seemslikeadream
06-01-2009, 07:43 AM
http://urbansurvival.com/week.htm
In the first Depression, the economic losses were immediate and personal in the wake of the crash in 1929. In that event, the losses in the banking industry ($3.6-billion in less than the first three years) amounted on a constant-dollar basis to about $481-per capita. This time, we're going well north of that: presently in the range of $650 per capita (and that's only looking at the $200-billion for banks). But what's different about Depression 2 is that we haven't really seen what I call the "Pocketbook Effect" of Depression 2 yet, since the loss on the backside will be through higher marginal tax rates. This BOHICA later than sooner means that Americans are going to slowly ramp up their personal savings rate, but remember this will only apply to the 11-people who will still have jobs when we get into double-digit unemployment later this year or early next, or as the global 'take-it-to-the-street' mode starts to appear late this month or early next and then rolls us into the 'summer of hell' since MSM continues to pump the unsustainable lifestyle imagery into the global mass consciousness. (Glad you asked?)
The second dynamic is that inflation impacts stock prices, but will likely only do so as long as the perception is about that there's a chance companies can struggle back to their 'old ways' which includes owning large 'market share' in this vertical (market) or that. The problem is, of course, that since I expect that consumers will keep on pulling in their horns - not to mention things like doubling up on housing for economic reasons, which will push commercial real estate further over the edge - in order to get their personal savings rate up to something near what's required to reform capital, which in turn is a years-long process itself and distinguished from 'papering over' which is the present effort.
Sorry for the five-lines-long sentence, but sometimes we have to deal with big concepts, even if it's Monday. You can almost take this to the bank IMHO: The same inflation that saves banksters after they foreclose on folks will also drive up 'asset prices' in a phony sort of way on Wall Street until someone wakes up and says "Hey! Milk's up to $7.50 a gallon - WTF?" But, by then it will be too late and the only place I see worth hiding is by investing in non-paper assets and things which can in and of themselves make economic sense. Buying solar panels which have done down quite a bit on a cost-per-watt basis seem to make sense. (More on that in the 'coping' section.)
In the first Depression, the economic losses were immediate and personal in the wake of the crash in 1929. In that event, the losses in the banking industry ($3.6-billion in less than the first three years) amounted on a constant-dollar basis to about $481-per capita. This time, we're going well north of that: presently in the range of $650 per capita (and that's only looking at the $200-billion for banks). But what's different about Depression 2 is that we haven't really seen what I call the "Pocketbook Effect" of Depression 2 yet, since the loss on the backside will be through higher marginal tax rates. This BOHICA later than sooner means that Americans are going to slowly ramp up their personal savings rate, but remember this will only apply to the 11-people who will still have jobs when we get into double-digit unemployment later this year or early next, or as the global 'take-it-to-the-street' mode starts to appear late this month or early next and then rolls us into the 'summer of hell' since MSM continues to pump the unsustainable lifestyle imagery into the global mass consciousness. (Glad you asked?)
The second dynamic is that inflation impacts stock prices, but will likely only do so as long as the perception is about that there's a chance companies can struggle back to their 'old ways' which includes owning large 'market share' in this vertical (market) or that. The problem is, of course, that since I expect that consumers will keep on pulling in their horns - not to mention things like doubling up on housing for economic reasons, which will push commercial real estate further over the edge - in order to get their personal savings rate up to something near what's required to reform capital, which in turn is a years-long process itself and distinguished from 'papering over' which is the present effort.
Sorry for the five-lines-long sentence, but sometimes we have to deal with big concepts, even if it's Monday. You can almost take this to the bank IMHO: The same inflation that saves banksters after they foreclose on folks will also drive up 'asset prices' in a phony sort of way on Wall Street until someone wakes up and says "Hey! Milk's up to $7.50 a gallon - WTF?" But, by then it will be too late and the only place I see worth hiding is by investing in non-paper assets and things which can in and of themselves make economic sense. Buying solar panels which have done down quite a bit on a cost-per-watt basis seem to make sense. (More on that in the 'coping' section.)