What’s new in civilization? We went to Cafayate last night. Our old friend Doug Casey hosted an intimate little dinner – for about 150 people. He’s developing a community down there – the kind of place he wants to live in…surrounded by friends, good food, bright sun, beautiful views…and everything else a man might want.
Whether this is a good idea or not, we can’t say. But it is fun to get together with Doug and his crowd.
Since we were back in Internet range, we checked in with our usual sources. Here’s what we found:
The economy is either growing slowly, or contracting.
Housing is probably going down. Remember, Mr. Market has to destroy the idea that “housing always goes up.” When he’s finished people will think that “housing never goes up.”
Unemployment? People are gradually beginning to realize that the last ten years were the worst for creating new jobs in America’s history. If they keep thinking about it they will realize that it is not just the bust that is destroying jobs; there was something very wrong with the boom too.
Meanwhile, the markets are still calculating, figuring, deciding what things are worth. In the last couple of days, they’ve been thinking that maybe stocks and gold got a little too uppity. Gold has lost more than $50 in the last two days. Stocks lost ground on Tuesday, but bounced up 36 points yesterday.
From all we can tell, the Great Correction continues. And here’s a report from The New York Times that tells us where it leads:
OSAKA, Japan – Like many members of Japan’s middle class, Masato Y. enjoyed a level of affluence two decades ago that was the envy of the world. Masato, a small-business owner, bought a $500,000 condominium, vacationed in Hawaii and drove a late-model Mercedes.
But his living standards slowly crumbled along with Japan’s overall economy. First, he was forced to reduce trips abroad and then eliminate them. Then he traded the Mercedes for a cheaper domestic model. Last year, he sold his condo – for a third of what he paid for it, and for less than what he still owed on the mortgage he took out 17 years ago.
“Japan used to be so flashy and upbeat, but now everyone must live in a dark and subdued way,” said Masato, 49, who asked that his full name not be used because he still cannot repay the $110,000 that he owes on the mortgage.
…For nearly a generation now, [Japan] has been trapped in low growth and a corrosive downward spiral of prices, known as deflation, in the process shriveling from an economic Godzilla to little more than an afterthought in the global economy.
“The US, the UK, Spain, Ireland, they all are going through what Japan went through a decade or so ago,” said Richard Koo, chief economist at Nomura Securities who recently wrote a book about Japan’s lessons for the world. “Millions of individuals and companies see their balance sheets going underwater, so they are using their cash to pay down debt instead of borrowing and spending.”
Bill Bonnerfor The Daily Reckoning
Since founding Agora Inc. in 1979, Bill Bonner has found success in numerous industries. His unique writing style, philanthropic undertakings and preservationist activities have been recognized by some of America's most respected authorities. With his friend and colleague Addison Wiggin, he co-founded The Daily Reckoning in 1999, and together they co-wrote the New York Times best-selling books Financial Reckoning Day and Empire of Debt. His other works include Mobs, Messiahs and Markets (with Lila Rajiva), Dice Have No Memory, and most recently, Hormegeddon: How Too Much of a Good Thing Leads to Disaster. His most recent project is The Bill Bonner Letter.
Haven’t been here in a while but nothing has changed. Still waiting for that Great Correction? At what point do you just admit you were wrong??
You tell us when you’re ready and we’ll be all ears.
Way-to-go Bill Bonner on picking an interim high on gold a week or so back. While its counter-productive to rely on short term trading, I too had the irrepresible suspicion that gold was over-bought by nearly $100 a ounce. I would be very intereted to hear what your interim predicition is for the next dip. My own inclination is $1165 an ounce. Perhaps more important for the underlying rally, volitility has increased considerably. Matters little if it’s up or down given the relentless gains the past 2 months, but having $40 moves a day presages the first $100 move, which I expect to be towards the upside after touching the interim dip.
So a silly fellow from Japan decided to buy high and sell low on a Condo… Boohoo
What about the next buyer, he got a deal. Meanwhile the Condo is probably about the same as it ever was… still reasonably new, still provides the same functionality as it ever did.
Apparently, If you are good with writing about financial doom and gloom, everything looks like a recession…
please let us know how your foraging into Green Energy is going along … whether we can dump the traditionals for some sun and some wind …
thanks beforehand …
PS Harry’s back … therefore, big chance that IT will habppen in the next few weeks
To both “Harry’s”
Your world is not the real one.
Good job, BB
If one is unemployed or underemployed, we are in a great recession. Even for those who are able to hold onto a job, chances are their wages and benefits have been rolled back. Like the fellow in Japan, many people have been living above their means. We are slowly returning to fiscal reality where purchases are made with saved earnings and you don’t spend what you dont have. I agree with Mr. Bonner, we are still slowly spiralling down and haven’t yet reached the bottom.
He’s baaaaaack. Must be GOOG that re-animated him.
BB will admit he’s wrong when unemployment goes below 5%, or Harry moves out of his Mother’s mobile. Whichever comes first.
In Canada the correction will because of high taxes like the HST (13%) on goods and services bought!
Government life support…liquidity injection… or a giant Band-Aid…whatever you want to call it, quantitative easing is the keeping the global economic ship afloat – but for how much longer? Richard Duncan explores…
Ben Bernanke introduced the world to the concept of "quantitative easing" back in 2002. It was an "unorthodox plan" to save the economy from the horrors of deflation. But the monstrous economy it has actually created is in some ways far worse. And as Richard Duncan explains, it's not going to end any time soon. Read on..
While the technical details of Bitcoin may intimidate the novice, they shouldn’t keep him from getting in on a digital currency revolution that -- while taking different forms -- isn’t going away. How do you get the simplest, easiest-to-act-on tips about how to invest, safeguard and grow your digital wealth? Dominic Frisby has more…
The duality is stark. In one hand, we have an energy renaissance underway, in the other, a virus is threatening to wreak havoc on the markets and, potentially, your life. Nothing we’re currently doing to fight the Ebola virus will work in 2014, say the researchers. Nothing we’re currently doing will beat it in 2015, either. We need a new game-plan. Read on…
Lose your shirt in 3D printing stocks this year? Don’t kick yourself. You’re not alone. (Okay, kick yourself a little if it’ll make you feel better.) You need to make sure you don’t lose your 3D-printed shirt in the next tech craze. Because there will be a next time. Look, it’s really not your fault if you got taken for a ride on 3D stocks. Greg Guenthner has more...