Household Net Worthless: Poverty Here We Come

Short selling has a 110.001% chance to be banned the femtosecond following a market’s croak. We’re talking TEOTWAWKI this time, not 2008. Nationalizations, expropriations, martial law, and all the fun stuff. Good luck with the plan, though.

Shorting the market would make sense if we’re headed for deflation. However, hyper inflation is what’s coming. They have the option of defaulting on social security, or creating the money for the ss checks out of thin air. So hyperinflation it will be.

You want to load up on tangible items. Gold is o.k., but with the ever present risk of confiscation, I would suggest a basket of as many different tangible items as you can store. Gold, iron, pipe fittings, copper, lumber, seeds, propane tanks (filled), etc.

When the DOW is at 32,000, you won’t want to answer the phone, it will be a margin call, lol. Yeah, I know the economy sucks. Do you think that will stop the Fed from buying stocks?

I suspect the number of Americans with ANY positive net worth has fallen dramatically so the ‘average’ net worth isn’t all that useful a measure. People who lost jobs were forced to take cash from their IRA’s,401k plans and any other savings they had so a lot of people who had positive net worth no longer do.

Worse, some who think they still have assets may find they don’t when they try and redeem them. Even those ‘lucky’ enough to have defined benefit pensions guaranteed by a company, municipality or state may find it is gone or reduced when they seek to draw it.

People have been focused on the ‘fiscal cliff’ of late and that is a serious problem but there is also a demographic cliff nearing as the post KOREAN war baby boomers (1953-61) reach retirement age. This cohort is bigger than the WW2 baby boom and when they start drawing down their assets or pension funds do the same to make the monthly withdrawals you have to ask… who will be the buyers?

“No, Virginia, Consumers Deleveraging by Default is not a Reason for Economic Cheerleading:

Unfortunately, the economy bulls are leaving something very significant out: defaults. The data is pretty clear. In the latest quarter, first and second lien charge-offs were $303.7 billion (with Home Equity Lines of Credit defaults high and continuing to rise). Meanwhile, aggregate consumer debt dropped by $53 billion. That’s better than 2012 Q1, but the drop in debt from defaults is six times larger than the total drop in debt.

Consumers aren’t paying down their debts, they are simply defaulting. And here’s another way to look at the problem. One in seven Americans is being pursued by a debt collector. And the average amount of that debt pursued has increased by about 8% in just six months.”

https://www.nakedcapitalism.com/2012/10/no-virginia-consumers-delevering-via-default-is-not-a-reason-for-economic-cheerleading.html

… all clearly intended to buy the target companies at more favorable prices.

Geee!
There is not a true market of competition.
Is this the real “free market” that we have always been living under?

I can’t even imagine the “feed fest” that could be happening in Europe.

It must be nice to have access to free money and free loans to be able to make a killing.

Who is making me poor?

My local barbershop owner is not giving up his lifestyle.

Last year, at this time, he raised prices by $2.00 to $12.00.
This year he raised prices by another $2.00 to $14.00.

Since the majority of his clients are seniors, on fixed income, he must be losing a number of his clients.

He might have too many gov. friends advising on what to do to keep his lifestyle.

Would prices go lower or would profits increase when PE firms get involved?

hehehe
The question doesn’t need an answer.

For those who think cutting tax rates for the wealthy spurs economic growth, think again:

“A new study by the non-partisan Congressional Research Service (CRS) using data from the past 65 years found that there is no correlation (PDF) between top tax rates and economic growth. But it doesn’t stop there. The study also found that there is a correlation between the reduction in top tax rates and the increasing concentration of wealth toward the top of the income distribution. The report, Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945, is also clear that this is not only about tax rates on regular income, and points out (PDF) that “changes in capital gains and dividends were the largest contributor to the increase in income inequality since the mid-1990’s.”

This practice leads to income inequality.

https://www.ctj.org/taxjusticedigest/archive/2012/09/its_official_cutting_top_tax_r.php

Stoneleigh,

Thanks for the response. I think that when our perception is challenged by facts to the contrary, it is better to look at things through a different lens, to make sure we have it right. In the present case, we know the USA economy is contracting. Also, the USA dollar is slowly losing World Reserve Currency status, as nations stop using the dollar for bilateral trade.

What are the implications of this? First of all, since the USA’s population is still growing, but the amount of stuff we produce is declining, there is less stuff per person. And since the dollar is SLOWLY losing World Reserve status, our ability to mooch off the rest of the world (ROW) is SLOWLY declining. So our total intake of stuff is declining on BOTH fronts, foreign and domestic.

So to make the ‘deflation’ argument, you have to argue that available ‘money’ will decline faster than the supply of goods available for purchase. I just don’t see this happening. For example, food stamps are certainly a money substitute, at least as long as food stores accept them. Do you see this supply of money declining? Obviously not. It is increasing sharply. This is one of several factors in the rise in food prices.

I agree, in theory, that with the USA govt. running a GAAP deficit of $5 trillion per year, the fact that we don’t have $25/gal gasoline is odd, and indicates that there are a lot of deflationary forces. But with Ron Paul’s elimination from the Presidential field last Spring, it is pretty much set in stone that the federal GAAP deficit is headed to $10 trillion, per YEAR, within a few years.

This is where I think you are making your mistake. They will not be able renege on social security and medicare claims, without declaring martial law and instituting currency controls, effectively ending the dollar’s reign as world reserve currency, which is, of course, hyper inflationary. So these $100’s of trillions in claims will be paid with ‘out of thin air’ money.

Once The Layoffs Begin They Will Hit Like An Avalanche https://chartistfriendfrompittsburgh.blogspot.com/2012/10/once-layoffs-begin-they-will-hit-like.html

PointOneSolutions post=5734 wrote: So they’ll declare martial law, or maybe something else but you can bet your ass that they will not hyperinflate their wealth away.

https://www.saveamericafoundation.com/2012/10/19/obama-fema-corp-recruits-conjure-up-memories-of-the-hitler-youth-of-1930s-germany/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+SaveAmericaFoundation+%28Save+America+Foundation%29

Honestly, the US is mostly under martial law already. Military checkpoints are appearing everywhere, and combat units are being prepared to engage the citizenry on all fronts. DHS is heavily entrenched and armed to full capacity, moreover with the appropriation of 1.4 billion bullets and the 30.000 [weaponised?] drones to be unleashed.

Now battallions of indoctrinated homeland-jugend to be deployed.
These are permanent FEMA corps, making the militarised Emergency Management a permanent feature, while domestic military command and control functions are largely transferred to FEMA directly.
The widespread political persecution of lawful dissenters for protected political speech and political activism denotes a demonisation campaign of anyone deemed a constitutionalist, in preparation for round-ups and purges.

If a nationwide state of emergency is declared, likely as a result of fullscale economic collapse or hyperindignation, most scenario’s project open civil war between the hellspawn ‘government’ and that part of the population who will resist the takeover. A civil war could then result in dollar hyperinflation or perhaps hyperdeflation, depending on fate.

If at any point full disarmament of the citizenry is attempted too openly, civil war will almost certainly be triggered, as prudence would dictate kinetic constitutionalism.
Only a select few combined disaster scenarios, such as those involving a pandemic bioweapon release, might interfere with the emergence of a coherent resistance of the citizenry and some portion of the military against the enemy takeover.

If there is no civil war, in either swift or prolonged collapse, the hostile occupying force now in control of the government will otherwise most certainly proceed with systematic extermination of the US population, the evidence for genocidal preparation is everywhere to see. All the infrastructure for mass concentration of [displaced] populations is in place, having an obvious dual use under guise of natural or manmade disaster contingencies [collapse and pandemic scenarios included]. Its undeniable that if the FEMA camps have a combined capacity for interning up to 50 million people, in cascading logistical collapse, there would not be sufficient food supply to keep interned people alive in those camps for ‘re-education’, if that was ever the enemy’s intent.

In several scenario’s, only a timely and proportionate civil war or constitutionalist military coup may prevent a successful and complete genocide of all targeted groups [at least 40-60 million people, basically anyone with a functional moral memory, especially the veterans], and the subsequent establishment of a supertyranny, although full military conquest/liberation of the US by either side would result in >90% casualty rate of the population.

Of course these scenarios are oversimplified with only two sides, red and blue teams under a singular ideological divide [not democratic/republican], while there will likely be geographic and racial subdivisions of the participating combatants, multiple state insurrections and secessions are also possible.

Perhaps the collapse will be so instantaneous that the police state would not activate and commence purging but instead become unravelled, the DHS and military personnel would desert, go home to protect their families rather than follow orders.
Something completely different may happen instead, but as I see it, many plausible scenario’s [admitting the full reality of tyranny and its dark synergy with economic collapse] leave the US with no more than 100 million people left alive by 2020. I pray none of the worst scenarios happen, the collapse itself will be dire enough.

A Nation That Doesn’t Make Things Is Not A Real Nation https://chartistfriendfrompittsburgh.blogspot.com/2012/10/a-nation-that-doesnt-make-things-is-not.html

Clearly from articles posted many are not getting what seems obvious to me.

My background was in investing where I made good returns for a few years because I had methods of forecasting that were unusual. One part was to follow a companies supply and waste and apply it against a stocks returns to confirm posted earnings. Another was to track misleading statements to see if they were increasing or decreasing.

I pulled out of the markets 10 years ago due to highly deceptive accounting practices and a world wide trend of shortages.

Capitalism only works if there are surpluses. By its own definition it is the redistribution of wealth. If there is no surplus capitalism will not work. This is always the case. Don’t believe it then look at any third world economy. No 3rd world economy benefits from capitalism if there is no real surplus and in fact all the worst cases of dire position are only capitalist 3rd world economies.

What this article proves along with others likewise printed is that we have consumed the grand surplus. We will continue to receive less of the pie because there is less in total. What I mean is never before in even recent history has so much land been put to agricultural use there is no significant amount of useful land yet to be cultivated. Mines have mined out all significant finds and vanes are much smaller today. Fishing industries around the world have fished the stock to its limits. Oil is pulled out of the ground at an ever slower pace. In each and every place consumption is meeting its roadblock of raw material. There is no new find that compares in quality and quantity to what our fathers found.

So this is what is happening – the end of an empire – the end of a concept of capitalism. Its only a problem if one is totally leaning on the idea of capitalism. The idea that we need to consume to feel better. The idea that our neighbours needs don’t matter. The idea that we can consume our way out of a problem.

Its a good thing. The math of the situation is coming home to rest – we consume greatly past our ability to contribute. No one is working hard enough to consume 10 years of natures energy in a few months. Then to believe that your children are deserving of even greater consumption – I will be glad when this evil is over.