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Dividends to disaster. Let them ride bikes, (Let them eat cake) A lot of underemployed carpenters and metal works, ready to bring forth the
Okay, I’ll do my best to give some counter to your views in this rundown. But do keep in mind that I don’t have any real opinions and for the most part I doubt everything and I do understand that you have your doubts too.
First, housing isn’t necessarily the end all be all for America. Before we got all weak in the knees over our big boxes out in the fake country sides better know as suburbia, we used to be an energy country. I’m sure by now you’ve read the statements put out by Citi on how America will become the next big energy producer. I don’t know if it is really possible or if it is just extremely wishful thinking, but I don’t doubt that we’d destroy anything that gets in the path of this goal. Meanwhile, Obama has gotten friendly to the idea and is slowly easing his position on this. I can’t imagine his prior decisions where anything outside of political chess moves anyway. I think the new thing is, ‘frack baby frack.” And we have increased our production (at a high cost of course) from ~6 mlb per day to 7. The Citi projections have us jumping to 14 by 2020. The chart just looks stupid though. Fracking has us going parabolic along with spikes in Canada and a notch up in Mexico, but Saudia Arabia and Russia are flat? If we go up do to technology, why wouldn’t they?
Now, the car thing. As the population increases, isn’t there more stuff near by? Don’t cities expand? Or do people just keep moving further and further out? It seems like in America that the ‘walk score’ helps the home value so long as you aren’t right on a busy street (no one likes to hear traffic). And when I’ve visited Germany, Spain and other Euro countries, there was always a shop nearby, The trains were really good to. Driving sucks… But the car makers can overcome this by making really expensive cars, can’t they?
Public sector jobs and Private sector jobs are the same thing aren’t they? It seems like the real job killer these days is technology. The post office used to employ more people, then the internet and email came along and created jobs and killed jobs at the same time. I don’t see any major trends in that chart jumping out. They both go down and up based on policy if anything. After the dot com bust there was some Keynesian stuff at play and now we have some Austrian stuff at play… I’m sure it will shift around again. The pendulum swings from end to end every few years because of something ~ technology? I have no idea, but there isn’t any real jump out trend there, unless I’m blind or stupid… Maybe both lol.
As for the Fed stuff on inflation, i.e., interest rates- didn’t you post a chart a while back with fed sentiment on interest rates that outlined the 12 or so views with little dots that had a few more fed presidents each quarter moving up each quarter until 2014 when the rate would eventually move? I think so and if so, seems to be right on schedule…we have number 1 in 2012. Is this really shocking? And honestly, do you think inflation projections will continue down forever? I mean, eventually every chart that looks like that inflation projection chart heads the other way, just like the fed funds rate chart you’ve posted several times. It came from way down in the ~40s/50s to way up in the 70s/80s to way down now… its going back up eventually, isn’t it?
Same goes for the top 1% dividends slide. I know you say taxes won’t go up but as soon as there is a war on, they will have to go up, right? its always the excuse historically… it just has to be a big one and we have to be broke. Perhaps you are talking about the short term, but I’m only 30… I’m sure I’ll see a tax hike in my lifetime and the only way is a big war. I think Faber has that one right. Unless technology has made that obsolete too. In which case, great. We just need a way to eliminate debt based money and then its off to the races… maybe?
Capital requirements is way too philosophic to really matter. Of course the number is arbitrary, but I think they have to have a line in the sand for now. 8% is just such a line, but the real issue is over them taking x% off the top which often sucks the innovative folks out of productive fields… but we’ve seen a shift there too. Just like that article you posted a long while ago about how MIT grads were going to wall street… now it seems like policy is forcing them to look elsewhere for the big payday- Am I wrong?
And when have Irish and Italian economies ever been good? Thanks to twitter we all know how sucky they are now, but I don’t think anything has changed. Maybe it has but I don’t remember ever hearing about a soft landing in Italy, not even in my history books… well, Rome. And the IMF v. China is old news. Hasn’t it always been East vs. West?
And about blah blah blah, i.e., blah +. Good. It makes sense and is the responsible way to manage the world economy. I was looking at possible extra degrees the other day (cheap ones I might add ~3-7K- which my company will pay for too) and saw a few MBSAs out there… masters of sustainable economics. The field I’m in doesn’t even require real physical product to turn a profit. Our focus is SAAS because it yields a high margin contribution. Why? because we don’t need much if any resources to increase units aka sales. I read once that the entire internet weights about 5 grams. I’m sure it requires a fair bit of energy, but a few solar panels later and some geothermal and we’re probably good. We can grow our veggies on the roof and filter our water~ Is there really a big Apocalypse coming? Eventually I’m sure, but in the next 4 years? Man, thats tough to put odds on. That don’t look good (in my eyes) at this point… hell, even a decade is a stretch.
I think plateau oil is right on actually. Wells due the bell shape because there are other cheaper wells that help drive the downside down. But, when there isn’t anyting cheaper, we pump in the money and except a lower EROI and the result is a long flat line- just look at natural gas. But what I don’t know is how long that plateau is and what happens after that… is the down slope even sharper? That, I think I will live to see, but I hope not.
Let’s face it….the energy needs to flow or those boxes are looking very silly.
The US is in a better position (than Europe for example…or Japan) with a lot of energy to burn, but strangely, I doubt it will do them much good. In a strange way, it would be better for the world (maybe) if the US found itself very energy constrained like everyone else…….then maybe, just maybe the world would get together and sort out some policies that would be in the interest of all the people of the world.
(this `me super-power, you weak-fuck` politics is revolting)
Technology. This shows how things work in the real world. Reactive or proactive.
Strangely, I don’t think technology is changing much and leaders who noted this could start to get ahead of things.
Inflation. No, not heading down forever….just being low forever.
Dividends will stop rising and start to fall.
Return to labour will not fall forever, but will stay low (until `the revolution`)
Public / Private. Private is open to Schumpeterian destruction, public not so much. The big problem here is that `capitalism` is not being played out and weakness is being allowed to survive. (this may be `the modern system` (and it is hard to see how it will work)).
Capital in banks. 8% is arbitrary, but the fact is that it is a number that is meant to `do a job` and 8% is a silly number for doing any sort of a job. Reserve requirements could be brought back.
Hello again…I have decided to make this into a video, so the rest are just cues for me to speak about.
“8% is just such a line, but the real issue is over them taking x% off
the top which often sucks the innovative folks out of productive
fields… but we’ve seen a shift there too. Just like that article you
posted a long while ago about how MIT grads were going to wall street…
now it seems like policy is forcing them to look elsewhere for the big
payday- Am I wrong?”
“And when have Irish and Italian economies ever been good?…..”
“…. Is there really a big Apocalypse coming? Eventually I’m sure, but in
the next 4 years? Man, thats tough to put odds on. That don’t look good
(in my eyes) at this point… hell, even a decade is a stretch.”
“I think plateau oil is right on actually. Wells due the bell shape
because there are other cheaper wells that help drive the downside down.
But, when there isn’t anyting cheaper, we pump in the money and except a
lower EROI and the result is a long flat line- just look at natural
gas. But what I don’t know is how long that plateau is and what happens
after that… is the down slope even sharper? That, I think I will live
to see, but I hope not.”