Wednesday, December 19, 2012

Skyscraper Indicator Update And It’s Dependence On The “Doing Each Other’s Laundry” Economy

The Skyscraper Indicator has been discussed quite a bit on here.  And, China is now readying another monster building in its drive to urbanize its population with its Sky City half-mile high skyscraper as noted in the link at the bottom of this post. 

Back before the 2008 collapse, I highlighted this indicator a few times including the Burj Dubai as the modern day Tower of Babel.  Or, put another way, man’s modern day example of hubris of the ancient and prophetic allegory about man’s timeless stupidity.   And, true to form, Dubai’s real estate had one of the worst collapses in the world in 2008.  Frankly, in history.  That includes the Burj Dubai, what is now the world’s largest, mostly empty, most expensive, 2500+ foot tall observatory.   ie, A 2,500 fot tall boat anchor. 

Dubai’s Ponzi economy and debt bubble collapsed along with it’s real estate back in 2008.  This was consistent with the theme on here leading up to the 2008 collapse that the Middle Eastern oil fiefdoms were headed for a massive bust; a very, very lonely position as Goldman Sachs, Morgan Stanley and other financial oligarchs spent billions increasing their presence in the region to serve the world’s perceived new super wealthy.  Obviously with American taxpayer backing.  How’s that working out for them?

You ain’t seen nothing yet.   It’s very likely when this system destabilizes again that the dollar rises violently and the world will no longer be able to afford petrodollar oil as dollar reserves around the globe continue their downward spiral.  Dollar reserves around the world are already shrinking again and that means nations will be begging for dollars as they did in 2008.  Just as we said they would before that crisis erupted.   That is why the Federal Reserve keeps extending dollar swap lines with central banksters around the globe.   You don’t get to wish the dollar to collapse based on hope as so many seem to use to determine where the dollar is headed next.  As I have said on here numerous times, the value of the dollar is determined by supply and demand dynamics not by wishing a corrupt nation to see its currency implode. Let the first virtuous nation step forward with their virtuous currency.  That figment of imagination doesn’t even exist.  All nations in today’s neoliberal world are wildly corrupt.  Iceland may be the exception given their crisis of massive fraud has created enormous change including a citizen-led rewriting of their constitution.

A violently rising dollar could ultimately prove bad news for oil prices just as it did in 2008.   The high price of oil is highly dependent on a global glut of dollars that were a result of American capitalism’s globalization Ponzi scheme.  When that scheme ends, and I can guarantee you it will as I have been saying for a long, long time, good luck to the House of Saud that could very well be toppled.   And, with it, possibly the petrodollar. 

Prices for oil are most certainly headed for collapse as we have noted on here time and again over the last seven plus years.  And, they could retest the 1998 lows of $10 a barrel; another long term thesis on here.   Yes, it was just a dozen or so years ago that oil prices were testing all time lows; something that many seem to forget when gasoline was 99 cents a gallon for a few months.  By the way, that $10 oil was signaling a coming collapse in the U.S. economy as has been noted on here.  That was courtesy of Bill Clinton and Al Gore’s destruction of the U.S. economy.   I have banged the drum very accurately on oil over the years and predicted the 2008 oil price bust, a downside target within a few percentage points of its ultimate 2008-2009 lows and the anticipation of it rising again as it has.    Next likely comes the bursting of the Peak Oil myth; another con of the fanatical mind. 

This economic cycle is rife with massive overbuilding and countless skyscrapers to the moon.  The real estate bubble is not a U.S. phenomenon.  And, it is not limited to housing.  It’s corporate & commercial space, retail space, etc.  The retail space in our nation is up over 500% per capita  versus 30 years ago.  That dynamic has created a non-living wage, benefit-less, less than forty hour per week, persistent-poverty-stricken, merchant-class corporate slavery for tens of millions of Americans; a direct result of the fraud in our financial and political systems driving the corporate state-induced hyper-consumerism bubble.   Or put more pointedly, we have a society where tens of millions of Americans live in perpetual poverty and underemployment because they are caught in the cycle of jobs that are effectively doing each other’s laundry as Henry Ford famously remarked.  

For the umpteenth time, a service-based economy cannot grow.  It cannot inflate its way out of debt.  85% of this economy is based on service jobs or jobs that are varying degrees of doing each other’s laundry.  Regardless of whether they require a college degree or not is irrelevant.  Our monetary-banking system does not match our economic system and nary a single person out that I see understands this simple mathematical fact.  Something must give.   That is either monetary policy or economic policy.  If not, the future will rectify this situation for us - if you would take away transfer payments, government debt spending and monetary inflating by the Fed, our GDP would not only shrink, it’s most revered participants would collapse under the weight of corruption in our financial,  monetary and corporate-political system.   More on that in my upcoming fiscal cliff post. 

One of the most egregious manifestations of the real estate bubble is the national building out of temporary storage facilities for Americans to store their endless supply of Chinese-made, Wal-Mart-sold junk.  Never in the history of humankind has any such hubris ever happened on such a massive scale.  Acquiring endless mounds of worthless shit for a promise to pay tomorrow.   It’s like Whimpy’s hamburger pledge on steroids courtesy of the manufacturer’s (China, Germany and Japan) endless funding.  You know, like America did leading up to the Great Depression.  It should be of no surprise that for the last seven years Wal-Mart has been reported as the future K-Mart on here.

In many ways I could explain how the global real estate bubble that has been growing for the last decade is a sign, not of global prosperity, but that the global trading system is and has been collapsing during that entire period of time.   Those who think with their eyes are deluded from a greater reality.  Unfortunately, there are far too few people who really appreciate how capitalism, capital formation and monetary economics are supposed to work and versus how they are actually working.   So, the vast majority of news, political commentary and financial-economic commentary in this space is limited to supreme ignorance and stupidity.  A sign of the dumbing-down of the United States by the truly idiotic corporate and political bureaucrats.

Gustave Le Bon wrote that the mob or the crowd takes on a mindset defined by the most ignorant and base mind in the crowd.  Politicians, Wall Street and corporate bureaucrats are, in fact, those ignorant and base minds given the illegitimate control and authority they have created for themselves over our media, our social values, our democracy and our economy.  They therefore define our media, social, democratic and economic values. 

When did we ever start believing bureaucrats were anything other than ridiculous?  When they grabbed control of the microphone and told us.  As the brilliant American philosopher Forrest Gump once said, “Stupid is as stupid does.”. 

China’s Sky City Skyscraper.

posted by TimingLogic at 6:12 PM

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