Financial topics

[Higgenbotham]

a, overall, it bears out the statistics you referenced that say the odds of escaping the bottom quintile in America are now low and getting worse.

[vincecate]

So they say the EBT problem was just a computer glitch, nothing to do with shutdown or debt limit. Hum. I wonder if these are people we can trust...

[gerald]

So they say the EBT problem was just a computer glitch, nothing to do with shutdown or debt limit. Hum. I wonder if these are people we can trust...

Follow the consequences of no EBT working to it's conclusion --------- and you end up in a very unpleasant place.
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America Fumes After Xerox "Routine Backup Test" Leave 17 States Without Foodstamps
http://www.zerohedge.com/news/2013-10-1 ... stamps-sat

"Ok, so the EBT failure not related to a government shutdown. It was, however, related to a simple "glitch" in a "Just-In-Time" world of peak complexity, which quickly cascaded through the logistical supply chain, and crippled the "purchasing" power of tens of millions of Americans, which potentially could have resulted in lethal consequences.

This was precisely the topic of our recent post "From Cascading Complexity To Systemic Collapse: A Walk Thru "Society's Equivalent Of A Heart Attack" which many read but few seem to have grasped. Recall from the article: "The extent of our contemporary complex global system dependencies, and our habituation to a long period of broadly stable economic and complexity growth means a systemic collapse would present profound and existential challenges." Such as resulting from a power outage at... Xerox Corp? If there is any better example of a system crossing the chaotic threshold due to a black swan event, we have yet to find it."
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Sun, 10/13/2013 - 10:23 | 4049760Ray1968
Ray1968's picture
I've always said that riots and revolution is only one EBT payment away. Stop the food stamps and start the gunfire.

[gerald]

There was a dentist named Weston Price who studied the tooth decay rates of the primitive cultures that were remaining in the 1930s and found it to be 1 tooth in 100 on average across the globe. He stated that the cause of tooth decay was refined foods and proved it by showing that when the cultures were corrupted by the refined foods of modern society, dental health went straight to hell. Now we have Coca-Cola and McDonald's comprising 2 out of the Dow 30 and a dental plan is thought of as a necessity. The idiocy is truly astounding.

My first job out of college was with a PepsiCo division. The company had a matching stock purchase plan for employees and at the time the stock was at 2, adjusted for splits. When the plan was offered I declined, thinking who will be stupid enough to continue buying worthless caramel colored sugar water? You know, they hadn't gone to the more toxic high fructose corn syrup yet. The stock has since gone to 60. I must repeat, the idiocy is truly astounding.

Along with that, I would assume the EBT cards allow for the purchase of Coca-Cola products, and that these products are placed in vending machines in every public school in America in order to support the Dow 30. If so, that is sick as hell.

http://www.motherjones.com/tom-philpott ... sity-rates
http://voices.yahoo.com/what-cant-purch ... 34882.html

http://www.gaulitics.com/2013/01/maine- ... nning.html

H -- A while back I read that the human body has a genetic propensity for sugar, salt and fat due to their lack of in the natural environment, this is some what akin to a deer's attraction to a salt lick. Combine this human craving with humanities preference for sloth and satisfying a need at a profit, and you get what we have. Consider this concept with the percentage of "foods" that are processed vs. the unprocessed in your average supermarket. ------------ Of course there is a cultural "advantage" to this (sarcasm) , If people were personally responsible for a healthy diet and lifestyle what would happen to all of the people involved in food processing the medical and dental industry and all of the related government programs?

[Higgenbotham]

If people were personally responsible for a healthy diet and lifestyle what would happen to all of the people involved in food processing the medical and dental industry and all of the related government programs?

To show how complicated and interconnected this mess is:

A potato is about 85% water. Most potatoes are grown in the Dakotas. For processing into potato chips, the potatoes are trucked all over the country to the various processing plants as far away as California. In other words, diesel is burned to haul water and the trucking industry is dependent on hauling this water. When the potatoes arrive at the plant, 98% of this water is then boiled off. Go to any snack food processing plant that makes potato chips and you will probably see a 4 inch natural gas pipeline entering the plant along with a lot of steam billowing out the top of the plant.

So it's not just the food processing and medical industries that are dependent on this so-called useless activity. It might be countered that the potatoes would be shipped somewhere anyway if people stopped eating junk food. Or maybe they wouldn't if they were grown closer to home. The larger processors are vertically integrated and own their own farms so it's hard to say what would happen.

Then we probably also have to consider that the supermarkets get a lot more profit out of selling snack foods than they do raw potatoes, but I'm not as familiar with how that works. I think the snack food manufacturers pay the supermarkets for shelf space, which is quite lucrative.

Food processing plants buy a lot of motors. They pay a lot of sewer. If there are a lot of food processing plants in a small city as can be the case, they could comprise over half of the sewer revenue. The list goes on and on.

[Higgenbotham]

In the past few days, there has been the government shutdown, the health care exchange failure to come online, and the EBT failure. Regardless of the technical cause or whether accidental or on purpose, it makes one think there may be a shortage of competent individuals. We may be seeing the first serious effects "Going Galt" has had on the system. Many companies like Xerox must be a mess internally. Further disarray like we saw yesterday will only make more competent employees want to get out.

It's also been my thought for a long time that printing money will stress the system more eventually, leading inevitably to the kinds of failures we are seeing. Another thing to consider is that the Fed probably knows by now that they have an out of control stock market bubble on their hands. Many have said that Bernanke won't let the stock market go down. Don't be so sure. If the Fed can find a convenient place to let some of the air out or even risk a crash, where they can absolve themselves of guilt and blame the Tea Party or a computer glitch that caused an unanticipated panic, I feel they will do it.

We may get our answer to that tonight.

As far as the Tea Party goes, probably for a long time they have been afraid of upsetting the applecart and getting blamed for any stock market crash that may have occurred. Maybe by now, the Obamacare implementation is close enough at hand that if they believe the implementation of Obamacare will destroy the economy (I think they are right to think it will), they will fight tooth and nail against it and not care anymore about what happens to the stock market.

As to one unanticipated way Obamacare can destroy the economy, I believe if the Tea Party loses this fight on Obamacare, a lot of their supporters and sympathizers are going to "Go Galt" in a big way after that happens. It was my original thought that would happen after Obama got elected but there was still hope. They will withdraw their money out of the banking system, shut down their businesses and many will go underground, having no permanent address, or leave the country. I am personally planning to do this. I believe that will be enough to collapse the country and begin the descent into the Dark Age. We shall see.

http://gdxforum.com/forum/viewtopic.php ... ism#p19420
http://gdxforum.com/forum/viewtopic.php ... ism#p19421

[Higgenbotham]

Speaking of the coming collapse and the 2% that make things happen let alone the masses, what do you think will happen if/when they pull this stunt? --- IMF Discusses A Super Tax Of 10% On All Savings In Eurozone http://goldsilverworlds.com/money-curre ... -eurozone/

I think people will get their money out of the system. Maybe slowly at first.

What do we do, escape into the jungle?

Keep a large supply of vodka on hand?

[Higgenbotham]

http://news.xinhuanet.com/english/indep ... 794246.htm

"Moreover, instead of honoring its duties as a responsible leading power, a self-serving Washington has abused its superpower status and introduced even more chaos into the world by shifting financial risks overseas, instigating regional tensions amid territorial disputes, and fighting unwarranted wars under the cover of outright lies."

"What may also be included as a key part of an effective reform is the introduction of a new international reserve currency that is to be created to replace the dominant U.S. dollar, so that the international community could permanently stay away from the spillover of the intensifying domestic political turmoil in the United States."

Will they put their money where their mouth is by buying gold and selling US bonds?

[aedens]

We do not need to move from the current view since it is as noted By John.

"You might think that's bad enough, Dear Reader, but now the story is going to get MUCH WORSE."

led by bureaucratic morons who really don't care whether the web site ever works or not and don't want to listen to anyone who actually is competent, as long as they continue to collect their enormous salaries.

They will bleed us snow white since that is all they ever do.

[vincecate]

Will they put their money where their mouth is by buying gold and selling US bonds?

China is buying gold. But will they sell their US bonds? They should. I expect they will figure this out at some point. Just not sure they will figure it out before war starts. Of course by then it is too late.