Debt Rattle Jul 30 2014: The State Of The Union Is Shocking
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Arnold Genthe Long Beach, New York Summer 1927 Oh yay, US Q2 GDP supposedly rose by 4%. Aw, come on. That’s only 7% more than in Q1 (or 6.1% in the on
[See the full post at: Debt Rattle Jul 30 2014: The State Of The Union Is Shocking]“which lowered the inflation-adjusted net worth from $87,992 to $56,335 (a loss of $31,657 per household), meant, assuming 120 million US households, that some $3.8 trillion in wealth went up in air.”
No, wait,,,what? I thought there was no inflation? But, if the numbers had been adjusted for deflation, then,,,well, it gets confusing.
Now, I’ll venture, just as GDP “grew” at the reported 7% from Q-1, in aggregate, wages will soon increase by 7-8%, as well. Certainly before the 2016 elections. That should put all this deflation nonsense to rest.
Wages are always lagging in the devaluation process. Always! By the time the new money trickles down to the bottom, it has completed it’s mission, and is mopped up by interest rate increases.
Nothing new here, just ever wilder interventionist gyrations, requiring longer periods of adjustment.
Interesting, that 4% GDP report was just what I expected. That allows room to revise it down to the Monetarists magic 3% with a couple basis points to spare. I’ll give ’em a revision to 3.65, for them to maintain a bit of plausible deniability in their reporting antics.
Bottom line, all the 50th percentile wait patiently for the reset, as usual. Nothing else for them to do now. They missed the boat on Au, Ag, Junk paper and the S&P 500 and soon Real Estate. So, adjusted for reported inflation, they pay the banks negative % to store their depreciating cash. Can’t imagine that cash staying in those accounts if the truth was discovered, that the cost of living is really increasing by closer to 7%. Then again, fear makes folks do strange things.
The cycle won’t be broken until the Fed is. Of course, all of it’s green paper then goes down with it.
“I wish a buck was still silver and a joint was a bad place to be.” Merle Haggard
Oh, just one wild card in my prognostication above. Big War. If that happens, we will no longer be privy to any economic information, only BS stats. In the interest of national defense, mind ya.
“Justice” for a billionaire, none for the state he ripped off:
“There has been much cheering across the corporate media about the Permanent Court of Arbitration in The Hague ordering the Russian government to pay more than US$51 billion as compensation for confiscating the assets of Yukos, yet silence concerning the original theft of the company by Mikhail Khodorkovsky. […]
This is a story that can not be separated from the fall of the Soviet Union and the looting of its assets, with a handful of newly minted oligarchs, mostly former black marketeers who became bankers, coming to control post-Soviet Russia’s economy. Estimates of the size of the assets that came to be owned by the seven biggest oligarchs (Mr. Khodorkovsky was one of them) in the late 1990s range up to one-half of the Russian economy. This at the same time that the Russian economy shrank by 45 percent and an estimated 74 million Russians lived in poverty according to the World Bank; two million had been in poverty in 1989.”
“Justice” for a billionaire, none for the state he ripped off
Boy, the banking business sure is lucrative, isn’t it? I guess they’re going to stick it to Russia some more.
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