Kicking the Can

It’s difficult to keep track of all the ways in which the hyperbolic explosion of time-preference is expressed in the present world economic order, especially in its Western core, where the rot is deepest. From insensate looting to exponential debt expansion, and from sugar-high stimulus programs to insolvent, culturally-ruinous welfare systems (cooked-up for a succession of short-term political head-rushes), the entire economic machinery is locked into virtual apocalypse accumulation. Never deal with anything today that can be added to the mountain of woes due tomorrow. As historical time collapses into sheer orgiastic spasm, it converges with the frothiest media attention span, hurtling towards the edge of the precipice where nothing remains but news.

Here‘s the latest dimension of kicking-the-can:

… if US inventories, already at record high levels, and with the inventory to sales rising to great financial crisis levels, had not grown by $121.9 billion and merely remained flat, US Q1 GDP would not be 0.2%, but would be -2.6%. [Emphasis in original]

Systematic unreality has a face, and it’s that of a talking-head telling you that the end hasn’t yet happened.

Nemesis is not mocked. When she arrives, it’s going to hurt.

ADDED: The popcorn version. (Think I linked this before as an Outsideness Strategy classic.)

April 29, 2015admin 32 Comments »
FILED UNDER :Collapse

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32 Responses to this entry

  • Mai La Dreapta Says:

    One can only hope and pray that the end comes quickly (the Spirit and the Bride say come), but still, it won’t do to get your hopes up too much. There’s an awful lot of can-kicking which a nation can get away with, especially when it’s the world’s hegemon with the global reserve currency. (For now, for now.)

    [Reply]

    admin Reply:

    Yes, to burn through half a millennium of world supremacy takes time.

    [Reply]

    Blogospheroid Reply:

    Tallest pygmy syndrome. There is no country that is willing and capable to take on the reserve currency role. Switzerland had to back track after breaking its euro connection because its export industries squealed. China is nowhere near the consumer economy it allegedly wants and its export industries will squeal even louder if they let the yuan rise.

    Germany seems to be the only decently sized country that is still wedded to hard money, but once the Euro is restricted to the exporting northern countries, the rise in the euro will make those exporting industries squeal as well.

    [Reply]

    Posted on April 29th, 2015 at 2:10 pm Reply | Quote
  • vimothy Says:

    Surely nothing is more ordinary than recession. How then can signs of recession also signal “the apocalypse”?

    [Reply]

    admin Reply:

    Because the recession has been postponed / intensified, according to an iron conservation law, exactly analogous to the elimination of the natural forest fire cycle.

    [Reply]

    vimothy Reply:

    In what sense “postponed”? Unexpected increases in inventory was always a leading indicator of recession.

    [Reply]

    Scharlach Reply:

    The increasing size of inventory as a fraction of GDP is being framed here as a proxy for the increasing instability of the American economy, as well as for its increasing inability to scatter the consequences of bad policy.

    [Reply]

    vimothy Reply:

    It sounds more like the buildup in inventories is being framed as an expression of bourgeois liberal weakness, forever trying to delay its inevitable doom, and in so doing, making it both more inevitable and more terrible.

    So in this reading it’s a dishonest and counterproductive attempt to deflect reality, which is that America should be is recession, absent the deliberate build-up in inventories!

    But anyone familiar with the observed facts of the business cycle knows that there is always a buildup in inventories prior to a recession, as producers’ expectations of demand turn out to have been too high, leading them to respond to by lowering output (the recession). This pas de deux takes the form of a dynamic process, with businesses planning a certain level of output according to their forecasts, then adjusting in the face of realised demand with a new set of plans, adjusting and readjusting, on and on, producing the cyclical fluctuations around a long-run trend we know as the business cycle.

    Nothing particularly apocalyptic about that. as far as I can see.

    admin Reply:

    The Apocalypticism is the aggregated can-kicking in all its dimensions, among which — I agree — inventory overhang is a mere rounding error.

    Scharlach Reply:

    @vimothy

    This pas de deux takes the form of a dynamic process, with businesses planning a certain level of output according to their forecasts, then adjusting in the face of realised demand with a new set of plans, adjusting and readjusting, on and on, producing the cyclical fluctuations around a long-run trend we know as the business cycle.

    What is the historical timeline of this cycle, though? Does it go back even a century? Maybe a little more? This isn’t a “cycle” the way the global climate is on a cycle. This is relatively new. Do you have enough confidence in its continuation? Not even the slightest doubt that maybe this cycle has an execution at its end, built into it from the moment it began?

    Posted on April 29th, 2015 at 2:25 pm Reply | Quote
  • Brett Stevens Says:

    The seemingly unending wealth of the West is what empowered democracy by encouraging bottom-end growth. When it hits, we will again see the wisdom of capitalism: remove all subsidies and suddenly you have fewer parasites and everything works better again. This is why I am an avowed anti-socialist, because ANY subsidies encourage the growth of parasites and the bottom-end that credulously support them.

    [Reply]

    Posted on April 29th, 2015 at 2:37 pm Reply | Quote
  • Kicking the Can | Reaction Times Says:

    […] Source: Outside In […]

    Posted on April 29th, 2015 at 6:02 pm Reply | Quote
  • GoldBackedBelief Says:

    ‘the entire economic machinery is locked into virtual apocalypse accumulation.’

    Oh, come now. Isn’t that precisely what you want?

    Or are you now such an Austrian that the corruption of HSSystems must now happen only via routes gold-stamped by ‘real’ economics?

    [Reply]

    forkinhell Reply:

    Nemesis is not mocked. When she arrives, it’s going to hurt.

    Does admin want it to hurt? (Maybe.) Does he have agency? Does it matter? (Do you have a question once desire is extracted?)

    [Reply]

    GoldBackedBelief Reply:

    Probably not, Siddhartha. But life goes on.

    In admin’s present usage, mocking Nemesis seems to be precisely equal to being foolish enough not to recognise the ‘reality’ of which ZeroHedge are masters and William Volcker was the progenitor.

    I find it hard to be impressed by this putative being, enraged by transgressions against strictly limited currency supplies and their proper ontological groundedness in gold or algorithm. I’m sure the administrators the (still) super-rich hired to implement a fiscally liberal system of usury will be terrified when a fiscally restrictive system of usury comes around, though. The ground quakes and the great gods of old awaken. And the rich will stay rich.

    Surely admin’s previous gods of hyperintelligent machinistic doom were more impressive? I doubt they’d have had a hard time with the idea that economic concepts are just concepts, and work only in so far as they form an effective symbiosis with human belief in them. I know he’s playing a game, but really now. Couldn’t he make his position in the game a little less silly? It’s getting dull. Where’s the fun in that?

    [Reply]

    forkinhell Reply:

    I’d had one too many glasses of Madeira. Hyperintelligent machinistic doom is algorithm, no? AI proves to be mundane; life goes on; then the Blockchain et al. eats us. C’est la vie…

    Posted on April 29th, 2015 at 6:17 pm Reply | Quote
  • SVErshov Says:

    Present world economy is like those game in which you invite participant into room and ask him if he want to be shot or beheaded. Then invite next participant, and then next till no body left.

    [Reply]

    Posted on April 29th, 2015 at 8:16 pm Reply | Quote
  • Kgaard Says:

    Who wants to make a bet? Which of y’all bears wants to put down a marker saying, “I think the DJIA will fall to xxxx by such and such a date?”

    Best explanation for the weak Q1 was the drop in the oil price, which caused a drop in oil-industry capex. Yawn. It will probably bounce back this summer.

    [Reply]

    Hurlock Reply:

    “Best explanation for the weak Q1 was the drop in the oil price, which caused a drop in oil-industry capex. Yawn. It will probably bounce back this summer.”

    Wait, it’s not the weather this time?

    [Reply]

    Kgaard Reply:

    Still no bets from you Hurlock. I’ve tossed this out there several times …

    [Reply]

    Izak Reply:

    Yeah, Hurlock!

    Take the bet! Take the bet!

    SVErshov Reply:

    no predictions will work in no trend market. 70% of all trades made by bots.  Data becoming sort of commodity: “the  consultancy  company  McKinsey  recently  estimated  that  the  additional value  of  Open  Data alone  amounts  to  be  $3­‐5  trillion  per  year. ”

    http://arxiv.org/ftp/arxiv/papers/1504/1504.03751.pdf

    How much out of that 3-5 trillion might be value of NRx generated content. With 700,000 google queries and 500,000 facebook comments per minute, for NRx to become visible need something better then Twitter and blogs. If there is such objective at all, of course.

    [Reply]

    Blogospheroid Reply:

    The market for gold in India is largely a market for physical gold. You can choose to make a bet on gold if you’re confident of the doom and gloom.

    This reminds me of an absolutely inane article i happened upon when browsing the bitcoin reddit. It said something like “negative interest rates point to the greatest default about to happen” or something lilke that. I was thinking “How spendthrift would you have to be to default on a negative nominal interest rate bond? And if you are, why didn’t the market figure it out yet?”.

    There is such a scarcity of good opportunities that the highest trusted governments are literally being handed over free money. And governments being the rulebound gargantuans they are, are not using the opportunity to wipe their debt slates clean.

    [Reply]

    SVErshov Reply:

    there is no other scenario (then doom and gloom), it is clear for anybody who read few books/articles on System Dynamics. It is not sort of romantical wishful thinking, it is a fact. Our perception of current developments is also suffer if we do not consider the way it fit into SD paradigm. For me it is clear that all major political decisions, beginning from Iraq war were based of SD analysis. Understanding SD is the way to see the world and not get emotional.

    Gold price in India dropped significantly at the beginning of Iraq war. So gold may be not best store value for the world on fire scenario. Good thing is that according to Forrester it will be one year in turmoil only and 60% of earth population gone. In his first book Forrester set 2015 as a year (if I recollect correctly) when when it all starts.

    Posted on April 29th, 2015 at 9:20 pm Reply | Quote
  • Scharlach Says:

    As I’ve said many times before, I think admin underestimates the ability of the global market to scatter and re-route economic consequences. Collapse likely exists on a very long timetable.

    [Reply]

    admin Reply:

    I’m not making a prediction on the schedule. The prediction is restricted to the fundamental conservation law that the further down the road this gets kicked, the more calamitous the final outcome is going to be. What’s the Virtual Apocalypse capacity of the present global system? — That’s the question.

    [Reply]

    Scharlach Reply:

    Thanks. That’s actually quite helpful.

    [Reply]

    SVErshov Reply:

    when you do not have any “good choices” left you will have to choose from set of bad choices. and it is not obvious that one will choose lesser bad, over greater bad. what’s the point prolonging suffering. at the end what is matter – who get what.

    [Reply]

    Different T Reply:

    “at the end what is matter – who get what.”

    and the beginning…. and the middle….

    [Reply]

    Posted on April 30th, 2015 at 1:42 pm Reply | Quote
  • Lightning Round – 2015/05/06 | Free Northerner Says:

    […] The middle class is exhausting itself. Related: Kicking the can: the inventory build-up. […]

    Posted on May 6th, 2015 at 5:01 am Reply | Quote
  • Different T Says:

    Why is there still insistence that the goal of the economy is to “maximize production” or “utility” or whatever? Why must the “global economy” be viewed as such. The commenters on this site do not make this mistake with politics, right? Is economics not about power and control?

    Economics is about power and control. It is a question of who, not what. “What” is a fantasy until realization, at which time the question solely becomes “whom.”

    And to put the link-back above in context: The middle class is exhausting

    [Reply]

    Posted on May 8th, 2015 at 2:38 am Reply | Quote
  • Different T Says:

    link from article:

    http://youtu.be/qPFOkr1eE7I?t=6m41s

    He says google or similar could take a small group of like 10k-20k and go into a country of 1-2M and just tell them, “Ok, we are going to provide everything you need and would normally work for. Now go find something really cool to do with your time.”

    Mouse-utopia?

    [Reply]

    Posted on May 10th, 2015 at 1:10 pm Reply | Quote

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