Time is running out on this ageing phony society and its appropriately fake policy of "Extend and Pretend"; which means that my days of blogging are coming to a predictable catastrophic ending. My last post will come when the Idiocracy gets monkey hammered into oblivion. Despite all of the head fakes over the past four years I am resolute in the fact that we need to "thread the needle" to survive this nascent meltdown. Putting aside the siren song of Wall Street, this isn't a fucking mystery novel, although the ever-obfuscating "inflationists", have made this situation out to be far more complex than it really is. Earlier this week, the inflation trade was taken to the woodshed as both gold and emerging markets got obliterated. In the last few days, reality came for the credit markets - just the latest asset class to succumb. As it was in 1987 and 2008, interest rates are now rising in the face of an over-bought U.S. stock market, the last asset class to roll over. Since the Dow has yet to plunge lower, the Idiocracy is still overwhelmingly complacent at this juncture, even though the number of stocks making new lows has spiked to a two year high, indicating major internal damage and confirming the Hindenburg cluster.
Ayn Rand Would Be Proud - Everything Got Sold, Including The Economy
The real story that no one wants to talk about - and the reason why Extend and Pretend is doomed to fail - is that this latest Fed-sponsored bubble covered up the rampant outsourcing that went into overdrive after 2008. It was history's biggest estate sale. All while the Idiocracy was keeping up with the Kardashians and otherwise shoving their head up their own ass. I almost shit a brick yesterday when John Boehner talked about the nation of "builders". The U.S. was a nation of builders up until about 30 years ago. Then this current generation of business dealers came along and liquidated what prior generations had built over 200 years, all while glassy-eyed con artist buffoons in Congress looked the other way.
[Original Post: May 30th, 2013]
From the time this consumption-oriented society decided that its single-dimensional and pointless goal in life was external gratification, then its disastrous fate was sealed.
According to the laws of marginal declining utility (aka. satisfaction), ever-more material gratification is required just to maintain the same level of "happiness" - more car, more home, more clothes, more food, more Prozac. The model does not go in reverse without inducing nervous breakdown.
So given this all-consuming cultural aspiration, it was inevitable that the day would come when spending exceeded income and this society mortgaged its future, its children's future, and its grandchildren's future. Like a drug addict prostituting for one more hit - there was nothing left to sell. There are those who will tell us that this collapse was a result of this proximate cause, that regulation, this politician, that policy etc. But in the end, it was a choice of external gratification over internal gratification that made collapse inevitable.
The Idiocracy Has Found Its El Dorado
I am speaking of course as if the collapse already occurred, because the damage has already been done. Like a four hundred pound fat man eating cheeseburgers every day but still trying to run up the stairs, the inevitable collapse is merely a function of time. There is nothing to predict. The burden of proof is not on me to prove why collapse will occur, the burden of proof is on today's bleating comfort seekers to explain why this will be the first society in human history to defy economic reality. ZH presented 40 irrefutable facts about the economy, all of which have been ignored for years if not decades. The vector is down and the acceleration point is inevitable. Therefore, the Idiocracy is under the delusion that it has found the mythical "El Dorado" - the secret to effortless wealth. What is it like to be a billionaire, having Central Banks bidding up their assets - no effort on their part - and then be able to use that effortless wealth to buy practically anything, as the working slaves at the bottom of the ladder do all of the heavy lifting for nothing in return? Anyone defending the status quo is defending a system that hands out free money to the obscenely wealthy while the hardest working people on the planet live in abject poverty. And for anyone who owns stocks right now, the implicit bet is that Central Bankers have concocted some secret economic formula combining massive borrowing with massive printing. What a bunch of fucking morons. All I can say is that wealth *may* trickle down, but rage definitely "trickles" up, and all of "this" hangs merely by the most tenuous thread of confidence.
Getting back to the point of the post, this society can't get satisfaction anymore. The model is going in reverse. Sure, there are a handful of billionaires growing ever-more obscenely wealthy and buying ever larger yachts. Below that millionaire/billionaire level of course, for the most part, the party is over and the hang-over is just getting started. There is not enough Prozac in the world to paper over the burgeoning chasmic gap between the lifestyle this society is used to and the one it's going to end up with.
These latest diversions that we are all presented with - iPhones, iPads, Twitter accounts, scrolling Facebook news feeds etc. These are just the latest microburst dopamine hits. These are the digital equivalents of mall shopping. This society has been conditioned to seek stimulation of any kind even though each dopamine hit is having less effect for shorter duration.
It's time to wake up to the fact that in this world of economic reality, more was always going to lead to less. And according to the way humans lived for the first hundred thousand years of existence, less was more.
Below is the amount U.S. companies spend annually to brainwash people into believing that consumption is the primary goal in life:
Amount spent on Advertising in the U.S. per year: $412 billion
To put that in perspective, only 27 countries in the world have GDP higher than $412 billion.
U.S. corporate brainwashing costs exceed the GDP of 173 countries.
