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Wednesday, October 5, 2016

consumerism dying 3 of 3


CONSUMERISM DYING 3

Are you noticing the trend towards moving most if not all of our after-tax income towards the banking sector?  And, yes, insurance is part of that sector.  Your house payment, your car payment and insurance, your medical insurance, your student loans, your credit card loans IF you can keep a line of credit open.  What is left after all that?  Not much.  But that Not Much is what the rest of the shrinking economy is living off of.  Is it any wonder retail spaces are closing ( online didn’t kill retail-online is merely bleeding off more of the volume from retail.  You can’t afford to sell retail anymore but it isn’t because of the Internet.  It is the death of consumerism.  Since online is slightly cheaper, desperate folks shop there.  A healthy economy wouldn’t see so many poor people pinching pennies )?  And make no mistake-the financial sector grubbing for more money ( using the monopoly over controlling government ) does by no means prove they can last all that much longer.  It is a last act of desperation as they try to survive ( falling energy supply=freefall profits ).

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The bankers have substituted stripping the copper wiring out of the walls for a household paycheck.  Falling energy is almost that simple.  In our old, pre-’08 economy ( one could argue the economy fell in ‘00 with the Tech Wreck and only survived on lowered interest rate construction, but no one can disbelieve the REAL economic crash was 2007/2008 ) there were enough paychecks to go around to enable everyone to borrow money and consume from companies that borrowed money to open for business.  The banks lived off the interest from everyone being in debt so as to consume.  They could make two car payments, a mortgage, PLUS eat out and shop at retail boutiques every day.  They could consume.  Now?  No jobs, no consumption.  Well, plenty of consumption, but at a lower level which is NOT enough to keep debt ridden companies in business.  Plenty of jobs, IF you are not part of the 25% of permanently unemployed.  AND if you love working part time.

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Buying out your competitor is old hat for businesses.  Buy his company but keep the old name.  Drive that once trusted brand name into the ground for profit, AND as a bonus you give the illusion of competing products.  The illusion makes you money as your pissed off customer switches to your other brand as the first brand ripped him off.  Sweet, eh?  ( That old saw about generics being cheaper than brand name because the generics don’t need to advertise?  BS.  You make MORE money by offering a generic as both the poor buy more volume generic since it is cheaper and the more affluent buy more of your brand name for social standing brownie points ).  But the problem now is that every surviving company did too much consolidating with their competitors.  As their customers spend less money out of necessity, their costs have increased from many factors but the main one is they have too much debt to service due to all the buy-outs of the other companies.  The bean counters assumed a 2X profit margin as normal which would have serviced the increased debt.  Most businesses are seeing a 20%+ drop in sales, not an increase.

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And how can you combat this drastic drop in profits?  You can’t cut labor costs much more.  Far less people are doing more than one mans worth of labor in a cut shift.  What used to take two people a combined 16 hours to achieve, one worker must now complete in seven.  We are almost at the point that the only thing cheaper for labor is going to be slavery, and you can’t do that in today’s market.  Remember, slaves can sabotage.  If you have any tools of production that can be broken, a slave will find a way to do that.  Just look at the sullen unproductive work of minimum wage workers.  Imagine paying them less.  The only reason you get them to work at all, without damaging the product and driving away customers, is to pay them too much now.  Only grunt field work or pick work in a mine are safe from worker ineptitude or poor behavior.  As more work is being turned over to robots, the more an owner must fear worker wraith.

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Not that much more can be automated.  Sure, you can robot burger frying and replace clerks with kiosks, but rather than employing the young you just send them to college to rack up years of debt.  Few job loses there.  And who cares if they robotize truck driving.  The idiots they have at the wheel now are barely less dangerous ( as wages drop for driving, so does the competence level ).  So everything than can be automated, almost, has already been over the last thirty or forty years.  You can’t pay workers less out of selfish necessity.

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 You can’t count on anymore “miracle” sources of low EROI energy, having economically exhausted all the deep well, tar sands from Canada, ethanol from weather failing crops, and now fracking fields.  After having seen BTU’s drop off a cliff for decades, now even the bottom of the barrel crap is running out.  This effects employment as everything becomes more expensive and it effects consumption as employees earn less.  What does that leave us with to kick the can down the road?  Banker manipulation.  And that trick is all played out as you can’t lower the interest rate anymore ( which will lower the amount the government can borrow, and the amount of debt consumers can hold and the amount of loan companies can take on to survive long enough to service the old debt-you won’t see interest rates increase, that is for sure.  But neither will you see increased stimulus from cutting rates ).  You can’t funnel any more workers wages towards the bankers as unemployment rises ( due to consumer demand destruction ).  The bankers can’t crap OR get off the pot.  They have used all their alchemist tricks just to survive and have no more to try. 

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One big giant circling cluster-hump, a self feeding, self perpetuating death circle.  Hopefully, you are a little less complacent right now, if I did my job and connected a few dots to fret over.

END

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15 comments:

  1. What's crazy, is they are building new houses like there ain't no tomorrow here ! Dunno where the buyers are supposed to be....
    Back in the day would mean lots of work for me...not now tho. Hell, since the. Accident, I can't even get my junk hard....sooo being a gigalo is out heh heh.
    The fish delivery job laid me off, cuz all the restaurants are going tits up too. Yet they're building new houses !!
    Must be all that cheap money loans for rich people only.

    Well, back at it ! Gotta board up windows next....
    Sucks being old and decrepit lol

    ReplyDelete
    Replies
    1. My guess is the government is paying them to build. For the incoming muslims that will live on section eight. Sorry to hear about the job ( I hope you didn't mention that before, as it means I'm getting too old and senile myself ).

      Delete
    2. Same here in my neck of the woods as far as home building goes, and this is in a somewhat rural area. It struck me as odd because I'm trying to figure out who has enough money these days to buy a country estate on a 5 acre lot. But I suppose that there will always be the few out there in such positions.

      Even if I were still gainfully employed, I can't imagine anyone out there today having enough confidence in the long term viability of their job to ever consider taking out a 30+ year mortgage. While I have not made it out to my Nevada desert lot as of yet, it is comforting to know that it's there when I need it. And need it I will, as my current place of residence will not be long term for a variety of reasons.

      Delete
    3. Another possibility is that the 10% Enforcers ( whores to the 1% ) are taking up the last of the rural areas as a better place to retire than the crapholes they dictate from currently. Their masters promised them 30 years to pay it off, but of course the 10%'ers AND the 1%'ers will all die shortly. So will most of the rest of us, but being poor will give us an advantage at least.

      Delete
    4. “Another possibility is that the 10% Enforcers ( whores to the 1% ) are taking up the last of the rural areas as a better place to retire than the crapholes they dictate from currently.”


      I don't doubt that at all James, but probably not the case for this particular locale, since it's a mere 25 miles from one of the crappiest of all crapholes to ever exist, Stockton Ca. Not much of it makes its way out here as of now, since the 25 mile buffer serves as an inconvenient deterrent, but come a collapse, you'd want to be a 1000 miles away from an uber-shithole like Stockton.

      Delete
    5. You're right about the gov't part Jim.
      Oasswipe rewrote the HUD rules so that the "clients" can have homes in the better areas. Since they destroy everything they touch and always have, the bombed out war zone look will be everywhere not just in the ghettos.

      Delete
    6. When the 10% move into an area, they aren't looking at it like preppers but regular white professionals seeking to flee the mess they helped create. To them, an SUV equals a fantasy bubble which protects them until they hide in their McMansion bubble magically fed by the everlasting grid.
      *
      Wouldn't you destroy a government paid house? I mean, if you were selling crack at parties and could just move to another one, why not?

      Delete
  2. http://www.gold-eagle.com/article/warning-coming-collapse-us-net-worth-will-wipe-out-millions-americans

    Finally another guy sounding a reality-based alarm about puffed-up paper values vs ENERGY. Y'know, the kind that powers real work, as opposed to logging in to Scottrade to buy shorts on Deutsche Bank. Great hair as always.

    ReplyDelete
    Replies
    1. Go to the source:
      https://srsroccoreport.com/
      He's one of the best, and worthy of a cash money monthly donation.

      Delete
    2. PS-he also allows you to e-mail alert for his newsletter. For the life of me, I can never remember his name.

      Delete
  3. "Remember, slaves can sabotage."
    ================================

    Also remember, public over the top slave beatings that serve as notice to the others.

    I see you have never been a manager of men, especially stupid ones.

    You tell the slave that if he breaks a tool you're going to tear his sack off with a rusty rake and you'll be sure he keeps it in proper working order.

    You may have to shred a sack now and then to keep them believing you're serious.

    ReplyDelete
    Replies
    1. I've managed many stupid people, and they always both seem to act against their self interests AND get away with it. Of course, our entire public/private employment system is geared to motivate stupidity, or at least accomedate it.

      Delete
  4. johngaltfla.com/wordpress/2016/10/04/earth-could-be-heading-into-another-ice-age/

    very interesting reading.don't know if it is legitimate.

    lovely pelt you have there!

    ReplyDelete
    Replies
    1. Hell, we don't know what is legit anymore-millions of rotten bastards lying to us to further their own agenda.

      Delete
    2. That's what tore it for me way back when, all the effen lying, from all directions.

      Now, it's not possible to know what is true, so instead you just go with self preservation and eff everybody else.

      Delete

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