Insider

This is a piece that I wrote in response to a request for a guest authorship over at ZeroHedge.  It builds on a point, made in yesterday's piece, that Switters thought had not yet been fully addressed elsewhere in the great Inflation/Deflation debate.  

I am interested in your thoughts on this line of thinking.  I will send it over to ZeroHedge later on.

My central thesis to this crisis, developed a few years before it even hit, is that the economic troubles are the symptoms, while the money system itself is the cause.

My views on this are expressed in the opening of an article that I initially penned in 2006 but updated in 2008: » Read more

Tuesday, October 6, 2009

This week's report is going to be largely free of data and news snippets and full of my opinions and broad strokes of logic.

As my long-time readers know, I consider my main occupations to be information scout, dot-connector, and analyst.  But as a side job, I also provide a decisive alternative to the mainstream economic propaganda machine, which is thoroughly dedicated to maintaining the status quo, regardless of cost.

I completely understand why our fiscal and monetary leaders would seek to hide the truth from us all.  We live in an economy that is based on growth and debt - which means it is a Ponzi scheme - and there's nothing more important to such a system than faith and confidence.  So economic propaganda is not just a noxious by-product spewed from our economic tailpipe; it is viewed by those in power as a form of fuel, a necessity for our peculiar economic engine.  They may have a point.

For my new readers, I want to make it clear that I do not expect or wish you to believe me over anyone else.  Heck, trust neither me nor them, if that works for you; instead, trust yourself and your gut instinct about what is right.  I began trusting myself several years ago, and I am much better off as a consequence.

This week (ending 10/1/09), despite the massive run up in stock over the past few months, despite the outrageous amounts of bailout and stimulus money applied, despite every attempt to put a positive spin on things, jobs continued evaporating, auto sales slumped to multi-decade lows, bankruptcies soared 41% over the prior year, and tax receipts continued to slide.

States such as California are sliding into fiscal chaos, and some, like Michigan and Alabama, are already there.

We are about to enter another leg of the downturn, and this one will be even bumpier and more uncertain than the last. 

Every so often I read an article that very nearly perfectly reflects my views on the bailout and stimulus packages.  This is one of them, at least from the perspective that we've really solved nothing but instead are actually deeper in debt than before.

How is it possible to solve a crisis rooted in debt by going deeper in debt?

That's a good question, and more and more financial professionals are asking the same thing.  The following article is well worth reading in its entirety at the link below.  Be sure to pay attention to the last sentence, as we'll be spending some time on that very topic over the next few weeks.

» Read more

There is such a tight correlation between energy use (specifically petroleum demand) and economic growth that it is almost unthinkable to suggest that one could actually have a recovery in the economy absent a recovery in petroleum demand.

But that's what we are being asked to believe, if we put the results of two separate government reports together that both happened to come out today.  The first says that the US economy shrank by only 0.18% percent in the second quarter, or at an annualized rate of 0.7%.  The second says that oil demand in July retreated to a level last seen 13 years ago.

These do not make sense in the least, and one of them has it dead wrong.  You know where I am going with this already, don't you?

Here's the first: » Read more