Every now and then – as a writer – there’s a chance that something will be ,’skipped over’ which the writer thinks is terribly apparent on the face of it, but upon reflection is based on the writer’s near certain knowledge that the reader will be able to keep up with dot-connecting at near warp speed. That doesn’t often happen, so this morning (*with apologies for not laying out the dots in more obvious fashion in Wednesday’s report) I’m going to hand a little more meat on the concept of “Depression-Era Thinking Visible, which was the top story/most important concept change I noticed on Wednesday morning.
To make this easy, I’m going to actually throw down a whole bunch of dots for you and lead you through the connections to avoid confusion.
Dot #1
The January 24 issue of Peoplenomics made it perfectly clear what my expectations are for the present period forward several years…as we slide to the bottom of the Second Depression.
“Decline starts here, doesn’t end this year and we see Down under 4,000 before the year is out. A bounce early next year after a low this year of….hand me a dart, wouldja? Uh…3765.8 on the Dow. Then a rally to (another dart?)….uh….7,223.79 and then a Wave 5 decline to Dow 783.”
Since that report, although we’ve seen a couple of rally attempts, the market hasn’t gone much of anywhere and the put options I bought have been up as much as 27% although in fairness, they’re presently up less than 10%. Nevertheless (and this is not trading advice so don’t whine at me later, you’re a grown up and your money is yours to deploy as you will), it seems to me that the majority of the bounce off the March 2009 lows has a better than even chance of being IT and a longer deeper decline lays ahead.
Dot #2
Some very good people I know…I mean extremely bright, talented, innovative folks in the money field have lost their jobs. One writes the most savory www.mindonmoney.wordpress.com and the other, Trader Jim Goulding got pink-slipped this week up in bond fields of Chicago.
The thing about Trader Jim’s being cut loose that bothers me is that I’ve told you many times about his excellent free ebook “Winter is Coming“. He’s an excellent trader and trading coach, yet he reports that when it comes to hiring nowadays up in Chicagoland Bond Trading World, the only folks in high demand are “quants” – quantitative analysts – who might be able to squeeze fractions of pennies on massive volume, but strategic trading? Forgitaboutit. Not in vogue.
Goulding’s resume is on line here if you know anyone who needs a group of traders managed or some serious risk management handled.
My observation (and it may be wrong) based on dozens of similar dots over the past year or two is that there is a fundamental change in how investing is handled in play.
We saw it coming along slowly at first as some of the major stats like M3 was “disappeared” by the Fed. True, it’s been reincarnated by Trader Bart over at Now and Futures, but don’t go looking there before you’ve finished breakfast: The annualized change rate for M3 is now running about 4% negative on an annualized basis.
Do I have to scream this at you? OK, then…
“DEFLATION IS OUT THERE!!!”
Which is why I have been telling anyone who will listen that my personal strategy (nut not advice) is to balance your risks so as to be impervious to a high rate of inflation or a high rate of deflation.
Which is why some money on property which can produce a little bit of income, some money in US Treasuries (as long as government is intact, they should have some return) and some precious metals to balance off the risk that government will have to resort to hyper-inflation in a year (or three) to create enough jobs to propel us out of the mess we’re sinking into.
A reader looked at yesterday’s report and sent in a note which needs clarification:
“What escapes the discussion is a fundamental problem of economics: IF people really DO cut back on their spending, it actually LENGTHENS the amount of time taken to recover. Sometimes best to shut up. ”
Say what? The Prez is not allowed to speak about values that made this country great?
It certainly is not consumption, borrowing to the hilt and indiscriminate spending. Is that not what got us into trouble in the first place? Have you looked at the exploding debt, relative to GDP since 1998? Every crisis was counteracted with more easy money from Easy Al and Ben. So what’s wrong with saving rather than continuing to consume and deferring the burden unto our children? It is precisely this now-now-ism that got us into this mess in the first place.
Want to be clear here: I’m not critical of the Obama administration’s ‘you don’t go to Vegas’…I’m simply saying that we’re seeing a process – one that Nicholas Kondratieff thought was unavoidable: At some point the return to core values (thrift & savings) collide with the desires of the bankster class and one faction of the PTB that wants to follow the myth of prodigious and persistent growth and deny the reality of economic cyclicity which the return to Depression Era “Thinking brings.
This is neither good nor bad. It just is.
Jim Goulding’s work in “Winter is Coming” suggests the bottom of the present ‘recession turned Depression’ won’t be along until sometime around 2014. I’m not trying to be critical of the Obama administration on economic policy (that’d be too easy). Instead, I’m trying to chronicle as we go how the rhyme with the first depression is laying out in this one and note that in Depression 1.0 government officials tried to guide financial behavior and it could be argued that their policy responses just made things worse.
The reality – best I can see it for all the media fog – is that this administration knows that the only way to kick-start the economy is with a whole lot of easy money but they lack the political capital to do what’s necessary and with headlines about how marginal democrats are starting to distance themselves in campaigns this year, and folks like Nouriel Roubini using terms like “political capital” it’s evident to me that we’re now into the acceleration to the downside of Depression 2.
Whether people want to get straight and come to terms with that reality is another matter. My main point was that pushing thrift now from the highest policy levels amounts to stepping on the gas in a car that’s just gone over a cliff. May not change the outcome, but it draws attention to who took over as driver once the car was clear of the cliff’s rim which happened in Bushtober of 2008.
No, UrbanSurvival is not a place of “now-now-isms” that got us into this mess.. It’s about watching the economy, driven off cliff, estimating its trajectory, figuring out an approximate landing zone, and then trying to figure out in advance how to crawl out of the wreckage.
No hurry, though. If Jim Goulding’s right, Robin Landry’s work is right, my consigliore’s work is right, and if my own well documented writings here are anywhere near right, we’ll be in decline for a couple of more years. Or has the reality of the ‘jobless recovery’ somehow escaped you, or hasn’t it sunk in yet?
WuJo: Code?
A couple of days back (or was it last week?) I had a link to an airport runway which when viewed with Google Earth seemed to be packed with vehicles. But a reader who looked at the strange places were there were no vehicles inferred something else:
“George, when I first looked at “closed” base and saw the SUVs parked on runways…first thought was it looked like the old computer punch code cards, why are there gaps in the grouping of the cars? why not fill in and why leave a space behind. if you were to get a vehicle they would come from the sides, not middle ???? strange…code”
Lacking our ability to make scalar communications system, are we trying to communicate something to off-worlders by laying our vehicles on a closed airport runway in punch card fashion? Makes a helluva plot for something..
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Send your comments to george@ure.net
Shop Till Your Drop Department:
Peoplenomics This Week
The “Art” of Social Engineering
I have only written about Directorate 153′s social engineering mission a couple of times previously; once when its existence could be hypothecated in the wake of September 9/11 (Peoplenomics #6, Dec. 1, 2001) and we covered the hypothetical hiring of a new fellow at the Directorate – an economics/applicant named simply Rick in our September 5, 2004 report #150. As you’ll recall, we hypothecated that a new head of strategic economic planning for the world’s hidden perpetrators of ‘peaceful war’ had been hired from senior global banking ranks in order to ensure social engineering and orchestration of global banking went smoothly. In today’s report we look at how that project has been going or late (hypothetically) and look ahead to future inflection points where terrorism/social distracters may again be desired by the PTB. Let me emphasize again, this is all hypothetical.
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Cookie Video
The folks at Maxa Research have put together a short video (sound track by guess who?) that shows the Maxa Cookie Manager. You can see it here.
I don’t usually get all whipped up about software, but this is one of those dandy tools that just simply works great. First thing I put on my new computer when I got it was Avira Anti-virus and Maxa Cookie Manager (MCM). Either follow the on-screen download instructions of simply click:
Once you try it out, to upgrade to the fully functioning version, just click the upgrade button (!) on the upper right hand side for the $35 unlock to get it to remove even those nasty and highly intrusive ‘non-browser specific’ cookies. Bonus: You computer may run faster.
Not for Mac’s: MCM does support the Safari Browser, but that does not mean it is compatible with Mac OS. Maxa-Tools only support the Windows world….so far. Give them time…
“Live on $10,000″ A Year
Having a hard time making ends meet? (Like who isn’t, right?) A good starting point to better match up income with outgo is our $10 e-book “How to Live on #10,000 a Year…or less!”
It’s an automatic download. It’s written in an information dense style: The whole thing runs about 65 pages, but it gives you a vision of how to not only live on the cheap, but also how to migrate up the economic foodchain if you have a little hustle left. A bonus section called “How to Build Anything” should instill confidence if you’ve never taken on a home improvement/home creation project before, too….. Click here for the index and details.
MyGroPonics
My commodity broker JB Slear and I have written a simple book to get you started on high density hydroponics. It’s an example of how someone with a little creativity, access to a few ‘dollar stores’ and willing to try out some new farming techniques can grow an amazing amount of produce sin a very small space – like even an apartment balcony (if it gets some sunlight). Sound interesting? It’s just $10 bucks here…
Pass It On
A different take on things – that’s what you’ll find here most mornings. If you know of anyone who might also like our content, simply click here and send a link to them. Or, if you hated what you read, send the link to all your ‘worst enemies’. Like they say in Burbank, “Ain’t no such thing as bad press…”
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Last week’s report is here. For back issues of this site, click here.
