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The Carry Trade Has Created Asset Bubbles

1. When Big Money can borrow without cost and invest without risk then it is no surprise that liquidity is flowing into financial markets domestic and specially foreign, into Asian real estate and into real assets of all kinds. Borrow free but worthless dollars and transform them into appreciating quasi or genuine stores of value or at least into less debased assets.......this is the great alchemic gift of WashDc to Big Money( lead into gold) and it is a gift that will go on until there is an explosive conclusion
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2. Not all appreciating assets, in dollar terms, indicate a bubble. Monetary metals and oil, the emerging monetary energy, are merely resetting their exchange rate versus the fake dollar. They are real stores of value and money flowing into them is refugee money, fleeing the fake dollar and the cascading risks being generated by the US Regime.

Why Charles Hugh Smith Doesn't Believe the Recession Is Over

It depends on who you are. Where you stand depends on where you sit.

If you are part of the WashDc, Wall St, MSM Ruling Troika or someone who lives off their connectivity to the Troika, then not only is the recession over but its a boom.... and in any case, there was no personal recession at all for you. Indeed this is a glorious time for feasting on vanity, greed, corruption and deceit: the 4 major food groups of the Troika.

If you are a member of the expanding lower class, then you are either oblivious or ignorant about the state of the Productive Economy:....... as long as the money illusion of rising transfer payments is maintained, theoretical and false entitlements keep expanding and you are well supplied by your daily diet of physical and digital addictions.

If you are a member of the typical middle class household making or trying to make a living in the Productive Economy then ,for you or your friends and family or neighbors the daily reality is:

No job+No credit = deep recession

OR

No job+No credit+No income +No home= depression.

There are 3 economies and 3 Americas today. In one there was no recession; in another it does not matter; and in the third(maybe the one you inhabit) there is a deep recession that is becoming the Great Compression.

Why Does the Fed Feel Powerless to Identify Bubbles in Real Time?

Vanity and a vast capacity for self delusion(and self aggrandizement) prevents the political Bosses WashDc or London or Tokyo from recognizing bubbles or properly deflating them once the bubble has become apparent to the few who can discern these things.

Vanity convinces the Bosses that they have profound and unique insights into economics, finance and the workings of markets and this insight allows them to control, manipulate and when necessary mutilate interconnected industries and complex economies into obeying the will of the Masters. In truth they have no impressive insights and much of that they "know" is false or incomplete.

Self delusion that leads the Bosses into believing that inflating asset values are an abiding vote in confidence in the ability of the Bosses to manufacture real performance and create genuine value.Very few inside a bubble can recognize one and when vanity and self delusion compound this inability to distinguish the fake from the genuine and lies from truth , then it is no surprise that the Bosses fail early and often.

Even when the Bosses do recognize there is a bubble it is in their manifest interest to not merely perpetuate it but inflate it further. As they are still doing.

Trade War? Don't Rule It Out, Yet

1.It takes great singleness of purpose, discipline and courage to initiate, fight and win an epic trade war. The US Regime consists of corrupt, self indulgent bullies with collapsing intellectual and moral authority at home and abroad. It lacks the attributes to successfully fight a trade war. Bullies and gluttons are not known for courage and self discipline.

2. The Global South and Russia would unite against the US in a trade war.Japan would collapse before China, which would resort to brutal martial law and forced labor. A collapsed Japan would repudiate its alliance with the US and subordinate itself to China. Australia would abandon the US. Mexico and Canada would have no use for NAFTA.

3. The Fake Dollar would collapse making imports of vital energy supplies and industrial metals and ores unaffordable or so expensive that widespread rationing of energy and raw materials would be needed.

4.The riots in the streets of major US metro areas would be far more savage as those in China. American citizens are heavily armed; Chinese citizens are not.

The End of Debt: Where's the Money Going to Come From?

The US Regime has a 3 part strategy to create an economic boom beyond experience and financial wonders without precedent.

1. Hang portraits of Orwell in all public buildings(these include the corporate headquarters of all arms of the Regime on Wall St, in Big Media and in failed Industrial Monsters) and adopt Newspeak as the official language of the Soviet. Accordingly, all liabilities are now declared to be assets, the dollar is declared to be better than gold and consumption is declared to be production.

2. Adopt Kafka as the reigning deity of the Regime. Parasites, thieves and liars are to be honored as leading citizens and middle class households who insist that work, justice, prudence and frugality are abiding values are to be disenfranchised with prejudice.
Only bubbles create true assets and since the Regime has an inexhaustible capacity to produce limitless bubbles, the assets of the Soviet of America are now declared to be infinite, capable of supporting infinite entitlements and transfer payments as well as infinite borrowing from foreigners.

3. Build a thousand Potemkin Villages on the banks of the Potomac. Visiting Asian central bankers will be taken on grand tours along the Potomac to marvel at the prosperity, serenity and astronomical net worth of these new Potemkin Villages.
Middle class households will be ordered to remain invisible and silent in their cardboard boxes and designated warehouses while these grand tours are in progress and may emerge when instructed.

All will be well in the best of all possible worlds.

7 Million More Job Losses Are in the Pipeline

In the New Economy jobs do not matter, especially if these are Middle Class jobs. The New Economy is now a Statistical phenomenon, where the new reality is what Govt Statistics say it is.

Govt. Statistics say that there is good economic growth that is about to turn into robust economic growth.
The three dominant leading indicators both unequivocally declare this to be so. These are: Wall St bonusses, Public Debt and Wash DC power. The trio is not merely up, but soaring. Statistical Growth will inevitably follow and the world will watch in amazement and dumb adoration.

In the New Economy there will ,soon, be no Statistical unemployment. Anyone receiving transfer payments and gorging on entitlements will be deemed to be " fully employed" since the US Regime has determined that parasites are the true sources of value creation and old fashioned workers who make real things for real people are a blight on the earth; just another form of pollution really; traditional work, frugality and prudence are now crimes against the State and the People.

No( former) Middle Class person claiming to be unemployed will be counted since the Regime knows that households formerly known as Middle Class are populated with slothful, pathological, liars.

Statistically, the US Regime will soon determine ( unless all the ungrateful whining about no jobs, no income, no credit, no home stops instantly) that the Middle Class does not really exist and Main St is a figment of the imagination of a non existent Middle Class.

Yes, there once was a Main St and a Middle Class in the bad old days of the Old Economy and Liberty, before the Soviet of America repealed the obsolete laws of economics, nature and morality. Now, in this New Economy, Main St and the Middle Class are just lingering bad dreams. Only WashDc, Wall St and Big Media are the waking reality. The Govt. has the Statistics to prove it.

Surviving the Recession of 2010

The great omnibus investment theme, in my view, is the gradual and fitful but nonetheless determined ascent of personal and property rights in the Global South, led by Asia and their parallel, rather swift descent, in the West and Russia, especially in the US.

As property and personal rights degrade and wither in the US, so free, fair and flexible markets are corrupted, price signals distorted and resource allocation becomes deformed and dishonest. The tangible manifestations are the fiat,now fake, dollar; credit availability and price based on political favoritism; selective asset bubbles; disenfranchisement of the middle class; defilement of real estate markets; explosion in unredeemable public debt; contempt for the Constitution; the primacy of entitlements; tremendous concentration of wealth and power. These are investment themes, of course, but they are even more potent social and moral themes.

In contrast, in the Global South, the slow but evident spread of liberty leads to an expansion in the productive economy; more people become franchised and liberated from feudal and collectivist plantations; the honoring of innovation and entrepreneurship and to a dramatic increase in the middle class. These are also investment themes but they are even more potent social and moral themes.

IF.... these current themes continue to be true then, in another generation, a vibrant capitalist, democratic, East will confront a stagnant collectivist, totalitarian, West.
Prosperity, security and human dignity go where freedom is welcome and freedom depends on the color of national character not skin.

Is the Dollar Toast?

Toast still provides nourishment, for a brief while.
The dollar is already moldy bread and soon will be fit only for the less discriminating worms.

How Can the Government Reduce Unemployment?

The best thing Big Govt can do to reduce unemployment is to shrink in scale and scope.

China Nixes Obama's Balanced Trade Rhetoric

Trade or capital flow or energy negotiations require that there be leverage that is not only tangible but will be used.
The US Regime lacks both leverage and the will to create leverage. It struts around the world , drunk on its vanity and blinded by its greed, thinking it has the power to bend or persuade nations and continents to its will......the way indeed America once could when it had true might , true vision and true will.

The rest of the world sees the US Regime for what it is: a bully at home, a coward abroad and a self adoring glutton and deceiver everywhere and at all times.

The world struggles to conceal its contempt for the US Regime on issues ranging from containing North Korea and Iran to currency exchange rates, from trade and immigration to energy and environment. Soon it will cease to struggle and openly display its disdain. It has nothing to fear.

The world, especially the Global South, grasps a great ,transforming truth that most in America refuse to see or face: The Red Star is slowly setting in the East and liberty(and with liberty prosperity and power) is gradually ascending. In the USA, the Red Star is rapidly rising and liberty is rapidly descending.
Where the Red Star shines high it shines on totalitarianism, poverty, corruption and stagnation. It is a death star.

Gold and Silver Continue Their Ascent

The ascent of monetary metals and oil(the emerging monetary energy?) is merely the most dramatic and tangible quantification of the dollar's debasement.

The dollar is now worse than a fiat currency ; it is a proliferating and corrupting lie. The lie is being exposed and as the lie inflates so will ,in time, all real assets in most parts of the world.

Real asset dollar denominated price ascent will then translate into an inflation in the price of essential goods and services in the US, since real assets are also the foundational goods of the economy.
This inflation will , soon enough, make obvious to currently uncaring or unheeding Americans( still a majority of citizens) just how far the US Regime has disgraced the dollar and dishonored the Nation. The global flight from the dollar is a global flight from the risks, perversions and pathologies of the current US Regime. It is a global vote of no confidence.

Roubini on Unemployment: 'The Worst Is Yet to Come'

Of course the worst is yet to come.
1. The bigger the Stimulus the more real jobs will be destroyed in the Productive Economy

2. The more WashDc and Wall St gorge their egos and their bellies, the more Main St must starve

3. The more Govt perverts free and fair markets via taxes, regulations, forced misallocation of credit, debased currency, bribes for consumption of goods and services people cannot afford and penalties for savings, coddling of failed industrial and financial monsters and bullying of small and new businesses...... the more real jobs will be destroyed.
4. The more Govt increases, the more Main St decreases.

U.S. Job Losses Demystified

1. Is the purpose of this "Jobs Summit" to count all those many and varied, high paying, high quality jobs that have been " created and saved" ?

The reason Middle Class unemployment keeps rising is that the Middle class is simply too blind to see these jobs, too indolent to apply for them if they actually happen to see them and just too unskilled to be hired , if, remarkably they actually do apply. No doubt the summit will make this very clear.

2. Jobs are created when free, fair and fast markets continually reallocate resources, via efficiency and bankruptcy , from low or no or negative value added uses to higher value added uses.
In a productive economy where price signals are true; where work, innovation, entrepreneurship and savings are applauded; where the alignment of risks and rewards is just and where credit and equity are based on merit, there is a "jobs summit" every day in which millions of free people eagerly participate.

It is only when the parasitic economy consumes the substance of the productive economy, when transfer payments and unmerited entitlements are glorified, when capital is allocated based on political favoritism, when unjust taxes and suffocating regulations are deemed good government and when anti-capitalism is the ruling ideology of the corrupt and thieving elite that a physical "jobs summit" organized by the anointed and attended by the self absorbed is needed: as yet another form of extravagant propaganda....... and self adoration.

The Real Reasons Behind Our 'Stupidity Economy'

An expanding middle class means an expanding economy when measured by real metrics(not the Big Lie of Govt. Statistics).
A Compressing middle class means a compressing economy when measured by real metrics.

In USA 2009 we have a manifestly greedy and cruel Upper Class in full emotional and financial control of a growing, stupid and brutal Lower Class. Between the plantation owners and the prison guards is a compressing Middle Class. Hence a compressing economy.

The bigger the Stimulus the bigger will be the Big Lie of Govt Statistics, the smaller the productive economy and the more oppressed the middle class.

Wall St is the objective enemy of Main St, WashDc is the objective enemy of ordinary, real Americans and the Stimulus is the objective enemy of Middle class prosperity, security and liberty.

The Stimulus is not stupid...far from it....it is very clever indeed in concentrating wealth and power and expanding the lower class....the Stimulus is not stupid, it is cruel.

Asset Bubbles as the Path to Recovery: I Think We're Turning Japanese

We are not turning Japanese......we do not have the same luxury the Japanese did and still do, which is to decline, slowly and peacefully into a comfortable national old age and subservience to the vigorous Nations that seek to shape the world in their image.

The Japanese, especially the Japanese middle class, have accepted their gradual decline in the material quality of life and influence in the world economy. They are also reconciled to shifting their allegiance from the US to whoever else will be the dominant Asia -Pacific power.

America, however, must now either decline rapidly and fall fast and far well below the Japanese or....In a tremendous moral, intellectual and economic renewal and surge by its still large but fragmented and compressing Middle Class regenerate itself.

The US Regime with its vanity, avarice, fiat dollar, internal coercion and external cowardice, and financial toxic vapors cares only about its power and wealth. It believes in nothing bigger than its ego and belly. As long as the ego and belly continue to gorge themselves, the US Regime cares nothing about America, especially the America of Middle Class hopes, aspirations, fears, and values and the America of the Constitution.

If the US Regime endures, then America's descent into moral, intellectual and financial bankruptcy is assured. If the Middle Class can regain its legacy sense of mission and purpose and recover its traditional self confidence then the Regime can be overcome and expelled and America will again ascend.

We will not be Japanese...We will be Americans( or former Americans), either much lesser than the Japanese or or much greater.