. oil exporters, but domestic energy will spark a jobs boom as well: Fuel to Burn: Now What?(via Joel M.).

“The reduced vulnerability of North America — and the world market — to oil price spikes also has deep consequences geopolitically, including the reduced strategic importance to the U.S. of changes in oil- and natural gas-producing countries worldwide,” Mr. Morse said in a recent 92-page report called Energy 2020. ”Pressures towards isolationism in the U.S. will likely grow, with consequences for global stability that can only just begin to become understood.” 

“In a world of high energy prices, the potential economic activity generated by this wave of new hydrocarbon production is extraordinary and should strongly boost national output, increase incomes, create wealth, stimulate consumption and create jobs,” according to Citigroup. 

Mr. Morse of Citigroup forecast that North American oil production could reach an astounding 27 million barrels a day by 2020, almost twice the rate of production of 15 million barrels a day at the end of 2011. Production from the United States could grow to 15.6 million barrels a day by 2020, up from nine million barrels a day in 2011. 

If that trend continues, the growth in oil and natural gas supplies in the next decades could turn the United States into a top energy exporter, rivaling some members of the Organization of the Petroleum Exporting Countries. Natural gas could be sold to Mexico and Canada (because exploiting oil sands is so energy-intensive, Canada might have to import natural gas to produce its oil). Refined petroleum products, and even crude oil, could find customers in Europe and Latin America. Coal could be exported to China. 

With less gasoline demand, the nation’s surplus refining capacity means the United States is already exporting petroleum products — like gasoline and diesel. The United States is now the top exporter of refined products, just ahead of Russia.
James Brick, an energy analyst with Wood Mackenzie, a research firm, said in a recent report that by 2030 the United States could end up exporting 500 million tons of coal a year, 3.2 billion cubic feet a day of natural gas and 2.5 million barrels a day of oil products.

All this surplus energy in North America sounds wonderful, but that doesn't mean the world as a whole has escaped Peak Oil. Even if these projections turn out to be accurate, that expansion of production will not replace the loss of production as supergiant fields in Mexico, the North Sea and the Mideast enter the depletion phase. Yes, technology can extract more oil, but technology is costly. The days of cheap natural gas may have arrived, but the days of cheap oil are numbered.

How all this plays out is unknown, but even raising U.S. production by 10 million barrels of oil equivalents a day--quite a challenge in the real world despite the easy-to-pen hype-- might not be enough to maintain current production levels. Since several billion more people desire the U.S.-type lifestyle of energy profligacy, then what are the consequences of the mismatch between global demand and supply?

We can also posit that "good-paying jobs" in developed economies are also tracking an S-curve. The post-industrial decline in labor has many causes, but the Internet is a key factor going forward as the Web leverages all sorts of productivity gains without the pesky overhead, costs and trouble of workers.

This reality was masked by the initial boom in Web infrastructure that topped out in 2000, and again by the credit-fueled global malinvestment in real estate that topped out in 2007. Now that those bubbles have popped, the reality of long-term employment stagnation can no longer be masked.

Credit bubbles are not engines of employment, they are only engines of mis-investment and wealth destruction on a grand scale.

A number of other questions arise as we ponder these dynamics. How "cheap" will all that cheap energy be to those without full-time jobs? How will 100 million workers support 100 million retirees, pensioners, welfare recipients and parasitic Elites as costs rise and wages stagnate?

The Status Quo is unsustainable on a number of fundamental fronts. How long it can maintain the facade of stability and sustainability is unknown, but the global willingness to squander four years on artifice and propaganda suggests that another decade will fly by and the end-game will be at hand whether we approve of it or not.

I address these dynamics in various ways in all my books:

Resistance, Revolution, Liberation (Kindle edition)
Survival+: Structuring Prosperity for Yourself and the Nation
Survival+ Kindle edition
Survival+ The Primer
Primer Kindle edition
Weblogs & New Media: Marketing in Crisis
An Unconventional Guide to Investing in Troubled Times (print edition)
An Unconventional Guide Kindle edition.

---

Resistance, Revolution, Liberation will be available in a print edition later in April; buy it now as a Kindle eBook for $9.95.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution, and it combines cultural, technological, financial and political elements in a dynamic flux.History is not fixed; it is in our hands. We cannot await a remote future transition to transform our lives. Revolution begins with our internal understanding and reaches fruition in our coherently directed daily actions in the lived-in world.

---

Thank you, Jan L. ($20), for your most-welcome generous contribution to this site--I am greatly honored by your support and readership.

Thank you, Rodney T. ($5/month), for your splendidly generous subscription to this site--I am greatly honored by your support and readership.

Read more...