Tuesday, November 3, 2015

Free Trade Is Not Free. The Cost Is $Everything. No Refunds.

Dumbfuckistan hasn't figured that out yet. They're still waiting for the economy to float back from China, and counting their fake wealth. Because there's always a free lunch at the end of the rainbow...

Capacity utilization dictates Monetary Policy as any blind man can see below:
aka. Fed policy by Chimpanzee...

Capacity Utilization (blue line), Fed Funds (green), Five year yield (red). Dotted vertical lines are recessions. 

Blue down arrows show peak capacity utilization. The time to raise interest rates is BEFORE peak capacity utilization, not after as the Fed is attempting now. Fed Funds rate peaks with the five year yield...

Peak capacity utilization: 85% (left scale)
Peak interest rate: 6.5%
Peak capacity utilization: 81%
Peak interest rate: 5.2%
Peak capacity utilization: 79% 
Peak interest rate: 1.8%

Shock doctrine visualized:

A recession in 1970 is now called "peak expansion". 

Rule #1 of the Idiocracy, ignore the past and never ask the central question, because there has to be a free lunch in here somewhere...Here Bill Gross tells us the "easy" fix for 35 years of failed alchemy: Just steepen the yield curve, voila, because we know that raising long-term interest rates after history's longest debt binge, won't implode the mega debt bubble instantly. Never once does he ask the real question - why interest rates at 0% have failed to reflate the "economy", when interest rates at 0% in 1975 would have caused Weimar Hyper-inflation. He brushes the truth with this quote below, and then zooms away into Wall Street PhD-fabricated fucktardation.

"easy money, which has invariably led to stronger economic recoveries, now fail[s] to stimulate growth close to the zero bound."

Yes Bill, if we close our eyes, we see these "stronger" ever-weakening economic recoveries above. The lies are not concealed anymore, they are in broad daylight...

"And then one day it all just stopped working. It had all been going so well. I mean for me. Fuck everyone else".  

History will not be kind to Dumbfuckistan. Laid off for special dividends.