Our Economy is a Dead Man Walking

Happy Valentine's day ATS (and happy Presidents Day Weekend and day before George Washington's Birthday)

We are witnessing a fundamental structural change of how the financial & savings system works... my advice would be for Americans to get prepared. I alluded to this in my last thread, The Game is Rigged: Modern Monetary Theory & The Great Reset in case you missed it.

To put it plainly, Our Economy is a Dead Man Walking

Episode 12 of Paradise Lost Financial - Our Economy is a Dead Man Walking

The incentives to work & be productive in the greater economy are quickly disappearing. Why should I work if I can get paid more on unemployment than I did at my job? Government is sending (some people) stimulus checks to stay at home & not be productive.

Monetary policy by the Fed, specifically "near-zero" interest rates disincentivize saving & encourages spending in the form of lower-priced mortgages, car loans, other types of credit

A lot of Americans in my age group (and a lot of people in general) don't have a solid grasp of how macroeconomics or monetary policy works, as a country it seems our citizens are asleep at the wheel as our purchasing power & standard of living are swiftly dropping with every stimulus bill that gets passed (as well as other policies we're getting used to seeing - forgiving student loans and minimum wage laws being some of them)

Personal income in all 50 states rose more than 34% in Q2, 2020 (according to the Bureau of Economic Analysis)
Approximately 11 million Americans (who are working age) who are still officially unemployed...
Roughly 70% of unemployed workers received more income on unemployment than at their jobs
Unemployment benefits & stimulus = increased personal income

Fed. Funds interest rate is at the floor, 0-0.25% (can't go lower, unless we go negative like you see in some other countries, by the way years ago top economists & experts in finance would have laughed at you if you proposed near-zero or negative interest rates for any prolonged period of time, yet here we are)

What everyone needs to understand is that in order to have a high standard of living relative to much of the world is thanks to the dollar's position as the World Reserve Currency, and that standard of living is heavily paid for by budget deficits in which the US imports most of our goods rather than producing them ourselves.

WHEN the USD loses World Reserve Currency status, the system we as Americans have grown accustomed to will not function the same way it currently does, and I think every American should be preparing for this:

• Become more self-sufficient
  
• Create multiple income streams if possible
  
• Diversify your investments & dollar exposure
  
• Think about diversifying your political risk - learn about other countries in the world where you may be able to qualify for residency or citizenship
  

Furthermore, the relatively high standard of living we have in the US is also thanks to productive individuals & companies, and economic incentives for individuals/companies to produce quality goods & services, thereby beating their competitors and satisfying market demand.

By destroying small businesses across the US with lockdowns and allowing the Amazons/WalMarts to increase market share, that is displacing millions of workers and productivity, which is not without consequence

The more we go down this path, the less options all of us will have for products/services, the less our dollar is worth, and the more we contribute to a growing welfare state (and subsequent lower quality of life for everyone, resulting in more civil unrest and a litany of other problems)



Additional Links & References:

Bureau of Economic Analysis News Release on Rise in Personal Income

CBS News Article on Unemployment Benefits paying more than people's jobs


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Why is gasoline $1 a gallon higher now (Chicago) than it was at Christmas? Economy is too hot, or what?

a reply to: carewemust

Dead pipelines and the coming environmental regulations and carbon taxes will make today’s cheap gas a memory.

I expect a big fall in the markets, is coming the question is when, but who will bail this financial institutions this time, I wonder.

Gas is going to get very expensive in China Biden greeny world.

a reply to: FamCore

A lot of Americans in my age group (and a lot of people in general) don't have a solid grasp of how macroeconomics or monetary policy works, as a country it seems our citizens are asleep at the wheel as our purchasing power & standard of living are swiftly dropping with every stimulus bill that gets passed (as well as other policies we're getting used to seeing - forgiving student loans and minimum wage laws being some of them)

This is what it really boils down to... A lack of understanding from the bulk of voters.

We are at a crossroads (likely far past).

We either gut spending, or raise taxes. Interest rates need to be raised as well.

Everything is as jacked up as it can possibly be right now... And there's no sign of that changing anytime soon.

Best case scenario is a correction at this point. Worse case we look up what people had to do in the depression.

originally posted by: carewemust
Why is gasoline $1 a gallon higher now (Chicago) than it was at Christmas? Economy is too hot, or what?

Oil companies managing what they are being given and the probability of new "impossible to live by" EPA regulations...

So what is going to happen is less supply and the never-ending increased demand, which will put oil back up to $80-$120 a barrel.

Less supply on a product that there is about 600 year's worth left just under North Dakota.

So the oil companies will have to deal with less overhead and a bigger profit margin...

While the average American citizen will see more taxes, higher energy costs and less return on their dollar.

Way to screw over Big Oil, Biden!!!

Oh wait...

a reply to: Lumenari

The 200 iq play would be help out domestic oil by putting the carbon tax on foreign oil.

American oil was was just as bad off with the cheap pricing as a carbon tax... They can't turn a profit unless the price per barrel is 35 or more I believe... and if I'm wrong I know you're the one who would know the number 😉

What would make it lose its status? Ive heard that it's possible for at least 10 years.

I wonder, is that part of the reason America is involved in wars, plays nice with china, saudi arabia, and other human rights abusers?

What do you think would be the final kick to have the dollar lose its place?

a reply to: blueman12

What do you think would be the final kick to have the dollar lose its place?

Given the treasury bonds will likely lose money when you factor in inflation here soon.... The clock is ticking.

That used to be the golden standard for safeguarding money.

a reply to: blueman12

I think a better question is "Why would the globalists want to KEEP the USD as the world reserve currency?"

Whether the IMF decides on SDRs (basket of currencies) or something entirely different, the USD will not be the world reserve currency by this time in the year 2031 unless policymakers make a 180-degree reversal in their approach (a probability of 1 in 10,000 if I had to guess... it's just not going to happen)

The catalyst has already occurred in my opinion, it was the US hollowing out our productive economy in place of handouts & crony capitalism, as well as the breakdown in the petrodollar system which is already underway

Big oil doesn't play by the "supply and demand" rules. Speculation is king!! and if you know the system you can play it to your benefit. There is a current glut of oil but the prices still increase at the pump.

a reply to: olaru12

It was fun to watch all the people thinking they'd get free money speculating oil futures when prices were negative though.

The futures contract dictates you have to pick up the oil on _______ date. Those playing musical chairs had a rude awakening when they couldn't offload the contract and had to pick up the oil in Oklahoma.

Almost as funny as the guy who lost his ass gambling on ornamental gourd futures.

originally posted by: CriticalStinker
a reply to: Lumenari

The 200 iq play would be help out domestic oil by putting the carbon tax on foreign oil.

American oil was was just as bad off with the cheap pricing as a carbon tax... They can't turn a profit unless the price per barrel is 35 or more I believe... and if I'm wrong I know you're the one who would know the number 😉

You are correct for the industry.

Roughly $34.60 for the Bakken oilfield, less for the Permian, more for Alaskan oil.

The problem is that now companies in the Bakken oil field just spent billions of dollars getting the infrastructure ready for more product.

Which Biden just made useless with his Keystone pipeline fiasco.

If it had gone through then production costs would have sunk to under $30 a barrel for the Bakken... making $40 a barrel oil quite profitable.

Oh well, those were the good times...

originally posted by: olaru12
Big oil doesn't play by the "supply and demand" rules. Speculation is king!! and if you know the system you can play it to your benefit. There is a current glut of oil but the prices still increase.

Just....

/facepalm

ETA.. I just have to expand on this a little.

If you buy stocks in an oil company and the price of oil doubles, where are you seeing a return on it?

Your stocks just went up 20%... if you didn't buy into stocks on an oil company that just went bankrupt...

For instance, I was given the option with one oil company I worked with to get a percentage of stock options at twice the price of actual payment for services.

I ended up with roughly 1,000 stocks at $42 each instead of collecting $20,000 for that year.

Awesome, right? They even sent me a cool embossed framed piece of paper that said I owned 1,000 stocks!

Then one weekend in June of last year they bankrupted and I now own 1,000 stocks worth 18 cents each.

I probably should have just taken the money...

But let's get back to where you bought stocks in an oil company and you are getting a 20% ROI for the purchase.

Meanwhile, the price you are paying at the pump doubles...

Your electricity bill goes up 30%....

Your food costs go up 20% (food doesn't grow at the WalMart... it gets delivered and those trucks run on what?)

Everything you will purchase that has plastic in it goes up in price as well...

So you made some money but at the same time increased your monthly bills.

Please think harder.

what a brilliant plan to gut the industry that is in place before we have done any real R&D on alternatives, thats some serious 4D chess if your in the right group I guess.

originally posted by: CriticalStinker
a reply to: blueman12

What do you think would be the final kick to have the dollar lose its place?

Given the treasury bonds will likely lose money when you factor in inflation here soon.... The clock is ticking.

That used to be the golden standard for safeguarding money.

I'm just not seeing that happening. I'm deriving a full income every month in the bond market without touching the principle. I fact, I'm making more retired than I was when I was working.

The only risk I see right now is that inflation - but other than government sponsored inflation (regulations and preventing raw oil from reaching refineries), the inflation rate won't go into a sharp upcurve. As the fuel prices rise to the $4 mark again, travel and spending will go down causing prices not to rise faster but hold steady. That of course depends on whether the government will do something stupid again like remove acres producing feed to make fuel. And the government would never do something that stupi........oh, wait a minute, you might be right.

a reply to: FamCore

Our Economy is a Dead Man Walking

You thought it wouldn't be?

a reply to: billxam

I have no doubt the bond market is hot in a time where savings yield little to no interest.

But my point was specifically on treasury bonds... Also, in the context of what they'll yield vs inflation if bought now and rode to maturity.

So I guess I'll ask it this way, do you think 10 year bonds would be advantageous if one bought now?

a reply to: Lumenari

Ah, but foreign imports will now be going up proportionally as Biden kills domestic energy production.

a reply to: FamCore

What about public and national debt?

Surely if you keep getting stuff on credit, and that you can't really afford, the creditors will come after you.

Perhaps the USA needs to go for a budget surplus for a decade or so, to make up for its accrued debt?