– Meanwhile In Venezuela… The Socialist Paradise Has Arrived (ZeroHedge, July 29, 2015):
As we recently warned, the hyperinflationary collapse in Venezuala is reaching its terminal phase. With inflation soaring at least 65%, murder rates the 2nd highest in the world, and chronic food (and toilet paper shortages), the following disturbing clip shows what is rapidly becoming major social unrest in the Maduro’s socialist paradise… and perhaps more importantly, Venezuela shows us what the end game for every fiat money system looks like (and perhaps Janet and her colleagues should remember that).
As we previously concluded, and seemingly confirmed by the above video,
Venezuela’s hyperinflation is reaching its final stages. It is probably already far too late for the government to stop the complete collapse of its currency. The bolivar is in the process of transforming from a medium of exchange to tinder for wood-stoves. Venezuelans who had the presence of mind to convert their savings into gold or foreign currency in good time are likely to survive the conflagration intact.
Those who bought stocks on the Caracas stock exchange seem to have successfully side-stepped the effects of the devaluation as well, but they need a plan for the post-inflation adjustment crisis, which will bankrupt a great many companies very quickly. Also, the government can simply close the market down at any time if it doesn’t like what is happening there, so there is the ever-present danger of even more government interference as well.
It is quite fascinating to see that in spite of numerous examples throughout history, governments never seem to learn. They all believe they can somehow overrule economic laws by diktat. This is not only true of Venezuela’s government, but of practically every government in today’s world. Central planning of money has been adopted everywhere. Venezuela merely shows us what the end game for every fiat money system looks like.
At some point the State is overwhelmed by the promises it has made to its citizens. When it can no longer pay by means of confiscating private wealth, the printing press is always the last resort. Recently one actually gets the impression that it is often the first, rather than the last resort.
In developed countries, people believe that the planners have everything in hand, and that their “price stabilization” rules will protect them from such outcomes. However, it should be clear that these rules will simply be abandoned in extremis. The independence of central banks exists only on paper – it will mean nothing in a perceived “emergency”. It is almost comical in this context that gold is being sold while most of the world’s major central banks are seemingly hell-bent on aping John Law’s Banque Générale Privée.
What is happening in VZ will be mirrored in Greece, then in the other small Euro nations most vulnerable to German greedy gut power mongers….It will spread throughout the western economy as the currencies continue to fall in value thanks to greedy gut debasement of the US and Euro…..Fukushima took care of Japan for all time, it is dying, literally.
There are things going on in the world markets that ought to get more attention. Here are a few things I garnered overnight; another night I never got to sleep…….
FED is still lying about inflation, insisting the economy is “in recovery” regardless of any signals from the real market such as continually falling retail sales, ETC. They say it will hit 2% gradually. Anyone who shops at all, or pays any bills, knows the real rate is in double, and in foodstuffs, triple digits over the last two years.
In the 1970s and early 1980s, we suffered inflation (not in food, we had a cheap food policy) in everything……and the FED was upfront and straight about it, they didn’t lie as they do now. But, we had a free press that stayed on these clowns, they could never get away with the stuff they pull daily now….
They seem to believe if you tell a big lie often enough, people believe it. These clowns have taken it a step farther into surrealistic reasoning…….say it long enough, and it becomes true. Psychologists call it Magical Thinking, most common in small children. It is insane because reality/truth is implacable, it cannot be overcome by fantasy. Magical thinking by definition is fantasy, a product of the imagination, not reality.
When I see the so-called financial leaders acting in such irresponsible ways on every side, I have grave fears for the present/future of the western economy and resulting societies….the Euro, US and Japan. The warning signs are present, one has to sift through lots of propaganda and chaos, but they are there.
Here are just a few news blurbs I picked up trolling the financials which I seldom do because of their total loss of credibility…..they lie to the investors every day now…..things are getting very shaky, and they pitch whatever they are told to sell. Through 2009, the financials like Bloomberg told the truth…..but no longer. The repression of the truth on all sides in our government and economic handlers are both corporate controlled because our lawmakers are bought and paid for by corporations. Thank the supreme court, in 2010, they made it legal……
Here goes:
Chinese market fell again yesterday by 2.2%, so much for the so-called recovery earlier in the day. Looking at their real economy, MFG & exports continue to decline. China’s economy is export dependent….
The Shanghai market was up 1.5% before the sell off which happened in the last hour of the day.
Shanghai market dropped 4% in that last hour.
Late day moves are puzzling China traders……..?
The 100 day Volatility is at a SIX YEAR high…….that takes us back to 2008-09…..Zero mention made of that “coincidence?” Why?
Does anyone doubt the consistently falling retail sales is affecting China?
China will be remembered as being the biggest economic fraud in history, even outdoing the US and the FED……Their economy was not just inflated, they built bubbles on top of the bubbles. First, real estate, those incredible Ghost Towns the three top government contractors built that nobody could afford. Thus, they remain empty, and that is how they got their name.
Don’t forget the multi billion dollar expenditure on the World’s Biggest Building, complete with an artificial seashore. Over 100 miles from any water, the seashore is described as amazing. The pictures of the building and its attributes were awesome. Bottom floor was for shops, beautifully set with waterfalls, trees, plants, artistic & exquisite. Additional floors were for offices and residences.
Only one problem, the building was empty, nobody in the real economy can afford it. Just like the Ghost Towns, it was a huge government expenditure providing zero return. Since the same contractors got all the contracts for the biggest building and the so-called new Chinese cities, the job growth was minimal, so the expenditures stayed in the hands of a few greedy guts……
There has been some job growth in China due to the onslaught of US and other foreign corporate MFG. These people enjoying cheap credit as did the rest of the world bought houses. With the endlessly soaring stock market, they were allowed to put up their houses to buy stock on margin……
Now, MFG has dropped in China once again due to that implacable reality of failing retail sales…..Nobody is going to buy their stuff if nobody is buying. The big fantasy that China would pull the global economy out of the endless malaise since 2009 was total spin. China is far more dependent on the western economy; there is no way their system is set up to save the global economy. Their numbers claiming endless growth were bogus, based on bubble on top of bubble.
Oil and energy companies continue to cut back, Shell cutting another 6500 jobs, the 3rd such energy company cutback this week. They are planning for another “prolonged downturn.”
Conoco Philips cut jobs to maintain dividend; this doesn’t speak well for their strength….
Royal Dutch Shell raised output by 12%, profits fell 37%
This all spells depression, not recession. When does a recession become a depression?
When oil usage falls, that has historically indicated recession, if not depression. Gasoline usage is a huge part of the western economy, especially the US and Japan….Japan imports all of their oil……This current corporate controlled oil glut will affect every nation in the west, and it will help destroy the three level economy we have enjoyed for the last 200 years……..We are headed back to a traditional society, two levels instead of three…..no middle class allowed. Just a few greedy guts on top, the rest all impoverished underlings……
The fall in oil is more than the Saudis sabotaging the west using maximum output, although it contributes to our current pain. Our insane activities in their regions were bound to have consequences……
Our current pain is the fact retail is down, and less trucks, trains and planes carrying fresh goods to stores are on the job. Ditto for every single retail outlet service in the US. How many jobs has the cutback in shipping cost the US economy? Many are contractors, thus not counted in the highly questionable unemployment rolls.
For every job lost, seven more are put at risk. This is an economic fact. If a person loses his job, he buys less gas as he isn’t going to work, he is at home emailing resumes…..He isn’t buying lunch at the local food outlet near work, not spending as much for dry cleaning……Auto maintenance..ETC.
When retail is down, so is the economy. This economy has relied on the consumer to keep it going for the past 35+ years…..They started pitching the consumer based economy back in the 1970s……and that is the same time that wages started their insidious stagnation while benefits commenced to cover less and less……
US economy grew by 2.3% this last quarter, it grew 6/10ths of 1% in the first quarter (revised down as usual) but, the talking head said brightly “At least it grew, and didn’t shrink….” It requires bigger percentages just to stay even with the growing population……this has been going on for YEARS……When did we last have a quarter where growth was real? More lies, and they will revise the 2.3% downward when they come up with another number for the current quarter…..
I am so weary of disinformation provided by selective reporting….they just don’t mention anything the corporate agenda doesn’t want exposed. Journalism in the US is dead…..there is none without a free press.
The global economic fraud that was China and the drop in consumption across the western economy (not just the US) along with a real unemployment rate of close to 50% tells me we are in a long term depression. Unlike the Great Depression, our currency isn’t backed with gold & we have delusional fools in power who are incapable of addressing any of the real problems. Unless some of this is tackled soon, there will be no way out, and this depression will become a way of living for 99% of the western residents. This is deadly.