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IMG Auteur
Publié le 11 janvier 2016
735 mots - Temps de lecture : 1 - 2 minutes
( 15 votes, 3,9/5 ) , 4 commentaires
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SUIVRE : Amazon Dollar
Rubrique : Editorial du Jour

I t looks like 2016 will be the year that humanfolk learn that the stuff they value was not worth as much as they thought it was. It will be a harrowing process because a great many humans are abandoning ownership of things that are rapidly losing value — e.g. stocks on the Shanghai exchange — and stuffing whatever “money” they can recover into the US dollar, the assets and usufructs of which are also going through a very painful reality value adjustment.

Of course this calls into question foremost exactly what money is, and the answer is: basically a narrative construct. In other words, a story explaining why we behave the way we do around certain things. Some parts of the story have a closer relationship with reality than other parts. The part about the US dollar has a rather weak connection.

When various authorities — the BLS, the Federal Reserve, The New York Times — state that the US economy is “strong,” we can translate that to mean giant companies listed on the stock exchanges are able to put up a Potemkin façade of soundness. For instance, Amazon.com. The company continues to seem like a good idea. And it reinforces that idea in the collective imagination by sending a lot of low-priced goods to your door, (all bought on credit cards), which rings your (nearly) instant gratification bell. This has prompted investors to gobble up Amazon stock.

It’s well-established by now that the “brick-and-mortar” retail operations are majorly sucking wind. Meaning, fewer people are driving to the Target store and venues like it to buy stuff. Supposedly, they are buying stuff at Amazon instead. What interests me in that story is the idea that every single object purchased these days has a UPS journey attached to it. Of course, people also drive to the Target store, though I doubt they leave the place with just one thing.

That dynamic ought to call into question just how people are living in the USA, and the answer to that is: spread out all over the place in a suburban sprawl living arrangement that has poor prospects for being reformed or mitigated. Either you drive yourself to the Target store for a slow-cooker and a few other things, or Amazon has to send the brown truck to each and every house. Either way includes an insane amount of transport, and sooner or later both the brick-and-mortar chain store model and the Amazon home delivery model will fail.

Now I don’t believe that will be the end of retail trade, but it will open the door for a painful transition to whatever the next iteration of retail trade will be. Probably much smaller and more local with less stuff. Unfortunately, it is difficult to imagine a resolution of that without also imagining a transition away from suburbia. The loss of faith in the suburban disposition of things will probably represent the greatest loss of perceived wealth in human history — which is how it should be, since it also happened to be the greatest misallocation of resources in human history. It seemed like a good idea at the time, and now its time has passed.

I suppose the loss of faith in value of all kinds will play out sequentially. It is starting in financial “assets” because so many of these are just faith-based stories, and in this quant-and-algo age it has gotten awfully hard to tell what is good story and what is just a swindle. One wonders, for example, how many well-dressed young people at the bond desks have been able to pawn off sub-prime car loans bundled into giant, tranched bonds with attractive yields to hapless counterparts at the asset allocation desks of the pension funds and insurance companies. My guess is the situation is at least just as bad as it was 2007.

The problem is that when this sucker goes down, to paraphrase the immortal words of George W. Bush, you have to wonder how much other stuff of everyday life for everyday people it will take down with it. The discovery phase of our predicament began ever so crisply in the very first business week of the new year. I’m going to hazard to predict that the damage halts briefly in mid-winter and then resumes with a vengeance in March. This may give thoughtful people a chance to rest and assess.

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jimmie. as the population boomed after the war where did you expect all of those people to live? in metro-parks like squatters? also in short order after the war there was a big net gain of income per family. so they spent it on being happy. wtf is wrong with that?
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I gave you 5 even though you understated the major weakness in the system: transportation.
Though fuel is currently at a multi-year low, it is just one portion of the over-all cost structure of transportation.

Now as JHK has pointed out, almost every item consumed is transported from far away.
The cities have a problem of no primary production and limited secondary (value-added) manufacturing.
We can thank the unions and local government's addiction to property taxation.
The suburbs have no production beyond a few scattered postage stamp gardens and no secondary production.
Both the urban and suburban environments are completely dependent upon the transportation sector and the JIT pseudo-warehousing scheme.

So this leaves only rural America to fill the demand.
Not happening and not gonna happen at a level high enough to feed the wants and needs of the breeders.
Besides, rural Americans rarely produce enough food to feed themselves for more than a couple months with most producing nothing.
Agribusiness is completely dependent upon transportation, easy and cheap financing for secondary manufacturing, a consumer base with credit cards and a stable operating environment.

We forget that most primary production left America decades ago.
Anyone looked at the Baltic Dry Index lately?
Few basic commodities being shipped means even fewer produced goods to be shipped.

JHK makes another assumption that is premature.
Local production will be a long time coming and for most areas the truth is not in anyone's lifetime.
What would be the basis for such a revelation on my part?
The skill sets are gone from our collective knowledge base.
The tools no longer exist nor the means to produce those tools.
Imagine something as simple as making a pair of work boots.

For a time, we will witness a scavenger economy.
Competition will be fierce and violent.
That competition will move out of the cities, but be limited in its migration due to limited transportation and available food for foraging.
Foraging includes theft by violence.
Remember the scavengers lack the knowledge to grow anything so we will see "killing the golden goose" on a vast scale.

Keep in mind that this will be on a global scale.
I contend that most of the developing world is incapable of feeding itself.
Look at the CIA Factbook on foreign countries and see what their primary exports are.
Those exports will limit the ability to be self-supporting on food production for large populations that predominantly doesn't grow its own food
We hear or famines regularly. Why? Most of the actual growers are subsistence level. Ergo, no surplus to sell.

In the USA, we have large scale agricultural production that is hopelessly dependent on a vast manufacturing and transportation system.
No fuel delivery, the tractors remain motionless.
Imagine the typical agri-businessman trying to repair a fouled injector on his tractor.
Do you really believe said operator will have abundant access to clean diesel? And what about the fuel pump?
Anyone, any idea how many acres you can farm without a tractor?

Jim C.
I contend that you are too close to the Prince Valium community.
No production equals no commerce.
Perhaps you have enough wealth accumulated to hire mercenaries to guard you.
With enough wealth you can buy whatever commodities you may want or need.
Or just accumulate enough mood-altering drugs while the market-place remains open.
And I don't recall JHK extolling the virtues of bugging out with no place to go.

The only difference this time will be one of scale.
Yah, this is gonna work out well.

And Jim, peak oil is just a small corner of the nouveau reality we are already starting to experience.

Cue up "Over my head" by The Fray

I never knew
I never knew that everything was falling through
That everyone I knew was waiting on a cue
To turn and run when all I needed was the truth
But that's how it's got to be
It's coming down to nothing more than apathy
I'd rather run the other way than stay and see
The smoke and who's still standing when it clears
On the brighter side, there is a substantial repository of knowledge re: self-sustainability amongst the elderly who grew up in a more frugal time without all the bells and whistles.

In my mid-sized city on Vancouver Island, I am heartened at how many young people have a veggie patch and a couple of fruit trees. Some living in apartments grow salad stuff in pots on their balconies, even though a wide range of produce is available in the supermarkets. The local farmers' markets are well supported and the smaller grocery chains promote locally grown food. Of course, the more exotic foods are imported but one can live without them in a crunch. There are community gardens where someone living in an apartment can have a small productive patch of ground and access to advice from more experienced growers.

Humans are highly adaptable and, if the S really hits the fan, I suspect goodwill and good intra-community cooperation might prevail, at least in some areas.

Human beings are adaptable and, with communit
Another 'Run, run, the world is ending' article from Kunstler...but with a difference. Normally he gives a reason for his skedaddling into the woods with a box of matches and, hopefully, a change of underwear. No such reasons offered in this article. Why? His constant harping on Peak Oil is no longer remotely rational and can no longer be rationally blamed for the demise of Western Civilization. But rest assured, he'll catch his breath and name another cause...but not Socialism, the real danger to our society.
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On the brighter side, there is a substantial repository of knowledge re: self-sustainability amongst the elderly who grew up in a more frugal time without all the bells and whistles. In my mid-sized city on Vancouver Island, I am heartened at how many y  Lire la suite
Themis - 13/01/2016 à 17:30 GMT
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