Doom-and-Gloom Crib Notes

A photo from my friend’s photo studio

In the U.S., does $4 trillion remaining on the Fed’s balance sheet represent the not-going-away, growing, pent-up anger from U.S. predatory lending — from rich to the formerly middle-class? The Fed said it could pay off QE debt. Ten years later, it hasn’t. Asset bubbles seem to be forming again. The cities get richer; farmers and manufacturers get poorer.

Immigration, Brexit, alt-right political parties, and so forth, increasingly feel like the emotional friction given off by a recession/depression developing in the West.

China is struggling with hidden public anger over income inequality. The rich own property in Toronto while the middle class Chinese own empty units in ghost cities. Honk Kong is forcing Beijing’s hand. Taiwan, looking at Xinjiang and HK, has no option but accelerating militarization. In short, like the West, Asian alliances are breaking apart.

Russia is licking its chops,in the hopes of selling fuel and advanced weapons technology to everyone.

2,500 years of history strongly suggests that once the horror of war is forgotten, humans would rather fight over their grievances, which they can’t articulate, then work together to equalize opportunity.

We group under nationalism, capitalism, religion, race. The belief that global happiness can be achieved through “human rights” only works as far the last stop on the city subway line.

No, I don’t believe war is going to happen tomorrow! My argument is only that it is getting closer, perhaps only years away.

The Curtain about to close on a Bretton Woods World…

A bitch gone in the teeth. Since WWII, the U.S. Navy has been used to project U.S. Superpower status. Aircraft carrier groups were fortress-like safe, the assumption being that the fighters on the ships can defend it against fighters from shore. In the next show of strength by the U.S., will this be shown to be obsolete by drone swarms (both in air, on sea, underwater), cyber-warfare and hypersonic missiles?

It may upend the world as we know it. The U.S. is once again isolationist. Other nations in the world, are once again becoming increasingly angered and powerful. Instead of strengthening domestic and global institutions, the Internet is becoming their undoing. Indeed, social networks are becoming a feedback loop of aggression. The ingredients of war.

On the other hand, there are reasons why war is unlikely. People don’t need sex for pleasure, they watch porn and take drugs for pleasure. People don’t need war for adventure, they can find it in their computer games. In the real world, weapons have become so precise that the side that shoots first may win, or the other side — either way, it will be quick and end up a blip in history. If true, these are positives.

Another positive? It’s always good to be young! If I was young I wouldn’t be writing this drivel. I truly hope I am wrong.

ECONOMICS

• Property bubbles in the cities. Will they go through what suburban Florida went through in 2008? Over-development of luxury real estate in every major city is facing slowing demand while city infrastructure deteriorates in the opposite direction (from tax cuts). To put it humorously, even the rich Asians will tire of buying empty condos in every major Western city. Read more.
• Increasing student-loan debt is creating demographic instability between young and old generations. That is, many young people will find it better to work low-paid jobs (without starting families) and pay minimums on their student loans than try to get a higher paid job where most of the money goes into paying off the loan.
• Excessive car loans and scale-back of automotive manufacturing. Similar to sub-prime real estate of 2008. Uber and ride-sharing saddling drivers with mounting personal car debt which can’t be paid down against counter-forces of Uber/Lyft monopolistic pricing (expense minimization).
• Credit card defaults rising, leading to unstable household budgets.
• New tax-cuts will widen Federal deficits; deficits growing faster than production, leading to an unstable relationship of future demand to current production

GEOPOLITICS

• Overwhelming evidence that climate change has destroyed past civilizations through instability yet faith that technology can fix it this time, leads to odd social pathology that those who can fix it should be ignored when they say they can’t, without greater investment. Feeds into…
• Mass immigration across the world (most caused by military weapons testing in the name of anti-terrorism) leads to instability if economy can’t absorb them quickly enough. Feeds into…
• China One Belt On Road and Maritime Silk Road + Naval bases are creating 3 military superpowers (Russia, US and China). Leaves various alliances with India, France, UK, Japan, Turkey and German and others unstable…leading to a now-growing costly arms race.
• Potential failed states: Syria (U.S. involved), Yemen (SA involved), South Africa (water problem), Venezuela (For stability-sake, U.S. would have invaded 20 years ago, but U.S. again, a bitch gone in the teeth.), Italy, Brazil, Argentina…
• Growing U.S. military high-tech favors stability of global wealthy at the expense of developed nation’s internal lower and middle classes.
• Brexit. If we don’t see a serious global recession before March/2019, I’d be very surprised if Brexit doesn’t cause one. (Now May, and I look foolish for that prediction! However, I see no real change in the forces in effect.)
• China’s HK problem. If the PLA occupied HK, Taiwan will be spooked and the region will accelerate militarization.
• Rising crime in South Africa, Mexico City, Ethiopia.

TRENDS

• Central banks continued reliance on money to insiders (member banks and top 25% of population) continues to find its way into unstable asset bubbles in luxury real estate, corporate equity/debt, automobiles and student loans.
• Atomic bomb treaties are not being replaced, increasing instability from new nuclear weapons in development which may be used. Talk once again of “tactical” nukes which aren’t “real nukes”.

LIABILITIES

• When financial bubbles pop, they create a few years or instability and greater income inequality which may lead to war from other social instailibites, like immigration and outsourcing.
• Rising income inequality increases instability.
• Neither political liberals or conservative can solve real problems when both focus on emotionally divisive issues that drive up the price of social media stocks which create geopolitical instabilities from their use in hybrid or gray-zone warfare.
• American rise of suicide rates (not same in Europe, though they have worse economic plight).

FUTURE

• Even if the Democrats are able to get back into power the fix will be short lived. The Western countries no longer have the economic/military superiority to grow at Asia’s expense. Or, if you’re Asian, you won’t be motivated to lower your standard of living for Americans. The trade war will increase and proxy wars develop between the West and Asia (including Russia).
• Climate change is not fiction. All the arguing about its existence obscures where it is already laying the foundations of future winners and losers in the global economy.

revisions 6/5/18, 4/23/18, 4/6/18, 6/27/18, 8/1/18, 11/3/18, 12/5/18, 12/25/18, 4/19/19, 5/26, 6/12, 7/12, 8/2