Category Archives: Economics

Spending it Forward? By Eric Peters

A strong argument can be made that it’s a good time to convert fiat debt instruments into actual, tangible things. From Eric Peters at ericpetersautos.com:

It’s hot outside, but I am splitting and stacking firewood – in anticipation of when it gets cold, not too many months from now. More precisely, I am stockpiling wood as a fallback – in the event the power goes out this fall. A not-unlikely event, given the “electrification” of everything. Also as an alternative, in the event the cost of propane rises beyond the constantly diminishing purchasing power of the currency we’re all forced to us to buy such things with.

But it is also a hedge.

The wood being more than just a source of heat – both to keep us warm and (should it become necessary) a way to heat food and even water, so as to  keep us clean. It is also a way to store the value of currency before it dissipates further.

Much better than a bank. Or rather, it is the best kind of bank there is.

The wood is a tangible asset, directly under my control. It can be withdrawn at any time and without even having to show ID. I can withdraw as much of it as I like, whenever I like, without having to worry about the transaction causing unwanted scrutiny. And – most of all – it will still be in my “account” come winter, even if the banks decide to lock my accounts with them, over something I wrote or said.

Continue reading→

Another Food Processing Plant Shutters Operations, Adding To Long List Of Closures, by Tyler Durden 

This is getting weirder and weirder, and there’s something nefarious and sinister behind it all. From Tyler Durden at zerohedge.com:

A top food processing plant will be closing down one of its facilities in Campbell County, Tennessee, adding to the long list of closures over the last year.

George’s Prepared Foods announced its chicken processing plant in the small town of Caryville would be shuttering operations by the end of the summer.

The reason for the closure was not disclosed and has caught local officials by surprise. Campbell County Mayor E.L. Morton told local news WVLT that he’s trying to keep the plant open to save hundreds of jobs.

“I have contacted the Tennessee Economic and Community Development staff to request assistance in keeping the plant open or facilitating a sale to another operator

“I have requested Governor Lee’s assistance as well. My primary concern is for the welfare of the dedicated workers who have been the backbone of this operation. Our prayers go out to them as well as our very best efforts to keep them employed in Campbell County,” Morton said.

Continue reading→

How Bad Will the Food Shortage Get? by Dr. Joseph Mercola

If you haven’t already, start stocking up. From Dr. Joseph Mercola at theburningplatform.com:

food shortage 2022

Story at-a-glance

  • It’s becoming increasingly clear that severe food shortages are going to be inevitable, more or less worldwide, and whatever food is available will continue to go up in price
  • The cost of agricultural inputs such as diesel and fertilizers is skyrocketing due to shortages — caused by a combination of intentional and coincidental events — and those costs will be reflected in consumer food prices come fall and next year
  • Mysterious fires, alleged bird flu outbreaks and other inexplicable events are killing off livestock and destroying crucial infrastructure. Since the end of April 2021, at least 96 farms, food processing plants and food distribution centers across the U.S. have been damaged or destroyed
  • The global food price index had risen 58.5% above the 2014-2016 average as of April 2022, due to a convergence of post-pandemic global demand, extreme weather, tightening food stocks, high energy prices, supply chain bottlenecks, export restrictions, taxes and the Russia-Ukraine conflict

Continue reading→

BlackRocking . . . by Eric Peters

As homeowners become involuntary renters, the homeowners who are left will end up subsidizing those rents. From Eric Peters at ericpetersautos.com:

 

Why are billion-dollar “capital” entities like BlackRock buying up hundreds of millions of dollars of formerly privately owned homes? It may be possible to divine the answer by looking at another number:

The millions of people on the cusp of being evicted from the places they rent.

According to the U.S. Census Bureau, there are some 6.7 million of these people – who’ve had their rents increase by $250 per month, on average. The majority of these people earn less than $25,000 annually – and all of them have had the buying power of whatever they earn reduced by about 15 percent, via what is styled “inflation,” in order to make the victims of it think that the things they need to buy or pay for (like rent) cost more. In fact, their money just buys – and pays for – less.

Many of these renters have had their rent subsidized as part of what was styled “pandemic” relief,” an odd way of putting it since the “pandemic” didn’t force anyone to stop working (or hiring workers).

Rather, it was the government that did it.

The same government also told landlords they could not evict renters who weren’t paying rent. Which meant that landlords were being forced by the government to pay their rent – via the cost of paying the property taxes the government didn’t hold in abeyance, as well as all the associated carrying costs of owning a rental property – including the monthly mortgage payment.

Continue reading→

The Entire World Order Has Changed, by Raúl Ilargi Meijer

Are we seeing the death knell of the West and the emergence of a multi-polar order? From Raúl Ilargi Meijer at theautomaticearth.com:

It was Jim O’Neill, Goldman’s chief economist at the time, who coined the term BRICS in 2001 for Brazil, Russia, India, China, and South Africa. Little did he know. He was talking about emerging economies. 13 years later, they no longer are. They are good for about 40% of the world population, and some 25% of global GDP. The world has not stood still since 2009, and it’s moving faster now.

Ironically, the BRICS countries never looked to be as prominent economically as they are today, they were happy to build up one step at a time. But then NATO decided to move east at a pace that Russia found intolerable, and now the BRICS have taken on a whole new meaning. 25% of global GDP may not seem that much, but the 5 countries hold a much bigger share of -essential- global resources and/or raw materials than that, and China moreover delivers an outsize part of finished products.

And we now know that they won’t be BRICS for much longer. Many countries choose to be affiliated, in one form or another, with the BRICS rather than the “west”. They see that Russia is winning in Ukraine, and they see the damage the sanctions do. It’s just practical considerations. Saudi Arabia and Argentina are interested in joining BRICS. So are Uruguay, Iran, Egypt, Thailand, and a number of post-Soviet States. They see where the real economic power resides.

Continue reading→

The Age of Discord, by Charles Hugh Smith

We’re sure not living through the Age of Sweetness and Light. From Charles Hugh Smith at oftwominds.com:

It’s very difficult to find common ground that supports cooperation in the disintegrative stage of scarcities, rising prices, catastrophically centralized power and social discord.

Today’s topic echoes Peter Turchin’s 2016 book, Ages of Discord, which I have often referenced in blog posts.

I’ll also discuss two other books I’ve often referenced, Global Crisis: War, Climate Change and Catastrophe in the Seventeenth Century by Geoffrey Parker and The Great Wave: Price Revolutions and the Rhythm of History by David Hackett Fischer.

Turchin proposes repeating cycles of history of social integration (people finding reasons to cooperate) and disintegration (people finding reasons to not cooperate).

Clearly, we’re in a disintegrative stage.

Fischer proposed a repeating cycle of history in which humans expand their numbers and economy to consume all available resources.

Once all the low-hanging fruit has been consumed, scarcities arise, pushing prices above what commoners can afford, and the result is economic stagnation and social/political revolution.

Either humans exploit a new energy source at scale to provide for the larger population and higher consumption per person, or the population and consumption decline to fit available resources.

Parker covers the mutually reinforcing climate, political, social and economic crises of the 17th century. A long cycle of cold, wet summers reduced crop yields, leading to hunger and strife.

Parker also identifies another cause of the tumultuous, war-plagued 1600s: political leaders had consolidated too much power, enabling them to pursue disastrous wars without any restraint from competing domestic social-political interests.

Continue reading→

The Illinois Political Establishment’s Shameful Response To The Departure Of Ken Griffin And Citadel – Wirepoints, by Mark Glennon

In their arrogance, Illinois leaders are disparaging a business leader who’s leaving the state and taking his business with him. From Mark Glennon at wirepoints.org:

On a wall in Ken Griffin’s office at Citadel in Chicago, I’m told by people who worked there, hangs a thank you note from a six-year old. Like many kids that age, he was enthralled by prehistoric creatures so he wrote to thank Griffin for funding Evolving Planet, a permanent wing in Chicago’s Field Museum.

The six-year old was my son, who asked if he could write it after my wife had taken him for what must have been the fifth time to the exhibit.

I was proud that he had the simple decency to feel a need to thank somebody.

I wish I could say the same about the Illinois political establishment’s send-off to Griffin and Citadel, who are leaving for Florida. There was no decency in any of it.

Griffin is among the most successful financial entrepreneurs in history and Citadel was a crown jewel in Illinois’ economy. But the decency of a proper send-off was nowhere to be found in Illinois’ leadership. There wasn’t even the standard, “we’re disappointed to see them go,” which they usually say about corporate departures. Just a kick out the door for a golden goose.

Continue reading→

It Costs $22,648 And Requires 11 Agencies To Start A Restaurant In San Francisco, by Simon Black

Those costs are in addition to the regular costs of opening a restaurant. Anybody who has eaten a meal in a San Francisco restaurant has paid those costs; meals are exorbitant. From Simon Black at zerohedge.com:

In a report called Barriers to Business, the Institute for Justice (IJ) analyzed 20 US cities for how easy it is to open five different types of businesses. To cover a range, those businesses included a restaurant, a retail bookstore, a food truck, a barbershop, and a home-based tutoring business.

Entrepreneurs who want to start a restaurant, for example, have 13 different fees totaling $5,300, on average across the 20 cities. In San Francisco, those fees reach $22,648.

Remember, these costs and regulatory hurdles are all in addition to the normal costs and work of opening a restaurant.

The IJ also looked at the number of regulatory steps, and the number of government agencies it took to open a business. On average, across the 20 cities, it took 55 steps and eight government agencies just to open a barbershop.

And as if the cost and time burden wasn’t enough, the report found that in many of the cities, it was not even clear what all the requirements were to start a business.

Continue reading→

In Defense of the West: ‘White Supremacy’ and ‘Anti-Asian Attacks’ Debunked, by Ben Bartee

There is a substantial group out there that thinks the most relevant attributes of a person are race and ethnicity, two factors over which no human being has any control. From Ben Bartee at thedailybell.com:

The “white man bad, muh white supremacy” narrative is out of control. It is ultra-simplistic, tribalistic, and panders to the lowest-common-denominator.

MSNBC, Huffington Post et al. would have you believe there’s a racist, misogynistic Klan goon lurking behind every corner, lying in wait under every vehicle, waiting to pounce on his next Person of Color© hate-crime victim. And the “white supremacy” spectre has a special thirst for members of the Asian American and Pacific Islander© (AAPI ©) community.

(Ironically, the acronym alphabet-soup term “AAPI,” the product of diversity-obsessed academics, is itself over-simplistic and prejudicial – some might even say “racist” – as it groups together heterogeneous ethnic identities as disparate as Mongolians and Guamanian into a single category.)

The “racist-whites-beating-Asians-in-the-street” pandemic narrative is now ubiquitous. It just one in a rolling list of Social Justice© “current things”–essentially the follow-up to Russiagate and the predecessor to the Jan. 6th “insurrection against democracy.”

Without necessarily diving into statistics, the “white supremacy anti-Asian” crisis of the corporate media should arouse the audience’s suspicion.

Continue reading→

The Global Power Shift Isn’t West to East–It’s Not That Simple, by Charles Hugh Smith

The power shift is going to be from those who borrow or beg to those who produce. From Charles Hugh Smith at oftwominds.com:

The mercantilist dependence on exports for growth, a winner for the past 70 years, has reached diminishing returns. Rather than be a source of growth, it’s a source of stagnation.

Conventional wisdom holds that geopolitical power is inevitably shifting from West to East. It isn’t quite this simple. The real shift is occurring between three sources of power that are not so neatly geographic:

1. The commodity exporters

2. The mercantilist exporters of products

3. The consumer-importing nations

Gordon Long and I tease apart the many dynamics in this complex power shift in Tectonic Shift of Mercantilism Revalued (42 min). There are three starting points: neocolonialism, mercantilism and importer by choice.

In classic colonialism, the colonial power expropriated commodities by force. The invaders took control of commodity-producing nations via military force and then oversaw the extraction of low-cost raw materials to provide the home markets with cheap materials to feed the colonial power’s valued-added manufacturing. The manufactured goods were then sold in the captured markets of the colonial states.

In what I call the Neocolonial Model, the control mechanism isn’t military force, it’s financialization and globalization. The Neocolonial Power extends cheap credit to the commodity exporting nation, and the state and its citizens gorge on this heretofore unavailable banquet of debt. Soon the state and its enterprises are creaking under unsustainable debt loads, and the Neocolonial Power swaps assets for debt, buying up the most valuable resources on the cheap or extracting the wealth via interest payments and refinancing.

Continue reading→