“We are all of us born, live and die in the shadow of a
giant question mark that refers to three questions:
Where do we come from? Why? And where, oh where, are we going?”
- Tennessee Williams
"Man remains largely unknown of himself. What are we, in our innermost recesses, behind our names and our conventional opinions? What are we behind the things we do in our lives, behind what we see in others and what others see in us, or even behind things science says we are? Is man the crazy being about whom Carl Gustav Jung spoke ironically, when he demanded a man to treat? Is man the Dr. Jerkyll that contains in himself a criminal Mister Hyde, and more than a personality, and contradictory feelings?
Are we the result of our dreams, as Prospero, in the Shakespeare’s “The Tempest” asked? Are we able to raise our nature and become the dignified beings evoked by Pico de la Mirandola (It’s the seeds a man cultivates that "will mature and bear fruit in him. If vegetative, he will become a plant; if sensual, he will become brutish; if rational, he will reveal himself a heavenly being; if intellectual, he will be an angel and the son of God")?
Almost two centuries ago, Spencer characterized the contradictory features of natives from the African east coast: "He has at the same time good character and hard heart; he is a fighter, conscientious, good in a precise moment, and cruel, pitiless and violent in the other; superstitious and rudely irreligious; brave and pusillanimous, servile and dominator, stubborn and at the same time fickle, relied to honor views, but without signs of honesty, niggard and economical, but careless and improvident".
It’s probably a good definition of a certain primitive man, to whom we are undoubtedly connected. But we are also cultural and ethic beings. We are able to change our values and behaviors. As William James says, human beings can change their lives through their mental attitudes. We can grow ethically. We can dominate part of our own instincts. And that’s why we can be different from the indigenous African described by Spencer. More: our thought dignifies us ("All the dignity of man consists in thought", says Blaise Pascal). We are, in many senses, the conscience of the Universe, and its utmost elaborated product. As Edgar Morin says, "in the core of our singularity, we carry not only all the humanity, all the life, but also all the cosmos, including its mystery, present in the heart of our beings".
We are creators, creator beings, and, in a sense, we can create, or recreate ourselves. All goes through our mind. It is our mind that constructs our truths and errors, and also the most sublime things in the Universe. And yet evil and stupidity exist in us. Sometimes we fall, we are stroked, and life reveals its cruelty, and we may think as Mark Twain, and say that it was a pity that Noah had arrived late to the ark. In our innermost recesses, there is also the cruelty and the inhumanity of life. Charles Darwin showed that we are descendants of inferior life forms: we have been long ago a "bush and a bird, and a fish silently swimming in the waters", to use the poetic terms used by Empedocles in its "Purifications."
From a genetic and evolutionist point of view, we contain in us the survival reflexes and the aggressiveness of the life forms that preceded us: "All that threatened the cave man - dangers, darkness, famine, thirst, ghosts, demons – all has passed to the interior of our souls, all troubles us, grieves us, threatens us from inside." (Morin). Besides, we are also beings that can differ significantly from each other. We are equal, but also different. "The awake involve a common world, but dreams deviate each one to its own world," Heraclites rather enigmatically declares. He thought we can’t help sleeping and living in illusory worlds, even when awake.
For all these reasons, Blaise Pascal’s celebrated definition of the human being, despite the hard language, not exactly agreeable to our ears, is undoubtedly one of the most powerful that can be applied to the rather unknown being that we can’t help being to ourselves: "What a chimera then is man! What a novelty, what a monster, what a chaos, what a contradiction, what a prodigy! Judge of all things, imbecile worm of the earth; depositary of truth, a sink of uncertainty and error; the pride and refuse of the universe! Who will unravel this tangle?"
"Humanity Is In the Midst Of A ‘Mutational Meltdown’
That Is Causing Us To Become Smaller, Slower And Dumber"
by Michael Snyder
"We like to think of ourselves as the pinnacle of human existence, but the truth is that humans have been getting smaller, slower and dumber for quite a while. So why is this happening? Over time, human DNA has accumulated an enormous amount of deleterious mutations, and each new generation adds even more. Our DNA is essentially an “instruction manual”, and these deleterious mutations are essentially “spelling mistakes” in that manual. Eventually there will be so many mistakes that our “instruction manual” is simply not functional any longer, and that is a major problem. What this means is that the clock is running down on the human race, and that is a reality that most people don’t want to face.
I know that a lot of you are already confused, and so let me take this one step at a time. According to a recent BBC article, human brains are now significantly smaller than they were thousands of years ago…"Your ancestors had bigger brains than you. Several thousand years ago, humans reached a milestone in their history – the first known complex civilisations began to emerge. The people walking around and meeting in the world’s earliest cities would have been familiar in many ways to modern urbanites today. But since then, human brains have actually shrunk slightly.
The lost volume, on average, would be roughly equivalent to that of four ping pong balls, says Jeremy DeSilva, an anthropologist at Dartmouth College in the US. And according to an analysis of cranial fossils, which he and colleagues published last year, the shrinkage started just 3,000 years ago."
So does that mean that we are getting dumber? Well, yes, that is what some scientists believe. The following comes from NPR…"The experts aren’t sure about the implications of this evolutionary trend. Some think it might be a dumbing-down process. One cognitive scientist, David Geary, argues that as human society grows increasingly complex, individuals don’t need to be as intelligent in order to survive and reproduce."
Whether we want to admit it or not, brain size matters. A chicken is never going to be as smart as a dog, and a dog is never going to be as smart as a human. And as our brains continue to shrink, humans will just keep getting dumber and dumber. If you doubt this, just go back and try to read the writings of our founding fathers. Most Americans today can barely understand what they were trying to say, and that is extremely unfortunate.
It turns out that we are also getting slower… A book by anthropologist Peter McAllister, "Manthropology: The Science of the Inadequate Modern Male," analyzes fossilized footprints left behind by six male Australian Aborigines some 20,000 years ago – and concludes that one of them was running at 37 kph, only 5 kph slower than Usain Bolt was traveling at when he ran the 100 meters in world record time of 9.69 seconds in Beijing. This is without hours of deliberate training or spiked running shoes; this was barefoot and in soft mud. Given modern conditions, the same man – dubbed T8 – could have, says McAllister, reached speeds of 45 kph. The book also refers to Tutsi initiation ceremonies from just a century ago. Young men had to jump their own height as part of the ceremony – with some of them jumping as high as 2.52 meters; the world record is 2.45 meters."
Other scientists have come up with similar conclusions. In fact, one researcher at Cambridge University claims that even our very best athletes would “pale in comparison” to our ancestors from thousands of years ago…"‘Even our most highly trained athletes pale in comparison to these ancestors of ours,’ Dr Colin Shaw told Outside Magazine. ‘We’re certainly weaker than we used to be.’
The study looked at skeletons dating back to around 5,300 BC with the most recent to 850 AD – a time span of 6,150 years. It then compared the bones to that of Cambridge University students, and found the leg bones of male farmers 5,300 BC were just as good as those of highly-trained cross-country runners."
But at least we have gotten taller over time, right? Wrong. We may be taller than many of the impoverished people that lived through the Middle Ages, but that was just because of a lack of proper nutrition. If you go back several thousand years, our ancestors were much larger and much taller than we are today…"An earlier study by Cambridge University found that mankind is shrinking in size significantly. Experts say humans are past their peak and that modern-day people are 10 percent smaller and shorter than their hunter-gatherer ancestors."
And if that’s not depressing enough, our brains are also smaller. The findings reverse perceived wisdom that humans have grown taller and larger, a belief which has grown from data on more recent physical development. The decline, said scientists, has happened over the past 10,000 years. They blame agriculture, with restricted diets and urbanisation compromising health and leading to the spread of disease.
Dr. John Sanford has had work published in over 80 scientific publications and he has been awarded more than 30 patents. He has done extensive research in this area, and he uses the term “genetic entropy” to describe what is happening to humanity. The following is how one reviewer summarized his perspective…
"Imagine an instruction manual of tens of thousands of pages in which random changes have been made every time it is copied. Who would trust such a manual? How many changes would it take to make the manual unusable? How long before the manual no longer makes a functional product? It is a testimony to the nature of our genome that we are still alive in spite of the level of decay. Again, Sanford points to the accumulation of deleterious mutations and argues that our genomes are not evolving to something greater; we are decaying and degenerating. In other words, our genomes at one point were in far better shape than they are at present. The decay process has taken a huge toll. This process he terms “genetic entropy.” He suggests that this decay trend is not only real, but it is an inevitable result of the random, natural accumulation of mutations in our genome."
Unfortunately, this process appears to be accelerating. Some researchers have estimated that the number of new mutations per generation is currently somewhere around 100, but other researchers claim that it is now closer to 300. In any event, the reality of the matter is that human DNA is steadily becoming corrupted over time, and it is getting worse with each passing year. Eventually we would get to a point where our DNA is so corrupted that the human race simply would not be able to continue.
As I have warned my readers over and over again, time is running out for humanity. But as I noted at the beginning of this article, most people don’t want to hear this sort of a message. Most people would like to believe that things are just going to get better and better and that the future is full of lollipops and rainbows. Sadly, that isn’t the truth.
The truth is that the human race and everything around us is in an advanced state of decay, and we desperately need help from someone greater than ourselves."
“All sins, of course, deserve to be treated with mercy: we all do what we can, and life is too hard and too cruel for us to condemn anyone for failing in this area. Does anyone know what he himself would do if faced with the worst and how much truth could he bear under such circumstances?”
"The largest home builders have more inventory than expected. People are canceling homes at a higher rate than they ever have. Prices on average for new construction have dropped 9 1/2%. The average consumer is not shopping. Have you heard of pink sauce? This is something that is taken over the Internet and the seller could be in big trouble."
"A few months back, precious metals expert and financial writer Bill Holter predicted the economy was going to tank, and today, the U.S. is officially in a recession. Holter says it’s not just America buckling under enormous debt, but the entire world. Holter explains, “This is only the start. They are trying to debate whether or not we are in a recession, but it’s pretty much a lock. Yes, we are in a recession. And this is not just the U.S. This is a global problem. Let me put his into perspective. If you add up all the global GDP’s, we are roughly $100 trillion. The problem is there is well over $350 trillion in debt worldwide. When I graduated college anything above 100% debt to GDP was considered a banana republic. Look where we are today. Globally, it’s 350% debt to GDP. What that tells me is the world is a banana republic.”
So, it’s no surprise big money is getting out of fiat currencies like the U.S. dollar. Less than a month ago, Holter, who is also a precious metals broker for Miles Franklin, brokered what looks like the biggest U.S. silver coin deal in history. Just the Silver Eagle portion of the deal was 650,000 coins, which was only part of the $50 million deal. Only $27 million of that could be bought in U.S. incremented silver coins. (The rest was used to buy gold U.S. coins.) Holter says that cleared out the wholesale market for U.S. silver coins, including so-called junk silver. Holter contends, “That shows you how thin it really is. By the way, a fair portion, 15% or so, was future deliveries from the mint. So, we basically cleaned up the next four to eight weeks of Silver Eagle deliveries. They belong to us, and we are still waiting for delivery from the mint. The client wanted U.S. coin. In the U.S., that is the best form of silver ownership. We did not touch bars, generics or foreign sovereigns. So, there is still much more out there to be bought, but how much? I think $1 billion would buy all the available silver in the U.S. Think about it. A billion dollars today is not even the mustard on a ham sandwich. Make no mistake, this deal was a big hit to the inventory of U.S. silver coins. This paper Ponzi scheme is going to come down, and the best place to hide is gold and silver.”
On housing, Holter says it has topped and predicts, “Now, there are no bids, and homeowners are lowering the price. It was a virtuous cycle to the upside. Now, it’s reversed, and it will be a virtuous cycle to hell on the downside. I say hell because there is so much debt outstanding, it will create margin calls across the board.”
Holter is still predicting a Mad Max apocalyptic future that looks more and more like a real possibility. Holter says, “We have had free and carefree times for the last 40 years. Now, you are going to see the reverse. Debt is a two-edge sword, and after 40 years, we are going to see the dangerous side of the sword. There is going to be starvation. This is going to be unlike anything anyone has even written about from a fictional basis. I’ll be surprised if we make it through this year with the real economy functioning as it is right now. Supply chains will break down. We will have some dire markets leading to market closures and bank closures.”
Holter adds, the derivative market will take down the central banks because it is thousands of times larger than all central bank capital combined. “When the system goes down, it will go down fast, and it will be uncontrollable,” predicts Holter." There is much more in the 44 min interview.
"We Are Going To See Energy Prices Go Absolutely Nuts This
Winter Just As We Plunge Into A Horrifying Global Economic Crisis"
by Michael Snyder
"How would you feel if your power bill went up by 50 percent this winter? How about 100 percent? Unfortunately, these kinds of price increases are already being announced. The world was heading into a major energy crisis even before the war in Ukraine started, and now that conflict threatens to create an extremely severe energy crunch that would have been unimaginable just a couple of years ago. If some sort of a miracle doesn’t happen, it is going to be a really, really cold winter for countless people in the western world.
The Russians have been trying to use energy as leverage, and on Monday they announced that the amount of natural gas flowing through the Nord Stream 1 pipeline will be reduced “to just 20% of its capacity”…"The Biden administration is working furiously behind the scenes to keep European allies united against Russia as Moscow further cuts its energy supplies to the European Union, prompting panic on both sides of the Atlantic over potentially severe gas shortages heading into winter, US officials say.
On Monday, Russia’s state-owned gas company Gazprom said it would cut flows through the Nord Stream 1 pipeline to Germany in half, to just 20% of its capacity. A US official said the move was retaliation for western sanctions, and that it put the West in “unchartered territory” when it comes to whether Europe will have enough gas to get through the winter."
In essence, Vladimir Putin is “turning the screws”, and it may just be a matter of time before he cuts off the gas completely. The Europeans never should have allowed themselves to become so dependent on Russian energy, and now a major crisis is staring them in the face.
Last Wednesday, a modest rationing plan for the member states of the EU was introduced…"The “Save Gas for a Safe Winter” plan announced Wednesday sets a target for the 27 member states to reduce their gas demand by 15% between August and March next year. That reduction is based on countries’ average gas consumption during the same months over the previous five years. The plan is focused on curtailing demand by businesses and in public buildings, rather than private homes. Among the proposed measures, the EU Commission is encouraging industry to switch to alternate energy sources — including coal where necessary — and to introduce auction systems that compensate companies for reducing their gas consumption."
Of course such a plan is going to be almost impossible to enforce, and even if all of the member states meet their goals it still won’t be enough if the Russians stop the flow of gas entirely. The U.S. has been ramping up exports to Europe in an effort to help, and one official is openly admitting that this could cause a dramatic increase in prices here in the United States… “This was our biggest fear,” said the US official. The impact on Europe could boomerang back onto the US, spiking natural gas and electricity prices, the official said. It will also be a major test of European resilience and unity against Russia, as the Kremlin shows no signs of retreating from Ukraine."
Sadly, we are already starting to see the price of natural gas rise to very alarming levels. According to Wolf Richter, the price of U.S. natural gas has “more than doubled” over the past year…"So here we go again. This morning, natural gas futures jumped to $8.29 per million Btu, adding to the jumps over the past week. The price has regained much of the lost spike, and is up about 30% from a month ago, and has more than doubled from a year ago."
Ouch. Needless to say, U.S. consumers are going to be feeling a tremendous amount of pain this winter. For example, just check out the rate hikes that were just announced in New Hampshire…"Electricity bills in New Hampshire are about to get higher. Eversource is raising its energy supply rate by about 50% on Aug. 1. With customers using, on average, 25% more energy in the summer, a typical customer could expect to see a $70 monthly increase, the utility said. The energy service rate for New Hampshire Electric Co-op will go up 77%, Liberty Utilities will jump 100% and Eversource’s rate will rise by 112%.
In the coming months, we will see similar rate hikes all over the nation. So are you ready for your power bill to soar into the stratosphere? And all of this comes at a time when the percentage of U.S. adults that are “having difficulties paying their bills” has just hit a brand new high…"The share of Americans who report having difficulties paying their bills has surpassed its 2020 pandemic peak in a US Census Bureau survey, underscoring the toll of soaring prices on budgets. Four in ten adults said it has been somewhat or very difficult to cover usual household expenses in a poll conducted end of June and early July. That’s the highest since the Census started asking the question in August 2020. It implies that more than 90 million families are struggling, up from about 60 million a year ago."
As I discussed yesterday, a recession in the United States is already here. Will the entire world soon follow? On Tuesday, the IMF warned that we could be on the verge of a major global economic slowdown…"The global economy is already in trouble, yet risks keep piling up. In a report released Tuesday, the International Monetary Fund once again lowered its world economic forecast as it predicted major slowdowns in the three biggest economies: the United States, China and Europe. Those downturns, combined with the ongoing war in Ukraine, inflation surging faster than expected, and tighter monetary policy around the world have continued to slam the already fragile global economy, it said."
It is often said that “energy is the economy”, and global supplies of energy just keep getting tighter and tighter. There isn’t any short-term help on the horizon, and if we stay on the path that we are on this new global energy crisis is just going to get worse and worse. Of course there is also the possibility that something could come along that could greatly accelerate our energy problems. A Chinese invasion of Taiwan is likely to happen at some point, and I have been warning that a war between Israel and Iran will erupt sooner rather than later. In either case, our new global energy crisis would rapidly evolve into a global energy nightmare.
So enjoy this relatively quiet summer while you still can, because I have a feeling that this upcoming winter is going to be quite crazy."
Baltimore, Maryland - "All over America, fights are breaking out. In the kitchen. In the bedroom. All over the place. “Do we have to go to such an expensive restaurant,” asks the head of the household. “Couldn’t we stick with Mickey D?” “I just wanted to try something different… a place where we can sit down.” “Uh…I don’t think we can afford to sit down.”
CNBC reports: "Nearly half of all Americans are falling deeper in debt as inflation continues to boost costs. Nearly 40% of consumers cannot put any money at all into savings, according to a recent analysis of household financial health and readiness by the American Consumer Credit Counseling, while about 19% said they had to reduce their savings rate."
The poor family dog. He hears the shouting and cursing… the wife yelling… and the husband using four-letter words. He sees the lamp hit the wall. But he really doesn’t know what to make of it. Maybe she is right; her husband is a tightwad bore. Or maybe he has a point: his wife is a spendthrift flibbertigibbet. He doesn’t know. Neither do we.
Where the Buck Stops: But we know who to blame. Thanks to the Fed, the poor couple has had nearly 10% of its income pruned off by inflation. And now it faces a recession. Can it refinance its house? Forget it. Can it get better jobs at higher wages? Where? Will it get another round of stimmies to fatten its accounts? Don’t count on it.
GM “curbs some hiring” as profits fall by 40%. Spotify says it is laying off 10% of its staff. Employers all over the country are looking carefully at their payrolls…while consumer prices rise. “Major brands keep raising prices as their costs grow,” says the Wall Street Journal this morning. Coca Cola, Huggies, Dove and Big Macs – all going up “as costs increase for everything from wood pulp to wages.”
Meanwhile, we also discover – on the front page of the WSJ – that a “Beijing Spy Campaign Targeted the Fed…” What a waste of time that was. The Fed is no master mechanic, no magician, no expert technician. It knows nothing worth knowing. It produces nothing worth producing. It has no secrets nor “sensitive information” worth protecting. It offers no services. It has no skill… no expertise… no insight.
Every projection it makes turns out to be wrong. Inflation, for example, turns out not to be ‘transitory’… and nowhere near the Fed’s prediction. Every idea it has – from its 2% inflation target… to its ‘neutral rate’– is foolish. And everything it does (mostly, inflating the economy with fake money) is essentially fraudulent. Apart from that, it is a fine organization of wonderful people who only have the best interests of all of us at heart. And what a swell haircut Jay Powell has!
Dust to Dust: The Fed has only one real tool – liquidity (cash or credit) – and only one real decision to make: add to it or subtract from it. Either pour some more liquor into the punchbowl or take the punchbowl away. Either inflate the economy with more credit (by lowering interest rates and ‘printing’ more money). Or kill the credit-based expansion that has been going on for the last 40 years.
After 12 years of heavy inflating, the stock market hit an all-time high in November of last year. But then, consumer prices began to rise. ‘Who could have seen that coming,’ said the Fed. And all of a sudden, the Fed had to stop inflating. And that meant it couldn’t backstop the stock market. Instead of lowering rates, it had to raise them. The Fed quickly realized – about 5 years too late – that it was “way behind the curve,” with its key lending rate far below actual inflation (CPI). It has been trying to catch up ever since.
The flow of money and credit is getting pinched off. Slowly. But relentlessly. Naturally, asset prices are falling… and the black crepe is coming out. Bells are ringing. Mourners are gathering. And trillions of dollars’ worth of assets have already been buried. But it has much further to go. So, as long as the Fed stays on course – with its ‘tightening cycle’ – the ‘primary trend’ will be down. And a lot of ‘wealth’ will drop dead. Stocks have further to fall. Bonds will probably go down over the next 20 years. And the real estate downturn has barely begun.
Meanwhile, inflation cuts into family budgets and sets off the aforementioned arguments. The typical household doesn’t notice or care that stocks are falling. It relies on income for its wealth, not capital gains. And incomes are falling along with asset prices. Note to the Chinese: it’s ‘Inflate or die.’ Everything else is detail. Stay tuned..."
"Strange Prices At Target! Empty Shelves, And Rising Prices!"
"In today's vlog we are at Target and are noticing massive price increases! We are here to check out skyrocketing prices, and a lot of empty shelves! It's getting rough out here as stores seem to be struggling with getting products!"
"How do clusters of galaxies form and evolve? To help find out, astronomers continue to study the second closest cluster of galaxies to Earth: the Fornax cluster, named for the southern constellation toward which most of its galaxies can be found. Although almost 20 times more distant than our neighboring Andromeda galaxy, Fornax is only about 10 percent further that the better known and more populated Virgo cluster of galaxies.
Fornax has a well-defined central region that contains many galaxies, but is still evolving. It has other galaxy groupings that appear distinct and have yet to merge. Seen here, almost every yellowish splotch on the image is an elliptical galaxy in the Fornax cluster. The picturesque barred spiral galaxy NGC 1365 visible on the lower right is also a prominent Fornax cluster member. "
"The Trends Journal is a weekly magazine analyzing global current events forming future trends. Our mission is to present Facts and Truth over fear and propaganda to help subscribers prepare for What’s Next in these increasingly turbulent times."
"Ranchers Are Selling Off Their Cattle In Unprecedented
Numbers As Global Starvation Plan Accelerates"
by Epic Economist, 7/26/22:
"Thousands of U.S. ranchers are being forced to sell their cattle as grass and water supplies continue to shrink due to extreme weather conditions. A horrific drought is devastating large swathes of the Southwest, leaving ranchers in “panic mode” as they struggle to keep their herds alive. Many of them are rushing to sell all their livestock because they don’t have any other options. The situation is raising major concerns about our domestic meat production, and it’s threatening our ability to feed ourselves in 2023 and beyond.
Local reports describe that North Texas has become the epicenter of this crisis, and thousands of ranchers are being forced to make some really difficult decisions. Thanks to the abnormally dry weather, there isn’t enough grass and water supplies for the herds, and ranchers are selling off cattle by the thousands before conditions get even worse. Typically, when extreme weather starts affecting cattle feed, ranchers usually give them hay instead. But that’s not something they can afford to do anymore. Prices of hay have shot up by 56% over the past year, according to a June report from the Federal Reserve Bank of Kansas City. Cattle producers are estimated to have lost money in the past two months, according to a cost-and-return analysis from Iowa State University. In other words, even if they can find hay for sale it has become so expensive that it is simply not economical.
Bridgeport rancher Jarrod Montford is one of the thousands who've had to sell his cattle due to the high costs to keep them fed. “It’s gonna hurt and it’s gonna hurt bad,” Montford said. “It’s a strain. And sometimes you have to sell some cattle to keep a few." Others are deciding to sell their entire herds because they ran out of options. In central Texas, the supply of hay is so small that many don’t even have alternative ways to keep their cattle alive, and hot temperatures are making ranchers fear that some of the older cattle may not survive until the end of the season.
According to Bloomberg, this means that in the short term a flood of beef will come into the supply chain. But in the long-term, next year’s meat supply will be compromised by a shortage of cattle. One thing most Americans don’t think about very often is where the meat they eat on daily basis actually comes from. And something we never really think about is the fact that a very small number of ranchers are responsible for feeding the entire country. But as the Texas rancher Jarrod Montford has pointed out, we rely upon a very small sliver of the population to feed all the rest of us. “1.6, 1.7% of the population feeds the rest. It’s not how bad are we at the end of the day,” Monfort said. “It’s the fact that if we don’t survive, our nation fails,” Montford emphasizes.
All of this is happening at a time when the UN is warning about the worst global food crisis in decades. Approximately 24 million Americans are already experiencing food insecurity, and famines are starting to erupt all around the globe while food supplies get tighter and tighter with each passing day. For years, people who worked in the food industry have been raising the alarm about this worsening situation and asking our leaders to take action to reverse or mitigate some of these worrying trends before it was too late. But nobody wanted to listen to what they had to say, and now, this is where we are.At this point, if you can stock up on meat before prices go through the roof, we advise you to do so, because meat prices won’t come back to where they are right now for quite some time."
"All the talk right now is about recession. Are we in one right now? (We’ll have the technical answer on Thursday.) The spinmeisters in the Biden administration and the media are of course trying to redefine a recession in an attempt to get ahead of the news cycle. But today, I want to take the longer view and see the bigger picture. What is it? Here it is: The economy remains stuck in the New Great Depression.
I’ve talked about the New Great Depression before. But I’ve gained a lot of new readers since I last wrote about it, who may not be familiar with the term - or the reasons why we’re mired in a depression. And long-standing readers who may be familiar with the term could probably use a reminder. So let’s dig in…
A Depression? Really? I’ve maintained that the United States has been living through a New Great Depression that began in 2007. It’s part of a larger global depression, the first since the 1930s. This New Great Depression will continue indefinitely unless policy changes are made in the years ahead.
Calling the current economic malaise a depression comes as a surprise to most investors. And I admit that talk of a new depression seems confusing at best. Where are the soup lines? Where’s the 25% unemployment rate? Investors have been told that the economy is in a recovery that started in 2009. It was disrupted by COVID in 2020, but we were back on the road to growth after the lockdowns ended.
Of course, mainstream economists and TV talking heads never refer to a depression. Economists don’t like the word “depression” because it does not have an exact mathematical definition. For economists, anything that cannot be quantified does not exist. This view is one of the many failings of modern economics.
A Conspiracy of Silence: No one under the age of 90 has ever experienced a depression until now. Most investors have no working knowledge of what a depression is or how it affects asset values. And economists and policymakers are engaged in a conspiracy of silence on the subject. It’s no wonder investors are confused.
Other observers can point to the declining unemployment and rising stock prices of the pre-COVID years as evidence that we were not in a depression. But they miss the fact that unemployment can fall and stocks can go up during a depression. GDP growth, rising stock prices and falling unemployment can all occur during depressions.
The Great Depression lasted from 1929–1940. It consisted of two technical recessions from 1929–1932 and again from 1937–1938. The periods 1933–1936 and 1939–1940 were technically economic expansions. Unemployment fell and stock prices rose. But the depression continued because the U.S. did not return to its potential growth rate until 1941. Stock and real estate prices did not fully recover their 1929 highs until 1954, a quarter century after the depression started. So the starting place for understanding depression is to get the definition right. That’s critical.
The Real Meaning of Depression: You may think of depression as a continuous decline in GDP. The standard definition of a recession is two or more consecutive quarters of declining GDP and rising unemployment. Since a depression is understood to be something worse than a recession, investors think it must mean an extra long period of decline. But that is not the definition of depression.
The best definition ever offered came from John Maynard Keynes in his 1936 classic "The General Theory of Employment, Interest and Money". Keynes said a depression is “a chronic condition of subnormal activity for a considerable period without any marked tendency either toward recovery or toward complete collapse.” Keynes did not refer to declining GDP; he talked about “subnormal” activity. In other words, it’s entirely possible to have growth in a depression. The problem is that the growth is below trend. It is weak growth that does not do the job of providing enough jobs or staying ahead of the national debt. That is exactly what the U.S. is experiencing today.
The long-term growth trend for U.S. GDP is about 3%. Higher growth is possible for short periods of time. It could be caused by new technology that improves worker productivity. Or it could be due to new entrants into the workforce. From 1994–2000, the heart of the Clinton boom, growth in the U.S. economy averaged over 4% per year.
For a three-year stretch from 1983–1985 during the heart of the Reagan boom, growth in the U.S. economy averaged over 5.5% per year. These two periods were unusually strong, but they show what the U.S. economy can do with the right policies.
Below-Trend Growth: By contrast, growth in the U.S. from 2007–2013 averaged 1% per year. Growth up until 2020 was only marginally higher. Then there was 2020. You could say the severe pandemic-inspired recession of 2020 was a unique outlier, but growth for the preceding decade was below the long-term trend. You can’t count 2021’s 10% GDP growth because the economy virtually shut down in 2020, so that growth came off a very low baseline.
The larger trend we’ve been experiencing is the meaning of depression. Again, it isn’t necessarily negative growth, but below-trend growth. The past decade-plus of sub-2% growth, when the historical growth is 3%, is a depression exactly as Keynes defined it. And now we’re either in, or heading toward, outright recession.
Put aside today’s supply chain disruptions and the inflation that derives in large part to them. Even before they became an issue, growth wasn’t strong because the problem in the economy wasn’t monetary, but structural.
The Economy Needs Structural Changes: That’s the real difference between a recession and a depression. Recessions are cyclical and monetary in nature. Depressions are persistent and structural in nature. What do I mean by structural changes?
Shifts in fiscal and regulatory policies. The list is long but would include things like lower taxes, approval of the Keystone Pipeline (I’m talking to you, Joe Biden!), expanded oil and gas production, fewer government regulations and an improved business climate in areas such as labor laws, litigation reform and the environment.
They don’t include Build Back Better or a Green New Deal. They’re structural changes, but the wrong structural changes. They would only make things worse. Power to make structural changes lies with the Congress and the White House. Until structural changes are made by law, this new depression will continue and the Fed is powerless to change that.
False Starts, False Dawns: What makes it a depression is ongoing below-trend growth that never gets back to its potential. That is exactly what the U.S. economy has been and is experiencing. The New Depression is ongoing. Growth never seems to get traction. First there are some signs of growth, and then the economy quickly slips back into low-growth or no-growth mode. The reason is simple.
Typically, a recovery is driven by the Federal Reserve expanding credit and rising wages. When inflation gets too high or labor markets get too tight, the Fed raises rates. That results in tightening credit and increasing unemployment. This normal expansion-contraction dynamic has happened repeatedly since World War II. It’s usually engineered by the Federal Reserve in order to avoid inflation during expansions and alleviate unemployment during contractions. The result is a predictable wave of expansion and contraction driven by monetary conditions. So that’s where we are today. Unfortunately, there’s no end in sight to the New Great Depression."
Baltimore, Maryland - "The news this morning, from Bloomberg: "Walmart Sinks as Inventories, Thrifty Shoppers Hit Outlook." "Walmart Inc. cut its profit outlook again in a surprise warning weeks ahead of its earnings report, sending retailer shares tumbling and raising new questions about US consumers’ ability to sustain their voracious spending habits with inflation at a four-decade high.
Adjusted earnings per share will fall as much as 13% in the current fiscal year as US shoppers spurn big-ticket items and focus on buying less profitable groceries with consumer prices soaring, Walmart said in a statement Monday. Two months ago, the world’s largest retailer said earnings per share would only dip about 1%. In February, the company had predicted a modest increase."
Walmart is where ordinary households buy stuff. But they’re not buying as much as they used to. Because the stimmies have stopped coming… refinancing is no longer an easy way to get more money… and wages aren’t rising as fast as consumer prices.
The Other Leg: Yesterday, we looked at one of the two legs that hold up American family finances – houses. Homeowners can no longer count on ‘taking out equity,’ because there won’t be any excess equity to take out. Nor can they refinance at lower mortgage rates – because mortgage rates are going up. Already, refinancing applications are down 80% and new house plans are being canceled. Soon, house prices should go down too. But today we look more closely at the other leg – income. In short, real incomes are falling… and they can’t get up.
Wages are said to be going up at a 5% annual rate. Prices are rising at a 9% rate. That leaves a 4% gap – which is the rate at which real incomes are falling. Workers will, of course, push employers for wage increases to keep up with inflation. But (thanks to years of Fed-induced malinvestment) productivity is sagging… so the only way employers can pay more is by passing along the costs to consumers – further pushing up prices.
This is the ‘wage-price spiral’ that troubles central bankers’ sleep. Wages go up to keep the working stiffs from losing ground. Then, the extra labor costs force up prices. The higher prices cause workers to plead for higher wages. Wages tend to be ‘sticky,’ say economists. Once a raise is given, it is hard to take it away. So, wage-driven price increases ratchet upwards with no easy way to bring them down.
Vociferous Kibitzers: So, the pressure mounts. The Fed must ‘do something,’ say the kibitzers. But what? In yesterday’s news, Senator Elizabeth Warren came forward with a typically blockheaded comment. The Washington Examiner: "Sen. Elizabeth Warren (D-MA) tore into Federal Reserve Chairman Jerome Powell, accusing him of threatening to undermine the economy with his efforts to curb inflation by raising interest rate targets.
Warren, one of Powell’s most vociferous opponents, argued against the Federal Reserve’s increasingly hawkish monetary policy in a Wall Street Journal op-ed. She pointed out that the economy has experienced a robust labor market for the past year or so and said that the central bank’s aggressive rate hikes could trigger a “devastating recession.”
Uh oh. The Fed is coming up to its “Decision of the Century.” It’s the most important decision ever made by a central banker… one that will shape our investments, our economy, and even our government for decades into the future. Recently, news items have focused on the challenge. One said it will test “Jerome Powell’s skill” as a central banker. Another noted that avoiding a recession will ‘require careful management’ by the Fed.
The Critical Choice: But it’s all nonsense. The Fed has no skills. It doesn’t manage anything. It just inflates… or it doesn’t inflate. And now it faces the critical choice: inflate or die. An economy based on increasing supplies of credit (lower and lower interest rates) can only survive as long as the credit keeps coming. When interest rates rise and credit gets tight, it dies.
Ms. Warren is already wearing black; she’s complaining because the Fed is tightening up credit. And she’s right; it has probably already put the economy in recession. That’s why Walmart shoppers are pulling back. It’s why stocks and bonds are down worldwide – with a total loss of (fake) wealth of $35 trillion. And it’s why the frothiest part of the market – cryptos, NFTs, money-losing techs – has gone flat.
But there are no tricks or skills that the Fed can use to bring back the good ol’ days. Inflation is no longer a risk; it’s a fact. And the Fed has only two choices. Inflate or die. The Fed now judges the risk of inflation as greater than the risk of a collapsing economy. It has resolved to protect the US economy from inflation… and remains steadfast in its purpose. For now. But our guess is that the collapse has a lot farther to go… and that the moans of the dying will get louder and louder… until the Fed – driven mad by the braying of jackasses like Ms. Warren – changes course. More to come…"
”Words offer the means to meaning, and for those who will listen, the enunciation of truth. And the truth is, there is something terribly wrong with this country, isn’t there? Cruelty and injustice, intolerance and oppression. And where once you had the freedom to object, to think and speak as you saw fit, you now have censors and systems of surveillance coercing your conformity and soliciting your submission.
How did this happen? Who’s to blame? Well certainly there are those more responsible than others, and they will be held accountable, but again truth be told, if you’re looking for the guilty, you need only look into a mirror. I know why you did it. I know you were afraid. Who wouldn’t be? War, terror, disease. There were a myriad of problems which conspired to corrupt your reason and rob you of your common sense. Since mankind’s dawn, a handful of oppressors have accepted the responsibility over our lives that we should have accepted for ourselves. By doing so, they took our power.
I shall die here. Every last inch of me shall perish. Except one. An inch. It’s small and it’s fragile and it’s the only thing in the world worth having. We must never lose it, or sell it, or give it away. We must never let them take it from us. People shouldn’t be afraid of their government. Governments should be afraid of their people.”
"Do you believe," said Candide, "that men have always massacred each other as they do today, that they have always been liars, cheats, traitors, ingrates, brigands, idiots, thieves, scoundrels, gluttons, drunkards, misers, envious, ambitious, bloody-minded, calumniators, debauchees, fanatics, hypocrites, and fools? "
"Do you believe," said Martin, "that hawks have always eaten pigeons when they have found them?"
"You can’t hide from reality. The economy is in shambles and now the Fed wants to rename the word “recession“. People are running out of gas when it comes to the ability to pay their bills. Farmers are selling cattle because they cannot get water to the cows. Michael Burry is furious that the Fed is trying to hide the grim reality that we’re living through."
"Insane Price Increases At Meijer! This Is Ridiculous! What Now!?"
"In today's vlog we are at Meijer, and are noticing a massive amount of price increases on groceries! This is getting ridiculous as this is the biggest price hike we have ever seen. It's getting rough out here as stores seem to be struggling with getting products!"
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