Tuesday, June 6, 2017

Globalization FAILED: The Truth Is Not An Option

EconoDunces and Corporate Mad Men will be happy to learn that Globalization successfully converged global standards of living - just in the exact wrong direction...

Ayn Rand's "great men" are all con artists. But don't tell anyone, because it's still a global secret...

Eight years since the Global Financial Crisis and thought dealers still won't admit that Globalization failed. Why? Because FAR too much capital is now committed to betting on the all-elusive reflation trade...

And nothing lies as much as misallocated capital:

Globalization was never about raising standards of living, it was always about lowering costs to increase corporate profits 10x. It consisted of corporate industrial arbitrage between the Third World and the developed world, and the selling off of the developed world middle class for corporate dividends. There was never any corresponding middle class created in the developing nations to pick up the demand slack, hence global interest rates remain mired at century lows: 

"Reflationists argue that trade is improving with the global economy"

Blind men and reflationists are essentially the same group of people:

"Reflation skeptics had their case bolstered by China’s May manufacturing purchasing managers’ indexes... The government’s PMI reading showed the sub components for both input and output prices dropped sharply"

We expect China’s real estate construction to slow down in the second half of 2017. Combined with remaining excess capacity in China’s heavy industry, this implies reduced support to commodity prices, domestically and internationally"

“China’s factory reflation story is over”

That leaves the reflationary ball back in Trump’s court. The U.S. president has promised to plow ahead with hundreds of billions of dollars in spending on new roads and bridges, funded by the public and private sectors, along with pledges for far reaching tax reforms.

“With China’s construction engine likely to ease back over the coming months, the global reflation risks running out of runway.”

“Trumpflation” will be “insufficient to offset fading Xiflation”

You don't say

Don't try this at home

"No reflation. Hot money has to go home"