Tribute to the Porcelain God: This economy should be making you sick

By The Ans

Ralphing up Dollars.

Lunch (revisited).

Upchucking for fun and profit.

Regurgitating Godot.

Tossing up dimes.

Losing dinner.

Why the subject line?

We are riding on the thinnest of the razor’s edge. One false move and over we go. Wheeee!!!

The 07/08 patch was a warning, we need to change our ways but yet, we don’t. The next patch won’t be so … tame.

Most sense it but can’t put their finger on it, others are well aware but spin their wheels chasing this or that nostrum on the net and finally just get acrimonious. This constant state of upset usually includes some gastronomical event(s).

Hence the tag line.

Me, I’m mildly amused.

Hey, we got our tickets punched, might as well watch the show. Besides that I liked lunch so I prefer to keep it. It never tastes as good the second time anyway.

On other items.

Saw a headline (Japan’s unemployment hits all time high) but the gist was that this event suggests that Japan’s economy has hit ‘bottom’ and there’s mints to be made!

Yeah, and El Dorado’s streets are pave with gold.

The ouroboros that confronts us is that with a consumer/service based economy that rode up on the backs of debt laden consumers must face the fact that if the consumer ain’t workin’ … they’re not going to be payin’ the credit card balance or buyin’ cheap crappe on a biscuit because they can’t.

Why can’t they?

Well, from a survey back in April, 66 percent of the US adults would have ‘significant’ difficulty making ends meet in 30 days. Between 25 and 30 percent would be in deep doo-doo after just one missed paycheck.

Unemployment (official) is well north of 9% and forecast to climb higher.

Connecting the dots, the PTB have moved to a ‘green shoots’ strategy to get the 33 percent to spend.

Sea change the ol’ psychology.

Accordingly, if this works then there will be an extended period of ‘bumping’ along due to the fact that the 33 percent are carrying the 66 percent along with some sloughing off of the 66 percent because these people either go bankrupt and take the pledge but begin to ‘start over’. Continued repair of the safety net (extending unemployment bennies) also extends economic activity as essentials will continue to be ‘paid’. Gradually, overall conditions should improve.

That’s the theory.

Now, there’s some problems with that because the stimulus drawdown and other functionings of the government, taxes and other governmental revenue inflows must be increased. To do this via VAT or FICA or income or some other method of expropriation will hit the 33 percent right between the eyes. These ‘frugal’ third will not spend enough to bounce along the bottom. Their mindset is not wired to spend what they don’t have.

See the problem?

So reflation via hyperinflation?

Fatal issues in spades … hoarding of non-cash vessels of value rather than spending plus the destruction of ‘trust”.

There is a pressure valve called the long Treasury rate, this is a function of confidence, if it goes ‘nuts’ consider yourself warned. The Fed/Treasury cabal can quantitative ease all they want but the illusion that they ‘control’ the yield curve is a fragile one at best.

Can’t do that or the party’s over.

So where do we go from here?

Until we have the political will to change our wastrel ways … it ain’t going to get better.

Left, right or indifferent.