Economy
by
Chris Martenson
With a new site and a number of new irons in the fire, Adam and I thought it a good time to revisit and renew the mission behind this movement.
Simply put, our mission is to create a world worth inheriting. By this we mean a clean, healthy living environment, a durable economy, and prosperous opportunities for all who participate with us. That's our big, lofty aim.
At heart, our view is that our policies, uses, and practices in all of the Three “E”s are unsustainable. One cannot forever grow non-renewable resource use in a finite world. The exponential nature of that growth just hastens things along.
Because of hard constraints, our exponential money and debt systems are on a collision course with reality. We will first and most immediately — and personally — experience the deleterious effects of this in what we call 'the economy' in the form of stagnant growth, rising unemployment, and various ills and maladies within the financial markets.
This is just another way of saying that very big changes are coming our way. In fact, they are here already.
The simple conclusion is that we must either change our habits and ways on our own terms — or on Nature's. We face a future that will be shaped either by disaster or design.
Here at Peak Prosperity, we are solidly behind the idea of positive change made on our own terms and that we are each responsible for whatever future is created.
There are a number of things that we absolutely have to do in order to achieve our mission. And at the top of the list is reaching and influencing a lot of people (millions upon millions) and doing so effectively.
Creating a World Worth Inheriting
by Chris MartensonWith a new site and a number of new irons in the fire, Adam and I thought it a good time to revisit and renew the mission behind this movement.
Simply put, our mission is to create a world worth inheriting. By this we mean a clean, healthy living environment, a durable economy, and prosperous opportunities for all who participate with us. That's our big, lofty aim.
At heart, our view is that our policies, uses, and practices in all of the Three “E”s are unsustainable. One cannot forever grow non-renewable resource use in a finite world. The exponential nature of that growth just hastens things along.
Because of hard constraints, our exponential money and debt systems are on a collision course with reality. We will first and most immediately — and personally — experience the deleterious effects of this in what we call 'the economy' in the form of stagnant growth, rising unemployment, and various ills and maladies within the financial markets.
This is just another way of saying that very big changes are coming our way. In fact, they are here already.
The simple conclusion is that we must either change our habits and ways on our own terms — or on Nature's. We face a future that will be shaped either by disaster or design.
Here at Peak Prosperity, we are solidly behind the idea of positive change made on our own terms and that we are each responsible for whatever future is created.
There are a number of things that we absolutely have to do in order to achieve our mission. And at the top of the list is reaching and influencing a lot of people (millions upon millions) and doing so effectively.
by
charleshughsmith
Executive Summary
- Recognize the signs of serfdom
- Calculate your income's vulnerability to the system
- Don't count on high inflation to inflate away your debt obligations
- 10 strategies you can start implementing right now to defend against the forces trying to sap your quality of life
If you have not yet read Part I: Middle Class? Here's What's Destroying Your Future, available free to all readers, please click here to read it first.
In Part I, we surveyed the key dynamics that have eroded middle-class wealth and income over the past 30 years. Some of these were conventional (higher energy costs) and some were unconventional/politically unacceptable (financialization; neofeudalism).
Regardless of what you identify as the primary cause, that the middle class (and labor in general) has lost ground since the early 1980s is undeniable, as is the ultimate failure of debt-dependent “growth.”
What can we do about it? It seems to me there are two responses:
- Avoid becoming a serf in the new financialized feudalism
- Avoid becoming dependent on the Status Quo and avoid collaborating/supporting those elements of the Status Quo that subsidize and protect the parasitic, inefficient, and unproductive sectors of the economy.
Getting Real About Serfdom
I am going to cut to the chase here, and I expect many of you to disagree. Debt is serfdom, period.
I often illustrate this point by asking two simple questions…
The Middle-Class Survival Guide
PREVIEW by charleshughsmithExecutive Summary
- Recognize the signs of serfdom
- Calculate your income's vulnerability to the system
- Don't count on high inflation to inflate away your debt obligations
- 10 strategies you can start implementing right now to defend against the forces trying to sap your quality of life
If you have not yet read Part I: Middle Class? Here's What's Destroying Your Future, available free to all readers, please click here to read it first.
In Part I, we surveyed the key dynamics that have eroded middle-class wealth and income over the past 30 years. Some of these were conventional (higher energy costs) and some were unconventional/politically unacceptable (financialization; neofeudalism).
Regardless of what you identify as the primary cause, that the middle class (and labor in general) has lost ground since the early 1980s is undeniable, as is the ultimate failure of debt-dependent “growth.”
What can we do about it? It seems to me there are two responses:
- Avoid becoming a serf in the new financialized feudalism
- Avoid becoming dependent on the Status Quo and avoid collaborating/supporting those elements of the Status Quo that subsidize and protect the parasitic, inefficient, and unproductive sectors of the economy.
Getting Real About Serfdom
I am going to cut to the chase here, and I expect many of you to disagree. Debt is serfdom, period.
I often illustrate this point by asking two simple questions…
by
charleshughsmith
Executive Summary
- Technical analysis offers methods for identifying long-term trend changes
- Introducing the Coppock Curve
- Why the Coppock Curve indicates a coming decline in the equities markets
- If correct, it may take 8-15 months to hit the bottom of the decline before a recovery begins
- Global markets are likely to all go down together, making finding "safe havens" more challenging
If you have not yet read Part I: When Will Reality Intrude and the Stock Market Hit Bottom?, available free to all readers, please click here to read it first.
In Part I, we explored the correlation between the stock market and the real economy (tenuous in times of massive intervention) and the probability that the economy’s next trough lies between 10 and 30 weeks in the future. We then looked to Japan’s Nikkei stock market index as a guide to equities’ performance in eras dominated by debt and deleveraging, and found that the Nikkei’s history suggests a bottom in U.S. stocks could be as far as a year away, in mid-2013. This aligns with the possibility that the real economy hits a recessionary bottom in late 2012 and the stock market finally reflects that weakness six months later in mid-2013.
As we look at other evidence supporting a significant decline in stocks, we must keep Part I’s caveats firmly in mind:
- It’s possible that equities could rise to previous highs or even reach new highs in the near term, despite the recessionary stagnation of real incomes and growth, as stocks tend to be “lagging indicators” of recession.
- Massive monetary easing and fiscal stimulus could push “risk-on” assets (such as stocks) higher, even as the real economy weakens.
- Global Corporate America could continue generating profits that would support stock market valuations even as the bottom 80% of U.S. households sees further deterioration in their real incomes and balance sheets.
These three factors could support a decoupling of the stock market from the “main street” economy as measured by real (inflation adjusted) incomes and household balance sheets.
Predicting the ‘When?’ & ‘How Far?’ of the Next Market Decline
PREVIEW by charleshughsmithExecutive Summary
- Technical analysis offers methods for identifying long-term trend changes
- Introducing the Coppock Curve
- Why the Coppock Curve indicates a coming decline in the equities markets
- If correct, it may take 8-15 months to hit the bottom of the decline before a recovery begins
- Global markets are likely to all go down together, making finding "safe havens" more challenging
If you have not yet read Part I: When Will Reality Intrude and the Stock Market Hit Bottom?, available free to all readers, please click here to read it first.
In Part I, we explored the correlation between the stock market and the real economy (tenuous in times of massive intervention) and the probability that the economy’s next trough lies between 10 and 30 weeks in the future. We then looked to Japan’s Nikkei stock market index as a guide to equities’ performance in eras dominated by debt and deleveraging, and found that the Nikkei’s history suggests a bottom in U.S. stocks could be as far as a year away, in mid-2013. This aligns with the possibility that the real economy hits a recessionary bottom in late 2012 and the stock market finally reflects that weakness six months later in mid-2013.
As we look at other evidence supporting a significant decline in stocks, we must keep Part I’s caveats firmly in mind:
- It’s possible that equities could rise to previous highs or even reach new highs in the near term, despite the recessionary stagnation of real incomes and growth, as stocks tend to be “lagging indicators” of recession.
- Massive monetary easing and fiscal stimulus could push “risk-on” assets (such as stocks) higher, even as the real economy weakens.
- Global Corporate America could continue generating profits that would support stock market valuations even as the bottom 80% of U.S. households sees further deterioration in their real incomes and balance sheets.
These three factors could support a decoupling of the stock market from the “main street” economy as measured by real (inflation adjusted) incomes and household balance sheets.
by
Alasdair Macleod
Executive Summary
- Why Greece is unlikely to release a new drachma
- Why globally-coordinated money printing is the most likely resolution to the Greek & Spanish crises
- Why the magnitude of derivative risk makes a Eurozone collapse much more frightening
- Why capital flight will get worse, and why gold will benefit from this
- Why Germany's odds for leaving the Eurozone are lower than most assume
- Why the time left before extreme action must be taken is than a few months – possibly only weeks
If you have not yet read Part I: Abandoning Ship, available free to all readers, please click here to read it first.
Here are some key points to bear in mind as the crisis progresses:
Greece: new drachma?
The Greeks would be crazy to embrace a new drachma, as recommended by neoclassical economists. A new drachma would be backed by nothing, unless it comes with full convertibility into Greece’s 111.6 tonnes of gold, assuming that actually exists. The complete lack of faith in any Greek government’s economic credentials would mean a new drachma in the absence of gold convertibility would rapidly descend towards its intrinsic value, which is zero. Interestingly, recent polls suggest that the Greek people understand this and prefer to remain with the euro.
The legality of changing deposits from euros to drachmas is highly questionable. Assuming the Greek government can force this through on domestic deposits that will leave an open question over loans, likely to be challenged through the courts. And in the past non-Greek banks lending money to Greek businesses have as a matter of course stipulated contracts to be governed by the laws of another jurisdiction.
Message: do not buy into the siren attractions of an independent drachma…
The Most Predictable Next Events
PREVIEW by Alasdair MacleodExecutive Summary
- Why Greece is unlikely to release a new drachma
- Why globally-coordinated money printing is the most likely resolution to the Greek & Spanish crises
- Why the magnitude of derivative risk makes a Eurozone collapse much more frightening
- Why capital flight will get worse, and why gold will benefit from this
- Why Germany's odds for leaving the Eurozone are lower than most assume
- Why the time left before extreme action must be taken is than a few months – possibly only weeks
If you have not yet read Part I: Abandoning Ship, available free to all readers, please click here to read it first.
Here are some key points to bear in mind as the crisis progresses:
Greece: new drachma?
The Greeks would be crazy to embrace a new drachma, as recommended by neoclassical economists. A new drachma would be backed by nothing, unless it comes with full convertibility into Greece’s 111.6 tonnes of gold, assuming that actually exists. The complete lack of faith in any Greek government’s economic credentials would mean a new drachma in the absence of gold convertibility would rapidly descend towards its intrinsic value, which is zero. Interestingly, recent polls suggest that the Greek people understand this and prefer to remain with the euro.
The legality of changing deposits from euros to drachmas is highly questionable. Assuming the Greek government can force this through on domestic deposits that will leave an open question over loans, likely to be challenged through the courts. And in the past non-Greek banks lending money to Greek businesses have as a matter of course stipulated contracts to be governed by the laws of another jurisdiction.
Message: do not buy into the siren attractions of an independent drachma…
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