The Coming Apocalypse?

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The coming apocalypse?

It’s often said that economists have predicted 8 out of the last 3 recessions.

 

So, when they’re calling for Apocalypse now, they’re talking into the wind.

 

That said, these are our predictions for the next 3-5 years, not in any order importance.

                            

1) In the USA, between 10 and 20 million people will lose their jobs.

2) The most job losses? Financial services.

3) We will undergo the biggest explosion in entrepreneurship in our history.

4) The worldwide housing market will collapse and not come back.

5) The oil industry is going to die on the vine.

6) Liberalism will be the biggest loser of them all.

 

1) In the USA, between 10 and 20 million people will lose their jobs.

 

This is simply knee bone connected to the thigh bone economics.

 

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As Jeffrey Gundlach says, US corporate debt is in trouble. Over the last ten years, corporations have been on the most absurd debt binge in history, much of which they used to fund stock repurchases. In 1999, US corprations will spend TWICE AS MUCH money buying their own stock back as they will on corporate income taxes.

 

In fact, corporate taxes have been flat for the last 4 years despite an exploding stock market.

 

To summarize, massive borrowing for buybacks, absurd debt loads, and irresponsible leaning can only lead to one thing.

 

Massive layoffs.

 

These layoffs should come from just a few places.

 

Retailers

– Construction

Universities

 

In fact, universities are so unsustainable, it’s hard to imagine more than a small handful surviving. The modern university is still using stone age teaching techniques to suck as much money out of a student’s pockets as they can while giving them almost no usable information.

 

Admissions requirement are collapsing is a sea of money grabbing through loans.

A really unique business idea!

 

2) The biggest losses will be in financial services.

 

It’s hard to see a bottom in financial services. Most CONSERVATIVE estimates are that the stock and bond market will have a zero percent annual rate of return between now and 2030.

 

Zero, zip nada.

 

Tens of millions of Americans work in financial services and affiliated industries. Many, if not most have no clue what the stock market is. I’ve never met a stockbroker or financial advisor that could read a financial statement and I’ve known hundreds.

 

Why would you pay someone 2% of your money for a 0% return?

 

For all intents and purposes, the stock market really hasn’t gone up in two years. Although the averages have eked out small gains, these gains rarely make their way to the investor, as they are eaten up by fees.

 

But the main problem the markets have is these “highs” are largely the result of a virtual river of borrowing at every level. Corporate, auto, mortgage, credit card and especially governmental debt levels are at highs never experienced in the history of capitalism.

 

5 reasons why you don’t need money to make money!

 

When Ben Bernanke left the fed, he passed a directive that put Federal Reserve guarantees behind private annuities, so insurance companies would get automatic bailouts. Then he put all his money in annuities, which meant any gains the annuities had were his, any losses you’d pay. (Mr. Trump reversed this, with an executive order)

 

I read an article that said 75% of doctors refuse end of life care. In other words, they refuse to have the operations that they make a living performing on YOU!! This is the true value of “Financial advice.”

 

3) We will undergo the biggest explosion in entrepreneurship in our history.

 

There is a precedent. During the great depression, the US created entire industries in retail, banking and farming.

 

As the university system in the US has destroyed two generations of Americans, there is an upside.

 

There has been an unprecedented river of money that has flowed into university research facilities. Much of this has gone into things no one sees like agriculture, chemistry, nanotechnology and metallurgy. As much as scientific advances typically never live up to the vaunted expectations, engineering advances usually do the opposite.

 

Nowhere is this more evident than in the oil industry where fracking techniques continue to move ahead, and recovery percentages blow away expectations.

 

In 2000, technology collapsed. This was largely due to the fact that computer technology was too far ahead of internet growth. It was the growth of telephone companies in the cable industry that paved the way for Google, Apple and Amazon.

 

But God’s delays are not God’s denials.

 

4) The worldwide housing market will collapse and not come back.

 

At least not in the lifetime of anyone over the age of 30.

 

The last housing boom the world has had that equates to this one was the US market in the 1920’s. This one is bigger, more leveraged and more dangerous.

 

The fact is the single-family home is an American phenomenon. Most of the developed world does not live in detached housing. The US today has 12 million empty houses. There are hundreds of neighborhoods of 2,500 square foot, 4-bedroom homes with two occupants.

 

The problem in China is much worse. China has 50 ghost cities. 20 are cities with 6 million or more houses and no occupants. China has 20 million heavily leveraged housing units where no one lives.

 

The only thing that makes these homes “affordable” is the fact that government is literally THROWING money at these people. The average US suburban retiree is getting $40-50,000 a year in social security, $25,000 in tax free medical benefits and paying almost no income tax.

 

People forget that many of the custom homes built in the 20’s were foreclosed on despite the fact that they were purchased with 50% down payments. Many, especially the mansions were torn down or converted into non-profit centers. The smaller luxury homes didn’t become marketable for almost 100 years.

 

By almost every measure, the US housing market is a disaster. If you compare the quality of the US luxury home with a German apartment, there’s no comparison. German flats are small, efficient and extremely well build.

 

US homes are made of cheap fast growth southern pine and plastic. In fact, there’s so much hydrocarbon in an American house that fire departments say you have half the time today to get out of a house that’s on fire than those built 50 years ago. They have asphalt roofs, plastic siding, glue-based underlayment and plastic windows. Todays rugs are made from chemically solidified methane gas.

 

4) The oil industry is going to die on the vine.

 

And it won’t be because of global warming.

 

As the economic historian Fernand Braudel teaches us, economies don’t collapse for a single reason, but a number of reasons working simultaneously. Nassim Talib adds to that, teaching us that systems collapse because they lack “robustness.” That is, the ability to withstand shocks.

 

Of course, global warming is a pseudoscientific fraud.

 

Most scientists know this. But what’s important is that the politics of it hide the fact that hydrocarbon use is poisoning the planet. Half of the non-developed world is, to quote Mr. Trump, a “shithole.”

 

China today has little potable water, little edible food and almost no breathable air. Even draconian reforms aren’t going to turn the tide. If China stopped expanding today, they would still be pumping so much soot into its air and pumping so much chemicals into their rivers that all the new technology in the world wouldn’t stem the tide.

 

1 in 5 Chinese die each year of respiratory failure. Just as the west drinks bottled water, the Chinese are buying bottled air.

 

The situation in India is worse. India has 1.3 billion people, yet toilets for only about 250 million. Every day, a billion Indians shit on the street, in rivers or in fields. 360,000 die every year of dysentery. If that’s not a shit hole, what is.

 

Structurally though, the industry has problems. Refining is a distillation process. Oil is boiled and different products come out as condensate at different temperatures. This creates a suite of products from LPG, to diesel, to gasoline, to motor oil, grease, other lubricants and finally, sludge. Sludge is used a bunker fuel and asphalt.

 

But perhaps the oil industry’s biggest problem is Chinese steel. China produces twice as much steel as it needs. China is a communist country run by psychopaths. They’re obsession is the fact that they’re surrounded by the steel producing enemies, South Korea and Japan. They have obsessed over dominating steel as a way of national defense.

 

The same is true of their cement industry and why they have 50 ghost cities. China produces 10X more cement than the USA. Their industries are dying in a sea of debt, pollution and political idiocy.

 

The price of oil is dependent on the fact that the entire barrel can be sold.

 

Petroleum sludge is a huge problem. Its toxicity makes it difficult to use. Since it’s become illegal to use as a bunker fuel (In tankers) it has to be disposed of.

 

Oil refineries emit two major chemicals with are highly toxic, Sulphur dioxide and nitrous oxide. In China these add to a portfolio of toxicity that is released into the air by the coal fired electricity plants as well as home coal use.

 

As these products become more difficult to recycle, the price of oil will explode. As the world moves to electric cars, they’ll use less motor oil and grease. You could have a situation where you have cheap oil and expensive gasoline.

 

The internal combustion engine is finished.

 

The internal combustion engine is the love child of the oil industry.

 

The first area where it will die is Europe, but it will spread rapidly in Asia and the US.

 

The fact is, the internal combustion engine is too expensive, has too many moving parts, is too heavy and uses too much petroleum.

 

The IRS calculates the cost of driving to be 58 cents per mile. The average car is driven 12,000 miles per year. Do the math. The average family with two cars spends $14,000 a year on transportation! This doesn’t include parking or airline travel.

 

This is an AFTER tax expenditure. This means a family MUST earn $20,000 and pay $6,000 in taxes to DRIVE TO WORK!

 

The industry has mitigated these expenses by extending car loans out to the life expectancy of Moses. (Satire, of course) This has added to the absurd purchasing power parity of the US.  Americans are the richest people in the world, yet they can’t afford college educations, health care or vacations.

 

Electric cars may help mitigate this somewhat, but what will “solve” the problem will be the urbanization of America, something that has been going on for twenty years now. Rural America is all but depopulated. Today, Texas has the same percentage of rural residents as New York.

 

 

5) Liberalism will be the biggest loser of them all.

 

If liberals are so popular, why can’t they win elections?

 

Because nobody believes their bullshit. They just go along with it because they don’t want to be assaulted by their army of fascist psychopaths.

 

Liberalism doesn’t work and has a long history of not working. From liberal arts educations, to IQ studies, to forced busing to organic foods, to global warming, to socialized medicine, they only thing they’ve been consistent about is the fact that they’ve never been right.

 

Yet they scream louder and louder as they try to stuff their bullshit down our throats.

 

History is hardly ambivalent about this. Liberalism ends when poverty kicks in. When everybody’s fat and happy, they don’t give a shit. Hunger and poverty elicit different emotions.

 

The Biblical story of Sodom and Gomorrah is a myth. In other words, it’s a teaching. Its “trust” is in the lesson and not the details. It’s a story of wealth and lust run amok.

 

Because it’s a myth, anyone can interpret it in their own way. The story is that angels came to Lot’s house and warned him to leave. A crowd found out that they were there and demanded sex with them. Lot offered up his daughters in lieu of his guests, but the mob refused them.

 

The back story though is that Sodom and Gomorrah were both wealthy cities intolerant of the poor. In fact, Lot’s daughter is threatened with persecution for feeding the poor at the well.

 

To me, the overriding theme are that Sodom and Gomorrah were two cities run by wealthy people. These people were not only immoral on many fronts but totally intolerant of Lot, a just man.

 

The people of Sodom weren’t asking for the right to “marriage equality,” they were demanding sex with men. They also, in their way, hated the deplorables of their time who lived in pre-aviation fly over country.

 

Even staunch rabbis don’t criticize Sodom and Gomorrah as being immoral as much as they were intolerant. Lot didn’t leave because he felt he was morally superior to his neighbors, he left because he was threatened.

 

The west isn’t falling apart because people are immoral. People today are perhaps more moral than in the past. There’s certainly less crime. It’s because, unlike in the past, there are no checks on excess. People can eat as much as they want, food manufacturers can sell anything they want, people can stick their dicks in anything they want and they can wallow in as much wealth as they can beg, borrow, steal or earn.

 

Remember when gluttony was a sin?

 

The story of Sodom and Gomorrah isn’t about God or even morality. It’s a story about how the power of inbred desires, which we refer to as sin, can destroy us. What used to be sins; avarice, lust, greed, envy and pride are today marketing tools.

 

People never really “believed” in Biblical stories, they just said they did because it was safer to be in the club of believers. This is how (and why) myths work better than new ideas. For something to be a myth, it had to prove itself over time. Great ideas often don’t last a week, much less several generations.

 

This is why liberalism will die. Because, like Lot, who was guided by angels, the west will be guided by elections. The forces that elected Trump will elect a real right-wing zealot. It won’t be God that destroys liberalism, it’ll be evidence.

 

 

 

 

 

 

 

 

 

 

 

 

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