Wednesday, December 11, 2019

Greatest Fraud Ever

In order to believe that this is anything other than the biggest fraud of our lifetimes you have to either be brain dead or a con man. In far too many cases these days - both. Too many people nowadays believe that non-stop lying is perfectly acceptable. The president and his loyal acolytes for example. This lesson will fix that assumption. Permanently...

One year ago in December, the Fed imploded the casino with a quarter point rate hike. The so-called "greatest economy in U.S. history" couldn't handle a 2.5% Fed funds rate. Making it BY FAR the worst economy in U.S. history, for those still keeping track of reality.

FRED: Capacity Utilization

Capacity utilization has been trending down for forty years straight. As underemployment grew rampant:

One year later, the Fed has unwound three quarters of the 2018 rate hikes. Therefore everyone can breathe a sigh of relief. We can stop worrying about the real economy and focus back on simulated prosperity.

The denialist fantasy of the day is that the Fed's successful "mid-cycle adjustment" exactly coincided with the milestone mark for the longest expansion in U.S. history.

This extraordinary feat is either due to unprecedented skill OR unprecedented mass buffoonery.

One thing we know with certainty, is that most people today believe that it's unprecedented skill. Which is proof that we are witnessing unprecedented mass buffoonery. 

The other thing we know with certainty is that the Fed can't afford to be wrong.

"We're at the middle of the cycle"

"Wall Street analysts say the 5G wireless upgrade cycle will benefit Apple (AAPL) and communications chipmakers in a big way starting next year"

"Bank of America also said Apple's 5G iPhone will be a positive catalyst for wireless chipmaker Qualcomm (QCOM)."

Globalization has generated forty years of non-stop deflation and eroding capacity utilization in the developed nations. What I call "underemployment": The continual replacement of good jobs with junk jobs, making up the difference with debt. Along the way, debt has been necessarily fully conflated with "wealth". People believe they are owners when in fact most are merely renters. What we have today is rented prosperity. 

Asset bubbles have been tremendously efficient at transferring wealth from the majority to the few. Be that Bitcoin schemes or S&P 500 index bubbles. The majority rush in at the end and hand off their wealth to a small minority cashing out. We've seen the same thing over and over again in this cycle. 

Under Globalization, the hardest working people get paid the least. And have no upward mobility. And yet still somehow otherwise intelligent people believe this model is "sustainable", despite decades of failure.

That is the unaffordable assumption. 

That and believing Trump is the "saviour".

"I thought with his track record for bankrupting casinos, he could borrow us out of this mess. All it would take is record someone else's money"