There are times when I read the financial mumbo jumbo on Bloomberg and the Financial Times and the Wall Street Journal, and I am astonished at how delusional the world’s controlling interests have become.
To take it at face value, and using major stock index highs as sole proof, one would have to agree that the world has certainly recovered from the ‘recession’ that began in 2009.
But, those stock market highs, evidence increasingly shows, have been purchased through the capitalization of the financial system through quantitative easing, stimulus, bailouts, zero interest rate policy (ZIRP) and increased institutional lending. So in lieu of demand, which is the natural fuel of stock markets and GDP, we have the synthetic fuel of fabricated capital. And in lieu of the the revenue and profit that flow from fulfillment of demand, we have synthesized demand for synthetic financial instruments such as ETF’s, CDO’s, SDI’s, and myriad derivative instruments – the trading of which absolutely generates fabulous numbers in terms of volumes bought and sold. But is any of that actually being invested in the real economy? Are there new manufacturing jobs, construction jobs, retail industry jobs to show for all the stimulus?
No. Instead, we have a way to count workers by eliminating those who have been too long out of work from the ‘labour participation’ rate. In short, we have elected to delude ourselves instead of confront reality.
So, while the employment figures tell us lies, we are seeing the level of debt – the disingenuous system by which capital and credit are fabricated from thin air -explode.
And here’s the funny thing about a debt: As long as the creditor doesn’t ‘call’ the loan, the borrower can theoretically continue borrowing ad infinitum. And if the borrower and the lender are one in the same entity, why would the lender ever force himself into delinquency by calling his own loan?
Welcome to the Grand Delusion
The mother of all bubbles is the sovereign debt bubble that is compounding exponentially on an annualized basis as a result of quantitative easing, stimulus, non-existent interest rates and credit default swaps. It is the mother of all bubbles because when it pops as all bubbles do, it will take every economy in the world, or rather, the world economy, into a catatonic coma from which it will only emerge after a serious re-ordering of the financial universe.
What is fascinating in a sick, train-wreck kind of way is both the complacency of regular folks, either from ignorance or nihilistic resignation, and the degree to which the elite financial interests destroying our collective future think they are in control. It’s like being on the Titanic. A bunch of smug boobs on the bridge are zooming the ship along at top speed directly toward a glacier while the rest of us are locked below decks dancing a jig.
There is no leadership. There is not a single visionary voice in the upper echelons of global ship command suggesting in any meaningful (and by that I mean by anybody who is in a position to do anything about it) way that the course chosen for us by our illustrious and esteemed politicians, bankers, and woefully myopic economists is straight into the maw of a premature self-annhialation. The lunatics have taken over the asylum indeed, but that doesn’t change the fact that the asylum is full of lunatics.
I am asked regularly by my associate Myra who writes the gold and precious metals column at market watch for my opinion as to why gold is doing whatever it may be doing on any given day, and I seriously have to ponder that for about 30 seconds before I choose which perspective I shall adopt for the day’s comments.
I’ve noticed that if I opt for what I view as the closest semblance of the truth – that commodities markets and their parasitic derivative sidekick futures are completely compromised and not at all representative of accurate supply, demand, or the future or even current spot price – that the comments don’t get printed, so I know that this is an unpopular angle for MarketWatch editors.
Lately the tone of even mainstream news has begun to reflect a growing sense of the inevitable in regard to the deteriorating ability of fabricated billions to produce data that could be construed as a ‘recovery’ under way.
There is just too much evidence building to the contrary.
Bloomberg reports today that China is printing at least another $114 billion this year just to reach its GDP growth target of 7.5%. Dour prognoses for Europe and the United States continue to emanate from central bankers, and in a most revealing stat, turns out food stamp usage in the United States has only declined slightly from its 2012 high of 46 million to just over 45 million registered users.
The U.S. war machine is gearing up for action on an expanded version of previous military operations across the Middle East – North Africa (MENA) region – an exercise that is sure to be a major consumer of U.S. tax revenue for years to come.
