Today the first quarter GDP comes in at an annualized 2.2% when 2.5% was expected. Given the adjustments that we've been seeing lately, expect it to be revised down later, but regardless, it is anemic. The "official" inflation rate is 2.4% which we are all pretty sure is bogus. Against population, a 2.2% increase is really negative.
The dollar tanked modestly against the euro (mainly because the euro sucks). Crude tailed off from the weak growth prospects. Metals rose, as did the equity market, both, along with the FOREX, begging for the Fed printing presses to be fired up. The Fed, though, knows that inflation is worse than depicted and even 2.4% is outside their "stability" range. All the government "pump priming" crap has made and continues to make bad matters worse.
Fiat currency and equity markets may make a few people feel wealthy for a while. The prudent person should look at the situation and make every reasonable effort to extricate himself or herself from the mirage. To be able to feed and otherwise provision oneself is the true measure of wealth. As this mess plays out, you may be better off with a 50'x50' piece of ground, a bag of Kentucky Wonder beans, a Bible, and a shotgun than a trunk full of stocks, bonds, and Federal Reserve notes. Your capital might be a forge and an anvil or the ability to weld or carpentry skills and tools or a tractor and a plow or a bulldozer or a pressure cooker and mason jars -- whatever. Invest in reality. It is the only sure thing.
That would be a lot of beans! Couldn't agree with you more though. We talk a lot about the financial house of cards which is pretty apparent to me. But there is the greater structural problem of the US where too few people produce real goods for a living, myself included. For every craftsman producing a product there are 10 youths whose only skill is the ability to make a video of said craftsman and post it on the internet. Once we left the farms and robotics emptied the factories, which we willingly did as a society, we created an imbalance with too low a percentage of the population able to produce the basics, food, energy, shelter, transportation. It all hangs together on global stability and debt (ruh-roh!). And don't confuse me with facts! This is a gut-level rant.
ReplyDeleteMy wife and I often quote the "Secret of Roan Innish" (a charming movie) where the grandfather says, "The only true wealth is land." Actually, I vote that movie be entered into the PFD recommended viewing list.
That's a good idea.
ReplyDeleteI was reading something the other day about how the old assembly line jobs were not really that good, but they provided employment for people who really weren't too productive. Farm labor used to be people-intensive. All that provided secure work for a segment of the population that now either flips burgers or works in some other retail component.
I agree that working on the factory line or being a farm laborer was no picnic but you were actually doing something, and that's good for the soul. Also, you were in an environment where there might have been the potential to better yourself.
ReplyDeleteTwo calloused thumbs up for "The Incredibles". If I recall, "Mosquito Coast" was a lot of fun until he decided to take the ice to the natives. But it has been a long time since I saw that one so I'm not going to recommend it.
I never worked in a factory, but you're right about farm labor. You're building something or accomplishing something where you can see the purpose and the end result.
ReplyDeleteI don't know if I have seen "Mosquito Coast". I'm thinking about adding The Dark Knight. Secondhand Lions, maybe, too. I'll have to watch it again.
I second Secondhand Lions.
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