What Tabby has been lecturing about.
 

What? Me worry?

https://www.zerohedge.com/news/2018-05-26/12-indications-next-major-global-economic-crisis-could-be-just-around-corner

That's why it was so important to get the huge tax cuts passed ASAP - once the next big recession hits, it will be politically impossible.

What planet are you on? Tax cuts will not matter.

The Central bank's with their interventionist policy have been able to keep the delusion going. The situation has steadily been stealthly deteroiating all along as can be gauged by the growing instability in society and politics.when a crisis hits it will be a snap back into reality as suddenly you will come face to face with just how broke Americans are. Those retirement portfolios and re will be worth zilch. Jobs what jobs without demand of a broad based MC?

Society will become much more basic. Buying food will be a big deal.

Thx Pwd...we may not get out clean?

I have not been following developments closely for some time. I do watch SP 500 religiously. The smart money leaving the market is a reflection that the savvy players think that the steady accretion in value since 2012 is done. The gravy has been had.

The govt in the advent of crisis and massive unemployment will go in the business of providing sustenance to everybody. Everybody will be getting an EBT card for groceries and utilities. The government could very well nationalize the means of production.so that there isn't wholesale starvation. You won't be worrying about retirement anymore you will be worrying about eating.

When BO was in office conservatives always beothched about how lousy the economy was. Now that Trump is in office they say how swell it is, conviently forgetting the fundlemental realities. This indicates that they never got it in the first place.

The Liberals just think that raising taxes with more government control with a socialy redistributionist agenda will do the trick.

Neither view is correct. The global economy has outstripped the ability of the consumer to purchase. Credit was used as the instrument to keep the music playing and now that is running out.

Tossed out as food for thought...Market volatility and rising interest rates does tend to make one think of paring down on equities and moving to bonds...I'm not saying long term treasuries, shorter instruments as a way of preserving capital.

Factor your ages in as well..a 30 year old with marketable skills could handle a nasty and lengthy downturn and have time to recover. Ol' PWD at 74 doesn't have that time. So yeah, Cindy & I are very light on equities...extremely light, according to many of the financial talking heads.

I do believe that because of the undermining of the foundations of the economy it is not going to be a recoverable situation in anybody's life time. With the fall of Rome western Europe fell into a protracted dark ages. When the Egyptian Old Kingdom fell the civilization hit a nadir before the New Kingdom rose. So it will be with the Western civilization model.

Most people's perceptions are myopically locus specific to a few decades at the most. People's attention spans have gotten awfully short. The more you understand the vicissitudes of time and history therein the more panoramic your view becomes. The better able to have a more distant event horizon.

The way monetary policy is being applied the only thing cash will be good for is to wipe your azz. Just like the Weimar.

The government might just ignore cash like it ignores CSA currency. It is worthless. So they may issue an EBT card good for so many food credits a month.

Whilst I am not as apocalyptic as Mr. Tabs, it is clearly a deteriorating situation in which Nero is fiddling while the spot fires are filling the backstreets and shops.

Root causes are largely to be laid on the ruling types who have via a perverse combination of cheap money (low interest), profligate state spending too often aimed at non-economic value add and buying votes and a propensity to do this all on the same cheap debt regime that makes all of us want to buy more without truly having the means to afford them.

Once one understands TANSTAAFL then the whole deal snaps into focus and your higher probability paths for success become clearer.

I personally oscillate between high debt which I believe has a fair chance of being inflated into nothingness or no/low debt which does not require debt service during the transition.

In terms of investment, no great insight there other than favouring companies with real, tangible assets whose services are essential to societal operation - e.g. those boring utilities, basic services, food production - no so much to make money but to avoid losing it all.

I do not support Mr. Tabs' view that there is no way out, although we are approaching the 11th hour, it will require Trump-like aggressive actions and cleanout of government bureaucracies and refocus on national interests, and the chances of that happening in most countries is the square root of dick-all.

I also have precious little faith in people as they have lost their underpinning moral standard where what were once vices are now glorified and honesty and ethical behaviour is more seen as an anachronism.

It will be an interesting ride...

Douwe

You say you do not support my view but then you cite the very basis of my rational that caused me to arrive at my view. Until the system hits bottom it can not have its moment of clarity. To be dissuaded from its fked up notions.

A couple of years back I found a Woman's League spiral bound cookbook (1985) on cooking during the Depression in a Thrift. It was full of personal stories about how people made do with what they had or could scrounge. The stories are sobering about those tough times

It was only ww2 that changed the dynamic. At that time the US had an extensive industrial plant that was just laying dormant. Today? It ain't the same.

the last crisis started with people protesting in Tunesia and what not, because food prices got to high because of high fuel prices.

First signs "It's kicking off" are happening in Brazil right now..

https://www.washingtonpost.com/gdpr-consent/?destination=%2fworld%2fthe_americas%2fin-brazil-a-truckers-strike-brings-latin-americas-largest-economy-to-a-halt%2f2018%2f05%2f25%2ffe3f06e6-6026-11e8-b656-236c6214ef01_story.html%3f&utm_term=.2a3f5e4b99e2

Truckers upset because their diesel costs more then they can afford to haul food around.
Gubmint thinks about subsidizing diesel now. That's not going to last.

Othere will be more things like this..
Look for 2nd world economies where they have imperfect gubmint, dictators, corruption prone, stuff like that.
They have ok economies when the going is good, but have no safety margin for high fuel prices and will be the first to choke...
mass strikes, protests, unrest, stuff like that.. that's how it started in Tunesia and surrounding areas in 08

People don't rebel against leadership if they are fat and happy, not even if their leadership is a dictator, like Khadaffi.
But but a reduction in standard of life is a feeding ground for dissent and then any other reason will be good, but the classic one is religion or left vs right.

That is already happening in the US with minority group unrest...BLM, Ferguson, Baltimore..

Look at the unemployment rates in those communities...welfare is pacification money to keep the dark pigment skinned people from lootin and burnin in your hood.

Why do ya perchance think Trump won?

Maybe.

In an apocalyptic collapse, of course the focus will be on food, fuel and shelter. And, though from an optimistic perspective, the US will close ranks and foreign involvement will evaporate.

If so, since we do have abundant F, F and S, or at least the technology to produce them, the cirisis will be short-lived.

What I find truly interesting is pondering what a global shuffling of the deck will ultimately look like. Transitions are always difficult and we are in for a big one.

In other words whatever our investment choices are it is a crap shoot and we're all likely screwed?

Our health will screw us before any collapse of modern society.

Then again, places like California pass laws that KILL productive farm land.

Paul, I wish you would stop reading Zerohedge. It is not just an unreliable source, it is a deliberately false source. The authors (there are apparently two or three of them pretending to be a staff of 40) manipulate their readers by making up a bunch of stupid stuff that sounds just plausible enough to convince people that the apocalypse is coming. In other words, they are not just lying to you, they are playing you for the fool. You are too good and too smart to let yourself be misled by them.

The economy will someday stall, the stock market will some day crash. But it's not crashing today and it's not likely to crash tomorrow. It's unlikely to crash any time soon because of all the trillions of dollars being repatriated through the tax change and the drop in overall corporate rates. Frankly, rising interest rates are the sign of a healthy and improving economy. Rates have to get back to realistic and sustainable levels. The Fed is making a good start at weaning us off cheap credit and getting the economy back on sound footing without causing a market shock. When things do go south Zerohedge will be there to tell you they predicted it. If you say the same thing long enough it will eventually come true.

Anyone who tells you they know when it will crash is lying. Even the guys in The Big Short who correctly read the market almost starved waiting for the market to come back to earth. Tabs has a good handle on the fundamentals of the economy but he lost objectivity in predicting doom and gloom and now he only announces news and analysis that supports his prior prediction. Zerohedge makes its money selling scares to people who want to believe the world is on the edge of collapse. Zero hedge is fine to read for fun or to see an (extremely) contrarian view, but it's nothing anyone should rely on. Kind of like the New York Times.

In constant dollars, US industrial production today is the highest it has ever been. Industrial Production - 100 Year Historical Chart | MacroTrends

Bless you.

Honestly yes you are. Why and I do give you a reason why to put your hat on. They are fking with the USD which is the world's reserve currency and everybody HAS borrowed STAGGERING sums of money. It is insidious because they are undermining the foundation of the system itself.

For the people who don't have anything they could care less...but it is guys who sweated and saved that are being bent over..You have something to take.

Tabs is Zerohedge. Doom and gloom! Fear! Death! New Dark Ages! Eat your pets!

Jeezus. Why do I still bother with this site?

Fact remains beyond a reasonable doubt the US govt is borrowing a Trillion USD a year. Regardless of tax reform that was going to happen as the Boomers retired. Sooner or later the appetite for that much debt is going to be sated. When is the question, so far it is just a complacent shrug of the shoulders as to the accretion.

So the metric to watch is the bid to cover ratio for US Treasury auctions. That in recent years has been skewed (along with the USD) in the US favor as a flight to quality move by the world. A lower bid to cover ratio.means you have to entice purchasers with higher interest rates. Unless a Central Bank picks up the slack.

The good news is the FED is slowly sloughing off their 3.5T worth as it matures. (They are slowly taking liquidity out of the system). God only knows what they are doing through proxy third parties? The bad news is that the European Central Bank is still printing money to buy debt at least through December.

The bid to cover has declined slightly recently as more debt than usual is coming on line. If this continues interest rates may become rather volatile. Which could very well prove to be fatal for the US with the amount of debt it is carrying.

Because you are a moth.

Quite frankly does MRM fully understand the complexity of the system? Can he track the beast on an ongoing basis in his head? It is far more involved than reading statistics it requires knowing and understanding sentiment as well. You have to know how the beast twitches.

Personally I don't read any of the doomer and gloomers. Only time is when a link is posted here.

The US govt is spending apx 4.5T a year on an income of 3.5T. It is creating a Trillion in liquidity year on the back of future income and productivity of the US. The bad part is that obligation including unfunded AP is roughly 120T. With private obligations it is apx 165T. The saving grace is that only 21T of the debt is interest bearing and is being paid on. As that payable portion of debt climbs as the AP comes due it will become interesting.

Ted, until any of your predictions come to be, I would be a little less bold, especially with those your senior. Or has the Dollar lost world currency status and we've been experiencing hyper-inflation for the last several years?

Perhaps more like a fly since the content you’ve posted here is... well... fly attractant.

The Chinese are working overtime on it. Along with other moves the Chinese have created an oil exchange based in on the RMB backed by Gold. This is a direct alternative and challenge to USD supremacy.

With the amount of liquidity created by the Central bank's there should have been hyper inflation given Demand being a constant. With weak Demand the huge amount of liquidity kept prices from deflating too badly. You see inflation in some hard asset classes..high end art, collectable cars & guns among others. Those are alternatives to traditional asset classes.

The FED realized in February of 2013 that if they continued to print money they would eventually run into problems. They counter acted that problem with the TAPER off of QE3 which ceased in Dec 2014. They maintained their credibility after someone whispered in their ear that there was a problem brewing.

I have had my money on the table and invested for 30 years. Shauny you must be hyper active as you are so impatient. It takes awhile for the water to boil and cook you. Never fear with huge deficits we are getting there.

If you want to be a fly you can be a fly.

China is only slightly less corrupt than India which less corrupt than Russia. So, no. You seem to revel in the small picture that only academia can produce.

Those are not examples of inflation, those are bubbles. Please, for the love of God, learn the difference.

Hmmm and how much more corrupt are they than HRC and the Democrats with their rigging of their Primary season? How much more corrupt are they over say the DOJ or IRS or VA affairs? Over Trumps collusion with the Russians (this is for you Liberals who would deny that HRC is corrupt).

The gun bubble has been expanding since 1997....

You are dealing with semantics...bubble, hyper inflation...both are the exuberant inflating of an asset price. Both have an element of being unsustainable and have a root cause of people valuing the object more than cash. One maybe greed and the other fear..In flush times it probably is greed, but in hard times it is more likely fear...in this case people don't trust the cash and the manipulation of the currency. Couple that with gobs of newly printed cash..liquidity and with no really viable alternative it has to go someplace ..into an asset that has perceived value.

You got anything else...to bring to the table..If not go stand in the corner. Ohhh and put your cone shaped hat on that says dunce on it.

Ted, please, everyone can see. Don't be dismayed, you'll get it. Someday.

So we are down to making exclamations....the last desperate grasping refuge of those that have run out of logic and rationality.

No, I just want you to be right for once. I'm pulling for you.

Thank you for the concern, it is appreciated.

Not quite, I have some original CSA currency. A Confederate $100 bill will bring more than $100 Federal! Of course, that only holds as long as there are collectors!

In San Quentin they say, "That is the way the pellet drops."

Economic predictions are of zero value without a timeline

A M.D. told my Dad's cousin he had 6 months to live. He died 4 years later. That medical time line had zero value.

Exactly

Im sure the economy is dying like the rest of us, but predicting its demise without accurately sayin when just makes you another missleading dr.