Loading ...Hunger Games 2.0
Every day we find ourselves responding to headlines, articles, papers, comments with the simple refrain – “Hunger Games”.
https://convex-strategies.com/2024/07/16/risk-update-jun2024-hunger-games-ii/
“The only winning move is not to play.” Joshua AI computer system, 1983.
WarGames (11/11) Movie CLIP – The Only Winning Move (1983) HD (youtube.com)
As we keep saying, the first player to reduce bond issuance wins.
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How do Common Knowledge games come to fruition? Very slowly, then all at once.
“It all comes down to the ever-growing imbalances in the complex adaptive system that is the global financial and economic construct. The US, as the keeper of the global reserve currency, acts as the core of the global nuclear reactor financial sandpile. That sandpile expands, aided and propped up by the tenacity of a multitude of interventions on behalf of the powers-that-be, all with the misspent belief that, by preventing and mitigating avalanches, they are make the sandpile safer. Eventually, inevitably, one last grain of sand will start an unforeseen, seemingly small avalanche, that will trigger the chain reaction across the connectivity of mass-accumulated fingers of fragility. We will get the phase transition, Ben Hunt’s ‘Great Ravine’, and the system will reset to a stable, natural, equilibrium.”
Nobody can know when or where that fateful grain of sand will fall. All we can try to do is understand the imbalances that exist in the current existing state of things. The best way to guess where there might be imbalances worth paying attention to is to look where the greatest and longest efforts are being made to impose unnatural influence on market functions. We can think of three pretty obvious big ones.
Japan. Multi-decade manipulation of monetary policy. ZIRP, NIRP, QE, QQE, YCC. They are now, ever so slowly, trying to back the train out of the tunnel they have been digging to nowhere. The obvious side-effect, and pretty clear indicator they are going too slowly, is the debasement of their currency, down nearly 60% against the USD since the beginning of 2021.
China. The largest creator of centrally directed credit in the 10yr period post the GFC that the world has ever seen. They were able to do so courtesy of stringent controls on the currency market. The side-effect, currently playing out, has been a major debt deflationary environment that has wreaked havoc on previously inflated asset prices. Meanwhile, it has necessitated ever greater manipulations of the currency.
Eurozone. Now into a multi-decade experiment on monetary union and internal currency peg, yet without fiscal or banking union. The side-effect, significant fragmentation with several key countries in a position that fiscal sustainability, without ongoing ECB support, is out of the question.
This is happening in the midst of importing the third world into the United States at a cost to the taxpayers of over $450,000,000,000 a year. Most of these are uneducated adults unable to contribute the brain power required to run complex systems that have been operated by a now aging population of experts. The brain trust is retiring leaving the aging infrastructure, power systems, water management to fewer and fewer remaining from a previous generation. In the meantime, our young are not having children, my wealthy son and his wife included. I want grandchildren! Those least able to have them are the only ones pushing out babies on welfare. We are doomed. And, to top it off, the United States is going to elect a fricken Communist as president. She’s also brain dead, which means another puppet in the White House populated by Cloward-Piven strategists. This enormous debt is their baby meant to collapse the economy leading to universal income and a nation of slaves. Of course they forgot smart people, paid well, are needed to provide the nation its food and water. Prepare Fully. Use that money from selling your horde to raise chickens, goats and more donkeys, if you haven’t started already. Maybe some cows and a garden would help. But, you already know we are screwed. I wish I’d started earlier and hadn’t lost my retirement on the miner stocks bust over the last decade. That’s my rant for the day. I’m not feeling well.