There never was a recovery. This was always obvious to me, I blogged about it often like during that same so-called-recovery. Here is a compilation of my warnings in real time as it went down: http://dwahts.blogspot.co.za/2016/01/the-world-is-in-trouble-to-protect.html
It's less frustrating making that point now because more people are working it out. The light at the end of the tunnel is, and always was a freight train heading our way. Now the frustrating part is that the talking head economists are looking at symptoms in isolation. like OIL and CHINA. That is no explanation, how about some sort of reasonable discussion, an interesting discussion that people will actually follow about what CAUSED it. It's very very simple. I can't stress this point enough. Anyone (I really mean ANYONE) can understand it.
I am not an economist, I have no training in macro-economics. None. I'm lousy with figures, yet it's strikingly simple to me, and I assure you my amateur take is there or thereabouts to the truth. That's how simple things are.
Permit to oversimplify one or two bits despite my claims of "simplicity" and leave a few factors out which distract or don't factor in the overall trend. Please correct me if you think I miss something as a result. I have to make the point that as far as I can tell there is no mystery here. If you can explain to me that I've missed something, please explain so that I can understand, nobody else is! It seems that this is what happened.
- Nixon did his owners job by taking the US off the gold standard in the early seventies, this set the broad parameters to facilitate a fiat currency ponzi scheme, but was not in itself the cause.
- The above allowed for real world economic laws to be abandoned in favour of central banking economic models and theory, justified by all sorts on fancy financial sorcery.
- The US bamboozled the world by pulling off a con that allowed the petro-dollar to allow the dollar to function as a defacto parasite currency and create a war-backed new backing system.
- In 1996 the Clinton administration destroyed remaining hope with NAFTA, but even more blatantly with their repeal of the Glass-Steagal Act, creating a terrible environment for a workers economy and essentially removing many safeties separating investment banking and banking. This almost directly resulted in the casino environment that created the "Too Big To Fail" banks.
- While they "rolled it" the new central bankster pranksters, like Alan Greenspan at the US Fed had the short term pay offs appreciated as a new economic frontier in thinking, rather than the scam it really was. Trickle down economics, an obvious scam, was seen as the future. The wealth gap and wall street economy was now firmly entrenched as a savior in societies press and financial institutions.
- The continued outsourcing of career jobs of the worlds largest consumer economy, the US, to China and the developing world, dangerous national debt and trade deficits where all relegated to marginal concerns instead of red flags, the destruction of union power and shocking unchecked Lobby power in congress, resulted in a bit of desperation for momentum as the money velocity dropped causing unusually lenient or risky terms in consumer debt responsibility. this was bundled off into all sorts of junk and futures derivative products which the investment institutions (now, like the new Mafia, were unrestricted by old laws) simply passed off as AAA rated. The recipe is now set for disaster but it does not happen right away.
- The Dot-Com Bubble provided clues, but the 2008 Credit Crises drove the point home. Why?
- Because of rising debt and fake printed money (made sound legitimate by using the term "Quantitative Easing") were seen to trump real world economic basics, monetary policy, printing money and dropping interest rates to absurd levels were incrementally tolerated, their short term quick fixes were seen as solving these problems for some mystifying reason.
- The establishment doubled down, used taxpayer money to bail out the banks and inceased the same failed policies to solve the problem. It follows logically that what they did was insane. I think a serious case can be made for either madness, or treason. That is not an attempt to be dramatic, it's a serious statement and plain to prove.
- The widening wealth gap meant the elite hold ever higher shares of the money. The elite are more likely to spend 5% of that money whereas if it were in the hands of the working class many would spend 100 or even 110 percent of what they earn.
- The velocity of money is now seriously shrinking and of course this is hammering global demand.
- Shrinking demand means less freight, less transport and a dropping oil price before production figures are even considered.
- China, by now the worlds largest producer, is selling to the US, the worlds largest consumer losing demand at record pace. China's growth rate must taper off according to logic. Add disastrous central bank EU policy and a failing EU to the equation and.... Well I think it's quite obvious isn't it?
- US military action, a petrodollar essential, is costing more and failing more. The tax dollars transferred from taxpayers to wealthy Military Industrial Complex shareholders rivals the wealth transfer rate of the taxpayer to financial institutions. The welfare for the rich starts as welfare for the poor, who need it, is pulled back each year. The scam term for this is Austerity and it manifests in countless morally reprehensible and economically unsound forms. It's simply not good economics apart from the moral factors.
- The markets by now have no real relationship to the real world economy, purely in investor sentiment (guided by the media) and the price of gold has no relationship to scarcity, supply or demand (thanks mainly to the "paper position" Comex market established by the banksters).
- A fantasy state of affairs has been created. The central banks are out of ammo. We actually have witnessed the birth of negative interest rates, once considered financial heresy. It's so bad that a war on cash has started to force people to keep their cash in banks instead of in their mattresses at home. Anyone with debt would see the principle debt reduce the longer it goes unpaid. It's actually nuts.
To end off, there is no easy way out. Trust me, we are headed for disaster. If you have any form of wealth, I suggest wealth preservation as your key strategy. Buy physical gold and silver. Wait for the property bubbles to pop before even thinking of buying property, it will only end in tears. This is the inescapable truth. Hold me to it.