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Retail Store Closures Have Huge Impact On Communities
Retail Store Closures Have Huge Impact On Communities
Across America many buildings stand empty or under-leased. They once housed thriving businesses that provided Americans with good-paying jobs.Over the last several years retailers have been closing stores and as the carnage rapidly accelerates this will be back in the news bigger than ever. The impact of these store closings all across America will be huge and take a huge toll on communities with a great number of jobs being lost forever.Much of this is linked to small businesses having its clock cleaned when forced to shutdown because of Covid-19, however, a lot is related to paying higher wages, compiling with new government regulations, and being forced to compete with big businesses backed by Wall Street money.
Retail closures come with a hidden cost to society that the average person fails to internalize. Retail closings will result in lots of other small businesses closing their doors. Not only will the retail employees lose their jobs but these stores support many local businesses.People often forget that the brick and mortar stores suffer several expenses not fostered upon online companies. All these constitute a sort of tax on these stores which benefits the community in which they are located.
These costs rapidly add up and include such things as maintaining landscaping, ensuring safe ingress and egress, or providing a parking lot for customers. Staffing for longer hours, for the convenience of customers, often results in being open when foot traffic would indicate a store should be closed. Dealing with security and shoplifters is another expensive burden. Over the last few years, stores such as Target and Macy’s have even had to face a slew of dishonest shoppers trying to sneak defectives products purchased online back as exchanges and trading them for a fresh unbroken product. I have seen this costly abuse recommended by several online shoppers that see this as an “easy fix” on how to handle defective merchandise.
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It Doesn’t Matter What You Think, Reality Is What It Is
It Doesn’t Matter What You Think, Reality Is What It Is
It doesn’t matter what you think, the reality we face is what we are seeing here on the ground. Reality is what it is and our government will as usual muddle through with poorly thought out politically correct solutions geared to kick the can down the road. This brings me little delight. I have gone a bit quiet lately because of how events are slowly unfolding, the keyword, in this case, is slowly. Rather than a wave washing over us we are experiencing a troubling drip after drip of bad news which a majority of the population has now come to accept as normal. You can put lipstick on a pig but no matter what you tell yourself, it is still a pig.
In some ways what is happening to people across the world could be compared to what occurred when the white-man came to America. The Indians slowly traded their freedom for baubles and what they did not trade away was slowly taken by force. In this analogy, technology is the shiny promise unto which we sadly surrender our future. Beware, those that claim the promise technology is the key to a better future are not quick to share its rewards.They prefer to turn us into mindless slaves and government is a tool they employ in their efforts.
Exploding debt and a slow recovery following the 2008 financial crisis. Many of us claimed it really was not a true recovery but rather a debt-fueled false economy. All this continued with the aid of a few major distractions which took our eyes off the ball. Then the corona-virus hit. Looking back, the first diversion was the emergence of ISIS and the wave of refugees that destabilized Europe and the second was the trade war with China.
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Someday They Are Going To Write Books About This!
Someday They Are Going To Write Books About This!
What is occurring today is absolutely mind-boggling. Someday they are going to write books about this! While there have been some messed up financial conundrums over the years none rival the current situation now before us. The dilemma before us is a fast-moving enigma wrapped in a gossamer cloak. Not only are the players that make up the global political-financial complex busy buying up bad debt, stocks, and bailing out those they deem too big to fail, they have destroyed the concept of real interest on loans. They have trampled all over true price discovery the basis of a free market.
The budget forecast be damned, its full speed ahead. The only justification we need is saying it will be far worse if we do nothing.The bungled response of a delusional government so obsessed with the idea that by simply passing legislation they can make things happen should not be overlooked. The Paycheck Protection Program or PPP was originally funded with $350 billion but the money was soon gone. Of the thirty million small businesses in America, only 1.7 million received money from the 2.3 trillion dollar aid package passed to help sustain America during this difficult time.
This resulted in more funding but still, the last report I saw indicated only around 13% of the, less than half the businesses that were eligible, were approved before the fund was again depleted and 60% of these had yet to receive any money. Just as poorly handled was rapidly getting out money promised to individuals and creating a system where many people could receive more money by collecting unemployment than returning to work. The problem is that when all is said and done, large businesses with access to cheap capital will again be the winners and the big losers are the middle-class, small businesses, and social mobility.
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“It Will All End Badly” The Coming Economic End Game
“It Will All End Badly” The Coming Economic End Game
The wonderful thing about numbers is that when they are not jockeyed, jerked around, and falsified they tend to tell the truth. Continuing on this thought looking down the road the numbers do not work. This is where the late, Allen Meltzer, recognized for his wisdom and achievements in economics, enters the story. Meltzer was a professor of political economy at Carnegie Mellon University and a visiting fellow at the Hoover Institution. He authored the three-volume “A History of the Federal Reserve” and for over 25 years he chaired the Shadow Open Market Committee, a group that meets regularly to discuss the policy of the Federal Reserve.
To say Meltzer was not a fan of the economic policies that have unfolded since 2008 is an understatement. “We’re in the biggest mess we’ve been in since the 1930s,” he has been quoted as saying, before he went on to claim that, “We’ve never had a more problematic future.” This is about a person born in 1928 that while viewed by many economists as America’s foremost expert in monetary policy is little known by the masses. Meltzer was not been a fan of recent economic policy.
In a Wall Street Journal opinion piece on June 30, 2010, titled “Why Obamanomics Has Failed” Meltzer wrote about how uncertainty about future taxes and regulations was the biggest enemy facing future economic growth. He goes on to say that the administration’s stimulus program failed. Two overreaching reasons explain the failure of Obamanomics. First, administration economists and their outside supporters neglected the longer-term costs and consequences of their actions. Second, the administration and Congress have through their deeds and words heightened uncertainty about the economic future.
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Government Overreach Is Taking Away Your Freedom
Government Overreach Is Taking Away Your Freedom
It is important to recognize the value of individual freedom, many people have sacrificed their lives to protect this valuable commodity. With this in mind, I write, it is the right and duty of every citizen to question the actions of their government. Are governments across the world currently looking out for the interest of their citizens or using the current crisis as a way to grab power at the expense of the people. If this is the goal of those in power, here in America, they gain in several ways by maximizing this crisis to exercise their authority. First, they train the masses to follow instructions and do their bidding. Second, they decimate the economy destroying small businesses and making us more dependent on their larger brethren which the government can control. Third but not least they increase the number of people relying on government handouts.
This also allows the government to ramp up surveillance for the “greater good.” The power of fear and propaganda are powerful tools in the manipulation of general consensus. This is one of the main flaws in a democracy, it allows a simple majority to force their desires upon a minority. This is why our forefathers set checks and balances in the Constitution, however, even these do not guarantee freedom will remain. Today, the burden of risk and skin in the game is not equally shared by all. Over time our financial system and institutions have been corrupted by crony capitalism and a political system that panders to the masses by exchanging favors for baubles.
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Damage Done To Market Signals End Of Buy The Dip Era
Damage Done To Market Signals End Of Buy The Dip Era
The damage done to markets will act as a barrier to higher stock prices in the future. This should force investors to return to reality. We have crossed the tipping point with the destruction of small businesses by the government in the name of the “greater good.” The heavy lifter, the great job creator, and the most productive part of society has been thrown under the bus. Most of the support being provided by the government is set to flow towards the most vulnerable parts of society, big business, and Wall Street banks. if anything small businesses are being asked to pay a great deal of the cost.
A few years back someone pointed out that a corporate chart indicating how a company works often ignores the truth of who is really making decisions and getting things done. For example, Fred may be the director of maintenance, and also the brother of the company’s owner, this puts him in charge of deciding when to replace machinery, however, Todd the maintenance foreman actually make the decision based on how often units require repair. In this case, if you want to sell equipment Todd is the man you want to talk to. My point is that things are not always as they appear.
This is a very complex market and it is important to sort out who is selling, who is buying, and why. The motivation behind investors’ actions speaks volumes as to where this market is going. It is difficult to argue there is a lack of visibility as to what lies ahead. We often forget the important distinction that the financial system is different from the economy.
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The Delicate Balancing Act To Protect Wealth Is Full On
The Delicate Balancing Act To Protect Wealth Is Full On
We Are Walking A Tightrope
The delicate balancing act to protect wealth is now in full crisis mode. The key players are central banks across the world and the corrupt bankrupt governments they seek to protect. At risk is the global financial system that has served them so well over the decades. For years these so-called guardians of the economy have siphoned wealth away from the many and into the hands of a few. Now unless they can pull a few more rabbits out of their hats rubber may hit the road.
President Donald Trump announced in a White House news conference that he would seek payroll tax relief and other measures to help businesses deal with the coronavirus outbreak. The Associated Press reported Trump said they were discussing “a possible payroll tax cut or relief, substantial relief, very substantial relief, that’s big, that’s a big number,” Administration officials said the White House wasn’t ready to roll out specific economic proposals, CNBC reported. Trump also said he was seeking help for hourly-wage workers to ensure they’re “not going to miss a paycheck” and “don’t get penalized for something that’s not their fault.” These were in reaction to a large market drop as the covid-19 outbreak spread.
President Trump’s proposal to cut payroll taxes is targeted at reinforcing investor confidence in the hope it will give markets a reason to rebound. It ignores the fact America’s deficit spending is already out of control. An analogy would be for a near-bankrupt parent giving their irresponsible child a raise in their allowance after finding they had been wasting money on lottery tickets.
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Major Liquidity Crisis Likely As Covid-19 Spreads
Major Liquidity Crisis Likely As Covid-19 Spreads
The corona-virus has the potential to foster a major liquidity crisis, call it a liquidity issue if you want but the system could be on its way to freezing up! People and companies may decide to, or be forced, to hoard the money they have when they begin to fear new cash will not be rolling in. Paying existing bills becomes difficult when you are not working or find you must close your business for an extended length of time. At this point, the one thing that is crystal clear is that it is impossible to know how severe this will be or long how long this will go on.
Liquidity Is The First Casualty In A Financial Crisis
As to the long and short term economic consequences of this outbreak, it is difficult to say. certain sectors of the economy will without a doubt take it squarely on the chin. Businesses involved in events or dependent on people gathering or moving about are in peril. Also, thedisruption of production and deliveries will have a massive effect on business. Many small businesses simply do not have the financial resources to absorb losses and weather this storm. this means they will fail. This will create a large number of defaults on loans to lenders, suppliers, workers, and landlords.
All these people also have financial obligations that will continue. Things such as taxes, insurance, utilities, loan payments, and more. Those businesses and people in the weakest condition will be unable to borrow and this creates the possibility of a domino effect starting that could ripple through the financial system. It is difficult to argue this won’t develop into an adverse feedback loop. History shows that banks have a way of failing us when we need them most and that is why liquidity is generally the first casualty in a financial crisis.
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Fed Chairman Confirms Fed’s Role As The Great Enabler
Fed Chairman Confirms Fed’s Role As The Great Enabler
As questions swirl about the Fed’s independence Fed Chair Powell has been busy trying to explain his reason for the “emergency” 50bps rate cut. Regardless of what he says Fed Chair Powell has confirmed the Fed plans to continue its role as the great enabler. This means central banks across the globe can now lower their rates or do additional stimulus without damaging the delicate balance in the relationship in the value of one major currency to another. This is a delicate balance they have long held in check to stabilize the financial system and add credence to the myth no major currency can fail.
Powell said, “My colleagues and I took this action to help the U.S. economy keep strong in the face of new risks to the economic outlook.”
Whether Powell succumbed to pressure from the highly critical words of the President for not acting immediately or fear the coronavirus would take a toll on the economy is not clear. As Powell tried to explain his actions, many of us who pay attention to such things cried “Bullshit.” Not only is a rate cut uncalled for at this time, but because it will also do little to strengthen the economy. What it will do is continue to prop up asset prices and encourage risk-taking and malinvestment. This is a big deal and may even result in more negative interest rates across the world which could create greater problems.
In the Austrian business cycle theory, malinvestments are badly allocated business investments, due to the artificially low cost of credit and an unsustainable increase in the money supply.
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Next Economic Downturn May Last Forever And A Day
Next Economic Downturn May Last Forever And A Day
Market Manipulation Has Created Big Problems
Based on how Japan has fared over the last several decades it is difficult to see the green shoots of a global economic spring forth as a result of lower interest rates. In fact, the next economic downturn will likely envelope the planet and may last forever and a day. This is because central bank intervention and manipulation often carries with it negative unintended consequences. People often forget how lucky Japan has been during its trying times to be located next to China. Because of China’s years of booming growth, Japan has been able to mitigate much of the pain that occurred when its economic bubble burst in 1992.
In the decades since, Japan’s stock market has never again come near the lofty peak it hit back then. During the years after Japan’s fall from grace, it was able to soften the impact of its economic problems by strengthening ties with rapidly growing China which needed help in developing its export-driven economy. Today many people feel the global economy is in a bubble eerily similar to the one experienced by Japan before its implosion. The question is not whether the market and economy are about to undergo a massive reset but when. Concern is also growing as to how deep, painful, and long the next downturn will last.
A huge factor in the world trudging forward following 2008 is the massive growth in the money supply and debt over the last several decades. This growth in debt and credit has exploded making the financial sector a far bigger part of our economy than it should be. The economy has become more about asset values than solid growth in production, this has added to inequality and this does not create a healthy environment for investors.
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Coronavirus Ignored To Protect Stock Market Rally
Coronavirus Ignored To Protect Stock Market Rally
It appears an effort to mask the danger of the coronavirus from the American people may be in play. This could be an attempt to protect Trump’s all-important stock market rally. It has become very apparent that the President values the stock markets’ constant move to newer highs as a reflection that he has done an outstanding job promoting economic growth. This shortsightedness coupled with Trump’s massive ego may have placed his need for self-gratification in front of the welfare of the American people.
Thus far many people in my part of the country are unaware of or under the impression, we have little to fear from this virus. Sadly, most Americans pay little attention to breaking news. How many Americans know of the events unfolding in Wuhan, China? The city of over 12 million people has been on lock-down since January 23rd. This coupled with what appears an attempt to deny or cover up the threat of how easily and rapidly the often deadly coronavirus can spread puts all Americans at future risk.
The President has even gone so far as to praise China’s leader Friday morning in a tweet. This seems to conflict with reports that Washington is especially frustrated with Beijing over the crisis. For the last month, the CDC has been offering to send a team of experts to help China combat the outbreak but the Chinese have refused to accept the help. The President’s tweet can be seen below;
Donald J. Trump
@realDonaldTrumpJust had a long and very good conversation by phone with President Xi of China. He is strong, sharp and powerfully focused on leading the counterattack on the Coronavirus. He feels they are doing very well, even building hospitals in a matter of only days.
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Japan Is Again Forced To Stimulate Its Troubled Economy
Japan Is Again Forced To Stimulate Its Troubled Economy
Japan faces a wall of debt that can only be addressed by printing more money and debasing its currency. This means they will be paying off their debt with worthless yen where possible and in many cases defaulting on the promises they have made. Japan currently has a debt/GDP ratio of about 250% which is the highest in the industrialized world. With the government financing almost 40 percent of its annual budget through debt it becomes easy to draw comparisons between Greece and Japan. While adding to the markets move higher across the globe the latest move by Prime Minister Shinzo Abe should do little to boost confidence in the small island nation.
Entering the third quarter of 2019 Reuters reported their monthly Tankan survey showed that Japanese manufacturers had again turned pessimistic about business prospects. Confidence in the service sector also plunged. Amid the escalating Sino-U.S. trade war, and problems in China the prospects for a global downturn remain large. Survey results showed the weakest sentiment reading since April 2013. Concerns about weakening global demand intensified after a closely watched bond market indicator pointed to the growing risk of a U.S. recession, and data revealed Germany’s economy was in contraction.
Japan. the world’s third-largest economy is highly dependent on exports. The U.S.- China trade war in conjunction with Japan’s export curbs to South Korea and the rising yen has put a lid on sales. This has stoked the fears of recession and raised questions over how much longer domestic demand can remain resilient enough to offset rising external pressures. Private consumption constitutes about 60% of the Japanese economy. Adding to the stress is the fact Japan’s economy is now under pressure from a hike in the consumption tax to 10 percent from 8 percent. This increase took place on Oct 1st. The Bank of Japan has estimated this will generate a net burden of 2.2 trillion yen on households in fiscal 2020.
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What Happens After The Economic Momentum Ends?
What Happens After The Economic Momentum Ends?
At Some Point We Have Simply Overbuilt!
The economic landscape before us continues to look like something out of “Alice And The Looking Glass”. A bizarre and unrecognizable land, a land that is distorted and papered over by ream after ream of paper. For over a decade this paper has been rolling off the printing presses of central banks all across the world in an attempt to mask reality. Peter Schiff says, printing money is to the economy what taking drugs is to a drug addict. In the short term, it makes the economy feel good, but in the long run, it is much worse off. Unfortunately, what was once the “long-run” or “distant future” is now getting much closer.
Many people are now set to blame any slowdown in global growth on what has been declared avery dangerous and protracted trade war. Going into it many economists warned it could be truly disastrous for the entire global economy. In my opinion, the fear of slowing trade and how it will affect America is being overplayed and is not the chief catalyst for a slowdown here in America. While it is easy to target trade as the culprit and Trump as the instigator this conclusion is not supported by facts. We should remember the economy moves in cycles and this one is long in the tooth by historical standards.
Since the Bernanke experiment began, time and time again, the green shoots of economic growth have withered and required more stimulus in order to move to the next level. Each prediction of achieving escape velocity has proven to be short-lived or overly optimistic. These bursts of good news have continually been followed by disappointing economic data forcing some kind of stimulus to get the economy over the next hurdle.
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Crashing The Financial System For Fun And Profit
Crashing The Financial System For Fun And Profit
Huge Fortunes Can Be Made In Falling Markets
It would be wise to remember we are in uncharted waters and this market could reverse on a dime. The stories flowing out of companies such as WeWork that are burning through cash screams danger ahead! This means we should not discount the idea that those in charge might reach a tipping point where they crash the financial system for fun and profit. While this may seem outlandish the possibility is real. This doesn’t mean that every rich guy and gal would sign on to this plan, just enough to push things over the edge. When things have gone too far in one direction history shows that a correction always takes place. It could be argued we have reached that point and true price discovery has been lost.
A huge amount of money can be made during a market crash for those properly positioned. As long as the Fed and the big banks survive those who control these institutions couldn’t care less about how the 99.5% at the bottom fair. In fact, the Dodd-Frank Act which is over 2,300 pages allows this under Title II what is viewed by many as a “bank bail-in”. This is done by imposing the losses of insolvent financial companies on their common and preferred stockholders, debt holders, and other unsecured creditors including depositors.
The whole event of a “bank bail-in” can be viewed as another way to disguise a massive default and it can happen here in America. An example of just how delusional we have become as to the fragility of our financial system is that many people have taken comfort in the efforts to control the banking sector through the Dodd-Frank act following the 2008 crisis.
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Warning! Interest Rates, Inflation, And Debt Do Matter
Warning! Interest Rates, Inflation, And Debt Do Matter
With our national debt blowing past 23 trillion dollars nothing is as sobering as looking at future budgets. We should be worried. Central banks across the world claim the lack of inflation is the key force driving their QE policy and permitting it to continue, however, the moment inflation begins to take root much of their flexibility will be lost. This translates into governments being forced to pay higher interest rates on their debt. For years the argument that “This Time Is Different” has flourished but history shows that periods of rapid credit expansion always end the same way and that is in default. This also underlines the reality that any claims Washington makes about the budget deficit being under control is a total lie.
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America is not alone in spending far more than it takes in and running a deficit. This does not make it right or mean that it is sustainable. Much of our so-called economic growth is the result of government spending feeding into the GDP. This has created a false economic script and like a Ponzi scheme, it has a deep relationship to fraud.
Global debt has surged since 2008, to levels that should frighten any sane investor because debt has always had consequences. Much of the massive debt load hanging above our heads in 2008 has not gone away it has merely been transferred to the public sector where those in charge of such things feel it is more benign. A series of off-book and backdoor transactions by those in charge has transferred the burden of loss from the banks onto the shoulders of the people, however, shifting the liability from one sector to another does not alleviate the problem.
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