Embrace the Bear

[james03]

New podcast out on the new Bear Market.

http://catholicsubsidiarity.libsyn.com/ep-50-embrace-the-bear

[Xavier]

Bulls and Bears and the constant Boom and Bust cycle are (unnecessary) features of the current central-bank driven economy. Even the Fed said it expects growth to continue for another 2 or 3 years, their latest excuse for hiking rates further. But without the Fed, and if a sound monetary policy of increasing money supply every year to the rate of growth of GDP were followed, (along with a sound fiscal policy, of low taxation, and less spending), we would never have a bear market again, but only a constantly growing economy.

[Tales]

along with a sound fiscal policy, of low taxation, and less spending), we would never have a bear market again, but only a constantly growing economy.

If the criminals would simply stop doing crime, man up, civilize themselves, then there'd be no more crime either.

But in reality, that will never happen, just as it will never happen that going forward the US will voluntarily have a sound fiscal policy.

As for a constantly growing economy, wowza!  The myth of infinite progress is still going strong I see.  History makes clear that there never is a constantly growing economy and that civilizations are both rare & finite.  They do not last.

Even in recent history it is questionable what growth there has been.  My grandfather had a nice house in town (not in the exurbs), two cars, five kids (all went to university) and a housewife, all on an AC repairman's salary.  When both grandparents passed we found several tens of thousands in cash hidden in their home.  Everything was long ago paid off, pure equity, and he did it working on AC systems.  Meanwhile today very many struggle to survive with both parents working, far fewer kids, houses located much further away, and the relentless threat of university & medical bills bankrupting the family.  But hey, we got iPhones and Netflix, so I guess life got much better, we've been growing growing growing, we're rich, look, the oligarch's own economic Delphi oracles from WSJ and FT told me so.

[Lambda Phage]

along with a sound fiscal policy, of low taxation, and less spending), we would never have a bear market again, but only a constantly growing economy.

If the criminals would simply stop doing crime, man up, civilize themselves, then there'd be no more crime either.

But in reality, that will never happen, just as it will never happen that going forward the US will voluntarily have a sound fiscal policy.

As for a constantly growing economy, wowza!  The myth of infinite progress is still going strong I see.  History makes clear that there never is a constantly growing economy and that civilizations are both rare & finite.  They do not last.

Even in recent history it is questionable what growth there has been.  My grandfather had a nice house in town (not in the exurbs), two cars, five kids (all went to university) and a housewife, all on an AC repairman's salary.  When both grandparents passed we found several tens of thousands in cash hidden in their home.  Everything was long ago paid off, pure equity, and he did it working on AC systems.  Meanwhile today very many struggle to survive with both parents working, far fewer kids, houses located much further away, and the relentless threat of university & medical bills bankrupting the family.  But hey, we got iPhones and Netflix, so I guess life got much better, we've been growing growing growing, we're rich, look, the oligarch's own economic Delphi oracles from WSJ and FT told me so.

Your anecdote is utterly meaningless in the face of statistics.

My cousin's friend's dog's original owner works at McDonalds and gets paid vacation, excellent medical benefits, and loads up his 401k each year. Your grandpa didn't.

Modern economic growth, and only modern economic growth, is real economic growth.

The fact that we expect a ~3% annual increase in GDP every single year is absolutely amazing. AMAZING.

[Tales]

I trust my lying eyes over the Delphi oracles paid for by oligarchs to obfuscate reality.

[Heinrich]

along with a sound fiscal policy, of low taxation, and less spending), we would never have a bear market again, but only a constantly growing economy.

If the criminals would simply stop doing crime, man up, civilize themselves, then there'd be no more crime either.

But in reality, that will never happen, just as it will never happen that going forward the US will voluntarily have a sound fiscal policy.

As for a constantly growing economy, wowza!  The myth of infinite progress is still going strong I see.  History makes clear that there never is a constantly growing economy and that civilizations are both rare & finite.  They do not last.

Even in recent history it is questionable what growth there has been.  My grandfather had a nice house in town (not in the exurbs), two cars, five kids (all went to university) and a housewife, all on an AC repairman's salary.  When both grandparents passed we found several tens of thousands in cash hidden in their home.  Everything was long ago paid off, pure equity, and he did it working on AC systems.  Meanwhile today very many struggle to survive with both parents working, far fewer kids, houses located much further away, and the relentless threat of university & medical bills bankrupting the family.  But hey, we got iPhones and Netflix, so I guess life got much better, we've been growing growing growing, we're rich, look, the oligarch's own economic Delphi oracles from WSJ and FT told me so.

He prolly wore the same shirt for twenty years, sat in the same chair to read the afternoon paper for twenty years or more, had the same coffee cup for longer, ate meat and starch and choked down green beans for supper, a couple sammies on white bread with an apple for lunch, a few eggs and toast with OJ for breakfast, had just one Detroit muscle beast for at least ten years cycled, kept the same Remington 870 for squirrel, deer and duck, helped with dishes, kicked ass when needed, let the boys sip a few brews towards end of high school and into university age years. What a pleasant way to live in America.*

*This is assuming that a sensus catholicus was present in your grandfather's life.

[james03]

Bulls and Bears and the constant Boom and Bust cycle are (unnecessary) features of the current central-bank driven economy. Even the Fed said it expects growth to continue for another 2 or 3 years, their latest excuse for hiking rates further. But without the Fed, and if a sound monetary policy of increasing money supply every year to the rate of growth of GDP were followed, (along with a sound fiscal policy, of low taxation, and less spending), we would never have a bear market again, but only a constantly growing economy.

Correct.

Your solution I oppose (monetarist school), but it would be far better than what we have.  Measuring GDP is pretty much impossible.  My proposal is to grow the money supply at a fixed 2%.  Simple and easy.  Still, attempting to follow GDP would probably work good enough. 

[james03]

But in reality, that will never happen, just as it will never happen that going forward the US will voluntarily have a sound fiscal policy.

As for a constantly growing economy, wowza!  The myth of infinite progress is still going strong I see.  History makes clear that there never is a constantly growing economy and that civilizations are both rare & finite.  They do not last.

It DID happen in the USA up to Bretton Woods, and kinda happened until 1972.  In fact the change that happened after 1972 is so dramatic that I must say the modified gold standard was doing a decent job.

One of the most telling graphs is the wage disparity between a CEO and a line worker.  After 1972 you get a huge divergence that accelerates.

Anyhow, since it DID happen, it can happen again.

As far as a growing economy, there are two ways to get growth: 1.  Make more stuff.  2.  Make the same stuff cheaper.

With technology we are seeing "2".

As far as recent history, it is important to understand causality:
1.  Boom/Bust Federal Reserve Banking Guild cycles.
2.  Free Trade.
3.  The National Organizations of labor unions getting co-opted by commies (evidence: Whittacher Chambers/Bella Dodd) which destroyed the labor movement.
4.  Nullification of the 9th and 10th amendments.
5.  Corporate Income Tax.
6.  Women infesting the manly work places.  Effectively cutting wages in half.  In fact Pope Benedict even caved, changing the definition of a living wage from a wage sufficient for a MAN to support his family, to a wage that FAMILIES can support themselves with (women working implied).

[Tales]

This is again just like I started with my post with joking that if only the criminals would act civil then things would be ok.  The problem is criminals will not act civil, and pinning hopes on such is strange indeed.

The "culture" of today is not the culture of the first half of the 20th century.  Women are not going to leave the workforce.  The politicians will not stop buying votes with welfare (of all types).  After half a century of propagandizing about the new future work and denigrating manual labor, Americans (en masse) will not voluntarily go back to working in factories and farms, nor will the thousand billionaires whose empires depend upon globalization allow this to happen.  How will the university oligarchs fare if the country were, in general, a manufacturing nation?  They will write endless articles bashing any such attempts to "bring us back."  "Progress" is practically hardwired into the American brain, and almost none of us, except for a few oddballs like myself and perhaps some of you folks, have any interest in "going back."  Most have been trained since childhood to have an immediate reflexive revulsion towards such "regression."

In a time as filled with vice and godless as today, how likely is it that the people will find virtue, such as temperance, to resist the cheap bread and circuses offered to them by the global oligarchs, in exchange for virtuous hard work and thrift?

I do not think it was possible in any way to save Rome once it turned into a populace of zombified citizens from all the bread and circuses.  I am reminded of the Grain of Wheat which must fall into the ground and die before good fruit can come forth.

Regarding the monetary system, are you speaking of 2% growth in base money?  If so, that would hardly matter, as the monetary growth primarily occurs in debt and debt-like money, such as loans and financial instruments.  Controlling such growth would be an enormous challenge indeed.  Booms and busts will still remain, and in our snowflake days, how likely is it that the government would not stop a bust from wiping the financial wealth of the nation out?  To maintain such a steady 2% monetary growth would likely entail shutting down the financial markets and strictly limiting lending.  America is the most indebted nation the world has ever seen, are we about to give this all up voluntarily?  Or must we, like the grain, die before we can be reborn?

[John Lamb]

Davis, I think the younger generation in the West is slowly acclimatising itself to the reality. We are realising that we can't afford houses or children. There's plenty of youth unemployment. The other day I was watching a video on youtube by a young man calling himself a "minimalist", which apparently is a pretentious / hipster way of living frugally. Of course he had to show off his hip way of making a cup of coffee, but as much as millennials are made fun of for their obsession with such luxuries, I don't think we're as materialistic or optimistic about progress as say the baby boomers. I can't stand to watch American films from the 50s because of how obsessed they all are with dressing in suits and slicking back their hair, etc., and all the women speak in a coquettish, luxurious manner that I find repulsive; I don't watch millennial films either because they're full of moral insanity like lesbianism or whatever, but I know they're full of depressed young people going through an existential crisis.

The realisation of the real poverty of our situation is going so slowly precisely because the oligarchs are doing everything they can to pull the wool over our eyes and convince us that we are living in a utopian progressive age. Look up E. Michael Jones on youtube and his talks about Occupy Wall Street and other such topics. He speaks about it being a moment of realisation for the millennials that they are being lead into perpetual debt and wage slavery, but the oligarchs have since co-opted the movement. Hilary Clinton said something to them like, "even if crack down on all the bankers, how are we going to overcome racism, or homophobia, etc." Basically, the ramping up of "gay pride" and all that other degenerate nonsense is a bait-and-switch to get the millennials attached to a (im)moral cause that will simultaneously distract them from their gradual economic enslavement and make them more addicted to vices which render them easier to enslave. E. Michael Jones points out the irony of a gay pride parade in Madrid by a population of youth which has something like 40% youth unemployment; he characterises the oligarch's propaganda as, "don't worry that you can't afford to have children or a house, just go down and have fun at the gay disco." Even, he says, those who aren't homosexual are expected to behave like homosexuals (both promiscuous and barren of children), and homosexuals make the perfect slaves - the reason why every corporation is backing gay pride: homosexuals don't show up to work demanding a raise because they have another child on the way. I have a friend who lives in a city apartment with his girlfriend, and no doubt they are using contraception: this is the about as much as our oligarchic overlords are willing to offer to my generation.

The vital question is whether or not millennials or the younger generation (gen. Z) will wake up and realise who is oppressing them, or whether they will fall for the oligarchic plan of progressive enlightenment and liberation (gay liberation, transgender liberation, black liberation, whatever liberation) which will only serve to fracture, weaken, and enslave them further. I don't hang around liberal circles but it would be fun in their presence to refer to gay pride and transgenderism as "a load of capitalist nonsense," and explain to them exactly E. Michael Jones' point about it being an oligarchic ploy to deceive our debt-ridden generation. I think our user dellery is right that it will all come down to the Catholic Church putting her house in order and becoming the moral voice that our generation desperately needs. There is an enormous spiritual gap that people and filling up with all sorts of pseudo-religions. It's really a question once more of whether the Catholic Church or the (semi-capitalist neo-)Communist Party is going to rule the minds of men. Obviously the latter are winning by miles at the moment, but there could be a massive shift with a few upheavals in world politics (here is where I think the full conversion of Russia is of crucial importance). I'm convinced that if the Church were to reform herself properly and sweep out all the filth so that she became respectable and credible once more, all it would take is one or two true preachers of apostolic character to convert more or less the entire West, or a great portion of it. That is how ripe I think we are for conversion, especially as people become poorer. If Russia would convert and become the leading example of (the restoration of) Christian civilization, it would send a shockwave throughout all the West. I was saying to my friend yesterday in a discussion about monarchy, that I think we all will have a monarch in 50 years time: it's just a matter of whether it's going to be a Christian king/emperor or a Communist dictator. Regardless, the days of liberal democracy and representative politicians are certainly numbered, because nobody has any faith in them any more, and everybody understands (on some level) that they are puppets of the oligarchs. People will soon demand a monarch, and the type of monarch they get will correspond to the type of people they are. Apparently Belloc wrote a book anticipating this, "The House of Commons and Monarchy."

[Gardener]

John Lamb, would you agree with the statement, then, that "Social Justice movements are the bread and circuses for the cynical"?

Or how would you phrase it?

[King Wenceslas]

How it all ends is a dictatorship (left or right).

The phase change during the USA and Brazil elections of Trump and Bolsonaro is showing where we are heading. More and more radicalism during the demoncratic (yes I spelled it right) process.

My own opinion is that when this Federal Reserve bubble pops (and it will) Trump can kiss his second term goodbye if it happens before November 2020. Then a new FDR is elected with near dictatorial (as back in 1933) or outright dictatorial powers.

The Federal Reserve is neither "Federal" or a "Reserve". Hidden behind the name is the Reserve's member banks and the top 80 families that control 40% of the world's wealth.

The only thing that can save Trump is if he moves against the FR after the collapse and destroys it like Andrew Jackson did the central bank back in the 1830's. It will be all or nothing for him. I hope he does. Can he be the imperfect champion of God that brings the money changer's temple down? Time will tell.

Cycle timers are predicting the markets drop in the third quarter of 2019. What is happening now are just preliminaries like back in 2007 before the debacle of 2008.

The world is a debacle of sin. It has to be cleaned out totally or the pus of sin will rise again very quickly. We can't expect this to be a smooth ride to the third period of man's history here on earth. It will be violent and bloody. Stay close to her who will finally crush satan's head.

[Tales]

John,

I have a cursory familiarity with E. Michael Jones' work on economics and am in general agreement with him.

A stock falls by 50%.  To return to its original level it must go up not by 50%, but by 100%.  Extending the crude analogy, so too with culture.  The decline is by orders of magnitude far greater to climb out of than it was to get into.  American culture is so far gone that barring direct divine intervention, I think it will exclusively be a full Roman collapse or secession that brings back any level of culture.  To me, signs are pointing towards a civil war, as Americans are finding it increasingly impossible to live together.  The veneer of nicety and material goodies from Chinese quasi slave labor will not hold this together forever.

The divisions within humanity we see today are a divide and conquer strategy by the oligarchs.  They made out of thin air new divisions (genderqueer, etc) for which people to identify themselves with and all outsiders as a newly annointed hate-group.  But this does not happen in a vacuum - such would not be possible had the Church been the predominant force in society.  There is the eternal question of which came first, the chicken or the egg - analogy being which causes which, do oligarchs cause the decline or do the decadent demands of the populace force the oligarchs to take these disastrous actions.  For example, do oligarchs think gay "marriage" is good, or did the decadent masses force them into it, or did the oligarchs create it to divide and conquer.  I think its yes to all of the above.  Its a vicious circle in which each group of actors is bad and together they take bad actions.

In the younger generation, I agree there are some interesting things afoot.  The fascination with Game of Thrones and super heroes suggests a dissatisfaction with modern life.  Minimalism suggests a turn away from materialism.  But then go talk to these people and your head will explode.  When I disconnect myself from the left for long enough I become wistful that with the right approach, right rhetoric, right situation, I can help guide them back to goodness.   Then I see Twitter or youtube and lose all hope for humanity as it is today.

There will be some converts along the way.  But society in mass will not give up its sin.  The piper has to be paid - it will only be through a terrible fall that society will get its act together.  I am assuming this is decades or centuries out.  What we can do today are plant seeds for the Church to be restored generations later.

As for a future president, I think it will be a Silicon Valley oligarch, and it will be disastrous.  These people so believe in progress of man that they will become the new Nazis. We already see out they deplatform anyone whom they dislike.  Once they take political power it will eventually come to be that they take more serious actions.  Perhaps not concentration camps, but the system will be such that any tradition-minded folks will be impoverished and ostracized from society, a new underclass.  China has its re-education camps and social credit scores, do not be surprised when Silicon oligarchs and their idol of progress and "education" do something similar.  They will not view us as humans, but as a weak defect that must be weeded out so that humanity can continue along the arc of progress (or as I joke, the Ark of Progress... progress is their salvation).

When Dems lose the election next week, expect in the next two years for a silicon oligarch to throw his name into the race.  They might even make a new political party, the Progress Party, and easily snatch the left from the Democrats.  Trump paved the way for big business populists, now its the left's turn.

[james03]

Davis,

I assure you I am not a utopian.  I have my cow bell ready and will join Laus and Greg in London to ring the bell and scream: "Die you faggot enabling child killers, the end is nye." as the nukes start to descend.  The only out is the Great Comet of Chastisement^(tm) and the great reset.

I'm diagnosing the cause only because I geek out on economics.  We will not escape from $22 TRILLION in debt.  It is now politically impossible.

As far as the 2% growth in base money, that would be coupled with 100% reserve lending, i.e. the Fed Discount window would be closed and the Fed would have no power to influence the Fed Funds rate (interest rates would freely float).  Again, we won't see that solution implemented, but it would fix things (after a huge recession).

[Xavier]

Last quarter GDP growth numbers were out some time ago and they are a comfortable 3.5. Should play well with voters just before the midterms. What I find hilarious is Obama has been trying to take credit for Trump's policies! After complaining Trump was undoing everything he did! Anyway, even the good non-partisan folk at Investor's Business Daily state Obama is flat wrong. "Growth: Barack Obama is on the road attempting to claim credit for the booming economy under President Trump. But the only thing Obama deserves credit for is making it easy for Trump to undo Obama's anti-growth policies" https://www.investors.com/politics/editorials/obama-trump-booming-economy/

Bulls and Bears and the constant Boom and Bust cycle are (unnecessary) features of the current central-bank driven economy. Even the Fed said it expects growth to continue for another 2 or 3 years, their latest excuse for hiking rates further. But without the Fed, and if a sound monetary policy of increasing money supply every year to the rate of growth of GDP were followed, (along with a sound fiscal policy, of low taxation, and less spending), we would never have a bear market again, but only a constantly growing economy.

Correct.

Your solution I oppose (monetarist school), but it would be far better than what we have.  Measuring GDP is pretty much impossible.  My proposal is to grow the money supply at a fixed 2%.  Simple and easy.  Still, attempting to follow GDP would probably work good enough.

Mostly agree, James. GDP is not a perfect measure of economic productivity. But if money supply growth rate exactly tracks GDP, people are incentivized to produce as much as possible. Social Credit proposes, as you know, once fractional reserve banking is abolished, the money supply is not distributed as loans or a debt but as a national dividend corresponding to the increase in wealth created by increased production. Alternately, it could be used to reduce or offset taxes as you suggested when we discussed it previously.

Even in recent history it is questionable what growth there has been.

True, Davis. Macroeconomics aside, growth doesn't mean anything in concrete terms to the average person if costs and prices increase faster than salaries and income does. That has been the problem, largely. Thus, standards of living have not gone up as much as perhaps they could have.

But anyway, the first step to restoration of economic prosperity is either to ban the Fed permanently or at least to force it to keep its federal funds usurious rate low for as long as possible - investors know and even recent history shows this has good effects on the economy.

Social Credit - an economic school entirely developed on Christian principles that condemns frb - has a solution to the increasing cost problem (just look at what happens when oil prices skyrocket, for e.g., ot's clearly a real problem, and worse when it affects more fundamental necessities - like rising food prices in developing countries). Based on the medieval Christian teaching of just price, this will ensure price decreases when productivity increases, and that the benefits of this are passed on to the end consumers.

It's a bit detailed so I won't go into it here. Those interested can read the St. Michael's Journal site that explains it. https://www.michaeljournal.org/articles/social-credit/item/the-cost-of-living-the-just-price