Author Archives: tehchip
I just landed in Bulgaria for a Europe trip / scout and reading something like this on the planes newspaper. http://www.heraldsun.com.au/election-apocolyse-greeks-stock-up-on-canned-food/story-e6frfm30-1226395368597 Btw, fuck Bulgaria air for not putting my luggage on the plane.
Money creation is the name of the game. It’s gotta come somewhere – and it comes from two places in the modern economy; from the government spending and from debt creation at fractional reserve. There is no other way for money to be created.
If you gotta get some money, you gotta go to the source. The government is about cashed running dry – the wankers in the senate are all ‘I don’t want to hit the debt ceiling, our fucking computers might run dry’, ‘Oh we have to fuck Obama, better tighten up the deficit.’ Wankers, they can’t get a clue.
That leaves the bankers. The big daddies, the ones creating debt and keeping our economy strong. They get bailed out – what do you expect? They create the money in this economy. Without them we’d be shit out of luck.
So the lesson is – go where the money is. You want to make money – suck up to the ones creating it. And watch the stock market rise.
Long and strong.
Let us think about the inflation vrs deflation bit that’s happening. Ray Dalio, a fucking smart man whose research has been declared ‘better than the Fed’s’ by the fucking fed, has spoken about this. Here’s a link to February’s paper: deleveraging cycle, for you who have not read it. Anyways, this smart transcendental finance dude says that we are entering a deleveraging cycle of too much debt. He also declares that the United States has chosen inflation over deflation.
Where is this inflation? Why the fuck is there deflation? Are our finance ministers fucking stupid, or is this whole tangled economic system too much for them to control?
Argentina is a great example of an inflation scenario. Every person says that one thing you notice when there is the start of inflation is the common people feel fucking rich. They go out and buy that washer they wanted, cause holy shit, they have a ton of money. In contrast, deflation creates a ton of low prices but nobody has a job, so there’s no consumers, and so the deflationary cycle continues.
What are we in? Objectively – fucking deflation. But why?
I put forward that our transmission mechanism for pushing more money into the economy is broken. The fractional reserve system is supposed to create more and more money through loans. The central banks are lowering interest rates so that banks loan out more money. But – seriously – this is not working. Fucking 6% loan to the common man? Really? The banks get .25%. So the banks are taking that money and putting it in the stock market or in other vehicles.
Where is the inflation? The inflation I think is happening in the rich. The financial markets are sucking that low interest money and money is flowing into the top 1%, causing inflation among the highest classes of goods. A recent apartment selling for 96 million in NYC, and another for 72 million when its like a 3 bedroom emphasizes this. There’s a shit ton of money in the high end, just swishing around waiting for something. Therefore inflation..
There should be inflation someday. If the central banks want it, they’ll invite it and it shall come. But first, the transmission mechanism of new money creation needs to come to the average person. If you give the average person access to loans at near 0% interest you would see inflation quick.
The market. It’s about the Spanish. It’s about the intervention – which is a metaphorical bazooka that the central banisters and policy makers may or may not pick up.
Not so quick with the bull run. The situation is not corrected. The announced bailout is Spain asking for money, from the pre made emergency fund – but not that they have gotten it yet. How happy is Germany going to be about this? What about the wrench of all bailouts – democracy in each country. There is a long way from here to actual stability is my lambastic claim. The core issue – the lack of fiscal sovereignty to devalue currency and a lack of a federal tax collecting bond guaranteeing strong fiscal union, is years from being solved and will take years to complete. The market will head generally down until that universally pointed out problem looks like it has the genetics of a solution. I am saying that this newfound euphoria for Monday’s launch is overblown. People are way to bullish for next week.
New lows will be found, and soon. This bailout is just not yet finalized. The market never goes in a straight line to where it should.
Chos theory is the theory of seeing structure in chaos. The tantalizing hope of making sense out of this fucked up universe. From random behavior in chaotic systems there arises a pattern – a pattern that you think you can describe, plot, and predict. Then you get dicked with a load of chaos.
This is the universe. The stock market is no different. If you think you can predict where the S&P will be in 10 days you’re wrong and delusional. Meteorologist can’t predict the weather accurately more than 3 days in advance – and they’re systems aren’t humans fucking changing their mind.
We are In fucking chaos – the stock market is going fucking sideways upside down like a bat with its ass on PCP. I’m short, cause in the end the actual long term patterns of macroeconomics say we are fucking dooooomed.
Germany was the world’s top exporter from 2003 to 2008. It truly was an economic powerhouse.
The Spanish had an empire once.
The French had Napoleon and kicked the rest of Europe around.
Alexander the Great kicked the shit out of Eurasia with the first major empire.
Nationalism is a very strong emotion within these fucks of prideful countries. Xenophobia is rampant.
A federal government, aka fiscal unity, aka the financial solution, is a long way off. Man the cannons, it’s time for war.
People are running scared. Up until a couple Friday bulls still had a case that the down trend was just a correction. Hell, they had been up 25%. They were still riding dirty. However, now that has all changed.
Now there are headlines like these:
WORLD BANK BOSS: We’re Headed For “Impending Catastrophe”
A Terrifying Vision of THE END GAME.
These are good signs for a coming bottom. Will the bottom be another 20% down? 10%? Who the fuck knows.. But the one thing I’ve noticed in my travels is that people are fucking retarded – seriously fucking retarded. That the capitulation has occurred means that a resolution is more likely to occur.
Are the wheels coming off the global economy? Yes, well maybe. But is it a straight line down? No. Are people going back to eating trash from dumpsters and living in huts squabbling over a turner patch? One constant – the world improves. Where are we headed, who knows?
This won’t be as bad as schadenfreude’s and not as easy as the rolling 90s.