Category Archives: demographics

The Great Misconception of a Return to “Normal”, by Chris Hamilton

Posted on May 13, 2017 | Leave a comment

If governments and central banks go deep enough into debt, they can make things look “normal,” at least for a while. But it’s not normal. From Chris Hamilton at economica.blogspot.com:

Since 2009, there has been ongoing discussion of the size & composition of major central bank balance sheets (I’m focusing on the Federal Reserve Bank, European Central Bank, and the Bank of Japan) but little discussion of why these institutions felt (and continue to feel) compelled to “buy” assets.  The chart below highlights the ongoing collective explosion of these bank “assets” since 2009 after a previous period of relative stability.
These institutions clearly have the capability and willingness to digitally conjure “money” from nothing and have felt compelled to remove over $10 trillion worth of assets from the markets since 2009.  This swap of illiquid assets for liquid cash had (and continues to have) the effect of squeezing the prices of the remaining assets higher (more money chasing fewer assets=price appreciation). 

A prime example of that squeeze, the US stock market total valuation (represented by the Wilshire 5000, below) is $10 trillion higher than the “bubble” peak of 2008…and $11 trillion higher than the 2001 “bubble” peak.  Likewise, US federal debt since 2008 has increased by…you guessed it, $10 trillion.

The narrative seems to be that 2009 was a one off event and that the central banks role was and still is to “stabilize” the situation until things “normalize”.

But right there…that idea that 2009 was a “one-off” or “abnormal” couldn’t be more wrong.  So what is “normal” growth, at least from a consumption standpoint?  Normal is never the same twice…it is ever changing and must be constantly rediscovered.  To determine “normal” growth in consumption, all we need do is figure the change in the quantity of consumers (annual population growth) and the quality of those consumers (their earnings, savings, and utilization of credit).  The chart below details the ever changing “normal” that is the annual change in the under 65yr/old global population broken down by wealthy consuming nations (blue line) and the rest of the (generally poor) world (red line).  The natural rate of growth in consumption has been declining ever since 1988 (persistently less growth in the population on a year over year basis)…but central banks and central governments have substituted interest rate cuts and un-repayable debt to maintain an unnaturally high consumption growth rate.

To continue reading: The Great Misconception of a Return to “Normal”

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Geert Wilders And The Suicide Of Europe, by Guy Milliere

Posted on April 12, 2017 | Leave a comment

Noting the obvious will soon be a crime throughout Europe. From Guy Milliere at thegatestoneinstitute.org:

• None of Wilders’s speeches incites violence against anyone; the violence that surrounds him is directed only at him.

• The only person talking about these problems is Geert Wilders. Dutch political leaders and most journalists seemingly prefer to claim that Geert Wilders is the problem; that if he were not there, these problems would not exist.

• What adherents of this view, that the West is guilty, “forget” is that Islam long oppressed the West: Muslim armies conquered Persia, the Christian Byzantine Empire, North Africa and the Middle East, Spain, Greece, Hungary, Serbia and the Balkans, and virtually all of Eastern Europe. The Muslim armies were a constant threat until the marauding Ottoman troops were finally turned away at the Gates of Vienna in 1683.

Even if the Dutch politcian Geert Wilders had won and if the Party for Freedom (PVV) he established eleven years ago had become the first party in the country, he would not have been able to become the head of the government. The heads of all the other political parties said they would reject any alliance with him ; they maintain this position to this day.

For years, the Dutch mainstream media have spread hatred and defamation against Wilders for trying to warn the Dutch people – and Europe – about what their future will be if they continue their current immigration policies; in exchange, last December, a panel of three judges found him guilty of “inciting discrimination”. Newspapers and politicians all over Europe unceasingly describe him as a dangerous man and a rightist firebrand. Sometimes they call him a “fascist”.

What did Geert Wilders ever do to deserve that? None of his remarks ever incriminated any person or group because of their race or ethnicity. To charge him, the Dutch justice system had excessively and abusively to interpret words he used during a rally in which he asked if the Dutch wanted “fewer Moroccans.” None of Wilders’s speeches incites violence against anyone; the violence that surrounds him is directed only at him. He defends human rights and democratic principles and he is a resolute enemy of all forms of anti-Semitism.

To continue reading: Geert Wilders And The Suicide Of Europe

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The Ruler of the World, by Robert Gore

Posted on March 5, 2017 | 19 comments

The emperor will make a mockery of the future.

There is a Supreme Ruler of the world. During the early years of his reign he won accolades and devotion, showering his subjects with goods and services that were beyond their means. As he consolidated his rule, a few malcontents warned that there was less to his cornucopia than met the eye. However, his grip on power tightened and they were shunned. Once he had an iron chokehold, their warnings were forgotten or ignored.

Meet Emperor Debt. The first true globalist ruler, his dominion spans the planet. A cosmopolitan and multiculturalist, he reigns impartially over all races, nationalities, ethnicities, genders, creeds, and political persuasions. The little figures who supposedly run things think he’s their servant; they are actually his puppets. They promise and propose; he denies and disposes. Just the other night a puppet made a long speech full of promises and proposals. The Emperor smiled at the speech and the raucous reaction in the ownership-claims market the next day. “We’ll see about that,” he said to himself.

One of Emperor Debt’s minions once said, “In the long run we’re all dead.” A ninety-four-year long run later, we’re all in debt, and it would be an optimistic mischaracterization to say up to our eyeballs. We’re buried. The world’s debt is so stupendously huge it can only be estimated. Nominal debt is roughly $250 trillion dollars, or over three times what the world produces each year. Unfunded promises for old age pensions and medical care are another $500 trillion or so. Throw in financial derivatives of $1.5 quadrillion. Stated debt, unfunded liabilities, and derivatives sum to $2.25 quadrillion, or about $300,000 per person. Leave out the derivatives and per capita debt and unfunded liabilities are still $100,000 (figures from “March 2017: The End Of A 100 Year Global Debt Super Cycle Is Way Overdue”).

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US statistics are equally unsettling. Nominal personal, business, and government debt is $67 trillion (over 3.5 times the GDP), unfunded government pension and medical liabilities are estimated at $105 trillion (some estimates are up to two times higher), and derivatives held by US institutions at $612 trillion (all figures from US Debt Clock.org). That’s $2.412 million per person. Back out derivatives and it’s “only” $529,000 per person. The Debt Clock says we have $395,000 assets per person, so net debt is around $134,000. However, asset values are the Emperor’s sleight-of-hand. His debt blows up asset values, but sometimes the Emperor punctures the bubble and asset values deflate. Obligations to pay interest and principle on debt, on the other hand, do not deflate, absent rescheduling or bankruptcy.

“We’ve been hearing about debt from Cassandras, Nervous Nellies, and Chicken Littles for years; nothing’s happened!” cries the Chorus, and the Emperor smiles. The Chorus is dead wrong; plenty has happened, none of it good. The more you borrow from the future, the less future you’ll have. Debt has grown faster than production; the future has arrived and growth rates are falling. Unable to borrow its way to prosperity, Japan has been in a recession punctuated by interludes of anemic growth for 27 years. Growth in Europe has been virtually non-existent since the turn of the century, and debt crises loom in Greece and Italy. In the US, Barack Obama left office as the first president who did not have even one year of 3 percent real growth. His government needed to borrow over $9 trillion just to buy a feeble recovery. The Chinese “miracle” has sputtered as China struggles to carry its increasingly heavy debt load.

In the US, real incomes are lower now than at the turn of the century. The young see an increasingly bleak future—more debt, less opportunity—and forego marriage and procreation. Birth rates have fallen across the Emperor’s domain, well below replacement rates. Populations are aging and there are fewer workers supporting more of the elderly trying to collect on all those unfunded liabilities. Some day the young will rebel against debt slavery to the old and the Emperor will smile: divide and conquer.

Central bankers are the Emperor’s subalterns. They promote cheap debt, “magically” breaking the link between debt and the production or assets needed to pay it back. The Emperor’s propaganda ministers hail the “prosperity” that flows from central banks exchanging their debt for governments’ debt. Both sets of debt are collateralized by nothing and are claims on nothing; they can only be “redeemed” for more central bank or government debt. Yet this debt can be produced without limit or restraint—including the obligation to pay it back with real goods and services—and the Emperor’s subjects think of it as money and wealth. Constantly expanding debt and illusory prosperity promote a mirage economy.

Say what you want about the Emperor, he has a sense of humor. Amused by his subjects’ delusions, he plays with them like a cat plays with its prey. When financial asset prices drop, buy into the next debt-fueled upswing. Prosperity won’t end as long as credit standards fall and more credit is extended. Borrow two dollars for a dollar’s worth of growth. Credit is income. Creditors’ claims are wealth.

Sooner or later, both the Emperor and the cat tire of their games. Pouncing, they make waste of the best laid schemes of men and mice. The Emperor has stopped armies, brought down governments, sparked revolutions, opened countries to invasion, and left poverty, devastation, and misery in his wake. Only fools doubt that he is not once again readying a destructive masterstroke that will level welfare and warfare states alike. Given the paper and promises that litter the globe, encumbering every asset and income stream, this one will be his most terrifying.

The Emperor’s reign waxes and wanes, but as long as humans remain human it won’t end. Hubris, avarice, and folly are occasionally tempered, never vanquished. There will always be that wish for something for nothing, that desire to consume more than one produces, that hope that continued improvidence won’t lead to ruin. Events, not contemplation, end mass delusion. It takes little foresight to see what’s coming, and little wisdom to recognize that it can no longer be prevented, but the herd refuses to see or think. That is the ultimate default.

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Posted in Business, Debt, Debtonomics, demographics, Economy, Government

Our Miserable 21st Century, by Nicholas N. Eberstadt

Posted on March 4, 2017 | 4 comments

This is a detailed and comprehensive examination of the economy and the quality of life in America since the turn of the century. The conclusion will come as no surprise to Trump voters: things are getting worse. You might want to bookmark this article. It’s got a wealth of the kind of data that bolsters arguments. From Nicholas N. Eberstadt on a guest post at theburningplatform.com:

On the morning of November 9, 2016, America’s elite—its talking and deciding classes—woke up to a country they did not know. To most privileged and well-educated Americans, especially those living in its bicoastal bastions, the election of Donald Trump had been a thing almost impossible even to imagine. What sort of country would go and elect someone like Trump as president? Certainly not one they were familiar with, or understood anything about.

Whatever else it may or may not have accomplished, the 2016 election was a sort of shock therapy for Americans living within what Charles Murray famously termed “the bubble” (the protective barrier of prosperity and self-selected associations that increasingly shield our best and brightest from contact with the rest of their society). The very fact of Trump’s election served as a truth broadcast about a reality that could no longer be denied: Things out there in America are a whole lot different from what you thought.

Yes, things are very different indeed these days in the “real America” outside the bubble. In fact, things have been going badly wrong in America since the beginning of the 21st century.

It turns out that the year 2000 marks a grim historical milestone of sorts for our nation. For whatever reasons, the Great American Escalator, which had lifted successive generations of Americans to ever higher standards of living and levels of social well-being, broke down around then—and broke down very badly.

To continue reading: Our Miserable 21st Century

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This Is How the Status Quo Unravels: As the Pie Shrinks, Everybody Demands Their Piece Should Get Bigger, by Charles Hugh Smith

Posted on February 17, 2017 | 1 comment

Demographics and debt guarantee that the American pie will shrink for a long time. That will inevitably lead to political conflict. From Charles Hugh Smith at oftwominds.com:

Fragmentation, discord, discontent, class war: this is the inevitable result of a shrinking pie.

The politics of the past 70 years was all about horsetrading who got what share of the growing pie: the “pie” being cheap energy, government revenues and consumption, sales and profits.

Horsetrading over a growing pie is basically fun. There’s always a little increase left for the losers, so there is a reason for everyone to cooperate in a broad political consensus.

Horsetrading over a shrinking pie is not fun. Everybody is shrilly demanding their piece of the pie should either grow or be left untouched; any cuts must come out of someone else’s slice.

Everyone turns on their most compelling emotion-based defense: “we wuz promised” is a reliable standard, as is “we need more money to defend the nation from the rising threat of XYZ.” “Help those in need” plays the heartstrings effectively–as long as the “help” comes out of somebody else’s pocket.

Everyone sharpens their knives, the better to carve a slice off somebody else’s slice of the pie. A passive-aggressive free-for-all ensues as everyone reacts with aggrieved defensiveness to any attempt to diminish their slice, even as they launch shrill attacks on everyone else’s defense.

As the pie shrinks, the motivation to join a broad consensus vanishes like mist in Death Valley. Any cooperation is merely a brief tactical move designed to carve a big chunk off another player’s slice. Once that’s accomplished, the alliance quickly splinters as the survivors battle over the meager spoils.

To continue reading: This Is How the Status Quo Unravels: As the Pie Shrinks, Everybody Demands Their Piece Should Get Bigger

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Germany’s Muslim Demographic Future, by Soeren Kern

Posted on February 8, 2017 | Leave a comment

Here is the European, and to some extent the US, dilemma. Birth rates have fallen below replacement levels, which means to maintain the population level, immigration is required. The population level has to be maintained, and realistically, increased to fund pension and medical benefits as these societies age. Unfortunately, much of the available pool of potential immigrants has little interest in working to support bloated benefits, and in fact many of them would like to hop on the gravy train. Some of them are also bent on violence and destroying native populations and cultures. From Soeren Kern at gatestoneinstitute.org:

• Critics of Germany’s open-door immigration policy are warning that the recent surge in Germany’s Muslim population — which surpassed six million in 2016 for the first time — has already changed the face of the country forever.

• The price for reversing Germany’s demographic decline appears to be the further Islamization of Germany under the guise of multiculturalism.

 • With a fertility rate of 1.6 births per woman, well below the replacement rate of 2.1, Germany will require a permanent influx of 300,000 migrants per year in order keep the current population level stable through the year 2060, according to the report.

• “We are importing Islamic extremism, Arab anti-Semitism, national and ethnic conflicts of other peoples, as well as a different understanding of society and law. German security agencies are unable to deal with these imported security problems, and the resulting reactions from the German population.” — Leaked German intelligence document.

• More than a decade ago historian Bernard Lewis warned that if current migration trends continue, Europe will be Islamic by the end of the 21st century. Germany’s political elites are at the vanguard of making that prediction come true.

To continue reading; Germany’s Muslim Demographic Future

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