My son and I both subscribe to the Investopedia website.  It has very informative articles sent out daily, and a stock simulator which allows you to lose digital, simulated currency playing the stock market instead of fiat currency in the real stock market. This morning’s email started out with an article on buying gold. I was struck by the fact that first on the list of ways to hold gold was through physical possession, something that has always been frowned upon by financial planners and most “investment experts.” Next came holding gold through ETF’s and stocks. There was even a reference in the article to planning for an “end-of-the-world” scenario.  It seems even the mainstream investment strategists are seeing the light, or darkness as it may turn out to be.

Read more about gold and precious metals at NotParanoidJustPrepared.com.

With the recent demise of all of The Limited’s brick and mortar stores- that would be the closing of its remaining 250 stores down from about 750 total back when malls were the craze, the writing on the wall is getting clearer.  What else happened in the last week? Macy’s is closing another 68 of its stores, 109 Kmarts will close, and 41 Sears stores will close.  And that is just the “big guys” that are going under. The full list is much bigger.

What does all this mean? First, the loss of what, 20,000 jobs? That will increase our overall unemployment rate, currently at an adjusted rate of about 5% (unadjusted it is somewhere around double that, if not more- pay attention to media nuances and verbiage!) It will make our sluggish economy even more so. But more importantly it will make one of my lifelong dreams a little bit closer to coming true. One day I am going to drive my truck through the empty and abandoned shopping malls of America, I am going to spin doughnuts in the food court, and take a leak in the fountain in the middle, the one right near the Orange Julius. All the while vintage Mojo Nixon will be blaring from my speakers. Mark my words, it won’t be too much longer.

This past week saw the latest Federal Reserve meeting.  I went online shortly after to find out what they said, what their latest move would be to shore up our failing economic system. More than anything else, one sentence in the New York Times online article entitled “A January Pause, but Fed Affirms Plan for Gradual Rate Increases“, by Benyamin Applebaum,  struck me. The telling sentence reads:

“Public expectations about future inflation also are eroding, a problem because those expectations help to shape reality.”

If there was ever any question about how media input shapes people’s notions about the economy, and how those notions are counted on to actually create the outcome, this sentence should help dispel those doubts.

The full paragraph reads:

“Public expectations about future inflation also are eroding, a problem because those expectations help to shape reality. People who expect prices to rise more quickly may press for higher wages, which can lead to higher prices as businesses compensate for payroll increases. That pressure may now be flowing in the opposite direction. A regular consumer survey conducted by the Federal Reserve Bank of New York found expectations of inflation in three years’ time had declined to 2.8 percent from 3.3 percent over the last two years.”

See the full New York Times article here.

 

 

There was a time when children had economic value. If viewed from a purely economic perspective, from the cost/benefit perspective, that is certainly not the case today. At least not for most people- there are of course welfare recipients whose business it is to procreate. The more children, the more money comes in the form of welfare entitlements. But that is not my direction here, deconstructing the welfare system, or the state of humanity.

If prospective parents sat down and discussed the potential economic benefits and economic burdens attached to procreation before having children, I think many would opt out of the process. If a spreadsheet was used, or a budget was prepared, or a “business plan” was written, if due diligence was done, the economic burden would surpass the benefits, not to mention the income, of many Americans. Okay, some people do plan well enough for their children. And some, I am sure, do opt out of the process for economic, as well as other reasons- I actually know a number of people who have. Unfortunately many of these people are the kind of parents kids need- logical, caring, practical, and educated. Still, too often logic is overridden by emotion and animal instinct, not to mention marketing.

Throughout history parents have had flocks of children purely as an economic endeavor- the more children you had, the more that were likely to survive and thus help provide for the family. It was about cost/benefits. And it was human instinct- animal instinct, at work. There were 40,000 years of human evolution behind the process, not to mention millions upon millions of years of pre-modern human instinct to back it up. Yes, it is true- humans are not different than so many animals- having large litters of offspring is an adaptive response intended to enhance the perpetuation  of a species. Of course with most animals there are checks and balances in the form of population pressures- the physical environment, availability of food, climate, and disease to name a few. These limit the number of animals in the species, the viability of offspring, and in all cases on a long enough timeline, the species itself. It is, or was, a self-correcting system.

This premise can be applied to other systems at work in our society as well- say religion. Various religions tell people to “be fruitful” and so forth. The idea here is the same animal instinct institutionalised. The more offspring members have, the more power that religion will eventually have.

Following these ides then, natural selection has been undermined by technology and marketing, religion, and our world today, by entitlements. What was once a necessity has now become about economics, which translates into power. The continuation of a vicious cycle is at play here, still institutionalised. But instead of a church, or a militaristic state, or the needs of an extended family promoting procreation and perpetuation of the lineage, now it is about the perpetuation of our economic system. The more mouths to feed, the more iPhones will eventually be sold. The more babies there are, the more consumers in the future. The more humans, the more money can be made by the few who make most of it. It is neo-feudalism, where the general population, the vassals, are paid a pittance, but kept happy through beer, drugs, and television. And unfortunately the more the population grows, the more limited the resources become.The more we “need”, the shorter our timeline becomes.

What was once adaptive, a response that insured our survival as a species, has now become detrimental to our very survival.

Walmart recently announced the closing of some 269 of its stores around the world. While it may signal the end of the world to some, that Walmart, the largest company in the world, is downsizing, in truth it had to happen. Everything comes to an end. And in this case, the end can’t come soon enough. I think most people are aware of Walmart’s horrid record of… just about everything. But here is a fact that was new to me, from the Wall Street Journal online:

“A report from House Democrats in 2013 found that a single 300-person Wal-Mart Supercenter store in Wisconsin costs taxpayers at least $904,542 per year, or about $5,815 per employee.”

The Walmart closings will eliminate 10,000 jobs in the US. In the long run, I can’t help but wonder how much money that will save us.

Many of us have been around to see a number of “bubbles burst”, as economists and disinformation sources like to put it. Let’s start with my favorite, the Savings and Loan scandal of the 1980’s (thank you very much Bush family). Then we have the housing bubble of the 1990’s, next the tech bubble of the 2000’s, and finally the Great Recession of recent memory (my memory at any rate).

So, what is next? Will it be a bursting bubble? Or an Earth-shattering, or at least dream-shattering, explosion? My choice for a title so far is “The Great Lie of the Teens.”

 

My son is home schooled. There is a county program that he attends one day a week that is intended as an enrichment to our own learning endeavors. One class he is taking is called Young AmeriTowne.  It is about economics and free enterprise. There was a pretest in the class to see where the children are at in terms of their knowledge of how our economic system operates. One of the questions in particular struck me (see image below). He got question number 25 wrong.  I am not sure exactly why.

wrong_answer