Will The Collapse Of Spain Put Romney In The White House?
Let’s be clear about this: Mitt Romney can only win the election if the American economy numbers plummet - significantly - in the next 30 days. Mitt's op-eds about the Middle East are not going to cut it. That is, of course, major caveat, unless Mitt has Diebold firmly in his pocket. But that for us is a known unknown.
There can't of course be any doubt that the US economy is a really big, if not the number one, factor that decides the presidential elections stateside. If things look good financially, the incumbent president sits pretty; if they are scraping the gutter, (s)he risks getting all the blame for it.
But who really knows whether the economy is looking up or falling down? Just about all the truly relevant data reside either in dark vaults or in some remote region of cyberspace protected by prime numbers and black holes.
Hence, and this is no coincidence, it’s not the real state of the economy that matters, it's the perception of that state that drives the opinions of experts, analysts, pundits and the public at large. And that is true, obviously, not just in the US, but on both sides of the pond, and beyond. All incumbents across the planet have a huge interest in making their economies look as good as they can get away with. You better look good than feel good.
For the challengers that is not exactly true. They can score credits by pointing out where things are not working, and by talking about how - and how much - they would do better. But they can't really go all out, because perception and opinion have reached a certain more or less stable level, which doesn't allow for an overdose of difference. Metaphorically speaking, you have space for perhaps a 10 or 20 percentage point deviation from perceived wisdom, but never 90%.
Go too far and you risk you entire nation's ridicule. It doesn't matter whether you're right or not. And on top of that, all your potential voters have a vested interest in the same illusion that the incumbent has: too rosy a picture of their own circumstances. A very human condition, we're all great liars.
So what's a challenger to do? Not a lot of room to maneuver. Then again, it seems quite simple really: Mitt Romney would seem to need a dramatic event that changes everyone's perception of the economy. Headlines such as "Republicans Want Mitt Romney To Destroy Obama On Libya This Week" clearly won't do it.
Ergo: ideally, the Republican team must push the button on Greece or Spain. Make sure that for either, or both, or a dark horse (Ireland, Italy), there's a strong hint, danger, or just the perception thereof, that they will leave the eurozone in the near future, if not tomorrow morning. That would cause an earthquake across the world's stock exchanges. And that might suffice to shake up American voters enough to cause a dramatic shift in the polls and eventually the election.
It would, however, also cause a huge move into the US dollar, perhaps gold, temporarily, and that might not be all that great for Mitt once he's taken up domicile at 1600 Pennsylvania Avenue. Would he care? Doubt it.
But does it really matter if Romney would speed up the demise of Greece or Spain? They're going down anyway. It might turn out to be a blessing in disguise for them. The ones really hurt would be the banks and their owners. Come to think of it, that might be precisely the reason Romney won't try.
At the same time, it should be clear both to him and to his backers that he has no chance of winning if things remain as they are today. So why haven't they pushed those buttons yet? Good question. Known unknown again. Spending hundreds if billions of dollars on luke warm TV ads just to see the other guy take it with ease, and a big smile to boot, where's the fun in that? Makes you wonder who backs Romney, and why? And why are they satisfied with this boring "race" to nowhere? Walter Mondale ran a more exciting campaign than this, for pete’s sake.
If I should venture a guess, I'd lean towards the idea that Romney and all his über-rich "friends" (he doesn't strike me as a man with an overdose of real friends) are stuck inside their own paradox. To make him win, they need to cause or hasten an economic disaster. But that would cost them a lot of money, far more then they spend on the campaign. Big gamble. One which by now, 30-odd days before the election, they are undoubtedly aware of. And that can only mean that anything can happen. Only chaos is certain. Unless Mitt's been a set-up patsy boy from the get-go. Hey, at least that would explain Romney's non-campaign so far.
As for the global economy, at least the fundamentals are clear, even if everyone and their pet parakeet are still watching the S&P for their work-daily feel-good dose. To wit, here's my daily grab:
EU unemployment rises to record. Mass protests in Portugal and Spain; teargas, rubber bullets and all. Ireland becomes a nation of feeders. Japan sentiment more pessimistic than it has been in ages. Spain needs €60 billion bank bailout, Spanish banks will need up to €105 billion, warns Moody's, Spain wants to borrow $267 billion in the bond markets. Iran's economy "is not collapsing, but it is on the verge of collapse". Dutch home sales down 5%, prices down 8% yoy. UK housing prices keep falling. UK manufacturing downturn deepens. France manufacturing nosedives. Car sales collapse in Spain and France. 'Six-month real M1 money' is contracting even faster in France than in Spain. Greece enters 6th year of recession. Chinese manufacturing contracts. Australia contraction in manufacturing new orders extended into a seventh month. Australia is "a credit bubble built on a commodity market built on an even bigger Chinese credit bubble," wrote SocGen's Dylan Grice. Yada yada.
Easy pickings for Mitt, one would say. Bulldoze Greece, hammer Spain, deplete Portugal, delete Ireland. From that point of view, it's potentially going to be a great next 30 days. Will Romney step up to the plate and do to a country what he routinely did to the companies he bought at Bain? He is sort of a specialist at bankruptcies, lest we forget. Convenient. Very.
Honestly, it seems a bit late in the day, but then, this is a world full of unknown knowns. If Mitt Romney and Paul whatshisface don't do something spectacularly dramatic soon, they'll have lost the election. They have nothing left to lose. That is, unless they're patsies, and were set up to lose.
All the opportunities are there, let's see if they grab on to them. If they don't, let's wonder why. Come to think of it, they may be aiming to expose Obama as a child molester or something weird like that, but that, though a winner, looks to be a long shot. Obama's machine is not entirely clueless.
No, if they want half a chance, it has to be either the economy or the Diebold machine. Me, I’m planning to sit back and enjoy.
Just a side word of caution: all those economies that try to make you believe they're recovering, doing well, great: they're not. The whole kit and kaboodle is broke as can be. And that can be used for political purposes, but Romney has to be clever about doing that.
For now, Europe seems to be in line with Obama's request to let Greece, Spain remain in the eurozone until after the election. That makes the EU a pretty big factor in the US elections. Well, unless you believe that Greece et al can stay in the eurozone forever. If you don't, the perception - and deception - being perpetrated these days keeps the S&P where it is, and thereby Obama where he is. So what will Mitt do? Sit back and let Europe decide the US elections? Makes him a patsy!
I already said it's going to be an interesting next 30 days, didn’t I?
Of course. It's in between the backers and the candidates where I think you find the people who do care who wins. For some reason that casino guy, Adelson(?!), springs to mind. He's betting big, tens of millions of dollars, on Romney. There's a lot of deep dislike in America for Obama. And for Romney too, of course. And there are many people in the grey shadowy area around the candidates who do care who wins, either for monetary reasons or for purely personal ones.
The best way to accomplish this transition is not through false demand created by fiat printing governments. That is what put us here in the first place. The answer is for force to step back and let the chips fall, just as occurs everywhere else in nature. Free markets are organic. Manipulated ones are false, false as the fiat systems that manipulate them.
As for financialization, well, what real wealth is created through rehypothication?
As for private sector investment and productivity, yes, these have fallen at the feet of ever expanding non productive government.
In order to grow this pile of wealth, to at least keep up with population growth, there has to be capital investment, over and above replacement levels. This isn't happening. You can especially see this in the USA where the non government (wealth creating) portion of the economy is shrinking, even as the population continues to grow.
There are multiple levels of competing claims for the world's wealth. One example is the rehypothecation of client funds. Another is central bank leasing for sovereign gold. They might have a receipt for the gold, but there is counter party risk.
There are many theories to explain how these competing claims will be resolved, e.g. deflation, hyperinflation, etc. However, the weak CapEx spending is just making the problem worse, because there is less stuff to claim.
I read the kitco article and I am not sure about your point. Silver is in short supply and mining companies aren't being invested in. Here is my take on this: Look at old silver mines and you will find generous vanes but new mines aren't so generous. Old mines had simple extraction but todays mines are more costly. My belief is if you are doing a rare materials play stay out of exploration because the planet has been mapped and any good vanes that existed a hundred years ago are long gone.
Will an energy cost inflation relate to dollar inflation? I just don't know. The politicians are awesome media spinners and possibly can keep confusion going on longer.
Or would we have been living within our means?
Like we used to?
Like we will again learn to do...soon.
Just for the record: I was born in a depression (it actually started when I was about 6 years of age), and lived in it up until 30 years of age. Consequence of my country's oil peak and repayment of debt (we were the suckers who paid it back).
It's not very cozy, and I don't see many learning to do it. It was also very mild compared to the multiple implosions coming up.
Or would we have been living within our means?
Like we used to?
Like we will again learn to do...soon.
Granted, commodities have also become more expensive based on oil inputs, and dollars have remained slightly pricy based on stagnant earnings, in part caused by energy and commodity price extraction, as well as falling productivity and government consumption (The DoD being the worlds largest single consumer of petroleum?) This in mind, we are well past "peak dollar value" here. That took place in 1913.
That posted, seems to me the one sure best "regulator" in all these equations would be the end users, the markets. The biggest obstruction to this natural regulatory function is the only entity which, in it's quest to remain in charge, must attempt to mask this natural market function to prevent it from discovering and exposing the real price at which these scarce resources should be valued. Governments.
If these "controllers" should simply step aside and let the actual players adjust to these realities, while pegging currencies to things real, this distorted mess would be over sooner. The longer they obfuscate and wangle, the harder the reality will be when it inevitably takes place.
Case in point. As an (ex)contractor, I could bid distant work based on my ability to absorb fuel costs for my always overloaded "giant pick up truck," but would almost always be under bid by someone in that distant local. Enter government distortion, my fuel is subsidized, off gross, before net.
Now I get the job next door to my distant competitor, and he gets the job next door to me, and our "giant PU's" pass in the night. Oh, and governments continue to protect their pals in the oil patch. Imagine if governments could own oil directly. They could subsidize it down to half price, to tweak their economic numbers, and tax intake, like in Mexico and many other places, and we could burn it all up pronto. State conservation?
Distortions created by central planners are rife with these absurdities. Not for these, the math would automatically equalize all. Any small contractor will tell you "First, conserve, then see if you can squeak out a profit." Just more so without a subsidy!
Till then, AC's for Eskimo's furnaces for Samoan's and Drone's for Afghans!
ps. The overloaded G-PU is because no sane small operator wants to enter into the world of Cl-5 over regulated trucking. PU's and trailers are the only way to put food on the table in the trades. Please don't ask how bad California regulations are, you wouldn't believe my response.
Easier said than done. Even with falling consumption, gasoline is near the all time (sustained) high dollar price in the USA. Obviously this is due to the end of cheap oil.
I find your theory a bit flawed, since the easiest way to mask the end of cheap oil (cheap everything?) would be to scale back on the non stop wars they promote. The military is a huge consumer of oil and other goods. This leads to a lot of jobs, but a lot of the 'investment' ends up in silos or as exploded ordnance. Contrast this with miners that blow up hillsides for the purpose of producing goods that are in demand.
You might find the following linked article interesting. It really destroys the 'deflation' theory, when you think about it!!! If you don't have much time for extra reading just ponder this:
"Precious Metals in the Rehypothecation Era
The Samsung/Cluff Gold deal also comes in the era of rehypothecation, which involves a broker pledging as collateral for a bank loan the securities in customer margin accounts.
Basically, the rehypothecation of assets, which infinitely dilutes claims on real assets, can and will ultimately lead to total losses even for investors who thought that they had strong collateral backing.
Furthermore, the inventory of the world's credible assets is literally evaporating in absence of CapEx spending, which is also one of the reasons behind the ECB's seemingly endless lowering of its collateral requirements."
www.kitco.com/ind/Lewis/20121004.html
I think that yours is a well-reasoned point of view. I'm inclined to agree. I've certainly never gone down the bilderberg rabbit hole before, but were I to do so, I think yours would be a reasonable methodology. Just my two cents.
So lets see what these Bilderberg über-rich are up to. How? A few rules to track people who are deceptive. 1) Used by the court system its called the law of first utterance: deceptive people tell more truth initially and continually back track to support what they want you to think. 2) The nature of people is to resist change keep doing the same thing. 3) There is a set of formulas used by these groups to predict behaviour which has made them super successful.
So when the agenda for a Bilderberg meeting was leaked and I knew who was speaking I then googled them. What is important is what each individual said 6 months prior. That will tell you why they were chosen. Following the week prior to them speaking will tell you how they polished their concept. Not perfect but when you track all of them you get the agenda. Depleted resources and overpopulation seem to be the only topic they speak of.
I picked a über-rich and followed his words, the first words he would use describing a new event. The verb fear was used repeatedly especially when as what direction he say the economy going, His common phrase: "I fear that ..." Because I believe this individual lead this group and seems to be a spokes person for the group internally, I believe this is the reason for them to act. It is the common driving force of action among the über-rich.
What formulas do they follow? Demographics the following of similar aged group and similar culture and what their habits are. Governments and über-rich follow this and chart or graph it.
Like it or lump it government around the world didn't need to talk to have the same agenda they just need to use the same tools. Suppose resources are depleted. As an elected government I must try to hide this fact as long as possible to prevent collapse of the economy. Depleted resources doesn't mean we are even low on resources but that we are just past over half use of stored resources. The second half use more resources to extract than the first and cost of extraction exponentially goes higher until the cost nears the benefit at which point no investor will risk extraction. Governments around the world know through history how sizes of populations act and what thresholds they can approach.
Since no geologist would argue with the concept that resources are costing more to extract and when extracted resources are not of the same quality of the past we can conclude one thing: As long as the real cost of obtaining cheap energy/resources goes higher, which will occur in the event of peak resources until exhausted, we have real inflation. The über-rich have to prevent this from being realized otherwise we have a collapse. This is the co-ordinated efforts of the über-rich Bilderberg and governments around the world.
And with that statement, who still doesn't think QE is going to accomplish what it is designed to do? Bail out governments, unions, their pension funds and banks, all the President's owners.
Simply put: Amazing work. Can't wait to read the next dose of truth and cold hard logic.
A link to this post from my own blog (and a somewhat shameless plug for my little corner of the internet) can be found below.
Thank you!
jthomsworld.blogspot.ca/2012/10/can-romney-capitalize-on-chaotic-state.html
www.oftwominds.com/blogoct12/artificial-economy10-12.html
"The Fed [ECB] simply does not care whether its actions are illegal or not. The Fed [ECB] is operating under the principle that it's easier to get forgiveness than permission. And forgiveness is just another means to the desired power grab it is seeking.
Politicians in high power as well as central banks do not give a damn about concerns, nor do they care about obvious illegalities. They do what they want because they consider themselves to be above the law."
They ARE the law. All central banks are colluding. If politicians don't go along, they are removed and puppets are installed. Madness.
Charles Hugh Smith speaks of this madness in his article entitled, "If You Prop Up an Artificial Economy Long Enough, Does It Become Real?" He concludes with:
"It's not difficult to predict an eventual spike of instability in such a system; the only difficulty is predicting the date of the instability."
"The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."
In other words, we'll do whatever we want and pretend it's for employment, stable prices, and moderate long-term interest rates. If things don't work out that way, we'll manipulate and fudge the numbers until they do work out. There.
Tao, I'd like to see the Federal Reserve gone! It couldn't come too soon.
Read it right to the last paragraph.
globaleconomicanalysis.blogspot.com/2012/10/concerns-mount-that-ecb-bond-buying.html
The language you refer to is found in Section 2A of the Federal Reserve Act. Section 2A did not go into effect as law until 1978.
The language does not mandate price stability or maximumum employment, but maintaining the long term growth of monetary and credit aggregates to do so.
The language found in Section 2A first went into effect in 1975 as a joint resolution of Congress at the urging of Chicago School monetarists like Milton Friedman who argued that the Fed's tinkering with the Fed Funds Rate was simply not good enough, that targeting the size of monetary and credit aggregates was required. Well, the law was put in place, Volcker tried it, and Volcker failed. The Fed stopped trying to target monetary and credit aggregates in 1984.
Be careful what you wish for: targeting monetary and credit aggregates was a stupendous failure and proved the quantity theory of money wrong. No need to go back there.
Make sure to read the entire section:
www.federalreserve.gov/aboutthefed/section2a.htm
Or elected ones, for that matter?
It's a well-oiled machine of carefully orchestrated booms and busts, privatizations, law changes where necessary, civil (not criminal) penalties and fines, etc. Their motto: "Let the fraud begin!"
The wine is flowing, and everybody's happy in the Hamptons!
All corporations and banks are interconnected, but we still have some power: STOP BUYING ANYTHING FROM THEM! Just go on strike. Don't buy houses, cars, whatever. Bleed them.
Do not play their game.
And for this appointed banker represented bureaucrat to be anointed with the task of "promoting" employment, relieving all individual employers and employees of the burden, suggests he "knows" more about the need to hire and layoff than the small businessman down there on main street.
In my experience, on both sides of the employee/employer paradigm, when I couldn't land a job, I lowered my wage demand to get in the door, where I could debut. On the other hand, as an employer, when business slowed, and I was losing money, I cut workforce and spending until things balanced. That usually occurred in the midst of Fed "inspired" busts, (followed by the same inspired boom) created by their arbitrary interest rate increases.
But, after all, the Fed knows much more about the value of risk capital than the users of said device, as it sits up there in it's penthouse offices and looks at the clock, counting it's outrageous income, stolen from the taxpayer, which flows is spite of the economic maelstrom raging outside it's doors.
But, now the blue sky! The market system of free association will prevail, as long as there are two or more people with something to exchange, and these egotistical power mad manipulators are eventually bypassed as being too obstructive and aggravating to deal with. Best for one to escape his cage about now, and develop a few free lancing skills.
Hey, in the Soviet Union, a few years before the collapse, a pair of Levi 501's was cheaper on the streets of Moscow, than in New York, (on an exchange rated basis) in spite of the long prison terms associated with alt market activities. Might be the "authorities" had to look the other way, lest they not have a pair for themselves.
"...to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."
Karl says: "STABLE means unchanging. It does not mean "the rate of increase in consumer prices (is) low and stable" -- it means the target rate of change in consumer prices is zero.
This is the "Grand Lie" told by Bernanke, by Greenspan and by those who came before them. It is an active and intentional act of law-breaking by every single member of the FOMC and has been serially since 1913!
Congress could change the law. It could specify that inflation should be "low and stable." But Congress said no such thing. Congress mandated stable prices, not "slowly-increasing" prices.
And let's not kid ourselves as to the actual impact of such a policy. The so-called "2%" inflation rate that is allegedly "low and stable" sounds like it's a pretty harmless thing. After all, how can 2% hurt you?
Well, over 100 years, what does 2% inflation turn a $100 item into? If you said $100 + ($2 (2% of $100) * 100), or $300, you're wrong. Because an inflation rate is an exponential function that item will cost $710.26 one hundred years down the road.
In point of fact, however, the actual inflation rate has been approximately 3%, not 2%. That doesn't sound like such a bad "miss", does it?
Well that same $100 item under a 3% inflation rate costs $1,865.89 100 years hence."
"Stable" means: steady - firm - steadfast - constant - fixed - solid.
Inflation = perpetual slavery
"So the countries we have are exactly as fragile as the financial system. That is not something that I initially realized. I knew that there was a lot of corruption. I knew that there was a lot of inbreeding between the financial and political elites, but I didn’t realize that the nation-state, as such, is pretty much gone."
Both Romney and Obama are taking their orders from the financial elite. No matter who wins, the financial elite has got it covered.
Who else thinks there are wealthy insiders that will be able to take their gains out of the markets before the big decline? The unlucky investors will be left holding empty bags and lots of debt. And aren't these the people who the wealthy prey upon to buy up whatever assets they can at cheap prices when people need to sell their stuff to pay bills.
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