There are caveats, even before we begin.
For years, I was most bearish about the economy then, as I got myself personally sorted out, became less so, more of “well it ain’t happened yet”. Four American banks defaulted a couple of Januarys ago and yet they didn’t. Not officially. All sorts of things were happening which, by normal measurements, meant the economy was tanking again. And yet it wasn’t.
One of the reasons is that the players are also the regulators and if they say a 2 billion default is not a 2 billion default, then it’s not a 2 billion default. But for how long can that game go on?
I personally moved to a more Capitalists at Work stance, not bullish by any means but equally not slitting the wrists just yet.
Somehow, I might have been wrong to move from the bearish and here is some evidence to back that:
It looks like transportation service requirements are dropping dramatically all over the world people are moving less of … well … everything. With an economy that still hasn’t recovered from the LAST recession, this is not good news.
The tankers are piling up outside Galveston.
Freight shipments are way down year over year.
Ok, these stories are both from Zero Hedge. There’s this one on Brickmuppet about Maersk laying off 4,000 people.
Now Maersk is primarily container shipping, so the shipping issues are going far beyond oil.
The Baltic Dry Index is in the tank.
I also posted this a couple of months ago.
It looks like rail shipping is in trouble as well.
This from the WSJ.
The big problem is that nobody’s buying.
There’s logic in this. I’ve stashed away as much as I can and I’m sure as hell not going to blow it on anything beyond the boat and even then it is being done quite carefully. So, no take-out meals, no trinkets and baubles, no schemes where someone can do what I can do myself. No more clothes buying – I’ve quite enough for needs. I can’t afford to travel and when I do, it will be by boat.
That’s just me. Multiply that by the millions who are doing similar, who are sitting tight, watching, not being drawn into anything, no home repairs, no car repairs, nothing. We are not keeping the economy afloat ourselves, except for what is prised out of our accounts.
ASDA know it – they are in trouble, as people buy only from the out-of-date shelf or from Aldi, people are buying everything else from pound shops. I mean the people in the middle or lower, which is where I am now.
And yet First World schemes continue to bombard us – requests to “work together” at the website, meaning pay them.
Meanwhile, the feckless class, including all the pollies, charity heads etc., the left coming out with ideas that your pot you’re sitting on is not yours, it belongs to the community and needs redistributing to the needy, meaning themselves, in other words, it’s theft of property. No more free rides, folks and the takers are not liking it.
Some of you might have noted and frowned at: “I’ve stashed away as much as I can.” As much what? Money in the bank? And if there is a crisis, what is that money then worth? Tinker’s cuss? In my case, it’s small change – the ones in trouble are those who do actually have assets because once the theft starts, it will snowball.
Those paying off homes – what happens? If it crashes in stages, then the banks can still call in the loans. If the banks go first, then all bets are off and odds are you just get to stay in that home but also law and order disappear and it’s lap of the gods on home defence. What happened in former days, e.g. the rancher days in America, when home defence was down to the homeowner? Days of the gangs.
I’d suggest we needn’t leap to this sort of thinking yet and if it is dire, there’s nowt you and I can do, so why worry now? But it doesn’t hurt to have contingency plans, just in case.
As for stimulating the economy – purr-lease:
Government technology promotion agency Innovate UK, the former Technology Strategy Board (TSB), surprised many last year when it agreed to spend no less than £800,000 on a piece of software that would “minimise building waste” sent to landfill by construction companies.
The happy recipients for this bizarre project included two SMEs, Sustainable Direction Ltd, Waste Plan Solutions Ltd and the University of the West of England in Bristol. In the real world, such software might cost £5,000 maximum. In addition, there is no market for the product as companies already strain to reduce the amounts sent to landfill and avoid excessive charges.
Sadly, it was just another example of the kind of worthless project signed off by Innovate UK, a group of about 100 apparently expert individuals based in Swindon. This wouldn’t matter if it wasn’t for the critical role Innovate UK’s huge budget plays in accelerating emerging companies and technologies in the UK.
This is what happens when people up there start tinkering with the economy for political ends, ideological ends, shafting many professions which always employed many but because it was mainly men employed, those industries could go. Instead, everything’s poured into service industries worth diddly squat in a crash – they produce nothing, they just run things. Everyone’s now a manager or a servicer, no one actually produces things of value to any society.
Golgafrinchan Ark Fleet Ship B awaits.