Sunday, July 10, 2016

Charlatans And Deceivers. Globalization Is A Dead End.

"At the end they fed everything into the stock market, including themselves"

Propping up the casino has already failed in Asia and Europe where stocks and banks are getting obliterated despite record "stimulus". The U.S. casino is next/last...

Today's EconoDunces don't understand global trade, Macroeconomics, markets, or anything else for that matter. They believe that Ponzi borrowing and printing money are the secrets to effortless wealth. We live in a de facto Corporate Idiocracy...

The stock market has become the holy grail of the modern pseudo-economy. As long as stocks are rising, every other factor of the economy can collapse in broad daylight while being totally ignored.

The casino is the mechanism by which the future gets monetized for consumption today. The casino discounts all future cash flows into one "price" that represents the value of all future wealth. And hence it is subject to MASSIVE manipulation. 

It started by arbitraging the economy from the developed world to the Third World aka. "Free" Imbalanced Trade. The free lunch, by which jobs were exchanged for corporate profits. Trade deficits funded fiscal deficits as the capital account was employed to offset the deeply negative current account (trade) balance. It was vendor take back financing on an historic scale. 

*Free* Trade visualized
U.S. balance of trade (red line, right scale) versus U.S. Federal debt:

When that imploded corporate revenue, due to lack of demand, it was on to leveraging the household sector 10x via 1% "Patriot Loans", during 2000 to 2007, using homes as ATM machines. 

When that stopped working, stock buybacks were employed on a massive scale to prop up stock prices. Cannibalizing investment in the economy in order to reduce share count and give the illusion of value. This alchemy reduces future economic growth, but that gets totally ignored as long as share price is rising.

When that failed to move the needle, it was time for CasinoConomy. The recycling of 0% poverty capital back into the casino. The Central Bank liquidity-induced momentum circle jerk. By which momentum algos deploy 0% to juice the market and induce momentum gamblers to drive market valuations higher giving the illusion of fake wealth that underlies today's pseudo-economy. 

To say that this massively leveraged delusion is going to collapse with extreme dislocation, is an asinine understatement. It will collapse in a way that INSTANTLY reveals the past several cycles of peddling fiction to be the morally void lies they've always been. And reveals those who propagated those policies to be the corrupt charlatans, they've always been. And reveals anyone who believed in this ponzi scheme to be the serial conned dunce they've always been.

And then the underwear shall be mighty stained.

Japan and Europe
(China's casino is down -45%, not shown):