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Peak Insiders
by
Gregor Macdonald
Prepare for the Collapse of the Dollar
by Gregor Macdonald, contributing editor
Monday, January 30, 2012
Executive Summary
- The decision whether to export its commodities will become increasingly strategic to the US
- Understanding why Washington has decided to kill the dollar
- What’s driving the dollar now
- What to expect from a coming secular decline of the dollar
- Why the deflation risk is ending and grand quantitative easing (QE) is now underway
Part I: The Price of Growth
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II: Prepare for the Collapse of the Dollar
The just-released GDP report, which wraps up the 2011 performance of the US economy, made for unhappy reading.
While the headline number was stronger in the fourth quarter, after adjusting for inflation, the reading for the entire year came in at 1.7%. As Business Insider’s Joe Weisenthal put it, that is the “final, pathetic growth number for 2011.”
Many writers over the past year, including me, have hammered away at the idea that the performance of the US economy in real terms was statistically indistinguishable from a flatline in the aggregate.
No one disputes that some sectors of the economy, like exports and shipping, are growing. At issue is whether the economy as a whole is operating for the majority and not just segments of the populace. (Again, in real terms.) At a growth rate of 1.7%, we can at least conclude that no meaningful headway can be made in employment. Since the 2008 crisis, the US has been building a multi-million sub-population of people who are unemployed long-term. Only monthly job growth that first utilizes all new workers coming into the labor force will be able to eventually cut into this labor pool. Hence the revelations from the Federal Reserve this week related to targeting inflation, maintaining a zero-interest rate policy through late 2014, and conducting further quantitative easing (QE).
Before we dissect this week’s Fed meeting, let’s take a look at the recent trend in exports.
Prepare for the Collapse of the Dollar
PREVIEW by Gregor MacdonaldPrepare for the Collapse of the Dollar
by Gregor Macdonald, contributing editor
Monday, January 30, 2012
Executive Summary
- The decision whether to export its commodities will become increasingly strategic to the US
- Understanding why Washington has decided to kill the dollar
- What’s driving the dollar now
- What to expect from a coming secular decline of the dollar
- Why the deflation risk is ending and grand quantitative easing (QE) is now underway
Part I: The Price of Growth
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II: Prepare for the Collapse of the Dollar
The just-released GDP report, which wraps up the 2011 performance of the US economy, made for unhappy reading.
While the headline number was stronger in the fourth quarter, after adjusting for inflation, the reading for the entire year came in at 1.7%. As Business Insider’s Joe Weisenthal put it, that is the “final, pathetic growth number for 2011.”
Many writers over the past year, including me, have hammered away at the idea that the performance of the US economy in real terms was statistically indistinguishable from a flatline in the aggregate.
No one disputes that some sectors of the economy, like exports and shipping, are growing. At issue is whether the economy as a whole is operating for the majority and not just segments of the populace. (Again, in real terms.) At a growth rate of 1.7%, we can at least conclude that no meaningful headway can be made in employment. Since the 2008 crisis, the US has been building a multi-million sub-population of people who are unemployed long-term. Only monthly job growth that first utilizes all new workers coming into the labor force will be able to eventually cut into this labor pool. Hence the revelations from the Federal Reserve this week related to targeting inflation, maintaining a zero-interest rate policy through late 2014, and conducting further quantitative easing (QE).
Before we dissect this week’s Fed meeting, let’s take a look at the recent trend in exports.
by
Chris Martenson
In this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish set their sights on:
The Fed
- 0% interest rates through 2014 (at least!). There’s not even a pretense left now about whom its policies are really directed at helping.
- Europe
- In the words of Shakespeare, the latest proposals are simply “sound and fury, signifying nothing.” At this point, a deep and prolonged recession is a certainty.
- Japan
- Decades of can-kicking are coming to their limit. 2012 could well be the year Japan topples into crisis.
Recorded on Wednesday, this podcast features Chris and Mish tackling the parade of head-scratching news announced by various governments and central banks this week. It’s almost as if these entities are competing with each other for the Darwin Award.
Off the Cuff: It’s a Mad, Mad World
PREVIEW by Chris MartensonIn this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish set their sights on:
The Fed
- 0% interest rates through 2014 (at least!). There’s not even a pretense left now about whom its policies are really directed at helping.
- Europe
- In the words of Shakespeare, the latest proposals are simply “sound and fury, signifying nothing.” At this point, a deep and prolonged recession is a certainty.
- Japan
- Decades of can-kicking are coming to their limit. 2012 could well be the year Japan topples into crisis.
Recorded on Wednesday, this podcast features Chris and Mish tackling the parade of head-scratching news announced by various governments and central banks this week. It’s almost as if these entities are competing with each other for the Darwin Award.
by
charleshughsmith
Determining the Housing Bottom for Your Local Market
by Charles Hugh Smith, contributing editor
Monday, January 23, 2012
Executive Summary
- Why we may need to revisit how we determine “fair market value”
- Local factors to consider
- The importance of sentiment, and how to use it to your advantage
- The emerging two-tier pricing structure for most markets
- Five tools that will enable you to estimate how near (or far off) prices in your local area are from a bottom
Part I: Searching for the Bottom in Home Prices
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II: Determining the Housing Bottom for Your Local Market
In Part I, we examined how the policies of the federal housing agencies and Federal Reserve have fundamentally socialized the US mortgage markets and are propping up housing sales and valuations via zero-interest rate policy (ZIRP), housing subsidies, and various loan guarantees.
Along with the structural factors outlined in my December series, Headwinds for Housing, this is the backdrop for our individual assessments of is this the bottom in my local real estate market?
Why This Time May Indeed Be Different
Before we look at some tools that will help us make that assessment, I want to stipulate that this overview is aimed at small-time investors, not institutional players, and that it may first strike experienced real estate investors as too basic. However, we must be alert to the possibility that this real estate market, so dependent on Central State intervention, ownership and policy, is qualitatively different from previous eras. And so the lessons of previous markets could be misleading, akin to “fighting the last war.” Thus we would be wise to start with the most basic tools as a foundation for further investigation.
Determining the Housing Bottom for Your Local Market
PREVIEW by charleshughsmithDetermining the Housing Bottom for Your Local Market
by Charles Hugh Smith, contributing editor
Monday, January 23, 2012
Executive Summary
- Why we may need to revisit how we determine “fair market value”
- Local factors to consider
- The importance of sentiment, and how to use it to your advantage
- The emerging two-tier pricing structure for most markets
- Five tools that will enable you to estimate how near (or far off) prices in your local area are from a bottom
Part I: Searching for the Bottom in Home Prices
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II: Determining the Housing Bottom for Your Local Market
In Part I, we examined how the policies of the federal housing agencies and Federal Reserve have fundamentally socialized the US mortgage markets and are propping up housing sales and valuations via zero-interest rate policy (ZIRP), housing subsidies, and various loan guarantees.
Along with the structural factors outlined in my December series, Headwinds for Housing, this is the backdrop for our individual assessments of is this the bottom in my local real estate market?
Why This Time May Indeed Be Different
Before we look at some tools that will help us make that assessment, I want to stipulate that this overview is aimed at small-time investors, not institutional players, and that it may first strike experienced real estate investors as too basic. However, we must be alert to the possibility that this real estate market, so dependent on Central State intervention, ownership and policy, is qualitatively different from previous eras. And so the lessons of previous markets could be misleading, akin to “fighting the last war.” Thus we would be wise to start with the most basic tools as a foundation for further investigation.
by
Gregor Macdonald
Why We Must Embrace Simplicity Now
by Gregor Macdonald, contributing editor
Tuesday, January 17, 2012
Executive Summary
- What current gold demand is telling us about economic growth expectations
- The dangerous conclusion from the famous Simon-Ehrlich wager
- Simpler energy sources are becoming cost-competitive with complex ones
- Why we will move towards greater simplicity, willingly or not
- Why many of our leaders are blind to this trend and will spend the next decade futilely fighting it. Will you?
Part I: Returning to Simplicity (Whether We Want To or Not)
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II: Why We Must Embrace Simplicity Now
The English thinker Thomas Malthus argued in his famous essay on the principle of population that there was no longer sufficient land to feed the world’s rapidly growing population, threatening poverty and famine. But an agro-industrial revolution soon transformed the economies of Europe and North America, and his fears proved unfounded. More recently, conventional wisdom held that market forces would always come to the rescue. Until ten years ago, this hope was largely fulfilled. During most of the 20th century, resource prices—of food, water, energy, steel, for example—declined, despite strong growth in the world’s population and even stronger growth in GDP. Prices fell because of a combination of new low-cost sources of supply and technological innovation. But in the past ten years, demand from emerging markets, particularly in Asia, has erased all the price declines of the previous century.
– Resource Revolution, from McKinsey and Company
It’s taken ten years of relentless inflation in food and energy, with myriad data showing declines in the quality and availability of many natural resources, for it to appear that the global consultancy McKinsey finally “gets it!”
I take this as a potential sign that Kahneman’s Availability Heuristic is about to undergo a sea change with regards to the prospects of technology-driven progress. Two hundred years of history exert a powerful force over people’s outlook, but a solid ten-year reversal of those trends just might be enough to induce some folks to begin reconsidering their previously-unshakable confidence in previous trends.
Why We Must Embrace Simplicity Now
PREVIEW by Gregor MacdonaldWhy We Must Embrace Simplicity Now
by Gregor Macdonald, contributing editor
Tuesday, January 17, 2012
Executive Summary
- What current gold demand is telling us about economic growth expectations
- The dangerous conclusion from the famous Simon-Ehrlich wager
- Simpler energy sources are becoming cost-competitive with complex ones
- Why we will move towards greater simplicity, willingly or not
- Why many of our leaders are blind to this trend and will spend the next decade futilely fighting it. Will you?
Part I: Returning to Simplicity (Whether We Want To or Not)
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II: Why We Must Embrace Simplicity Now
The English thinker Thomas Malthus argued in his famous essay on the principle of population that there was no longer sufficient land to feed the world’s rapidly growing population, threatening poverty and famine. But an agro-industrial revolution soon transformed the economies of Europe and North America, and his fears proved unfounded. More recently, conventional wisdom held that market forces would always come to the rescue. Until ten years ago, this hope was largely fulfilled. During most of the 20th century, resource prices—of food, water, energy, steel, for example—declined, despite strong growth in the world’s population and even stronger growth in GDP. Prices fell because of a combination of new low-cost sources of supply and technological innovation. But in the past ten years, demand from emerging markets, particularly in Asia, has erased all the price declines of the previous century.
– Resource Revolution, from McKinsey and Company
It’s taken ten years of relentless inflation in food and energy, with myriad data showing declines in the quality and availability of many natural resources, for it to appear that the global consultancy McKinsey finally “gets it!”
I take this as a potential sign that Kahneman’s Availability Heuristic is about to undergo a sea change with regards to the prospects of technology-driven progress. Two hundred years of history exert a powerful force over people’s outlook, but a solid ten-year reversal of those trends just might be enough to induce some folks to begin reconsidering their previously-unshakable confidence in previous trends.
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