May 15 2019: Global Trade Collapsing To Depression Levels

I'm hammering on the "trade war" narrative because there is no more visible sign to those capable of perceiving it that the global economy is in its final downward spiral toward ultimate impact -- Wiley Coyote style. Global trade was dropping BEFORE the trade wars fired up, but now with the "trade war narrative" the powers that be have a convenient whipping boy to blame. The trade wars propaganda blitz is proof (in my opinion) that the elites know without doubt that economic collapse is unavoidable, and in preparation they've fashioned this propaganda narrative so that when it all does finally go to hell in a hand basket they'll have something and someone to blame. But never forget, global trade and the global economy was destined for crash and burn anyway, BEFORE this elaborate ruse known as "trade wars" was created as an alibi.

To be sure, even before the latest trade war round, global growth and trade were already suffering, confirmed most recently by last night's dismal China economic data, which showed industrial output, retail sales and investment all sliding in April by more than economists forecast.

May 14 2019: Farm Crisis: Soybeans Crash To Decade-Low As Trade War Intensifies

Is the "trade war" what the media and politicians portray it to be, or is it an elaborate facade, a multi-pronged propaganda spectacle designed to force realignments in global trade and national alliances that would otherwise be difficult to explain or politically inconvenient? Is it truly just an effort on the part of the Trump administration to get a deal with China that benefits Americans, or is it in reality a grand scheme intended to set Trump and his trade war(s) up as the primary cause of the impending economic collapse? Is it an effort to rebuild industry and jobs in America, or is it just a clever ploy to provide fodder for financial algos, a way to manipulate the stock market up or down as needed with simple tweets?

Everybody has an opinion but nobody knows for sure. What we can be absolutely sure of at this late stage of industrial civilization is that we must never, ever accept narratives pumped by mass media and political elites at face value -- not if we want the truth. Because these days, sadly, it is all illusion, all pretend, all double-speak, all the time. We need to look at what "they" do, not listen to what they say. We should be watching to see what the results of an action are, not at what officially pronounced intentions might be. To get to the truth, we have to always look for the hidden meanings and the unstated intentions in any public policy.

Here's what I see when I "look behind the curtain": I see a world running low on resources and energy, with an exponentially expanding population, billions of people all wanting their slice of "the good life" or at least a bare minimum standard of living, all of which places an unsustainable demand on Earth's rapidly depleting resources. I see crashing global trade, plummeting demand for consumer goods and an approaching economic crash that will incite millions worldwide to anger, fear and extreme acts of desperation. I see a secretly terrified global elite who are well aware of the approaching calamity, and national leaders in desperate need of someone, something to blame in order to deflect anger from themselves and on to someone or something else. Trump and his trade wars for example. I see a global trade regime that consumes far too much energy, that is totally unsustainable, that needs to be cut way down to size. And finally, I see a need for nations in Europe and Asia and elsewhere to rethink their trading agreements and political alliances with America and to focus instead on alliances and trade with those countries that have closer geographical proximity, as unpleasant as those changes might be.

The Trump trade war is forcing these changes while also daily reinforcing the "Trump and his trade wars did it" narrative that political leaders worldwide will soon be using to deflect anger from themselves. OK, maybe the trade wars are solely intended to provide a means for manipulating stock market indexes via tweets and news headlines -- if so, we can all see how extremely well that works -- but I doubt that's all there is to it. Every well conceived and executed propaganda campaign has multiple objectives, and the way I see it, the "trade wars" are just that -- an elaborate propaganda extravaganza devised to accomplish multiple objectives.

CBOT Soybeans futures plunged to their lowest level in a decade as China on Monday said it would raise tariffs on $60 billion in US goods in retaliation for Trump's decision on Friday to raise duties on $200 billion in Chinese products to 25% from 10%. The deepening trade war has pushed American farmers onto the verge of disaster.

May 13 2019: The Trend is Not Your Friend

Every once in a while James Kunstler hits one out of the park. This Monday's rant is one of those times. He ties it all together -- illusory stock markets, the looming end of the "shale miracle", the farcical propaganda production referred to as the US-China "trade war", political corruption and gridlock on a scale so large that no doubt remains but that we can no longer depend on our "leadership" to solve or even to mitigate the world's innumerable problems -- The End Of The World As We Have Known It. Coming soon to a theater near you.

There is already enough tension in the world as it faces not just the end of a global trade fiesta, but a world-wide synchronized economic depression. This is the one from which there will be no “recovery” but only adaptation to lower standards of living and new arrangements for getting by. In other words, the contraction will be permanent.

May 13 2019: Dow Dumps Over 550 Points, Breaks Below Critical Technical Support

Up and down the stock market goes, when it ends nobody knows... We've had an entire decade of this theatrical production called "the stock market". Over valued to historical extremes, manipulated by FED jawboning, plunge protection team rescues, coordinated central bank liquidity injections, stock buybacks and who knows what else, the "markets" long ago disconnected from the real economy. Every time a meaningful correction occurs the cavalry rides to the rescue with QE or interest rate cuts or "whatever it takes" to pump the markets back up. How much longer can it continue? When will we see the last dead cat bounce, the one after which no amount of FED jawboning or stock buybacks can reverse the plunge? Excellent question. When it finally happens all hell will break loose -- banks will go bust, companies will fold, trade will shut down, the delivery trucks will stop running. We all better be ready for that inevitable point in time because it is surely coming.

For the first time since February, the Dow is back below its 200-day moving average...

The Shale Boom Is About To Go Bust

There was a time when Peak Oil was a very real concern. But then began the so-called "shale revolution" back in 2008, just at the instant in time when global production began its long predicted decline. American "Energy Independence" was the new battle cry. Investors rushed into shale production investments. Artificially low interest rates combined with vast oceans of newly printed money provided the financial fuel for the shale "miracle" to really take off. Production soared. It seemed to many that true American energy independence really was within reach. But it was all a lie, a propaganda scam. As an industry, shale production has never produced a profit. Just the opposite. Shale producers are loaded with debt and their debt load just keeps growing and growing. Reason why: Because shale production is so energy and technology intensive that the amount of energy required to produce a barrel of shale oil is nearly equal to the amount of energy provided by that extracted barrel oil once it has been refined and put into distribution channels. The EROI -- energy returned on energy input -- is insufficient to produce a profit. But still the propaganda pumped through thousands of media channels non-stop, 24/7/365, and the investors kept coming. Now we begin to see the end of the shale revolution on the near horizon, and with it all illusions of somehow avoiding Peak Oil and its dire ramifications. Leaving what? A world where the energy required to run the global economy is in decline, moving along a steeper and steeper downward trajectory with the economy by default moving along the same downward trajectory. At some point along this trajectory real trouble will start. It's probably already begun. A consumption and debt-based economy does not work in reverse. It grows or it dies. And to grow, it must have ever increasing amounts of oil/energy, exactly what we don't have in a resource-constrained world. But hey! It was a wild ride, something like 200 years of The Age Of Oil. We burned it fast, we partied hard, next comes the hangover. The end of what we have all come to know as "business as usual" is quickly approaching. Time to prepare.

For a while, there was enough acreage to allow for a blistering growth rate, but the boom days eventually have to come to an end. There are already some signs of strain in the shale patch, where intensification of drilling techniques has begun to see diminishing returns. Putting wells too close together can lead to less reservoir pressure, reducing overall production.

China Has Propped Up Global Markets Since December - Is This About To End?

The "trade war" narrative is everything this article claims it is, and more. It is an elaborate Public Relations propaganda ploy designed to "explain" failing global trade and as the author states, a scapegoat for the rapidly approaching economic collapse. More than that, Trump is to be the designated fall guy, the loose cannon who wrecked the global economy with his trade war and tacky tweets. When this economy finally collapses, national leaders worldwide will need someone to pin the blame on, and Trump is IT. As the masses grow restless and the suffering from economic hardships intensify, their anger will be directed toward Trump and his trade war. How convenient. But the trade war serves one more major purpose that is not mentioned in this article: to realign trade agreements between nations. It is doing that, forcing businesses and politicians in Europe and Asia and other countries to rethink their long standing arrangements with America which they have grown to depend on, to begin planning for a time when they must look to forging alliances and trade agreements with nations closer in geographical proximity. Huge changes going on behind the scenes these days, with economic collapse looming ever closer, unavoidable.

Global stock markets and some treasury markets have become a rather spectacular farce over the past ten years, so much so that there are many people in the investment world that actually believe the long running bull market rally will “never end”. My view of stock markets has always been the same – they are an economic placebo; a psychological crutch that is exploited by central banks and governments to dupe the public into thinking our financial system is stable, even while the rest of the economy is in steep decline.

The climate change story is half true

Energy supply and GDP are attached at the hip -- take a look at the chart. Gail is correct in this article. The most immediate looming threat facing humanity is not climate change (aka: global warming). As bad as many weather events have been recently around the world, nothing compares to what's about to hit us. And what might that be? Resource shortages, oil especially.

The problem I have with the climate change story is that it paints a totally inaccurate story of the predicament the world is facing. The world’s predicament arises primarily from too little affordable resources, especially energy resources; climate change models tend to give the illusion that our problem is one of a superabundance of fossil fuels.

The Erosion of Everyday Life

We rode the wave of cheap energy and plentiful resources to historic heights. For many years it seemed as if the sky was the limit, that opportunity existed for every person to advance themselves into better jobs, better wages, better everything. The promise of technology and global trade enriching the lives of billions was portrayed on television and movie screens around the globe for all to see and internalize. A great future was unfolding and one only needed to reach out and grab their small piece of it. Happiness and success was within reach for all, that was the promise. But it was a false promise. The reality is that the demand placed upon Earth's resources by 7.5 billion all aspiring to "better" lives is untenable. The promise was a lie, a propaganda blitz, the seeming truth of it an illusion based entirely on unsustainable debt. There will be consequences, repercussions. We see it already. The disillusionment and distrust of a system that promised so much only to fail so completely has left too many people simmering in anger. More and more join those ranks day by day as the Big Promise slowly unwinds and crumbles to dust. We are all left staring into the face of grim, harsh reality. A breaking point approaches.

Working hard and doing what you're told is no longer yielding the promised American Dream of security, agency and liberty.

All That’s Missing Is a Black Swan

A Black Swan, or, as fragile and indebted as the world is, even an ill-advised tweet could set off the chain of events that bring it all down.

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."
- Ludwig von Mises

Boomers Are Facing A Financial Crisis

The "good news" is that Boomers aren't the only ones facing a financial crisis. We're all facing one, and it seems to be growing closer and closer day by day. This article assumes that "business as usual" will continue on as it has the last ten years, indefinitely, in which case, Boomers would definitely be the ones suffering the most from their loss of or dramatically reduced pensions, all of which seem to be critically underfunded. But let's face it. Before or during the time when the "pension monster" starts laying waste to a large swath of retiring boomers, the rest of the fragile house of cards will most likely collapse anyway -- leaving us all in a state of "financial crisis". Or worse.

There is a “crisis” brewing in America which will affect more Americans than the subprime crisis in 2008.
What is it?
It’s the pension and retirement crisis.

Get Real

Fast falling global trade volumes. Commerce Department's recent GDP report a another in a long series of calculated efforts to paint a rosy picture that obscures dismal truths. The harder they try to convince us that "all is well", the more obvious it becomes that our global economic and financial system is breaking down.

Let’s get real. The liquidity machine can hide reality only for so long and that is: Things keep slowing down. Cycles don’t turn on a dime, they take time and that is what we are seeing unfold and the signs are plentiful. From Japanese industrial production going negative the past 3 months to home sales in the Hamptons slowing to the slowest level in 7 years. I’m using these couple rather random examples to illustrate a point: The slowdown is as broad as it global:

LOUSY SHALE ECONOMICS: Financial Troubles Continue At ExxonMobil

The Age of Oil has entered it's twilight phase. The vast amounts of energy that are needed to power economic growth are rapidly depleting. Plenty of oil still remains in the ground, only problem is it's too costly and too difficult to extract and bring to market. Shale oil production has been a "miracle" alright -- more like an illusion.

After reporting lower than expected earnings, ExxonMobil’s stock price sold off on Friday. The company blamed poor performance on reduced production volumes and a weaker oil price. However, the real culprit will turn out to be Exxon’s big move into the Great U.S. Shale Oil Ponzi Scheme.

"The Quiet Panic" - Kyle Bass On Hong Kong's Looming Financial & Political Crisis

There's a whole lot of quiet panic going on these days, not just in Hong Kong.

For the better part of the last 36 years, since Hong Kong pegged its currency to the USD and ceded monetary policy to the Fed, Hong Kong has been a financial and political oasis for investment into mainland China and Southeast Asia. Today, newly emergent economic and political risks threaten Hong Kong’s decades of stability. These risks are so large that they merit immediate attention on both fronts. In this letter, we will discuss the origins of Hong Kong’s impending crisis, a brief history of Hong Kong, the economics of currency boards/pegs, the agreement that governs the United States economic and political relationship with Hong Kong, and how Xi Jinping’s China is forcing the Hong Kong Government to violate the agreement that requires Hong Kong to maintain its autonomy or lose most-favored-nation trading status and be treated as China itself is treated.

$220,000 For Every Man, Woman And Child – America Is Now 72 Trillion Dollars In Debt

The global economic and financial system MUST expand or die. It used to be that organic growth expanded the economy -- new technology, relatively cheap energy and other natural resources, the labor and increasing wages of millions and millions of workers. No more. The cheap and easy to get resources are all gone and there's a conspicuous absence of new technological gizmos hitting the market to juice industry profits. The only economic "growth" we've had since 2008 is due to expanding debt. Not sure how much longer this can go on.

Are you ready to cough up $220,000 to pay your share? One of the reasons why a day of reckoning for the U.S. economy is inevitable is because we are in way too much debt. The 22 trillion dollar debt that the federal government has accumulated gets most of the attention, but the truth is that we would still be 50 trillion dollars in debt even if the national debt was eliminated somehow. Today, debt levels are exploding on every level of society. Corporate debt has more than doubled since the last financial crisis, U.S. consumers are more than 13 trillion dollars in debt, and state and local governments are piling up debt as if tomorrow will never come.

Americans' Stress, Worry and Anger Intensified in 2018

"Even as their economy roared..." LOL!! The economy is puking, not roaring. So we start out with a false premise, a shameless push of the official narrative, totally disregarding the actual facts. Roared... give me a break. But I totally buy the angry, worried and stressed findings of this Gallup poll. Seen it with my own eyes. It's going to get a whole lot worse.

WASHINGTON, D.C. -- Even as their economy roared, more Americans were stressed, angry and worried last year than they have been at most points during the past decade. Asked about their feelings the previous day, the majority of Americans (55%) in 2018 said they had experienced stress during a lot of the day, nearly half (45%) said they felt worried a lot and more than one in five (22%) said they felt anger a lot.

World Trade Volumes Are Plunging at the Fastest Pace in a Decade

Short and sweet. Just the facts. Plunging global trade, worse since 2009. Who are they going to blame?

The global trade funk is dragging on, with new data on Thursday showing volumes are falling at the fastest pace since the depths of the financial crisis.

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