Thinking of Investing in Popcorn Futures

The Obama regime is probably planning on swapping out Barack for Michelle at the end of this term.  They might be looking for a way to have the 22^nd Amendment thrown out by a packed Supreme Court.  Or, they might let Barack run as Michelle’s Vice President by having the Court rule on the interaction between the 22^nd Amendment and the 12^th Amendment, i.e., service versus election.  By 2016 there will be a solid and entrenched fascist majority of judges that will not be removed any time soon.  The left is practically orgasmic over all this.  That’s the bad news.

There’s worse news.  Initial claims came in at well over 400,000 this week, due, according to the spin, to Hurricane Sandy.  The core CPI is running 2%, but food inflation is, as Denninger notes, double that.  Retailers are expressing caution.  The euro bounced off the floor after the Fed Open Market Committee announced more money printing, but it should have soared against the dollar.  The fact that it did not indicates that the situation in the EU is deteriorating.  The EU has dropped back into a “double-dip” recession.  I would not be surprised to see a similar admission regarding the U.S. economy.  My opinion is that we have never gotten out of the recession from 2007.  The government has papered over it with irresponsible deficit spending and bogus numbers.  Still, sooner or later, the politicians will have to face the reality.  I’m sure the problem will turn out to be rich people not paying their fair share.

So is there any good news?  It’s hard to say.  A serious economic collapse could derail the left’s happy train to Utopia Junction.  Those familiar with the situation in Europe, e.g., the Frogman, doubt the libertarian scenario of impending economic doom, in that places like France have kept the socialist plates spinning for eighty years.  They may be right.  Nevertheless, one wonders how much of that “success” has been due to the vast, voracious, seemingly bottomless consumer economy in the United States.  Our appetite for stuff helped to subsidize the world, especially Western Europe and Japan, after the end of World War II.  Our ability to produce an over-abundance of food and other agricultural products helped millions afford more than adequate meals with money left over to spend or invest.

This is what I can’t help wondering, if you choke back American productivity with taxes and inflation and bureaucratic regulation, won’t there be a ripple effect?  I’m pretty sure it worked the other way – our productivity and somewhat-free market prosperity rippled out to prosper people in other countries to the point that they could “afford” socialism.  Thatcher’s famous line that “you run out of other people’s money” remains true, but the pool of “other people” was expanded with globalization.  The European and American parasite class has been supported, of late, by outright slave labor or the next thing to it in China and India.  The Chinese government, in particular, skimmed the profits for selling cheap goods and bought bonds to fund the increasing Western deficits which, in turn, filtered back to China via exports.  Thus the consumer bubble continued to expand.  For the last thirty-plus years the expansion has been increasingly a function of the growth of government debt.  We rode a demographic wave of population expansion into the eighties and a wave of productivity expansion into the 1990s.  Now it’s over and we are depending on the expansion of credit and a flood of immigrants to save us. 

I really question how that is going to work out.  I still think the credit default swaps that are exposed to a collapse and exit of Greece from the euro-zone are a lynchpin that dumps the load, perhaps domino-fashion, toward Spain, Italy, and Portugal.  I also think that Bernanke and the Fed have a little better grasp of reality than Krugman and the rest of Keynesian Greek Chorus.  Printing is ultimately as much of a damper on real economic growth as taxes and redistribution.  Inflation in a zero-interest-rate environment is destructive to capital while forcing people, especially older people, to spend less and try to save more.  As our population ages, more of us will try to “grab that cash with both hands and make a stash.” 

See how well that’s worked for Japan?  How long has the Nikkei been stagnant?  And that’s without a 15% unemployment problem. 

I still think we are going to crash.  I do not know when.  Certainly the parasite never intends to suck its host dry.  But, if you get a critical mass of deluded bloodsuckers, that’s what is going to happen.  The political and financial class will try to keep us back from the edge of open rebellion, try to keep us just mollified enough that we let ourselves be boiled.  Ah, there is the problem.  Someday we will be boiled, and, when that happens, after the bones have been picked clean, who is going to pay for your Tomahawk missiles, the fuel to run your drones, the wine and beer, the Kools and Twinkies to placate your voter class?  

The coyote caught the roadrunner.  Now what?  Or, maybe, the awesomeness of reality.