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I Have Some Bad News About the Economy


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2022 Oct 15, 5:36am   14,150 views  302 comments

by Patrick   ➕follow (61)   💰tip   ignore  

https://www.hennessysview.com/p/i-have-some-bad-news-about-the-economy?publication_id=572577&post_id=78488561&isFreemail=true


Accounts are widely out of balance

How bad, you might be asking yourself, will the economy get? We’re about to find out.




The orange line is US wealth. The blue line is US GDP. The gap is the amount of wealth American households and non-profits must surrender. You see, these two lines must move in lockstep. They do over time. When they get out of sync, something will put them back into sync.

The gap is debt.

Accounts must be settled. It’s called “a reckoning.” And the reckoning is here knocking on the door.

To put this gap into historical perspective, here’s an extended view of the same data with Dr. Hunt’s markups.




From 1951 to about 1997—the year the Monica Lewinsky story broke and Howe and Strauss published The Fourth Turning—the two lines moved in lockstep. Then Alan Greenspan decided to tinker, to grow wealth without growing GDP and without kicking off inflation. ...

What that gap represents is one of two things:

Money stolen from other people (other economies).

Money stolen from future generations of Americans.

How We Borrow from the Future
A few years ago, in the 1990s, we heard a lot of stories parents going to jail for identify theft perpetrated against their own children. About 1990, the government required babies to have a Social Security Number before they left the hospital. (I remember because it happened between our second and third children.)

Some shiftless parents soon realized they could apply for credit using their kids’ SSNs. They could default, and the creditor could do nothing. You can’t collect from a six-week-old infant.

This, of course, constituted credit fraud, so the parents who did this (and there were many) went to jail. (Not sure what happened to their kids who were left with no parents and lousy FICO score, but that’s not the point.)

The point is, all of us have been doing what those parents do only legally. The government allows us to run up our kids’ and grand kids’ debt as long as we do it with the government’s approved identity-theft programs.

So we did.

If you look at that chart, about 1/3 of our household and non-profit wealth is stolen from other generations or other countries. And we have to pay it back. Now. Or soon. ...

How We Borrow from the World
Some months ago, I wrote a series of posts about the US dollar (USD) as the world’s reserve currency and the petrodollar. (Here and here.) To summarize, almost all international debt is settled with USD regardless of the two local currencies involved. Britain settles its debts with Costa Rica in USD, etc. This includes the oil markets. Saudi Arabia, in turn, buys US treasuries (national debt) as a store of value for its copious oil profits. This allows the US run up massive debt knowing there’s always a market for our bonds.

Until there’s not.

Have you notice that Saudi Arbia is drifting out of the US orbit?

I wrote it about in those earlier posts, but the most certain sign of the Kingdom’s pending divorce with from Uncle Sam happened this week. Saudi Arabia disclosed that Joe Biden tried to strong-arm the Saudis into delaying OPEC+ oil production cuts until after the November elections. In diplomatic worlds, this was a slap in the face insult to the US and, particularly, to the Biden regime.

Rumors say Biden threatened to cut military sales to the Saudis if the OPEC+ cuts were announced before the elections. Not only did OPEC+ announce the cuts on its timetable, the Kingdom told the world about Biden’s threat (without disclosing the exact terms or names). Among “partners,” such public humiliation is a sign of pending breakup.

In return, the State Department and Joe Biden announced they would reevaluate the US’s strategic arrangements with Saudi Arabia after the election. That should be interesting.

What it means is that the US might not have as eager a buyer for debt as we’ve grown accustomed to. And that means the price of US treasuries will decline. Less demand means lower prices. When the price of bond goes down, the interest goes up. ...

I’m not saying the Saudis are about to stop taking our checks—I’m saying the for the first time since the Nixon administration, they’re acting like they might. Which means the are going to demand a bigger discount—the difference between the face value of the bond and sale price. That discount is the interest, and the bigger the discount, the less cash we have to spend tomorrow.

That’s one way to close that gap. You reduce the amount of cash you get in return for a future promise to pay. The amount you owe stays the same, but the amount you get now gets smaller.

How Our Kids Get Their Money Back
Remember the two ways we built that gap between wealth and GDP? That’s the first way. The holder of US treasuries want to cash their bonds, and they don’t want to buy new ones.

The gap begins to shrink, and that shrinking is mostly in household wealth.

The second way is intergenerational theft. So how do our kids and grandkids force their accounts settled?

Have you heard about the labor participation rate? Have you heard about the labor shortage?

An odd thing about the jobs numbers in recent months. While the number of “new jobs,” also known as “new hires,” has been strong, the number of people working has been going down, down, down. Why is that? ...

The kids aren’t taking our post-dated checks, either. They’re simply not participating in the US economy—at least, not in the official US economy. They siphoning of that excess household wealth NOW, in the present. They are not working in ways that grows the blue line (GDP). They’re shrinking the gap by lowering the orange line (wealth).

Wonder where inflation is coming from? We’re spending the excess household wealth without increasing the products and services available to buy with it. Inflation is how future generations close that gap. They spend your excess wealth without producing. And it’s happening right before our eyes. ...

In truth, we will only lose our ill-gotten gains.

While, we didn’t personally rob from the kids and foreigners, we were participants in a rigged game—a game that’s getting unrigged in a hurry. We enjoyed the spoils of the petrodollar and zero interest rates.

This account-settling process is called a reckoning, which sound harsh because it is.

https://www.epsilontheory.com/hollow-men-hollow-markets-hollow-world-2/

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238   AD   2024 Sep 2, 11:46pm  

HeadSet says

That style of chart is very misleading, as stats that use % change usually are. In this case, that 2% decline comes right after a 26% runup. A chart with the actual M2 dollar amounts would tell the real story.


Yes, as far as qualifying this data like "2% decline" as the Yahoo article does expand and clarify about this in regards to the "26% runup" below, as this is like putting a footnote at the bottom of the page or put an asterik next to it.

....................................................................................................................................................................................................

" Based on data published monthly by the Board of Governors of the Federal Reserve, M2 peaked in April 2022 at $21.722 trillion. The newest reading, as of July 2024, shows U.S. M2 at $21.054 trillion, representing a decline of 3.07% in a little over two years. While this is well off the peak-to-trough drop of 4.74% from April 2022 through October 2023, it still marks the first sizable decline in U.S. M2 money supply since the Great Depression.

There are, however, some caveats and asterisks to the above data that should be noted to give a more complete picture of what's going on. For instance, M2 money supply is actually growing again on a year-over-year basis. Over the trailing-12-months, through July 2024, M2 has expanded by 1.4% -- and expansion is par for the course over the long run.

Furthermore, M2 skyrocketed by more than 26% on a year-over-year basis during the COVID-19 pandemic. Fiscal stimulus checks dumped money into the laps of many consumers and increased M2 faster than at any point dating back to 1870. "
241   RC2006   2024 Sep 4, 10:07am  

Patrick says





Is there a reverse of that showing who is hiring?
242   AD   2024 Sep 4, 10:30am  

Harris is lucky this is not happening 6 months before the election. Only about 2 months to go and to short of a period for the economy to collapse given all the current weakness.

Unless the stock market crashes and it causes less motivation among the white affluent voters especially in Atlanta and Phoenix metros to vote for Harris.

...............................................

https://www.cnn.com/2024/09/04/economy/us-jolts-job-openings-hires-layoffs-july/index.html

The number of available jobs in the US shrank more than expected in July, an indication that demand for workers continues to wane amid a cooling labor market.

Job openings fell in July for the second consecutive month to an estimated 7.67 million, from 7.91 million in June, according to new data released Wednesday by the Bureau of Labor Statistics.

That’s the lowest number of openings since January 2021.

Economists were expecting that the July postings would total 8.1 million, according to FactSet consensus estimates.
243   RWSGFY   2024 Sep 4, 2:23pm  

RC2006 says

Patrick says






Is there a reverse of that showing who is hiring?


Plumbers!
244   WookieMan   2024 Sep 4, 3:07pm  

AD says

Harris is lucky this is not happening 6 months before the election.

These are west coast jobs. These retards will still vote for her anyway because of TDS. You need massive job losses in MN, MI, WI and PA to make an impact. I still think Trump sweeps all 4, but these job losses don't matter for the election. Maybe move 100k people in the popular vote which doesn't move the electoral map at all considering most is in CA.
245   AD   2024 Sep 4, 5:49pm  

WookieMan says


These are west coast jobs.


The article applies to a nationwide statistic as far as job openings. You are saying most of the drop in job openings is on the West Coast ?

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246   AD   2024 Sep 7, 1:00pm  

its that bad when the $1.25 store is at $66 a share compared to its all time him of $174 in 2022

not sure how Walmart can compete with Dollar Tree or even Dollar General as they have very limited items that compete with Dollar Tree

there is one side of a small aisle of $1 items at Dollar General on Front Beach Rd in Panama City Beach ...its like toothpaste, bleach, and a few household items ...
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247   AD   2024 Sep 9, 4:10pm  

more bad news

maybe the current statistics like unemployment are obsolete in an economy that has a lot more gig workers and multiple jobs workers compared to when the unemployment rate was first invented and from the 1960s to mid 1990s
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249   Al_Sharpton_for_President   2024 Sep 10, 2:28pm  

Insane Seatlle blast from the past: Lezbo mayor proclaims murder and mayhem to be the “Summer of Love.”



250   AD   2024 Sep 10, 4:52pm  

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Panama City Beach and Florida tourism down compared to 2023

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251   AD   2024 Sep 10, 7:36pm  



252   AD   2024 Sep 10, 7:45pm  

.

Look at Disney and Starbucks stock. Less affluent people to be loyal to these brands.

Its the bifurcation of American economy, the rich or well off, and the rest that are struggling that can't afford $6 small soy lattes or $90 a person per day ticket price to Disney, let alone $22 a person for lunch at Disney.

The rich alone cannot keep these two businesses afloat.

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253   AmericanKulak   2024 Sep 10, 8:23pm  

AD says


Look at Disney and Starbucks stock. Less affluent people to be loyal to these brands.

I didn't investigate, but I saw a piece claiming that Starbucks is moving to cashless, at least in some areas.
254   Eric Holder   2024 Sep 12, 1:17pm  

AD says


Look at Disney and Starbucks stock. Less affluent people to be loyal to these brands.


Haven't been to Disney parks in ages, but whatever problem Starbucks has it's not the lack of customers. If anything it feels like the opposite: the ones I visited recently in the the airports and downtown Chicago were complete zoos with people crowding the pick-up counter for their orders. Could be the function of them being slow to make over-complicated drinks, hence the drive to reduce the # of permutaions in the menu. But if the assertion that people are too poor to drink SB was true if would manifest itself by the majority of orders being the cheapest brewed coffee which is very fast to serve. Alas, this is not what I observed. Ironically, out of 20+ folks I was the only one picking up "just" black coffee made in a dripper machine. I drink coffee for caffeine, not "taste" or sugar or milk or any other shit.
255   AD   2024 Sep 12, 4:17pm  



256   AD   2024 Sep 18, 12:07am  

https://www.shadowstats.com/alternate_data/gross-domestic-product-charts

see above website, as the economy is not as good as what is being reported by federal government economists
257   rocketjoe79   2024 Sep 18, 11:08am  

I did find a place where EVERYTHING is expensive: Switzerland.

I stopped to eat at a highway cafe, with an attached Burger King. Whopper Meal 17.90CHF = $21.27

Across the border in Germany, the same thing is about $10.

This is the same country where the Climate Change Pushers meet every year at Davos. The place that allows Bank accounts with no traceability, y'know, for reasons, like running Pedo rings and sending monies to corrupt UN officials.

Keep everything expensive, we don't want ANYONE else to move in.
258   AD   2024 Sep 18, 11:25am  

rocketjoe79 says


Keep everything expensive, we don't want ANYONE else to move in.


yeah, but they have to have some service workers at the Burger King, nursing homes, roofing repair business, etc. and where do they live ? in squatter villages or tiny home and RV villages at the edge of town ?

that is what I am noticing here in Panama City Beach as far as a gentrification effort

granted the Burger King on Thomas Drive still charges about $11 for a large Whopper meal and pays $15 an hour starting wage , and they regularly mail $8.99 coupons for a large Whopper meal

wonder what is the starting hourly wage for that Burger King in Switzerland based on a +$21 Whopper meal

South Walton like Rosemary Beach is extending into Panama City Beach, and you see everyday more and more trailer parks being bought out and built as "luxury" beach homes such as along Joan Avenue

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259   AD   2024 Sep 19, 10:51pm  

.

This is very telling as Fed Ex is down 11% in after hours trading as it misses its quarterly earnings forecast and also projected a future downturn in shipments.

UPS stock price is at its January 2018 level.

What else do we need to understand as far as the economy is not as great as the mainstream media and Democrats claim ?

https://www.shadowstats.com/alternate_data/gross-domestic-product-charts

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261   DOGEWontAmountToShit   2024 Sep 20, 3:05am  

AD says

.

This is very telling as Fed Ex is down 11% in after hours trading as it misses its quarterly earnings forecast and also projected a future downturn in shipments.

UPS stock price is at its January 2018 level.

What else do we need to understand as far as the economy is not as great as the mainstream media and Democrats claim ?

https://www.shadowstats.com/alternate_data/gross-domestic-product-charts

.


The stock market isn't 'the economy'.
262   WookieMan   2024 Sep 20, 4:15am  

AD says

granted the Burger King on Thomas Drive still charges about $11 for a large Whopper meal and pays $15 an hour starting wage , and they regularly mail $8.99 coupons for a large Whopper meal

This got me triggered. I think this is the first year that I haven't had any fast food at all. I was a road trip fast food person, but I've ate none this year. I know I've said I don't eat it, but it still happens from time to time. But nothing this year. I'm kind of shocked. Might be 2 years now.

I'm mentioning this because those prices are completely retarded. $11 for a a bad burger that I can make in 15 minutes fresh with veggies I grew, which I'm guessing 15 minutes is likely the waiting time now a days. Pre-covid when I did partake it was slow as can be. Fast should be removed.

Sidetracking even more. I can get sit down food, fresher/better in 30 minutes and be done. Have a beer. Fast food from my last experience wasn't fast. I think they might be going the way of the movie theater. Fast food is a shit experience unless in a crunch or poor. A $25 lunch is a nothing burger (pun intended). Life isn't a rush, enjoy the time or you'll regret it. Even if it costs a bit more.
263   stfu   2024 Sep 20, 4:27am  

This site is turning into ZeroHedge. Paying attention to this doom porn is a good way to lose money.
264   WookieMan   2024 Sep 20, 4:41am  

stfu says

This site is turning into ZeroHedge. Paying attention to this doom porn is a good way to lose money.

I think this is Patrick's hobby. Something to do. Not about money at all. I frankly ignore most doom porn topics. Sure I've made comments, but generally am a set and forget guy. I have a rough idea about how much money I have, but I could be 5 figures off if I guessed. Potentially 6.

You can only control what you can control. Which is you. Live life. Have fun. It's okay for people to bitch about life. It's therapy to an extent. I don't even know what ZeroHedge is. I know I'm making money and living my best life. I think most here are. It's just a discussion at the end of the day.

I don't like a lot of websites. I just don't view them. If you have shit content I won't look. Hence why I've never been compelled to visit ZeroHedge. Shitty name anyway.
265   AD   2024 Sep 20, 9:55am  

DemocratsAreTotallyFucked says


.

The stock market isn't 'the economy'.


The companies like Fed Ex, Disney, Amazon, and Dollar Tree are what make up "the stock market".

When their CEOs say that consumers are dialing back on orders and purchases during their quarterly earnings call, then that is "THE ECONOMY" .

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266   AD   2024 Sep 20, 9:59am  

stfu says

This site is turning into ZeroHedge. Paying attention to this doom porn is a good way to lose money.


Any doom is at least presented with reasoning and data.

We are not Peter Schiff here saying to always keep all your money in gold and silver.

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267   AD   2024 Sep 20, 10:28am  

WookieMan says


I think this is Patrick's hobby. Something to do


I believe Patrick got this page started for the most part because of the housing bubble (~2001 to 2008)

Patrick wrote a great book about the " Housing Trap " explaining the costs and benefits of renting versus buying a home.

He has not monetized this page yet, even after having this much of an audience.

I was thinking what kind of advertisers would be interested such as placing their ad banners on this website.

It could be an eclectic mix of advertisers like homesteader/survival kit suppliers, financial planners and accountants, etc.

"Josie On-The-Go" set up her Facebook page for Bay County a few years back as a eyewitness news source due the local media lacking that capability.

Josie now has some advertisers on her page geared to her audience like Cutting Edge Window Tinting and Panama City Cycles.

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268   AD   2024 Sep 20, 11:52pm  

stfu says


This site is turning into ZeroHedge. Paying attention to this doom porn is a good way to lose money.


https://www.zerohedge.com/markets/bank-deposits-money-market-funds-see-sizable-outflows-stocks-surge

someone is making money with this latest rally
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269   AD   2024 Sep 21, 1:29am  

Ann Arbor, Michigan


270   RWSGFY   2024 Sep 21, 7:37am  

stfu says


This site is turning into ZeroHedge. Paying attention to this doom porn is a good way to lose money.


Yep, the "get out of stonks NOW" thread sure lost money for whoever followed that advice.
272   WookieMan   2024 Sep 22, 4:30am  

DemocratsAreTotallyFucked says





MFT. CA is the state with the most EV's. When you go from 100% MFT to 0% with one car sale, how's that going to work out? It won't. Times that by probably 1M cars not paying MFT.

Last time out there the roads were shit as well. Considering no freeze thaw cycle, they should be much better. IDOT here can eat a bologna sandwich of cock, but our counties and townships do a solid job.

Massive construction right now, but our tollways are extremely good. Yes tolls suck, but they at least do a good job after getting their ass handed to them in the 90's with fraud. So I have no issue paying. Hurts poor people, but just wake up earlier and take the side roads to work.

Beside road taxes, you don't have the production or refining capacity. The Rockies and Sierras kill you guys. I give it 5 years and you will be paying $10/gallon. 2029. Mark this post and call me out. Trump can't fix a state level problem like this one. He's not an EV pusher either as far as I've heard. Seems like he gets along with Musk, but EV's are kind of destroying the infrastructure economy. I/wife benefit massively without getting into details. Keep pumping the EV's. Everyone sold makes me money.
273   AD   2024 Oct 11, 6:21pm  

https://www.sfgate.com/food/article/amys-kitchen-to-lay-off-hundreds-of-workers-19832158.php

Amy’s Kitchen, the Petaluma-based manufacturer of organic and frozen foods, will lay off more than 300 employees later this year, according to documents filed with the state.

The move will affect workers at two facilities in Santa Rosa. The plans call for 283 workers to be let go at the company’s Northpoint Parkway location, and another 22 at the Dutton Avenue location.

In an interview with the North Bay Business Journal, Amy’s President Paul Schiefer said the move is part of a wider reorganization — one that is integral to keeping the company viable in a market that has become more competitive since the COVID-19 pandemic. In addition to making grocery staples like soups and frozen pizzas, vegetarian burgers and burritos, the company also operates three vegetarian restaurants in the Bay Area.
274   AD   2024 Oct 11, 6:44pm  



275   AD   2024 Oct 11, 8:10pm  

https://www.cbsnews.com/news/convenience-store-7-eleven-closures/

7-Eleven is closing about 444 stores, which is 3% of its North American stores.
276   DOGEWontAmountToShit   2024 Oct 11, 8:12pm  

AD says

7-Eleven is closing about 444 stores, which is 3% of its North American stores.


Bet most are in areas where Demtard police won't do anything about the crime.
277   WookieMan   2024 Oct 11, 10:46pm  

AD says





While I agree I'm guessing it's the stand alone stores in Dem cities as you say. The gas station ones I've been to are just fine. I don't know when the influx of India Indians into the US happened, but maybe they're starting to retire and move back? Not sure most Americans care to put I owned a 7/11 on their resume.

I'm usually a gas station guy because I'm getting gas and half the time I don't go into the store, but I'm more likely to go in versus stopping at a stand alone. That never made sense to me. You are likely near to a full sized grocery store or Walgreens that has more options. 7/11 is just junk food. So of course a lot of them were in crime ridden areas.

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