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At the beginning of this year (2013), I identified eight key dynamics that will play out over the next two to three years (2013-2015):
Trend #1: Central Planning intervention in stock and bond markets will continue, despite diminishing returns on Central State/Bank intervention
Trend #2: The omnipotence of the Federal Reserve will suffer a fatal erosion of confidence as recession voids Fed policy and pronouncements of “recovery”
Trend #3: The Mainstream Media (MSM) will continue to lose credibility as it parrots Central Planners’ perception management
Trend #4: The failure of what is effectively the “state religion,” Keynesianism, will leave policy makers in the Central State and Bank bereft of policy alternatives
Trend #5: Economic Stagnation will fuel the rise of Permanent Adolescence
Trend #6: Income, the foundation of real economic growth and wealth-distribution stability, will continue to stagnate
Trend #7: Small business—the engine of growth—will continue to decline for structural reasons
Trend #8: Territorial disputes will continue to be invoked to distract domestic audiences from domestic instability and inequality
I know it may strike some as “cheating” that my forecast is for these trends to be consequential within a three-year window rather than by a specific date, but note these are trends, not events, and trends tend not to matter until suddenly they do. This is the nature of Pareto Distributions, in which trends are inconsequential until they reach a critical mass of 4% of the populace, at which point the “vital few” exert outsized influence on 64% of the populace.
Let’s see how the trends developed in 2013:
Trend #1: Intervention yielded outstanding returns on corporate profits and stocks, but diminishing returns on employment, household incomes for the bottom 80%, and growth, all of which are historically subpar:
Trend #2: The Fed’s members are still regarded as heroic demigods who benignly manage the Earth’s economy. When (not if) the stock market rolls over in 2014-15, Fed omnipotence will suffer.
Trend #3: This one is difficult to track, but anecdotal evidence (declining circulation of many mainstream print media, declining viewership in some cable news channels, etc.) may reflect rising disenchantment with the media’s coverage of key issues.
Trend #4: I think it is quite clear that the Fed and its posse of experts have no alternatives to ZIRP (zero interest rate policy) and QE (quantitative easing).
Trend #5: This one is difficult to monitor. If we use the percentage of young people still living at home and the rise of “selfies” (photos taken of oneself), then perhaps a case can be made that this trend is already visible.
Trend #6: Median household income has edged up, but I suspect this is the result of higher incomes for the top 10% rather than widely distributed gains. Since the top 10% collect 51% of all income, it stands to reason that increases flowing to the top will boost median income even if the bottom 90% sees declines in income:
Trend #7: The unintended consequences of the Affordable Care Act have yet to fully play out.
Trend #8: China’s recent invocation of a “defense zone” that includes the Senkaku Islands suggests this trend is definitely in play.
I also listed eight outcomes:
Outcome #1: The counterfeiting of risk-free assets will continue to be a primary policy of the Status Quo.
Outcome #2: Risk will continue to be transferred en masse to the public.
Outcome #3: Democracy in America is officially dysfunctional.
Outcome #4: Incentives will continue to be structurally perverse, and the rule of law will continue to be bent by individuals, enterprises, and the government.
Outcome #5: Health care (a.k.a. sick care) will continue to be an enormous drag on the economy as diminishing returns, fraud, complexity, and defensive medicine add costs without equivalent improvements in health.
Outcome #6: The costs of complying with Obamacare will act as an inflection point in the decline of small business
Outcome #7: The trend of the Status Quo “solving” perceived problems by adding layers of immense complexity to systems already suffering from marginal returns will continue.
Outcome #8: The informal cash economy will continue expanding, as those who choose to opt out of the Status Quo and those who must opt out as a survival mechanism do so.
Without going into detail, I think a self-evident case can be made that each of these outcomes is already visible at the end of 2013.
Additional Trends to Watch in 2014
Since the trends listed above are still operant, these eight are additional rather than replacement trends:
Trend #1: The Number One growth industry in the private sector will increasingly be lobbying the government for favors. When the State selects the winners and losers throughout the economy, then companies are essentially forced to make their case for special dispensations via campaign contributions and unrelenting lobbying. Elected officials benefit from their centralized powers as the line of corporations anxiously pressing campaign cash on them lengthens in direct proportion to the expansion of State power.
This is the essence of what some call the Corporatocracy that effectively governs the U.S.A. and what I call the Neofeudal Cartel/State system, as the State and its chosen cartels dominate the economy and society in a fashion that can only be described as neofeudal.
Since organic growth from increases in wages and purchasing power are limited to the top 10%, the only sectors that can possibly gain growth from rising sales are Porsche dealerships and other luxury outlets that cater to the top 10%. But since the number of households adding income is a thin 10 million out of 121 million households, moving more luxury goods offers little growth opportunities for the rest of the economy, which is stagnant at best.
As a result, lobbying the central State for favors is the default “growth industry.”
Trend #2: The difference between anemic growth and recession will increasingly be semantic. This is another “How many angels can dance on the head of a pin?” debate in which Ivory Tower/State economists parse juiced or manipulated data to conclude the economy is “growing slowly” or slipping into negative growth; i.e., recession.
Experientially, if purchasing power and discretionary income (what’s left after paying taxes, rent, mortgages, food, utilities, etc.) are both declining for 90% of households, the “growth” in inventories, exports, and other factors that feed into gross domestic product (GDP) are not reflecting the economy we actually inhabit.
Trumpeting what amounts to signal noise as “steady growth” is adept perception management (i.e., propaganda), but if it doesn’t include increases in purchasing power and discretionary income for the bottom 90%, it’s a propaganda embarrassment, like the Fed official hyping the declining cost of tablet computers while someone in the audience shouts, I can’t eat an iPad!
Trend #3: The decline in local government services will accelerate as rising pension/healthcare costs squeeze budgets. Local governments (city, county, state) have avoided the politically combustible collision of rising pension/healthcare costs and angry taxpayers tired of service cuts by accounting trickery and jacking up fees and taxes. Crunch-time has also been put off by rising home values that pushed property tax revenues higher.
These solutions are running out of rope: Property values have topped out, and accounting trickery hasn’t solved the fiscal impossibility of maintaining services and meeting pension obligations in a stagnant economy. When push comes to shove, services must be cut, either by bankruptcy or by negotiation. Since the likelihood that taxes will drop is zero, taxpayers will get fewer services for their taxes.
Trend #4: Middle-class income, purchasing power, and discretionary income will all continue to stagnate. Unless you define “middle class” as those households earning $150,000 and up (9.1% of households)—and if you define the top 9% as “middle” class, your definition has lost all meaning—what’s left of the middle class will see real and discretionary income continue to stagnate. The causes of this decline in labor’s share of the economy are structural and cannot be remedied by lowering interest rates to zero or jacking up the stock market: Zero-interest rates have deprived households of income, and few in the bottom 90% own enough stock to affect their wealth. (Source: The Distribution of Household Income and the Middle Class)
Trend #5: Junk fees will continue to replace legitimate taxes. Fearful of blowback from ever-rising taxes, local governments have turned to junk fees as the preferred method of “revenue enhancement.” These include sharply higher fees for recreation, parking tickets, permits, etc., and a multitude of add-ons to property taxes and other existing tax structures. Local authorities are counting on the taxpayers to sigh but do nothing as long as the fee increases are small enough to avoid triggering political resistance.
In our small California town, the city has raised the fees for trash pickup by more than 100% in recent years—ironically, their reason is that recycling (which they encourage) has reduced the amount of trash being collected. This sort of nonsensical rationalization for radically higher fees will join the usual justifications; i.e.,We can no longer fill potholes and pave streets unless we raise your taxes.
How did they manage to perform these basic services 10 or 20 years ago with much smaller budgets? The answer: See Trend #3, skyrocketing pension and healthcare costs.
Trend #6: The African oil exporting nations will move from the back burner to the front ranks of geopolitical flashpoints, joining the South China Sea, the Mid-East, and North Korea. I recently discussedThe Scramble for Africa’s Oil and the “resource curse” that is fueling the potential for conflict over Africa’s untapped oil wealth:
Trend #7: Americans will continue to passively accept the rise of the Police/National Security State. This may eventually change, but for the next few years the existing motivations for passive acceptance of increasing centralization of power will continue to hold sway.
The first is complicity: The 49% of all Americans—156 million out of 317 million—who receive direct transfers/benefits from the Federal government see little reason to rock the boat or put their cash from the government at risk. (Source)
The second reason is a rational fear of State power: fear of getting tear-gassed and arrested should you join a protest, for example, and a generalized fear of putting whatever you still have at risk by confronting a government given to secrecy and retribution against whistleblowers, protesters, etc.
Trend #8: The Federal government will quietly absorb the rising losses from defaulting student loans rather than reveal the bankruptcy of the entire Higher Education/Student Loan Cartel. There are myriad ways to quash the recognition that the Higher Education/Student Loan Cartel is failing to provide useful education while it burdens younger generations with $1+ trillion in high-interest debt: quietly forgive some defaulted loans, stop enforcing collection of defaulted loans, etc. The Federal government doesn’t want to call attention to its management of this powder keg, as widespread recognition that the system is broken will unleash calls for a general debt amnesty that will blow the big-debt-for-worthless-degrees system wide apart.
In Part II: Outcomes to Bet On in 2014, we’ll forecast the most likely consequences of these trends. With such understanding comes the opportunity to position ourselves in front of them for protection and/or profit.
A year ago today flash mob round dances took place across the country, and thousands of people danced and marched from Victoria Island to Parliament Hill, in Ottawa.
“It was an impressively massive show of cultural and solidarity” said CBC’s Waubgeshig Rice, “and although I was covering it for CBC, I found it impossible not to be moved.”
While some have wondered whether Idle No More is still a growing movement, the flashmob Round Dances taking place across the country this weekend are in indication that there is still a lot of momentum.
So far this weekend flash mob round dances have taken place in Winnipeg, Toronto, Sudbury, Saskatoon, and Lethbridge. There are plans in place for Fredricton, Surrey, and Montreal. And there is a ‘treaty information check stop in Delaronde, SK.
Flash mob round dances in 9 cities this weekend
While some have wondered whether Idle No More is still a vibrant movement, the flash mob round dances taking place across the country this weekend are an indication that there is still a lot of momentum.
A year ago today Idle No More flash mobs took place across the country.
Here are some snapshots of round dances happening across the country this weekend.
This one is a re-share of Aaron Pierre’s Instagram photo at Winnipeg’s Friday flash mob:
To change it up, Idle No More in Treaty 6 Territory held an treaty information check-stop by Delaronde Lake in memory of those who lost their lives defending the land.
George Carlin on Politicians
Getting ready for Christmas? What’s Santa got in his sack for you this year? Well, if there’s one thing you should be preparing for, then it can only be the big crash of February 2014. The signs have been there for months now and it’s definitely now on the books for February next year. Santa will be emptying his sack and it won’t be presents that will be falling from the sky as his sleigh goes whizzing past us.
Stick the date in your diary, pop it on your iPad and synch it with your iPhone. Use them while you can, because they will be relics of the past most undoubtedly in the coming months. You won’t be needing anything in the future, once the financial world implodes and it is set to happen in February 2014.
If we were in 1929, this would be June 1929, just a few months before the crash happened back then. Yes, we can say whatever we like with numbers, but like cameras, there are some calculations that never seem to lie. Businesssweek’sTom DeMark, a financial analyst has put together indicators that are able to predict movements of the market with surprising accuracy. DeMark states that “the market’s going to have one more rally, then once we get above that high, I think it’s going to be treacherous. I think it’s all preordained right now”.
Some might be saying that we didn’t need a crystal ball and we had no need for mathematics either to show that. You just had to look at how the Federal Reserve has bounced the financial markets back into a false-sense of security without actually doing anything at all to change the economy. Where’s the employment, where’s the increase in industry? It’s in the past. The only thing that is there right now is the virtual prosperity of the financiers and the banks. The next US shutdown and arrival at the debt ceiling will be just in time too for the biggest crash in history and will probably be linked.
Cash in on the last rise of the financial markets before what has been set down long ago comes of age and ripens completely. After that, who knows! You’ll have to buy low and wait a long time before the markets move back up.
The chart that compares pre-1929 and today is uncannily identical. Take a look for yourself. Pooh-pooh it, refuse to see it, do whatever you wish, but the crash will be coming and it’s the banks that started it all. The government will finish it all. God bless America! Game over! Goodnight!
It’s something when you end up witnessing the downfall of your own country. Some have been predicting it for years now and have been shouted down. They will be consoled by ‘I-told-you-so’ vociferating. But, it’s doubtless if that will help them anymore than anyone else.
The number of companies that is pushing the stock markets higher is narrowing at an alarming rate and there are a handful today that are taking the markets higher. That handful will gradually reduce and collapse. The eggs that were put into one basket by Ben Bernanke will end up being splattered on Janet Yellen’s face as she takes over. She should get out now while she can! The few companies that are dragging the financial market up by the collar are distorting the perception of the rest of the companies there and so speculation is becoming greater and greater.
January will see the bull rush on the financial markets for the last time. Then things will fall dramatically. You’ve been warned.
Yet again, those that believe they know will turn their noses up and say it’s never going to happen. Granted, the markets are unpredictable. But, there is one thing we all have to agree on, they are buoyant on nothing right now. They are increasing without any reason to do so. That won’t last at all.
January is named after the ancient Roman mythological God Janus. He’s the god of beginnings and transitions, changes and endings or new beginnings. This year Janus, the gateway god, will be looking back into the past to 1929, stopping off on the way at the financial crisis of 2007/2008. But, he isn’t two-faced for nothing.
He’ll be looking into the future and pin-pointing February as the time you’ll need to take cover. Forget the financial crisis of yesteryear or yester-century. This one will be the biggest, the best, the most of everything you could imagine.
The Americans always did excel in verbose language and hyperbole. They always did excel at showing the world that they were the top of the roost and the best at whatever they did. As the last beats of Auld Lange Syne play out, ringing in your ears, the Americans will be surely remembered as those that started it all. Well done the Federal Reserve; well done the successive governments.
Above all, well done the banksters, the gangsters of the financial world. Let’s remember the old acquaintances… Shid ald akwentans bee firgot, an nivir brocht ti mynd?
Here are the only two charts that matter:
First, the Fed now owns a third or 32.47% of all 10 Year equivalents, up 32.22% from the prior week, and rising at a pace of 0.3% per week.
Second, the Fed is now monetizing a record 70% of all net US 10 Year equivalent issuance.
That is all.
Source: Stone McCarthy and RBS
CBC’s flagship news program sold favorable coverage to the Harper government, then lied about it – Boing Boing
CBC’s flagship news program sold favorable coverage to the Harper government, then lied about it
Cory Doctorow at 6:46 am Wed, Nov 13, 2013
Jesse Brown from the Canadaland podcast (RSS) writes: “CBC News has made a bad error in judgment. They sold news coverage to the Harper government, who were seeking publicity for a shipwreck salvaging expedition which, in a federal Minister’s words, is an effort to “enhance” Canada’s sovereignty claims in the Arctic. The government is embroiled in a land claim dispute with Russia; both nations covet the massive oil and gas deposits that are thought to reside beneath the the Arctic Ocean. The CBC covered the government’s (fruitless) salvage expedition with fawning stories across its platforms: there’s a dedicated news website and a two-part documentary that aired on The National, CBC’s flagship newscast. CBC Chief Correspondent Peter Mansbridge himself reported live from the Arctic on a Parks Canada boat, at no time informing viewers that the subjects of his story had paid for his presence.”
“We do not get paid to provide coverage. Ever.” -CBC News Editor in Chief Jennifer McGuire
“CBC will provide news coverage on various platforms” -invoice for services provided by CBC to the government in exchange for $65,000 (p.147)
Experts say the evidence that climate change is being driven by human activities is convincing [GALLO/GETTY]
|Atmospheric volumes of greenhouse gases blamed for climate change have hit a new record in 2012, the World Meteorological Organisation says.
Heat-trapping carbon dioxide gas was measured at 393.1 parts per million last year, up 2.2 ppm from the previous year, said the Geneva-based World Meteorological Organisation in its annual greenhouse gas inventory.
That is far beyond the 350 ppm that some scientists and environmental groups promote as the absolute upper limit for a safe level.
“For all these major greenhouse gases the concentrations are reaching once again record levels,” WMO Secretary-General Michel Jarraud told a news conference.
Worse than ever
He said the accelerating trend was driving climate change, making it harder to keep global warming to within 2C of pre-industrial levels, a target agreed at a Copenhagen summit in 2009.
“This year is worse than last year, 2011. 2011 was worse than 2010,” he said. “Every passing year makes the situation somewhat more difficult to handle, it makes it more challenging to stay under this symbolic two degree global average.”
Greenhouse gas emissions are set to be 8-12 billion tons higher in 2020 than the level needed to keep global warming below 2 degrees, the UN Environment Programme said on Tuesday.
If the world pursues its “business as usual” trajectory, it will probably hit the 2C mark in the middle of the century, Jarraud said, noting that this would also affect the water cycle, sea levels and extreme weather events.
“The more we wait for action, the more difficult it will be to stay under this limit and the more the impact will be for many countries, and therefore the more difficult it will be to adapt.”
Delegates from more than 190 nations meet in Warsaw next week for a UN conference to work on emission cuts under a new climate pact to be signed by 2015, but to come into force only in 2020.
The WMO bulletin said the volume of carbon dioxide, or CO2, the primary greenhouse gas emitted by human activities, grew faster in 2012 than in the previous decade, reaching 393.1 parts per million (ppm), 41 percent above the pre-industrial level.
The amount of the gas in the atmosphere grew by 2.2 ppm, higher the average of 2.02 ppm over the past 10 years.
Based on that rate, the organisation says the world’s carbon dioxide pollution level is expected to cross the 400 ppm threshold by 2016. That level already was reached at some individual measurement stations in 2012 and 2013.
Carbon dioxide is very stable and is likely to remain in the atmosphere for a long time, Jarraud said. The concentrations were the highest for more than 800,000 years, he said.
“The increase in CO2 is mostly due to human activities,” Jarraud said. “The actions we take now or don’t take now will have consequences for a very, very long period.”
- Greenhouse gas volumes reached new high in 2012: WMO (reuters.com)
- Greenhouse gases continue relentless rise (irishtimes.com)
- Greenhouse Gases Rise to Record Levels in Atmosphere, WMO Says – Bloomberg (bloomberg.com)
- Concentrations of warming gases break record (syndicatednewsservices.com)
- Greenhouse Gas Emissions Reached New Highs In 2012, World Meterological Organization Says (huffingtonpost.com)
- Concentrations of warming gases breaks record (arunbabyveranakunnel.wordpress.com)
- Greenhouse gas at record high – 141% increase on pre-industrial levels (blueandgreentomorrow.com)
- The New Economy is the No Jobs Economy (rinf.com)
- Lagarde cautious over stimulus exit (bbc.co.uk)
- Americans to Obama: The Economy Is All That Counts (247wallst.com)
- IMF’s Lagarde Warns of Risks to Global Economies When Stimulus Ends (marketcurator.com)
- Thai economy in surprise recession (bbc.co.uk)
- Outlook for Jobs and Confidence in Economy Sink (globaleconomicanalysis.blogspot.com)
- Reality Check: Ghana’s Economy Cursed And Broke – Duncan-Williams (modernghana.com)