Hey, John Wilder (and "Unusual Whales", by extension):

(Graph as found. Reality is quite a bit harsher. And Gen Z would
be far better off if they hadn't learned math from 60's hippies.
They're about to learn it from their dead grandparents from 1934.)

(Dear JW:

I'd have posted this as a comment to your previous CW 2.0 post, but it keeps getting cock-blocked there, due to wonkiness. This is one way to drag me back here, kicking and screaming. Well-played.)

FTR, whoever "Unusual Whales" is, the graph line that suggests "Real wages" have increased 30% in the last 40 years is far beyond mentally retarded. And merits them an internet dick punch of Godzilla-ish proportions.

Wages since 1985 have cratered. Case in point, my parents' combined household income in 1985 was at the 50th percentile at the time, i.e the mid-point, nationally. Or notionally. Mine is currently at the 90th percentile nationwide, all by my ownself, IOW, better than 90% of US households. But for me to have the purchasing power they enjoyed near the household median in 1985, my paycheck would need to be larger than it is by seven- to ten-fold. IOW, I make 500% of what mom and pop did, yet the purchasing power of my income is only about 40% of what theirs was then. That's how much nothing my fiatbux "Real wages" command currently, and how badly "Real wages" have dropped.

Gold is gold, which is why the spot price is USD$4500/oz as I write this, compared to +/- USD$300 in 1985. That means a dollar in 2026 is worth less than 7% in real terms what it was 40 years ago. (You could look it up.) Let me turn that up:

A 2026 dollar is worth <7% of what a 1985 dollar was worth.

(And BTW, a dollar in 1985 is worth less than <7% of what a 1932 dollar was worth.)

For Common Core grads, that means your dollar now is worth less than 5/1000ths - 0.005% - of what a dollar was worth in 1932. ($1 x 0.065 x 0.07 = 0.00455. QED) A dollar currently is worth less, in real terms, than the cost for the ink and paper to print it. Maybe write that down on your hand in Sharpie, lest ye forget. We don't need zinc pennies anymore, because $1 bills are the new 1/2¢ coin. And the only people who've figured that out are EVERYONE who's selling you anything, worldwide, and why all your sh*t, from cars to houses to Happy Meals,  has zoomed in price. Gold hasn't zoomed. Your dollars are simply worth Jack, and Shit. That's how inflation works, with the Treasury printing fiatbux three shifts a day, and inflating the unbacked money supply by trillions, year after year. Fun times, dead ahead. 

Oh, and that wasn't Boomers who f**ked you, Boomer-haters. You kneejerk know-nothings know who you are. It was every generation prior to Boomers, those born from 1850-1944 who own that. As anyone with an IQ about room temperature knows, when Nixon was elected in 1968, only the pitifully few Boomers born 1945-1947 - three years out of twenty one for that generational 1945-1965 demographic slice - could even vote for Nixon. But you dipshits "learned" - I use that term loosely - Common Core history from the same aging commie fucktards that taught you economics, which is why reality from both math and history is kicking the shit out of you in both ends at the same time. Stand up, and maybe let a cluebat smack you in the forehead, rather than the foreskin, and you might actually learn something, instead of spending your entire lives getting butt-f**ked by Reality. You public-schooled shithead simpletons. /rant

(This is also why comments from the people who chided me for saying "buy gold as a hedge against inflation, not stocks" from a year or five back haven't aged well. Suck it, chuckleheads.)

This reality is why Fiatbux - dollars, francs, yen, renminbi, whatever - are all finely engraved toilet paper. Don't make  me do a retard crayon talk here. The only things that have cratered harder than "real wages" since 1985 are Russian armored regiment performance, or possibly Minnesota fraud investigations. Even Catholic church child abuse investigations have improved more than real wages since 1985. To suggest otherwise makes CNN economic reporters and hosts on The View sound wise. 

The "Real wages" line on that graph should actually look like Rosie O'Donnell's future media prospects, with the endpoint somewhere below my third paragraph in this response; to suggest otherwise - as that dickheaded graph does - deserves to have the creator of that graph punched in the throat with brass knuckles, then set on fire alive, dropped in a vat of av gas, and have the dwindling pyre shot at by hunters with buckshot. It's so far beyond cretinous, that actual cretins couldn't see the creator from here, even looking from the Webb telescope in space. If somebody can't get something that simple correct, maybe graphing things isn't their game.

Sometime between tomorrow and death, most of the world is going to discover firsthand what the inhabitants of Weimar, Zimbabwe, and Venezuela all learned about financial reality. It isn't going to be pretty. In a Wile E. Coyote running off the cliff kind of way. Mind the drop.

Just saying.

- Aesop

Two Questions

Caveats:

A) IANAStockbrocker, stock picker, or any other kind of stock exchange guy. I GTFOut for good after the second time in 10 years it crushed my savings and wiped out half of my accounts in '08. I have since found more resilient investment vehicles since then. I leave serious market research to the likes of market and business bloggers like Tyler Durden, Deninger, and other aficionados of that particular game of chance. 

B) I'm sure the stock market is honest and above-board as the day is long, because the SEC assures us it is so, and the government would never, ever lie to us. It's just wild coincidence that every time there's trouble for big investors, the government swoops in with barrels of cash, and every time the market wipes out little investors, the government burps, farts, and wanders off looking for another drink.

Having said that, two questions occur to me:

IF the market were something approaching "rigged", and another major crash was coming with some inevitability, where it could be nudged around somewhat...

1) If the person(s) overseeing that rigging loved, Loved, LOVED Emperor Poopypants, knowing there was an election coming on Nov. 5th of this year, when would they want it to crater?

2) If the person(s) overseeing that rigging hated, Hated, HATED Orange Man Bad, but despite putting both thumbs, a foot, and a fat lady on the scale he somehow managed to beat the Margin Of Cheating and prevail on Election Day, when would they want the market to crater?

Hmm. Mirabile dictu! In both cases, things start looking pretty shitty for stock investments right around 5 minutes after the opening bell on November 6th of this year.

Assuming the market ain't entirely straight and above board.

Assuming a "major market correction" is imminent/inevitable.

No reason to assume that might happen, just because inflation has gone from 1.4% to 9% officially since Jan 2021, or because Money Printer Go Brrrrrr! policies has seen your dollar worth 20% less now than it was worth just a few years ago, or because unemployment is at record levels, and all the jobs "added" since 2021 are minimum-wage entry level jobs getting snagged by endless hordes of wetbacks from around the world, and people whose green cards haven't even had the ink dry on the signature line. Just another coincidence, I'm sure, and endless happy days are coming like a freight train.

But the answers to those two questions would seem to indicate that stock investment gets kind of sketchy come the sixth of November, or anytime after that, for those of you still betting on that particular faro game.

Just spitballing. YMMV. Time will tell.

Problems Solved While You Wait

h/t WRSA

Difficult problems require simple solutions.

Got Another Pay Raise At Work This Month...

Plus ça change...

A Century Of US History In One Panel

 h/t daily timewaster

Equal opportunity? Fear not.
The Republicans put the air in your bike tires.

Oopsie

 

(Forbes) Why I'm not getting so much of the spam screeds in comments telling me of the strength of the ruble.

The Dog That Hasn't Been Barking - MOAR RUSSIAN WINNING!: 

"Russia’s ruble slipped past 100 per U.S. dollar on Monday morning, a nearly 17-month low that has sparked internal discord over monetary policy as economic pressures from its ongoing war in Ukraine mount and international sanctions erode Moscow’s income streams."

Crayon drawing for the slow learners:

Dear hardcore retards:

Currencies go up and down. I haven't cock-a-doodle-dooed about this before now, even as the ruble slipped back to reality (starting last winter), for the same reason you shouldn't have been doing it when the ruble temporarily went up last year (for about seven months).

The dollar is shit, because we've inflated it beyond reality. That's bound to come in for a landing one day, sooner or later. And yet it's still better off than the ruble (currently by 10% overall), compared to five minutes before Pootie-poot got all grabby about other people's countries. Suck on that. There's also more USD being held as the world's reserve currency than there was several months ago. So news of the dollar's utter demise is a wee bit early, even if it's fundamentally less sound than Emperor Poopypants' memory.

The ruble is shit, because all Russia has to back it with isn't gold (they're not handing that over for rubles, jackholes, never were, and never will), it's commodities. Which revenue stream has been halved since Putard's asinine invasion, and which they're only selling (at fire sale prices) to India and China, both of whom are ecstatically happy to profit from Russia's stupidity, and get cheap energy while they can.

Whether there are long-term consequences and punishment from the rest of the world towards India and China when the dust settles remains to be seen, but neither has anything long-term to look forward to.

But FFS, stop pointing to the ruble as some bastion of stability. It's the Mexican peso in Cyrillic writing, with the inherent worth of Zimbabwean dollars. Even more so as long as they're an international pariah. Their economy is currently a fraction of what it was 20 months ago, and it isn't going to get better until they end this war, withdraw from Ukrainian territory in haste and for good, and probably pay hefty reparations on top of that. That's what they've bought themselves. Get over it, snowflakes.

Kremlin PANIC: FORTUNE: in-panic-mode-after-ruble-plunges-below-a-penny-russia-rescues-vladimir-putin-from-humiliating-currency-collapse-with-emergency-hike

Worse Than You Imagine

 h/t WRSA

Today, CA gave you this:

The reality is far worse:

What's in your wallet? Finely-engraved toilet paper, in most cases.

1978 Flashback

 

Econ 1

 

Weimar Inflation Template

 h/t Odd Job

Much like inflation, this pic embiggens.

Nota bene the time span from Bad to Disaster:

Year One: High inflation (60% bracket).

Year Two: Hyper-inflation (5300% bracket).

Year Three: Societal collapse inflation (16M % bracket).

Killer App

 h/t John Wilder

Go read today's post.

Napkin Barf-Bag Math

 h/t BCE twice

For the Common Core math grads, inflation like that is cumulative month-over-month, versus trending against an annual baseline.

Think moon launch, not jet take-off.

Assuming that meme is accurate (we have little reason to doubt it), this is a crash warning.

(If it's overstating things because whoever made it misstated the reality, it's rampantly recockulous. We advise you to check it against facts, and see for yourself. We suspect it's spot-on.)

That means that something that cost $1 last Oct 31st, isn't now going for $1.08½ , it's actually now running at $1.44.

(Which accords with companies like Kraft Foods jacking all prices up 30% and announcing another 30% jump, not to mention gasoline going from $2.50/gal to over 5.00/gal.)

IOW, inflation for the last five months is 43.8%. Which trendline predates the opening of hostilities in Ukraine, for the historically moronic, by some nearly four months. Biden didn't do this. FDR did this. Truman did. Eisenhower did. Kennedy did. Johnson did. Nixon did. Carter did. Reagan did. Daddy Bush did. Clinton did. Dubbya did. Obozo did. Trump did. Biden and Puton just gave the car a last little push over the cliff.

And note the trend: 

inflation is getting bigger, with every passing month.

That's the difference between sliding over the edge, and falling to terminal velocity.

Annualized, that means that by next year, what you bought for $1 this January 1st, will cost you $2.74 by next January. Every dollar you're holding now will be worth 37¢ in a year.

That's Weimar rates, headed for Zimbabwean rates, of inflation. If the monthly rates increase, think MOAR! Bigger! Faster!

(Assuming it doesn't stop. And it probably couldn't, even if we wanted it to.)

It's unlikely your salary is going to go up 274% this year.

If you need to run off to the bathroom to vomit, we understand.

That collapse, and the attendant problems everyone said would never come? 

And this penny still hasn't dropped in Normieland. 

Meaning you still have a brief moment or two to not go down in flames, before everyone figures it out.

Do you want to buy at things at $1.44 now, or wait for $2.74 (or worse; remember the monthly jumps are trending bigger each month, nor staying the same) later?

Suture self.

 

More Napkin Math

 

Putin's gonna peg the Ruble to gold, and knock off the dollar! Eleventy!! ZOMG!!!

Natzsofast, Guido.

Last year's Russian budget was $233,000,000,000. (Way more than that - 16 TRILLION - in Rubles, which are worth about a penny, and less now that two months ago.) Russia's gold on hand, per some commenter, which we'll stipulate for humor purposes, is 2200 tons. At current rates of gold/dollar exchange, that means that the Russians printed 33% of the government spending out of Putin's ass-gas from borscht and caviar. And that's only LAST year. That means everything they printed every year prior and every year from now on is ass-gas too. Times, what...32 years, just since the birth of the current Russian Federation?!? And forward in perpetuity??

(Bonus: Anyone remember why the Soviet Union collapsed? Anyone? Beuller?? Ferris Beuller...???)

And the Russian government budget is only 20% of their national GDP.

IOW, in order to meaningfully peg the ruble to gold, they'd need 7-8 times more gold than they have, which would be 50% of the total known gold reserves of the entire world, which they ain't got, ain't gonna get, and never will have.

And the Russian economy is only about 7% the size of the US economy. We have double their gold reserves, and we couldn't do what they're announcing in a thousand years, short of worldwide ironclad agreements, and massive deflation, which would also halt all government money printing virtually forever. NTTAWWT.

This is like Texas trying to take over the world by printing Confederate money, and requiring it (or gold) to buy Stetsons, Pace Picante Sauce, and Igloo Coolers.

Sh'yeah, when monkeys fly outta my butt.

Not. Happening.

And in any event, neither Putin, nor Russia, nor anyone sane, is ever going to swap rubles for gold. That ship sailed for good in 1971. Which means this is all Russian bullshit, and the ruble is, and will continue to be, finely-engraved toilet paper, just like all fiat currencies. (Including the dollar, as we've told you, and told you, and told you.)

It would take a simultaneous agreement for 5300% worldwide deflation, from everyone, and a permanent exchange rate, to back the world by stable currencies, using all gold reserves in existence, divided by the current planetary GDP.

Your $10K in savings would be worth about $189.

Your $50K annual salary would shrink to about $18/wk.

That's 46¢/hr. $3.68 for an 8-hour day.

Minimum wage (from $15/hr) would be 28¢/hr. $2.08 for 8 hours.

And that's pre-tax income. Uncle Gimme and his state and local minions would still have their hands out for 10-50% of what you make.

Gasoline (from $6/gal) would be selling for 11.9¢/gal.

8¢/gal in the free states.

And so on.  

Forever.

Get 200 nations to sign on to that, and we can back everything with gold, forever.

Until then, as neither Russia nor any sane nation will ever again trade their fiatbux for physical specie (gold or silver), this is all smoke and mirrors. Fairytales. Vaporware.

To be crudely blunt, but precise, the only way Putin's pegging the ruble with gold is like this:

There may come a point where the dollar isn't the international reserve currency*.

But this news ain't it. It would take a helluva lot more than just Russia to do that.

Stop swallowing the doom porn. Pay your bills, and go deep on the preps you can.

That is all.

*UPDATE: Want to see how it's far more likely to come about?

Capitalist Eric: RTWT h/t WRSA

[Pro Tip: You've heard about this from Peter at BRM. You've heard it from CA at WRSA. You've heard it from me. You've heard it from Phil at Bustednuckles. And from John Wilder. You've probably heard it from Deninger and Tyler Durden a time or twelve too. Now Eric is piling on, in splendiferous detail. Bracken. Ferfal. Selco. Michael Yon. ,Rawles, since ever. And on and on. Maybe, just maybe, at some point, the penny will drop for you, if it hasn't already. And you'll start to think in terms of a world where those green pieces of paper in your wallet and bank account are worthless. And you'll decide to prepare for "Then what?", hopefully while there's still some brief period of time to do so.

Nota bene: NOBODY is telling you to run around like a headless chicken, or a person whose head is on fire. They're telling you that the financial system you take for granted, and have your whole life, is a house of cards, and a windy day is coming. Make prudent preparations for that. If you can figure this out for yourself without being a spaz now, you'll never have to be one later. I'm guessing the Fukushima Tsunami was a lot more fun to watch from over here, than it was on the coast of Japan in real time. I'd venture a guess that financial collapse will be a lot like that too, and high ground for that looks a lot like arable land with available potable water, a garden and some barnyard animals, friends and neighbors to ride the river with, clear fields of fire, and being pretty self-sufficient for most to all normal needs. Just like for 37 other possible problems.

Worst case? You're early, or it never happens, and you're still ready for a buttload of other grief from any number of scenarios.

Don't care? No problem. Suture self.]

Inflation, Redux

Poor Peter, over at Bayou Renaissance Man, had the temerity and unmitigated gall to point to last week's post here on Inflation, because he thought foolishly that I had explained things pretty clearly. Silly me, so too did I.

What we failed to account for was the irritated asses (I mean that in every possible sense of those words) of the Butthurt Platoon.

The ones for whom it's not wrong because it's wrong, it's wrong because *I* said it.*

Which is good, because Peter and I are not the only ones saying this.

Divemedic is apparently still butthurt because Alec Baldwin is still free, because he's legally and morally blameless, exactly as I noted, however much it pains him and sets his teeth on edge. Sorry, man. It's not what I'd wish for either, but I call it like I see it. Better luck next time.

But to his credit, he at least engaged the argument on the merits, and made a valiant effort.

Right up until he admitted that, no he wasn't in stocks and such anymore, and had converted all his investments out of the exact stock investment he was touting like a mofo for three posts, and had moved everything into real property, including *gasp*...PMs like gold. Because of looming INFLATION.

Geez, if only someone had suggested doing that, somewhere, where other people could see it, like, I dunno...maybe on a blog page??

And then, caught hand-in-the-cookie-jar, his brilliant retort was

"You are a fucking idiot."

 QED.

Game. Set. Match.

Clearly, me pointing out the obvious truth: that dollars, or stocks valued in them, were not a wise future repository of value, exactly as he had concluded on his own, some months back, was the last straw.

Mad props, man. Well-played.

Because the guy who gets check-mated and flips the board over in disgust always wins, right?

I'm a fucking idiot for stating the obvious truth that inflation has been the driving force for most, if not all, of the recockulous growth in stocks since 1932 others keep wanting to pretend is both normal, and perpetual.

Because back when money was stable and solid, 1% was seen as a good annual rate of return, for, oh, about a hundred and fifty years, back to the founding of the Republic.

For anyone who came here on the short bus, yet again, YOU COULD LOOK IT UP.

I even took the time to explain this, laboriously, in multiple comments at Peter's blog.

For the TL;DR crowd, here's the DK picture dictionary version:

IOW, to be a millionaire in terms understood in as recently as 1932, you'd need to have $89M now. ($89,501,150, to be precise.) But if you'd had as little as $11,000 dollars then, and simply converted it to gold, and buried it in your back yard, you'd be worth $1M now. But if you'd kept the cash in your pocket, and never spent a penny, that same $11,000 would be worth $122.90 right this minute. Next year, it might be worth $92.18. (Maybe even less than that.) 

That's INFLATION. 8950%, and counting, since 1932, in the U.S.

It also illustrates rather vividly the difference between what you have when you hold money, versus when you hold fiatbux, or anything valued in them.

That's why a $2000 car back when my old man made $10K/yr now costs twice as much, in real terms, at $40K when I make $100K/yr., ten times what dad pulled down. I'd need to be making $200K, just for parity with a guy in the 1960s with a high school diploma working a low-level purchasing job. BTW, the same job he had now? $77K/yr, top tier. The new car he could have paid for with 3 months' salary would currently take his modern counterpart six months' salary.

Inflation makes everyone a serf, working more and harder for less and less, every single year. As it's designed to do.

Let's be fair: People, like Divemedic, and most of the stock-enamored whiners commenting at BRM or anywhere else, are absolutely right in one respect:

Stocks can compound growth.

They are a great investment idea.

In 1940. Or 1970. Or even in 2001.

If, IF, IF you pick the right ones. And/or you die, or bail out of the market, before the bottom drops out.

If you acquired Ford, or Coca-Cola in 1920, you would have done okay.

If you'd picked RC Cola and Studebaker, not so much.

Index funds?

Suuuuuuuuure.

If we assume a stable sensible economy, with sound money (neither of which we've had since 1928), that will never, ever go tits up. Like it never did in Weimar. Zimbabwe. Venezuela.

Show of hands: How many people think the next 40, 30, 20, or even 10 years, financially and economically, are going to be anything like as stable, with the same sort of stock growth, as anytime in the last 80 years have been??

Beuller? Beuller...? Ferris Beuller?? Anyone???

What's the FIRST RULE OF INVESTING?

Don't believe me. Look at the people who bought shares of Sears, Pan Am, US Steel, RC Cola, for just a few examples. Or who invested with Lehman Bros., or in ENRON.

Literally anybody can pick stock winners in hindsight. Going forward, not so much.

You've seen this con before. It's called past posting.

You can read about it, or just watch The Sting.

Spoiler Alert: It pays off great for Henry Gondorf and Johnny Hooker.

Not so much for Doyle Lonnegan.

That's why he's called "the mark".

All I've suggested is that you don't be the mark. And that you check your calendar before putting your money down, and decide whether you're betting on the past, or the future.

The future for both fiatbux and stocks doesn't look so good.

But then again, no one's ever invented $15,000,000,000,000.00 in just a couple of years by pulling it out of their own ass before. Well, almost no one.

So, how did that work out?

Make that, "No one in the U.S." Or... hey waitaminute!

So consider your options, and then decide what to do, based on your own analysis.

After that, YOYO.

You're On You're Own.

This man is not your friend, (rarely ever has been)
but he does have a bridge for sale. Cheap.

If anyone has a quibble with any of that on the merits, have at it. Bring your calculator, and your history book. I put up the original post to make a point, not to make enemies. I've never been shy about good give and take, and as I've stuck to unassailable historical facts in this, I like my odds. But if you're just looking to display your amazing total inability to marshal facts and logic on your side of an argument, showcase your shocking lack of manners and abysmal upbringing, and flaunt your rhetorical shortcomings:

Who'da thunk common sense and stating the obvious would be such a hard sell, right?

*[Shout out to B:

Dude, you argue like a jealous little bitch. And I mean that clinically: bringing up imaginary past sh*t, and a continued inability to come up with any reason for your current hissy fit in the moment. We're not dating, we aren't related, and this is the only time I've mentioned you spontaneously in recorded history, because like Herr Steiner, my instincts about certain things are similarly infallible. My comments are unwelcome on your blog, which is entirely your prerogative, and you're utterly incapable of admitting when anyone points out where you've made an error (hey, I feel your pain), but much as it stings, you're not logical enough to examine the error without taking the correction as a personal slight. I hope that's not how you navigate and aviate, or you're going to have a shorter career at it than you'd have hoped, and end up landing into a mountain somewhere. And despite your shock, even I don't want that.

So please, get over the fact that your little blog isn't much of a draw, and either up your wordsmithing game, or just hold your peace. I'm living in your head rent-free, and that's all your problem and your choice, not mine. You're smart enough to fly planes, and wealthy enough to pay for them. Good for you. Sincerely. But that's not the global rarity you think it is, so either up your game, get used to a life of constant disappointment, or go out in that big wide internet, and just mind your own business in your little corner, without flinging sh*t you can't back up on other people's blogs because you can't control your impulses. It just looks catty and juvenile. Unless that look is what you were going for from the outset. If that's the case, You go, girl! But I'm still not interested in you, and my utter unconcern for your personal opinions of me cannot be measured with existing instrumentation. Scuttle back off to whatever it is you do, and we can both happily ignore each other endlessly, m'kay?]

Economics 101: Inflation

 

As related in ongoing conversations at SiG's blog , and Zero's, and multiple observations at bikini graphologist par excellence Wilder's blog, times beyond counting, far too many Americans understand Jack and Shit about how inflation affects everything they think they know about economics.

For those who need it, a simple refresher trendline graph:

This is also the trendline of space shuttle landing
glidepaths. Until we get to Columbia's last attempt.

How accurate is that graphic? I made it. It's dead-on, balls accurate.

At every point? No. It's a trendline, so only at the four points that matter:

1932, 1969, 1978, and five minutes ago.

In 1932, the US standard and NY open market price for an ounce of gold was $20.67.

It was largely unchanged (except for a decade-plus hiccup of post-Civil War inflation) from 1837-1933. (It was barely less than that, at around $19.39/oz, for another half century prior to that.)

By 1969, gold was selling for double that 20.67/oz price, meaning a dollar was worth half its former value.

By 1978, the dollar was worth 10¢ and less, when gold climbed above $206.70/oz.

In 2022, with the NY spot price at $1850/oz, a dollar is worth exactly 1.117¢ents. i.e. $0.011117 dollars.

(On the .Gov's graph at SiG's post, FedGov spokesholes are caught trying to bullshit the value of the dollar currently at being 5¢. 

They're off by 500%, and it hasn't been worth a nickel in actual terms since 2004. Government liars? Color me shocked.)

From 1932 to present, decoupled from actual gold backing, the Fed has stolen 98.9 cents on every dollar via inflation, by printing literal trillions of dollars of fiatbux, backed by nothing but love and kisses. The dollar bill in your pocket is worth less than its actual cost in ink, paper, and printing press energy to make. It's finely-engraved toilet paper.

Inflation of US dollars, over 90 years' time, stands at 8950%. It's at 918% since just 1970.

The prices for things you see rising are what happens over time, as other people and  countries realize they've been getting Monopoly money.

This has been done in Rome, England, the Confederate States, Weimar, Zimbabwe, and Venezuela, among many other examples.

The results of such fiscal policy aren't outliers, they're the template for what happens when a country debases the coinage. Every. Single. Time.

Fiatbux dollars (nor pounds, marks, francs, yen, or pesos) are not money.

Money stores value. Those instruments are, and have been for all your lives, nothing but currency, not money. They are currently traded and accepted in lieu of money (hence the name).

Precious metals (gold, silver) are money.

1) Gold doesn't really go up; an oz of gold is a constant. Only fiatbux move .
2) These are trendlines, not annual price points.
See the actual annual averages for yourself: historical gold price

If you don't have any of either, you don't have money.

So FFS, stop thinking a 401K is money, or a stack of hundreds, or (ye Gods and little fishes) that Social Security or your pension from Spacely Sprockets are money. Those things are but promises of a money-like item, which may or may not actually arrive, and may or may not actually be worth anything when the time comes.

And between now and whenever you shuffle off this mortal coil, anything valuated in fiatbux is inflation's bitch, 24/7/365, forever.

What we call a "millionaire" today? That was the guy with only $11,000 in his pocket in 1930.

Canned food, bullets, fish hooks, super models, or even bags of bullshit (used as fertilizer) are commodities. They may be of incalculable worth, when fresh.

But exactly like readily inflatable fiatbux, all those things degrade over time, and their value declines. No one wants $100 worth of canned goods from 1935 now. Let alone $100 worth of Farah Fawcett or Betty White. Commodities of all types have a shelf life.

But an ounce of gold or silver from Caesar's time, or Hammurabi's, is the exact same thing as an ounce of gold or silver today.

You can invest in stocks, and get something that may hold value for awhile. Or it may not.

Ask the shareholders in Pontiac, Sears, or Pan Am about that.

The DJIA dumps stocks that tank, and grabs those that succeed, in order to preserve the illusion that stocks go up, individually, or on average. They do no such thing. The DJIA picks the winners after they win, and dumps them when they lose.

This is like playing roulette with a house that places its bets and gives its odds after the roulette ball drops. Good luck bucking that game over time. If you want to get rich in Vegas, or on Wall Street, it's easy: open a casino, and wait for the suckers to lay down their bets.

Neither the skyscrapers on Manhattan, nor the luxe hotels on The Vegas Strip, were financed with the profits paid out to other people who beat the game. They were financed with the dough left behind from suckers' pockets.

So spare me the ROI your broker (paid out of your pocket) assures you you're making on your 401K, or anyotherdamnedfoolthing. At best, over the long-term, you might keep near pace with inflation, unless you're incredibly lucky, and then GTFO with your winnings. Just like at the casino gaming tables. But unless you buy the winning Powerball ticket every week, you aren't investing well enough to beat the inflation of time until you retire if you keep playing the game. All elevators, even the stock market, go both ways, up and down; they do not go up endlessly, all the way to heaven, nor are they likely to go up 918% from your teens until you apply for retirement. But inflation already has.

Cash, while it remains of some worth, is always nice to have. But it won't be so in endless perpetuity. And it's only worth anything until it's not.

Have a cash float, yes. But understand that like anything else, it has a shelf life. And make your long-term plans accordingly.

You don't live in Weimar, nor Zimbabwe. 

Yet.

But looking at the trendline on the graph I posted should give you some bone-chilling face-slaps of reality, if you haven't been paying attention until now.

UPDATE: Peter at BRM seems to think I nailed this. 

But the sting of butthurt in the comments from "investors" is scorching.

UPDATED UPDATE: It ain't just me telling you the truth. You can lead a fool to wisdom, but you can't make him think.

Oops...!

 

Just Like We've Told You All Along Department:

Turns out PropTwat, Hannah Gutierrez-Reed, future felon for manslaughter on Rust, comes by her ineptitude and total incompetence naturally, as the stories flow in from her prior gig, on The Old Way with Nicolas Cage.

(Getarope News)'You just blew my f**king eardrums out!' Rust armorer Hannah Gutierrez-Reed 'discharged weapons without warning and infuriated star Nicolas Cage' on her previous film

• Hannah Gutierrez-Reed was the subject of numerous complaints while working as the armorer on her previous, and first ever, movie The Old Way

• Nicolas Cage, the star of the film, reportedly yelled at her after she fired a gun without warning for the second time: 'You just blew my f**king eardrums out!'

• A crew member from the The Old Way said she 'put the cast and crew in several unnecessary and dangerous situations'  before he reported she should be fired

• In a podcast interview after filming ended, she said she wasn't sure if she was ready to be a head armorer on a movie set

• Two production sources claim Rust armorer Hannah Gutierrez-Reed previously gave a child actor a gun without checking it on set of the The Old Way film

• The rookie armorer was named as the person who loaded Alec Baldwin's prop gun that killed cinematographer Halyna Gutierrez-Reed on the set of Rust 

Word To Your Lawyer, PropTwat:

End the farce. Cut a deal and plead out, while you still have a shot at some leniency for killing someone. You'll be out in 12-18 months, tops, and thankfully, never be legally allowed to touch a firearm the rest of your adult life, which will save as many lives as a cancer cure at this point, based solely on your demonstrated performance on one and a half movies.

So, total shocker, untrained and incompetent non-union PropTwat was a walking disaster with weaponry, and only by some miracle took until her second movie gig to kill someone, in a way no one has done in Hollywood in...lemme see, carry the zero...ever. (Neither Brandon Lee nor John Eric Hexum were killed by live rounds on set. Gutierrez-Reed is thus the only propmaster/armorer in recorded cinematic history, AFAIK, to screw that pooch right out of the gate, and managed it on her sophomore film, which was yet another low-budget piece of crap.)

RTWT

And for those spring-loaded to the stupid position, there were multiple producers on Rust, and she wasn't hired by Baldwin (who had no such hire/fire authority), but rather by line producer Gabrielle Pickle (who has a documented history of firing camera crews when they complained that safety corners were being cut), and/or by Unit Production Manager Katherine Walters.

The locus of stupid on this disastrous film aren't Hollywood people at all, but in fact a bunch of cut-rate indy film bumpkins from Georgia, trying to do everything on the cheap, and think of themselves as scrappy, but are in fact crappy, right up until they killed someone. These cheapskates are working overtime to live up to ever stereotype about producers that exists, and bringing them to life before your very eyes. Wannabes will get you killed every time, even in movie-making.

Gutierrez-Reed, total newb to guns, and yet serial fuck-up armorer

Dave Halls, 2d AD, the guy supposedly double-checking Guttierez-Reed, and previously caught violating weapon safety rules on another production (and as a member of the production department, not the prop department, he should never have anything to do with weapons on any set, yet here he was screwing that pooch again too)

Gabrielle Pickle, line producer, already found guilty of violating federal labor laws for firing a previous camera crew on another production when they complained about unsafe practices on-set 

This movie was being made by a complete rogue's gallery of incompetent assholes, and for the motion picture budget equivalent of peanuts.

"When you pay peanuts, you get monkeys." - Aesop 

QED

*{Hot tip, kids, when I use "non-union" derogatorily in the context of movie and TV productions, that's because it's true. I was dragged, kicking and screaming, into two unions over two decades in Hollyweird film production. The point isn't, as you imagine, because union membership confers infallibility. Anything but. As an elected officer and member of my union's executive board, we spent 90% of our time on the 5% of our union members who were nonetheless stone-cold f**k-ups. The point, in Hollywood, is that getting union membership for behind-the-scenes crafts and guilds is that it takes 30 days working on either a union show, or non-union show that organizes, to get it. And getting that, usually takes 1-3 years, on average, meaning no one on a union show with their shiny paid-up AFL-CIO card is a freaking incompetent rookie, because they'd never last. Hannah Gutierrez-Reed never got those 30 days, nor 1-3 years, nor took the week's worth of mandatory union classes the producers - that would be Universal, Fox, Warner Brothers, Paramount, Disney, Sony, et al - require before you can be in your job. Which, in Gutierrez-Reed's case, would have included not just general set safety classes, but for propmasters and armorers, she would have had an entire class devoted solely and entirely to firearms and ammunition safety. She would have had to pass at least a basic test, before being allowed near any set, to do the sort of f**k-ups she did on both of the one and a half movies she worked on, right up until her multi-incompetence manifested itself in killing someone - by deliberately violating 50 or 60 of the most basic on-set rules for the job for which she was hired, after representing herself as an expert, rather than a farking novice and junior moron, which is what she was and is. A non-union member in Hollywood is one step above an absolute rookie level moron, whereas anyone with a union membership card has at least enough acquaintance with their job to not do anything as stupid as the plethora of screw-ups she pulled off, let alone killing people. Which exact lack is why she took on too much job, for too little money, with too few brains, and committed career-ending manslaughter. People on set sound like the kid in The Sandlot - "You're killing me, Smalls!" , and they say that to their co-workers all the time, usually jokingly, for making their job harder. When they say that to Gutierrez-Reed, they mean it literally.}

2020: the Year Of The L-Shaped Recovery

It is said that the measure of a man's intelligence is related to how much he agrees with you.

By that standard, John Wilder is brilliant in his latest post.

In it, he looks at the recent prognostication by Scott Adams, of Dilbert fame, that the economy is going to come surging right back.

Unfortunately, Scott is wronger than two boys fornicating.

And as noted above in comments at the OP, Adams is, indeed, smoking industrial quantities of hopeium.
I share his wish that things would be otherwise, but people can't buy groceries with wishful thinking.

As we told you back at the beginning of the month, the oil business isn't going to bounce back. Probably not for near a decade.
The auto manufacturing business - and 400 ancillary industries - aren't going to bounce back.
Airline travel drop-off is going to kill some major carriers.
Tourism, hotels, and everything related won't be back for a year.
Hollywood is looking at the south end of a northbound worst-movie-summer-in-recorded-history since Thomas Edison invented the motion picture. TV production is on the longest hiatus since the last writer's strike. People in the biz are losing their houses.
Concerts? Gone.
Trade shows? Gone.
Sportsball? On life support.
Farmers? Lucky to stay off of food stamps this year.
Restaurants? This year will probably be the most closures and bankruptcies since 1929.
Retail? Aloha. Malls are going to be the new ghost towns.

And all those employees? The ones not working anytime soon?
They'll be the exact ones NOT buying all of the above goods and services.

This isn't going to be a V-shaped recovery.
It isn't going to be a U-shaped recovery.

Welcome to 2020: The Year Of the L-shaped Recovery™.
(Anybody can use that one, but *I* said it first.)

And before this year is out, we'll be happy if we could just get back to the Obozo economy.
Getting back to the Trump economy from 2019 will likely be something that takes years and years.
If ever.

Ask Weimar, Zimbabwe, or Venezuela: you can't inflate your way to prosperity.
It fails every time it's tried.

Buckle in, kids. if you've got a paying job to go back to, count your blessings.
And if not, start scrambling.
Like Tom-Brady-looking-at-a-wall-of-blitzing-linebackers scrambling.

Because if you don't you're going to be sacked, and become roadkill.
Just part of the collateral damage from Kung Flu.
And if you aren't careful, you'll find out that massive unemployment brings Famine, which brings Plague, which brings Death. And the unrest from that brings War. Which doubles down on the first three.

No points for noting that all four of those riders come visiting on Four Horses.

The Road To Serfdom, And The Train To Freedom

SiG's got a great post on how software licensing is creeping into everything, including high-end items (cars, tractors, and all "your" stuff), and making slaves of nominal "owners".

RTWT

Like much of the march of progress (and chaos) this is going to take lawsuits to fix.

People are going to have to sue to force hardware manufacturers to assume the cost of upgrading, for example, a PC, when it is no longer capable of handling the operating updates.

It's going to have to be turned back around on them.

When Ma Bell owned the phone system, the phones were built like brick sh*thouses, to last 100 years of heavy-duty use. The onus to upgrade them was on Ma Bell, not you.

Alternatively, people will have to revolt: if my PC/car/gadget can be turned on and off, downgraded, etc., then the maker is going to have to eat 90% of the costs for it up front, as it's no longer "mine".

I'll happily pay $20/year to rent their machine, and they can do what they like with it.
If they're not willing to do that, and take the hit on not collecting revenue up front, someone else will build machines that will run actual open-source software, and run existing computer and software companies out of business, exactly as happened to music companies, as is happening to movie and television production studios.

Boilerplate "licensing" agreements aren't worth the signatures they're not signed with, and it's going to take some nuclear lawsuits to make that point in court, but it's inevitable. And it's happened before.

Precedent: how Thomas Edison killed the NJ movie industry, and cut his own throat

Back in the day, Edison & Co. tried to shake down everyone making a movie as someone who owed him a cut of the action, since he'd invented the camera and the manufacturing rights for the projector, and NY/NJ courts and judges, in Edison's pocket, upheld that idea. I should point out that typical "Joisy" tactics were employed to enforce this racket. (Click the link and watch the video, it's a great short explanation of what really historically happened.)

So half a dozen young gentleman of primarily Ashkenazi heritage realized that if they were going to make movies, they'd have to get out from under Edison's thumb, and they hopped the train westward. They arrived in Phoenix the one day it was raining in months, so they continued on to Union Station, in Los Angeles, and decided that was the perfect place to make movies.

Edison's stranglehold on the technology was eventually broken, and the rest is history. Literally.

The next train hopped will be metaphorical, but somebody (or a lot of them) are going to do with software and the internet of my things, what guys named Laemmle, Fox, Zucker, Mayer, Thalberg,  etc. did with motion pictures: break them out of serfdom.

Mark my words.

People will be free, and they will own their possessions outright. You can't stop the signal.

What You're Freaking About, Versus What You Should Be Freaking About

John Wilder



has a great post today about the greater lesson (and impact, in all likelihood) of the Kung Flu of 2020.

RTWT.

This has been the greater lesson all along: the problem is not the Kung Flu getting here nearly so much as it's about the second- and third-order effects, here, of Kung Flu rampaging across China, there.

This is the Mel Brooks Comedy Theory, applied to economics: "Tragedy is me stubbing my toe. Comedy is you falling off a cliff."

They have 400,000,000 people in China (at last report) on house arrest, most of them in their industrial belt. If you get anything made in China, you won't be getting it, probably for the rest of 2020.
Period.

No Keebler elves making your crap means no Keebler cookies. Or anything else. Multiply that times the second largest economy on the planet, and we have a problem, Houston.

But the beauty of the Invisible Hand is that (assuming people who aren't lunchmeat for brains running the show) capitalism starts doing workarounds ASAP for all the things China cannot provide.

Kung Flu is going to be the Third World Full Employment Act of 2020, and entire industries elsewhere are going to reap the windfall.

Eventually.

In the short term, expect scattered PITA, with a chance of disasterpiece theatre.

Bonus: GMTA. Peter adds another 2¢ at Bayou Renaissance Man.
Blogs are on our bloglist for a reason.

Chaos Brings Opportunity...And Chaos

So, as I said I would at the end of that post, I went through my E.R.'s supplies this past weekend, and made a list of items that we source from China. The list is esoteric, and very inside-baseball, unless you're in the trade. I sent it, in a memo, up the chain, so that hopefully administration will source alternative vendors for items which may become Chinesium Unobtanium any day now, until further notice, because between 50-500M Chinese are no longer going to work in the toy factories that make the things I use to make sick people well. So forget the item list, but take away this TL;DR note:

Of 54 major items, 43% (23 items) are sourced from, assembled in, or produced in China. That's nearly half of everything we use, 24/7/365, forever.

Many of them might be sourced elsewhere (and I hope to hell we do it before it bites us in the ass); but many cannot be. The lack of some will get you or someone like you killed if I haven't got it.

Multiply that times nearly 5600 U. S. hospitals, and countless clinics and doctor's offices, just for healthcare, nationwide, and you can begin to grasp the magnitude of this problem.

Then, extrapolate that to the entire economy.

Then go from second-order effects, to third order effects.

WallyMart and Horror Freight live and die on importing literal metric mega-fucktons of cheap Chinese sh*t, to exist.

So when that pipeline dries up, possibly overnight, you tell me:

What does stock in WalMart or Harbor Freight open at on the market the day after they can't get their goods?

What about fourth-order effects?

Who gets laid off as a direct result?

What happens to the economy, not only for the family of Joe the Greeter and Sally the Checker, but for the folks whose groceries they don't buy, the movies they don't see, the gasoline they don't need to drive to work at the job they don't have any more, and the state and federal welfare dole they swell?

Because some little sh*theads, in some sh*thole, had to have batburgers last year, the economy, perhaps of the world, takes a punch right in the crotch.
And the rot of fiatbux means the house of cards could all come tumbling down.
Possibly in a matter of weeks. Or months. Or hours. Or never.

No one has any effing idea whether or not, nor how fast and far, such a collapse could go.

And it doesn't even require even one single person more outside China to get corona virus, (or whatever-in-hell this is).

That's enough rose-colored glasses for one morning.
Think it over yourself.

And have a happy day.