Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Canadian Cannabis Stocks CRASH as Canopy Growth Hits a Dead End - 14th Dec 19
Retail Sector Isn’t Dead, and These 6% Dividend Paying Stocks Prove It - 14th Dec 19
Top 5 Ways to Add Value to Your Home - 14th Dec 19
Beware Gold Stocks Downside - 13th Dec 19
Fed Says No Interest Rate Hikes In 2020. What About Gold? - 13th Dec 19
The ABC’s of Fiat Money - 13th Dec 19
Why Jo Swinson and the Lib Dems LOST Seats General Election 2019 - Sheffiled Hallam Result - 13th Dec 19
UK General Election 2019 BBC Exit Poll Forecast Accuracy Analysis - 12th Dec 19
Technical Analysis Update: Tadawul All Share Index (TASI) - Saudi Arabia ETF (KSA) - 12th Dec 19
Silver Miners Pinpoint the Precious Metals’ Outlook - 12th Dec 19
How Google Has Become the Worlds Biggest Travel Company - 12th Dec 19
UK Election Seats Forecasts - Tories 326, Labour 241, SNP 40, Lib Dems 17 - 12th Dec 19
UK General Election 2019 Final Seats Per Party Forecast - 12th Dec 19
What UK CPI, RPI INFLATION Forecasts for General Election Result 2019 - 11th Dec 19
Gold ETF Holdings Surge… But Do They Actually Hold Gold? - 11th Dec 19
Gold, Silver Reversals, Lower Prices and Our Precious Profits - 11th Dec 19
Opinion Pollsters, YouGov MRP General Election 2019 Result Seats Forecast - 11th Dec 19
UK General Election Tory and Labour Marginal Seats Analysis, Implied Forecast 2019 - 11th Dec 19
UK General Election 2019 - Tory Seats Forecast Based on GDP Growth - 11th Dec 19
YouGov's MRP Poll Final Tory Seats Forecast Revised Down From 359 to 338, Possibly Lower? - 10th Dec 19
What UK Economy (Average Earnings) Predicts for General Election Results 2019 - 10th Dec 19
Labour vs Tory Manifesto's UK General Election Parliamentary Seats Forecast 2019 - 10th Dec 19
Lumber is about to rally and how to play it with this ETF - 10th Dec 19
Social Mood and Leaders Impact on General Election Forecast 2019 - 9th Dec 19
Long-term Potential for Gold Remains Strong! - 9th Dec 19
Stock and Financial Markets Review - 9th Dec 19
Labour / Tory Manifesto's Impact on UK General Election Seats Forecast 2019 - 9th Dec 19
Tory Seats Forecast 2019 General Election Based on UK House Prices Momentum Analysis - 9th Dec 19
Top Tory Marginal Seats at Risk of Loss to Labour and Lib Dems - Election 2019 - 9th Dec 19
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19

Market Oracle FREE Newsletter

UK General Election Forecast 2019

Delusions of Endless Credit Something Very Bad is Going to Happen

Interest-Rates / Credit Crisis 2009 May 21, 2009 - 12:35 PM GMT

By: LewRockwell


Best Financial Markets Analysis ArticleRichard Daughty writes: James Howard Kunstler, famous author and speaker, opines, “For now, the ‘bottom’ is in” which took me completely by surprise! I mean, how could anybody in their Right Freaking Mind (RFM) think that “the bottom is in” as far as the economy is concerned?

Of course, there may be lots of things that have seen their “bottom”… Like crime, which is destined to soar as desperate people resort to desperate measures, in a kind of “win-win situation,” where the person either gets away with the crime, or he doesn’t, and if he doesn’t, then he gets sentenced by a judge to a bed, clean sheets, a communal crapper and three FDA-approved meals a day, free.

But most things have NOT seen their bottom yet, and are still falling, falling, falling, like the economy, my pathetic career, my income, my hair, my teeth, and my ability to control myself from screaming in Loud Mogambo Outrage (LMO) at the economic insanity that has gripped the world, which has NOT bottomed!

Naturally, I was just getting ready to fire up a scathing LMO missive to Mr. Kunstler to inform him of the Facts According To The Mogambo (FATTM), which are that some hypothetical “bottom” is years, if not decades, away, which assumes that the economy survives that long after being beset by outrageous fiscal insanities from an idiotic Congress and a Federal Reserve that creates the outrageous piles of money that finances it all, which, in a just world would mean prison and utter ruination for them all. A pox on all their houses!

You can see how I was getting myself worked up, and so it was a big letdown when I quickly learned, after I read further, that I had made a mistake! Oops! He did NOT say the economy had bottomed, but “the bottom of this society’s ability to process reality.”

Well said! And as a guy who seems to have a problem processing reality, I am paradoxically Very, Very Happy (VVH) to hear this! Hooray!

I soon realized that he was not predicting some “miracle cure,” whereby I suddenly get along with family, neighbors, coworkers and Democrats, when he went on to explain that “We’re done doing business” like we did up to now, and as one of the profound things that he calls “epochal discontinuities” for starters he says that “The revolving credit economy is over.”

This seems to go along with a recent report from that “Consumer credit in the U.S. contracted by a record in March after the jobless rate reached its highest level in a quarter century and banks made it harder to get loans in an effort to buttress their balance sheets.”

So, how far did consumer credit fall? It fell by “$11.1 billion, almost three times more than forecast and the most since records began in 1943” which is not only a long time ago, but is also chickenfeed when you compare it to the remaining $2.55 trillion in outstanding consumer credit! Hahaha! We’re freaking doomed!

And the news just keeps getting incredibly worse, as Old Bad News (OBN) is made into Fresh Bad News (FBN) with the, ummm, news that “Credit also decreased by $8.1 billion in February, more than previously estimated.”

Oddly enough, consumer spending, which “accounts for about 70 percent of the economy, rose at a 2.2 percent annual rate in the first quarter, the most in two years.” Hmmm!

That “Hmmm!” at the end of the previous sentence can be interpreted various ways, but in this case it simply means, “What in the hell is going on when consumer credit fell by an astonishing $20 billion in the last Two Freaking Months (TFM), and yet consumer spending went up?”

Bloomberg does not mention my clever use of “Hmmm!” or mention me at all, actually, but goes blithely on that the $11.1 billion in decreased credit sales was derived from adding “Revolving debt such as credit cards [which] decreased by $5.41 billion in March” to “Non- revolving debt, including auto loans and mobile-home loans” which “fell by $5.69 billion.”

“Six of one, half dozen of the other,” as far as I can see!

But with the staggering avalanche of money being poured into the world’s economies by central banks and deficit-spending governments, a Something Very Bad (SVB) event is going to happen to a lot of prices, which will in turn cause a lot of other SVB events until, well, just say it is ugly.

Thankfully, owning gold, silver and oil will make every day a beautiful day for you if you, too, buy gold, silver and oil.

And if you don’t, then it’s back to SVB events for you, chump! Hahaha!

Whee! This investing stuff is easy!

Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron’s, The Daily Reckoning, and other fine publications.

Copyright © 2009 Daily Reckoning

© 2009 Copyright - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules