Wednesday, December 2, 2020

Party Like It's 1933

America's Casino Class has a fatal blindspot for unprecedented poverty. In the Third World tradition...

Post-pandemic, the World will face unprecedented poverty in 2021. Wall Street is upgrading stock price estimates, while the OECD is downgrading the global economy.

Gamblers are riding a Monetary-induced crack high that is about to wear off.

COVID put this failed system of robbing the poor to pay the rich on steroids. In the U.S., the four year MAGA circus only made the problem far worse, as Trump worked overtime to stripmine the working class of benefits to pay for his tax cuts. However, the modus operandi of neo-conservatism is to forget the past of recycled failure, and focus all attention on the here and now. That's how all of these Neo-Marxists "came out of nowhere", because it was all going so well. "The system" was working great as usual. Unfortunately, for these historical illiterates history has a much better recollection of all of the tax cuts, mass outsourcing, stock buybacks, Wall Street bailouts, and false promises that created this epic disaster called the American Dream. It's a testament to the power of brainwashing that half the country STILL believes in this con job. To change a system leading to now imminent self-destruction would be "socialist". History will say they were a useful Idiocracy to the very end. 

Yesterday, the OECD cut their global economic forecast and warned that additional massive stimulus will be needed to cross the valley of COVID death to get to the other side:

"The resurgence of the coronavirus pandemic has dramatically weakened the global recovery and it could get a lot worse if governments withdraw support too soon or fail to deliver effective vaccines, the OECD warned"

China will account for over a third of the global expansion.

Governments should continue to support their economies beyond the end of lockdown measures and avoid “fiscal cliffs,”

This is the potential magnitude of the U.S. fiscal cliff in 2021, which is now dependent upon the level of political gridlock:

Yesterday (Tuesday), stocks ramped on the news that a bipartisan group is working on a stimulus compromise in the order of $900 billion. However, by the end of the day, McConnell shot it down. What he has in mind will not prevent tens of millions of Americans from falling into abject poverty in 2021.

Economists and Wall Street are far too focused on growth rates and not at all focused on absolute levels of (un)employment. We continue to see a weekly level of jobless claims that would be considered apocalyptic at any other time in U.S. history.

A few people are starting to understand what is coming after this vaccine crack high wears off:

“The Covid-19 outbreak has the potential to have an even bigger effect on the economy through the channel of debt overhang than what we identified in the Great Recession”


We are on the cusp of experiencing a level of poverty not seen since the depths of the Great Depression. Jim Cramer's 1933 moment of post-pandemic ecstasy will feature billionaires celebrating record monetary-sponsored wealth amid record poverty for society at large. There is absolutely no plan on the table to create the level of jobs that will be necessary to prevent wholesale economic devastation. 

Last year, around this time here is what I wrote for my 2020 prediction, pre-pandemic:

"Social mood rollover and crash from a lower high, portends rage on a scale we've never seen before. A society bilked AGAIN by the exact same psychopaths. Going into this, the sheeple are of the belief that everything is going just fine. Consumer sentiment is at a seven month high. Major U.S. stock indices at record highs. They are blissfully unaware that record stimulus gimmicks have been deployed to create this illusion. An asinine 10% of GDP in combined fiscal and monetary stimulus, as we enter 2020. Unprecedented in U.S. history. This is the best con job record amounts of money could buy"

Today I would write the same thing all over again for 2021, with only a few updates:

Social mood rollover and crash from an all time high portends rage on a scale that makes 2020's rioting look like a picnic. An asinine 30% of GDP in combined fiscal and monetary stimulus has been deployed to create this illusion. The biggest mistake our policy-makers are making right now is ignoring this chasmic divide between billionaires and everyone else. They have perfected the technique of generating insane asset bubbles while the economy disintegrates in real-time. A diversion that has allowed the entire developed world to achieve Third World status in just over one decade's time.

The crowning achievement of Globalization.