My unpublished (100,000 word) book “The Financial Jigsaw”, is being serialised here weekly in 100 Issues by Peter J Underwood, author
Quote of the Week: “When one with honeyed words but evil mind persuades the mob, great woes befall the state.” – Euripides
In this issue we look at the stagnation of wages over the many long years and what this forecasts for the future. This article has a good description: Quote: “It’s a note about financialisation, the ‘zombiefication’ of our economy and the ‘oligarchification’ of our society. https://www.epsilontheory.com/yeah-its-still-water/
My book describes a new economy which I expect to emerge following either a sudden crisis or alternatively, a gradual decline in our economic wellbeing. Charles Hugh Smith agrees with my proposition. His article and podcast describes the coming adjustments we will all need to make. Quote: “You’re not going to be able to get rich speculating in the stock and bond markets – and run a farm, and build a community. You’re going to have to give stuff up. You’re going to have to sacrifice some things in order to get what’s really fulfilling to you.” https://www.peakprosperity.com/charles-hugh-smith-will-you-be-richer-or-poorer/
AND, I am not the only one thinking this – that a greater depression is in the cards in the next 24 months – we are back to 2006/7 all over again but it is going to be much worse:
https://usawatchdog.com/fed-panics-starts-massive-money-printing-michael-pento/
AND: Quote: “There should no longer be any doubt that the U.S. economy is slowing down, but most Americans still don’t realize what is happening because the major news networks are completely focused on the endless impeachment drama that is currently playing out in Washington.” http://theeconomiccollapseblog.com/archives/the-boom-turns-into-a-bust-here-are-14-signs-that-the-u-s-economy-is-steadily-weakening
Other views are welcome!
Here is the link to last week: Issue 75
Now that the Brexit final conclusion has been delayed yet again, I will continue to provide weekly updates as events progress:
Brexit Update – 1st November 2019
The Brexit deadline is no longer 31st October 2019; it is now 31st January 2020 and Boris still needs to get Parliament to agree his new exit plan during this period. But now all has changed as Parliament has now agreed to a general election to be held on 12th December the outcome of which is highly unpredictable. So now the deadlock has broken and as long as we don’t end up with a hung Parliament – progress of Brexit should resume after the final result.
Here is a run-down on the current situation from my friend, Dr Richard North:
AND the latest rumour is that the Brexit Party is prepared to stand down in Tory marginal seats and only attack key Leave-voting Labour constituencies. If true, early days, but it looks like a potential power shift towards a strong Leave victory and a big Tory victory. If in the unlikely event that Labour win, you can kiss goodbye to the good old UK economy for 5 years and another 10 years to recover! https://www.zerohedge.com/geopolitical/nigel-farages-brexit-party-weighs-pulling-out-100s-racing-critical-deal-conservatives
Details of Parliament’s deliberations when sitting can be found here:
CHAPTER 13
The New Emergent Economy
“Winning is a habit. Watch your thoughts, they become your beliefs. Watch your beliefs, they become your words. Watch your words, they become your actions. Watch your actions, they become your habits. Watch your habits, they become your character.” – Vince Lombardi
“Everything is determined, the beginning as well as the end, by forces over which we have no control. It is determined for the insect as well as the star. Human beings, vegetables, or cosmic dust, we all dance to a mysterious tune, intoned in the distance by an invisible piper.” – Albert Einstein
“The Chinese use two brush strokes to write the word ‘crisis.’ One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger — but recognize the opportunity.” ― John F. Kennedy
Employment options in a New Economy
Businesses are no longer willing to afford labour although it is suggested the opposite to be true because, for employers, the economy has not actually recovered. Employers today do not have an ability to increase wages because it takes a growing economy to drive employers into paying the going rates and as we have discovered economies are not growing just as we witnessed in the foregoing Chapters. Here is a real-life example from a business in Michigan, USA:
“We design, manufacture, install and service our machine systems in Michigan. We have been in business for 40 years. Our order backlog is 14 months. Many of our employees have been with us for more than 15 years. We make good money and must be doing something right. If we mistreated our people financially, they would be long gone.
Our products are [at] the heart of automation technology; automated packaging systems for industry. Every system installed permanently eliminates 2 workers per shift. Our customers recover their costs in less than 3 years. We have systems running in the field that are 20 years old, where the plant manager insists on retaining the equipment and buying our service and spare parts to keep the stuff working. The point of the article is that businesses cannot ‘afford’ to pay higher wages because their businesses are not growing. There must be some truth to this. If you cannot sell more stuff with what you already have, you go the route of cutting costs to achieve the same output with more profit; saving wages through automation. Save in material but substituting new material which does the job and costs less. Automate the front office to save wages. This is not rocket science. This is common sense.
We see the consolidation of industries – huge companies buying other huge companies. This is good for us (but probably not good for America with the concentration of key industries in fewer and fewer hands). The guy running the consolidated operation closes plants to eliminate overcapacity. He modernizes what’s left and buys our stuff. I have no answer for any of this.”
This is but one example illustrating how even employers are frustrated by the tardiness of the present economy and this is something that will not change in the New Economy.
We will be expected to do ‘more with less’ but at least we can be reassured that this new, lower level of operation will be sustainable; something which clearly is not possible under our present regime. A new ’employment paradigm’ will emerge based on self-employment and the local trading of skills and services much as was prevalent in the 19th century.
What will trigger the next global financial crisis?
Throughout this book we have considered many possibilities for what might spark the next crisis. A catalyst could be the imminent European recession that creates contagion in America and thence globally.
It is certainly likely to be one triggered by US monetary and fiscal mistakes by the Fed and American policy-makers. China is already showing signs of economic deterioration and this area is certainly poised to crash and cause an emerging market meltdown.
Whatever the cause we expect that there will be a ‘Great Reset’ globally of all asset values with extreme losses occurring across a broad spectrum of investors and bring a failure of traditional western cultural norms which have prevailed since World War 2.
Does it feel like our western culture has been progressive? We can all agree that in a material sense we have indeed progressed exponentially but at what cost to our culture? Everything that has a seed in human weakness and depravity has been promoted and expanded across the decades.
Our culture is over-sexualised; we thieve and betray one another over the smallest rewards. There has been a massive growth in psychological problems and increases in prescription drugs for many self-imposed ills.
In spite of the public ‘wars’ on drugs, terrorism and crime these antisocial activities have increased exponentially. Alcoholism (which is a particularly insidious legalised drug) is both openly promoted and applauded through main stream and social media.
The rampant fragmentation of the family unit and a corrupt and unreliable system of law which supports that fragmentation are the greatest loss we could ever have experienced. This is all supported by an educational system which is failing critical thinking and ‘dumbing down’ generations by its inability to meet the main criteria of any education system: the celebration of learning itself and equipping students with the tools to prosper in the competitive worlds of work and play.
The foregoing list is necessarily incomplete but serves to illustrate how we will have to make significant individual changes in the way we live and how we deal with our neighbours in the New Economy which will require ‘cooperation’ rather more than ‘competition’. Many new skills will be needed to prosper in a society changed beyond measure when the old adage of self-sufficiency advocates: ‘less is more’ might prevail.
To be continued next Saturday
The Elite, the Keynesians and their Useful Idiots have made a Royal Mess of everything; it’s all coming to a Head and the next Shearing of the Sheep will undoubtedly become a managed slaughter.
So true Robert, thanks and the fact that the Fed is panicing and printing QE yet again, with Repo running amok, is a strong indication that all is not well in the banking and finance world.