{"id":12955,"date":"2015-10-03T08:48:41","date_gmt":"2015-10-03T13:48:41","guid":{"rendered":"http:\/\/olduvai.ca\/?p=12955"},"modified":"2015-10-03T08:48:41","modified_gmt":"2015-10-03T13:48:41","slug":"how-bad-can-this-get-and-how-fast","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=12955","title":{"rendered":"How Bad Can This Get, And How Fast?"},"content":{"rendered":"

How Bad Can This Get, And How Fast?<\/a><\/h3>\n

There\u2019s so much negative real bad economic and financial news out there that it\u2019s hard to choose a \u2018favorite\u2019, but I guess I\u2019m going to have to go with what underlies and \u2018structures\u2019 it all, the IIF stating that for the first time since 1988 and the Reagan presidency, there\u2019s more money flowing out of emerging markets than there\u2019s flowing in. That is for sure a watershed moment.<\/p>\n

And no, that trend is not going to be reversed either anytime soon. Emerging economies, even if they wouldn\u2019t include China -but they do-, have relied exclusively on selling \u2018stuff\u2019 to the rich world which combined cheap commodities with cheap labor, and now they see their customer base shrink rapidly just as they were preparing to harvest the big loot.<\/p>\n

Now, I hope I can be forgiven for thinking from the get-go that this was always a really dumb model. That emerging nations would provide the cheap labor, and the west would kill of its manufacturing base and turn into a service economy.<\/p>\n

This goes very predictably wrong if and when we figure out that A) economies that don\u2019t manufacture anything can\u2019t buy much of anything, and B) that we can sell those services our economies are \u2018producing\u2019 only to ourselves, as long as the emerging nations maintain a low enough pay model to make their products worth our while to import.<\/p>\n

It makes one wonder how many 6 year-olds would NOT be able to figure this out. In the same vein, how many of them would be hard put to understand that our economies, overwhelmed by, and drowning in, debt, cannot be rescued by more debt? Here\u2019s thinking the sole reason so many of us don\u2019t get it is that we\u2019ve been told it\u2019s terribly hard to grasp, and you need a 10-year university course to \u2018get it\u2019.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

How Bad Can This Get, And How Fast? There\u2019s so much negative real bad economic and financial news out there that it\u2019s hard to choose a \u2018favorite\u2019, but I guess I\u2019m going to have to go with what underlies and \u2018structures\u2019 it all, the IIF stating that for the first time since 1988 and the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[6525,130,1851,175,195,1732,9542,9543,9544,9545,7738,670,5177],"class_list":["post-12955","post","type-post","status-publish","format-standard","hentry","category-economics","tag-capital-outflows","tag-china","tag-commodity-price-collapse","tag-credit","tag-debt","tag-emerging-markets","tag-gaussian-gauge","tag-global-dow","tag-iif","tag-models","tag-raul-meijer","tag-recovery","tag-the-automatic-earth"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12955","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12955"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12955\/revisions"}],"predecessor-version":[{"id":12956,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12955\/revisions\/12956"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12955"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12955"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12955"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}