Saturday, December 19, 2020

Buyer Beware Third World Values

In 2020 the U.S. achieved a fully virtual economy that is solely the fiction of monetary hallucination...

Those of us who have warned of the slippery slope of debased values know that there is now far more at stake now than Ponzi markets. After all, money will come and money will go. Economies can be rebuilt. However, along with this casual attitude towards financial corruption has come a casual and unnoticed moral collapse. Many bloggers rail away at the elites for their plundering of the masses, however these observers never blame the masses themselves for accepting continuous bailouts of billionaires as capitalism. What this era proves is that democracy doesn't work in an Idiocracy. 
And why not fight this continual descent into squalor? Because, it was the path of least resistance.

Now, we have a bifurcating society. Those who are regressing towards a Fascist ideology. And those who are regressing towards a Marxist ideology. The center can't hold. There is more at stake here than merely a zero sum game of robbing Peter to pay Paul. Civilization is now at stake. Every person has a responsibility to strive for sanity, perspective, and civility. This is a moral imperative, however it's also a personal imperative. Some people are becoming far too comfortable with the increasingly vicious refugee camp culture of everyone for themselves. America’s signature "we" versus "me" has now reached Third World levels of exploitation. This country only has two major classes of people now - the minority exploiters and the majority exploited.

As long as central banks continue to artificially inflate the wealth of the upper middle class and inner party elites, the silent working class will continue to go under the bus. During the pandemic, the white collar casino class received a free work from home gambling vacation and massively inflated Ponzi wealth. Whereas the working class in the service industry was destituted. What makes a country truly Third World is the ability of the well off to ignore the plight of the silent majority. America’s working class has no political voice aside from a fraudulent con man pretending to be a man of the people while creating the largest wealth divide in US history.

"I love pandemics!!!"

Meanwhile, only in the lamestream media can the exact same recycled bullshit be called "news". I am referring of course to the six month recurring headline that a stimulus deal is imminent. Policy-makers are now months behind the curve on creating the borrowed and monetized “GDP” necessary to stave off widespread destitution. The fiscal cliff is now inevitable even if they pass a $900b bill, most of which is already designated to debt collectors and landlords.

Since the March bottom the casino class has been pricing in an imaginary recovery that is a fictional byproduct of central bank asset inflation - while the economy collapses like a cheap tent. Not one of them bright enough to understand that this is all a liquidity driven Ponzi scheme. They see their asset values rising and they automatically assume that it’s because the economy is improving. They have been fooled by the central bank trickle down fake wealth effect and the virtual simulation of prosperity. Just as they were fooled in 2018 when Trump's "middle class tax cut" turned out to be 2019 tax refunds pulled forward into 2018 by tax withholding sleight of hand.

January 2018:

"The agency is under pressure to take as little as possible so people will see big increases in their take-home pay ahead of this year’s midterm elections. But that would come at a cost: smaller or even nonexistent refunds next year, though millions rely on them to plug holes in their family budgets."

Today’s con artists have overplayed their hand this time around. Markets have now priced in a multi year fictional recovery while depressionary zero interest rates have allowed them to ignore infinite valuations. It's the "I'll have my cake and eat it too" theory of investing. Which is why both the cyclical reflation trade and the virtual economy trade have been rising in tandem. Gamblers conveniently believe the theory of economic reflation while at the same time clinging to the deflationary belief in perpetually suppressed interest rates.

Ironically, it's this newfound belief in a "virtual economy" that is preventing the real economy from recovering. In prior eras it would have been impossible for the white collar class to sit at home and order everything online to be drop shipped to their door. The super Tech bubble has been the direct beneficiary of the implosion of the real economy. One employs silicon chips and the other employs real people. 

When the "reflationary" stimulus finally arrives, I predict that the Tech bubble will final explode. The bidless vaccine-induced implosion in early November was a minor taste of what is about to come. That brief selloff preceded a six week melt-up into this end of year stimulus vote that is now tied to the shutdown of the government.

"Congress bought itself two more days to negotiate a coronavirus package on Friday evening even as lawmakers stumbled in their efforts to seal the deal on a $900 billion relief agreement."

I also predict that cyclicals will open on the highs of the day and close on the lows, leaving no place to hide. And then shared sacrifice will come to America for the first time in decades.