Friday, September 2, 2016

Labour Day. Capital Half Century.

One day per year, the Idiocracy pretends to remember that return on labour aka. wages are important. The rest of the year they gamble everything they own in the 0% casino...

Soon comes the moment when they collectively realize, as Hanjin shipping realized this week, that wages are revenue, and when that runs low, next comes insolvency. One day cheap Ponzi rollover capital is flowing like a river, and the next day the bank's not answering the phone, no warning...

In other words, they're human call options, 350% leveraged to the consumption lifestyle, incapable of considering a way of life that doesn't include accumulating rare hand-crafted junk made in Third World sweatshops...

Therefore, there's only one way this can end, because AC360 never mentioned this is history's biggest mass delusion:

U.S. jobs versus stocks:

From my forthcoming epitaph for Globalization, which is pending mega-collapse and final spell check:

Serial Asset Bubbles Papered Over a Declining Standard of Living

"In Japan, after 25 years of failed alchemy, the breathlessly awaited “Abenomics” was said to be based upon three pillars: Monetary, Fiscal, and Structural Reform. In the event, only the first two legs of the policy stool were ever implemented. Why? Because an aging populace has no interest in reforming anything. Therefore it was the Japanese who pioneered Quantitative Easing, meaning Central Bank asset purchases to temporarily inflate stocks and provide essentially a trickle down fake wealth effect. The policy has no sustainable effect of course, and yet policy-makers globally copied the Japanese in propagating fake wealth across global asset markets. What these bubbles essentially represent is a declining standard of living papered over with printed money. Worse yet, the preoccupation and diversion caused by these bubbles gives politicians a free ride to ignore the difficult structural reforms necessary to rebuild the economy for the future. In other words, these asset bubbles represent the propagation of the status quo and the incumbent balance of power. They’re a form of economic repression imposed upon a struggling middle class who are essentially imprisoned by the status quo and its zero upward economic mobility. Right up until they end with extreme dislocation"

Bank of Japan balance sheet (red) with Nikkei

Combined Global Central Bank Assets with Global GDP Growth (red):