Higgenbotham's Dark Age Hovel

[spottybrowncow]

Intermediation gone wild. Or intermediation of intermediation gone wild. Really, it boggles the mind. Amazon does roughly the same thing when they insert themselves between a buyer and seller of goods. What I mean is the fee the seller pays Amazon is about 35% of the sale on average.

I agree that Amazon seems to be gouging, as does eBay and a host of other online entities.
But they ARE contributing something of value - a large, easily-searched online marketplace that makes it infinitely easier to sell and acquire goods.
The question is, what is the fair market value of this service? eBay's final value fees started out very low, as they gained market dominance they escalated to 10% of selling price. Once a platform gets large enough to where they think they can, they start increasing fees wildly because they've determined they have no real competition. Is this the fair market at work, is it monopolization, or is it something in between?

[Tom Mazanec]

Amazon Kindle is usually cheaper than dead tree editions. And I can fit a library in my pocket (no more room in my condo) AND search for words.

[Higgenbotham]

Is this the fair market at work, is it monopolization, or is it something in between?

Mostly it's a mad dash for Federal Reserve printed money. In the course of the mad dash, pretty much anything goes, which includes my favored characterizations of late - manipulation and fraud. The speed with which the loot is grabbed is of the essence because it's thrown out there sporadically and there's a lot of competition.

This week, the financial media is asking if the new Yahoo CEO will be able to turn Yahoo around when the others have failed.

To answer this question, first, we know that the tech companies that are very clever like Google and Apple have a knack for siphoning the excess money that is in the economy off into their coffers. Apple has an enormous amount of accumulated cash.

We can see how this happens. Consumer X may have a mortgage that they are not paying. No worries, the zombie who occupies the White House makes sure that the bank who holds the mortgage gets their bailout, their cut of the $1.5 trillion deficit, and we can add one more house to the shadow inventory. Consumer X can then go out and buy their favorite Apple devices with the money they save by not paying their mortgage and the zombie hopes this scam can go on until the election (to be clear, I'm not voting for Romney either - he's another farce and the Pub party should be absolutely ashamed to put that caiber of candidate in front of the public).

Assuming that the new Yahoo CEO, who comes from Google and is one of their 20 original employees and supposedly a major contributor to their success, can maintain that level of performance, then I do believe Yahoo can be turned around under the condition that the $1.5 trillion in deficit spending continues. If it does, those clever folks at Google, Apple, and now Yahoo will be able to find a way to continue to siphon a good share of that $1.5 trillion into their coffers.

On the other hand, if the budget is balanced next year and the excess $1.5 trillion disappears, then my assumption would be that no matter how good Yahoo's CEO is, there will be no possible way to turn Yahoo around. And I don't think even Apple will have an easy time of it if that were to happen.

Squatter Nation: 5 years with no mortgage payment
By Les Christie June 12, 2011: 9:23 PM ET
Foreclosed homeowners have stopped paying their mortgages.
Millions are staying in their homes without paying their mortgages.

NEW YORK (CNNMoney) -- Charles and Jill Segal have not made a mortgage payment in nearly five years -- but they continue to live in their five-bedroom West Palm Beach, Fla. home.

Lynn, from St. Petersburg, Fla., has been living without paying for three years.

In Thousand Oaks, Calif., an actor has missed 30 payments, and still, he has not lost his home.

They're not alone.

Some 4.2 million mortgage borrowers are either seriously delinquent or have had their cases referred to lawyers to pursue foreclosure auctions, according to LPS Applied Analytics. Of those, two-thirds have made no payments at all for at least a year, and nearly one-third have gone more than two years.

https://money.cnn.com/2011/06/09/real_e ... /index.htm

Last I read, the shadow inventory is still out there and millions still aren't paying their mortgages. That may have been before the latest and greatest bubble of the past couple years. Probably the more recent bubble has allowed some of this inventory to be sold or refinanced. Also, there was an enormous amount of government paid and deferred rent the past 3 years. Student loan debt was on the table, but I haven't even followed the play by play to see how that has gone.

Supreme Court could soon rule on Biden’s student loan forgiveness program. Here’s what borrowers need to know
Katie Lobosco
By Katie Lobosco, CNN
Published 5:00 AM EDT, Wed June 14, 2023

Millions of borrowers may learn soon whether they could receive up to $20,000 in debt relief under President Joe Biden’s student loan forgiveness program.

The fate of the unprecedented debt cancellation program lies with the Supreme Court, which is expected to decide to either uphold or strike down the proposal in late June or early July.

The student loan forgiveness program, which Biden announced last August, has been on hold due to legal challenges. No student loan debt has been canceled, despite the fact that the government approved 16 million applications eligible for relief last year.

https://www.cnn.com/2023/06/14/politics ... index.html

Because they couldn't work during covid, they left here owing the management company money. She said the company didn't attempt to collect but it appears on her credit report. I asked her how much. She said $17,000. She said she would like to come back here and work the debt off. I told her I didn't think they would accept that.

The real estate company may have invested much of that $17,000 into the housing stock, whereas she may have spent much of it on products offered by Silicon Valley. The "they couldn't work during covid" as quoted was her version of the story as she was telling me. I knew her well enough to know what was really going on. That was one reason I asked how much. $5,000 would have been reasonable and was what I expected to hear. He was working as a floor installer and was out of work during that time but she was working at home for an insurance company. My conclusion was that she wasn't paying the rent because she didn't have to. At that time, nobody was allowed to be evicted. I asked her the other day whether she applied for rent assistance during covid and she said no.

Rent is not being paid multiples of levels.

This reminds me, I was talking to the maintenance man at this apartment complex recently. Since this complex has a government mortgage (Fannie Mae) tenants got a deferral on their rent. He told me the rent was forgiven if the tenant moved by December 31. I said that since I live in the back I'm not able to see what goes on out front, but would assume the trucks were lined up at the end of December. He said that would be an understatement.

Anecdotally, we have some friends who rent and normally when we get together he just wants to talk and watch documentaries.

But more recently, maybe a month ago, he wanted to talk about starting a business. It was a lot of pie in the sky talk like the only way to become a millionaire in the US is to have your own business and that we could start the business he had in mind and sell it for millions in a few years.

Then by mistake his wife let it slip that the government had been paying their rent. Turned out they got over $18,000 from the government to pay their rent.

My guess would be that those payments stopped, oh, about the time he wanted to stop the small talk and start the talk about the big business plans.

Some additional background to this. He was told by the real estate management company involved in this scam to take all his money out of the bank so that he could qualify for the "free" rent. According to him, he withdrew 40K and kept the cash in his house. He also said the management company ginned up false late fees and billed the government for them. I can't vouch for whether any of that is true, only what was said. This is of interest because it describes additional ways that the bottom lines of tech companies may have been boosted.

The final part of this post is to consider whether high tech companies wanted to foment BLM chaos to benefit their bottom lines. During that time, Amazon in particular was voicing support for BLM. Without digging up the details, I left 2021 with the clear impression that was the case. More BLM chaos equated to more bricks and mortar destruction, more deferred rent, more government paid rent, more people afraid to venture out of their homes, more tacit support for lockdowns, etc., all of which means more business for Amazon, less competition for Amazon, and probably higher fees for Amazon (finally getting back to the original topic).

[Higgenbotham]

The Archdruid discusses the future role of money as complexity ratchets down.

WEDNESDAY, NOVEMBER 12, 2014

Dark Age America: The Hoard of the Nibelungs

Of all the differences that separate the feudal economy sketched out in last week’s post from the market economy most of us inhabit today, the one that tends to throw people for a loop most effectively is the near-total absence of money in everyday medieval life. Money is so central to current notions of economics that getting by without it is all but unthinkable these days. The fact—and of course it is a fact—that the vast majority of human societies, complex civilizations among them, have gotten by just fine without money of any kind barely registers in our collective imagination.

And what gold will do for you.

The contemporary fixation on abstract value isn’t limited to economists and those who believe them, nor is its potential for catastrophic consequences. I’m thinking here specifically of those people who have grasped the fact that industrial civilization is picking up speed on the downslope of its decline, but whose main response to it consists of trying to find some way to stash away as much abstract value as possible now, so that it will be available to them in some prospective postcollapse society. Far more often than not, gold plays a central role in that strategy, though there are a variety of less popular vehicles that play starring roles the same sort of plan.

Now of course it was probably inevitable in a consumer society like ours that even the downfall of industrial civilization would be turned promptly into yet another reason to go shopping. Still, there’s another difficulty here, and that’s that the same strategy has been tried before, many times, in the last years of other civilizations. There’s an ample body of historical evidence that can be used to see just how well it works. The short form? Don’t go there.

It so happens, for example, that in there among the sagas and songs of early medieval Europe are a handful that deal with historical events in the years right after the fall of Rome: the Nibelungenlied, Beowulf, the oldest strata of Norse saga, and some others. Now of course all these started out as oral traditions, and finally found their way into written form centuries after the events they chronicle, when their compilers had no way to check their facts; they also include plenty of folktale and myth, as oral traditions generally do. Still, they describe events and social customs that have been confirmed by surviving records and archeological evidence, and offer one of the best glimpses we’ve got into the lived experience of descent into a dark age.

Precious metals played an important part in the political economy of that age—no surprises there, as the Roman world had a precious-metal currency, and since banks had not been invented yet, portable objects of gold and silver were the most common way that the Roman world’s well-off classes stashed their personal wealth. As the western empire foundered in the fifth century CE and its market economy came apart, hoarding precious metals became standard practice, and rural villas, the doomsteads of the day, popped up all over. When archeologists excavate those villas, they routinely find evidence that they were looted and burnt when the empire fell, and tolerably often the archeologists or a hobbyist with a metal detector has located the buried stash of precious metals somewhere nearby, an expressive reminder of just how much benefit that store of abstract wealth actually provided to its owner.

That’s the same story you get from all the old legends: when treasure turns up, a lot of people are about to die. The Volsunga saga and the Nibelungenlied, for example, are versions of the same story, based on dim memories of events in the Rhine valley in the century or so after Rome’s fall. The primary plot engine of those events is a hoard of the usual late Roman kind, which passes from hand to hand by way of murder, torture, treachery, vengeance, and the extermination of entire dynasties. For that matter, when Beowulf dies after slaying his dragon, and his people discover that the dragon was guarding a treasure, do they rejoice? Not at all; they take it for granted that the kings and warriors of every neighboring kingdom are going to come and slaughter them to get it—and in fact that’s what happens. That’s business as usual in a dark age society.

The problem with stockpiling gold on the brink of a dark age is thus simply another dimension, if a more extreme one, of the broader problem with intermediation. It bears remembering that gold is not wealth; it’s simply a durable form of money, and thus, like every other form of money, an arbitrary token embodying a claim to real wealth—that is, goods and services—that other people produce. If the goods and services aren’t available, a basement safe full of gold coins won’t change that fact, and if the people who have the goods and services need them more than they want gold, the same is true. Even if the goods and services are to be had, if everyone with gold is bidding for the same diminished supply, that gold isn’t going to buy anything close to what it does today. What’s more, tokens of abstract value have another disadvantage in a society where the rule of law has broken down: they attract violence the way a dead rat draws flies.

The fetish for stockpiling gold has always struck me, in fact, as the best possible proof that most of the people who think they are preparing for total social collapse haven’t actually thought the matter through, and considered the conditions that will obtain after the rubble stops bouncing. Let’s say industrial civilization comes apart, quickly or slowly, and you have gold. In that case, either you spend it to purchase goods and services after the collapse, or you don’t. If you do, everyone in your vicinity will soon know that you have gold, the rule of law no longer discourages people from killing you and taking it in the best Nibelungenlied fashion, and sooner or later you’ll run out of ammo. If you don’t, what good will the gold do you?

The era when Nibelungenlied conditions apply—when, for example, armed gangs move from one doomstead to another, annihilating the people holed up there, living for a while on what they find, and then moving on to the next, or when local governments round up the families of those believed to have gold and torture them to death, starting with the children, until someone breaks—is a common stage of dark ages. It’s a self-terminating one, since sooner or later the available supply of precious metals or other carriers of abstract wealth are spread thin across the available supply of warlords. This can take anything up to a century or two before we reach the stage commemorated in the Anglo-Saxon poem “The Seafarer:” Nearon nú cyningas ne cáseras, ne goldgiefan swylce iú wáeron (No more are there kings or caesars or gold-givers as once there were).

That’s when things begin settling down and the sort of feudal arrangement sketched out in last week’s post begins to emerge, when money and the market play little role in most people’s lives and labor and land become the foundation of a new, impoverished, but relatively stable society where the rule of law again becomes a reality. None of us living today will see that period arrive, but it’s good to know where the process is headed. We’ll discuss the practical implications of that knowledge in a future post.

https://thearchdruidreport-archive.2006 ... lungs.html

I posted the opposite view on gold from Hugo Salinas Price.

I think that we're going to see eventually a series of bankruptcies. And I think that the rise in the interest rate is probably the fatal sign which is going to ignite a derivatives crisis that is going to bring down the derivatives system. There is something like a quadrillion of derivatives and most of them are interest rate derivatives. The spiking of the interest rate in the United States may set that off. And I think that what is going to happen in the world is that eventually we're going to come to a moment where there's going to be massive bankruptcies around the world and what is going to be left when the dust settles is gold and some people are going to have it and some people are not. And then the problem will be to hold onto what you've got. Because it's not going to be a very pleasant world. That's what I see coming, my friend.

--Hugo Salinas Price (transcribed from the link above)

"In 1987 Ricardo succeeded his father Hugo Salinas Price as CEO of Grupo Elektra. He is the fourth richest person in Mexico behind Carlos Slim Helu and the 34th richest person in the world with a wealth of around US $17.4 billion in 2012."

http://en.wikipedia.org/wiki/Ricardo_Salinas_Pliego

I agree with the Archdruid. I sold all my gold and silver in 2011 and no longer own any to speak of or plan to. The reason is that it was in 2011 that I came to the conclusion that the future will likely more resemble the one that is described in his November 12, 2014 post. Having gold and trying to hold onto it is a fool's errand, in my opinion.

"Now of course it was probably inevitable in a consumer society like ours that even the downfall of industrial civilization would be turned promptly into yet another reason to go shopping."

Yes, that is exactly my thought when I see all the promoters for this or that magical money bullet out there.

There is no investment strategy that will preserve capital over a long time horizon, just strategies that allow it to go extinct more slowly. Wealth never survives more than a few generations no matter how much it is or who manages it. A lot of people point to gold. Gold costs roughly 1% per year to insure and store. If one chooses self storage, it will likely be lost or stolen when the crisis it is meant to protect against comes to pass.

Yeah. They knew that back in 30 C.E. "Where moth and rust doth corrupt and thieves break in and steal." Not to mention the guy whose wealth was secure, but apparently his health wasn't. "You fool! This night will your soul be demanded of you." Oops... or as is said when many a fat cat or member of the Powers That Be has a heart attack, "They examined his heart and found nothing"?

A repeat of more recent thoughts on the same topic.

From the Archduid's column of September 15 - "The Negative-Sum Economy":

With all this, let’s cycle back to the question we discussed at the beginning of this post: how to preserve wealth and avoid illth in the face of a difficult future. Most people who ask this want me to tell them what set of tokens they can hoard so that they will be able to exchange those tokens for wealth, at something like the same rate of exchange those tokens bring today. Most of them, though they’ve never heard of John Ruskin and don’t know the word “illth,” also want to use their tokens to avoid illth at something like the same rate they can today. Neither of these are possible, because wealth and illth are both functions of economic production. When the amount of wealth being produced is steadily dropping, and the amount of illth being produced is steadily increasing, any set of tokens—no matter what they happen to be—will command a smaller amount of wealth and avoid a smaller amount of illth.

That said, some tokens will lose value faster than others. Economists, like generals, reliably try to fight the next war using the weapons and tactics of the last one, and that has been a massive source of trouble over the last few decades. The last major era of economic crisis reached a peak in the 1930s, when the mismatch between an expanding economy and a gold-backed currency that couldn’t expand fast enough resulting in an epic depression. That was finally solved by abandoning the gold standard and flooding the economy with debt-based money.

When the global economy began to run into trouble in the 1970s, economists were still fixated on the experiences of the 1930s and tried to do the same thing all over again. That was a critical mistake, since the crisis of the 1970s was not caused by too much growth—it was caused by too little. Economists and policymakers have doubled down on the same mistake ever since, flooding the economy with money under the serene delusion that you can fix a shortage of wealth by increasing the number of tokens used to distribute it. That risked inflation, and the history of the last fifty years has been dominated by the struggle to find gimmicks to keep inflation under control while expanding the currency supply. (The culture of elite kleptocracy that has generated so many absurdly overinflated fortunes in recent years is one of these gimmicks.)

At this point, as a result, the single most pressing need the global economy faces is the need to clear away a spectacular oversupply of tokens. When the United States defaults on its unpayable debt or hyperinflates it out of existence—sooner or later it inevitably must do one or the other—that will take care of a lot of it, but by no means all. As the production of wealth declines and the production of illth increases, the mismatch between the supply of tokens and the supply of wealth will increase. To the extent that entire classes of tokens (such as US dollars) lose all their value, that will allow other classes to retain more of theirs, but every kind of token—yes, including gold—will have to shed a good share of its capacity to claim wealth and avoid illth.

All this can be summed up quite simply. During the long era of expansion made possible by the exploitation of fossil fuels, the world’s industrial nations had positive-sum economies: that is to say, the total amount of wealth in those nations increased on average from year to year, and it increased faster than the total amount of illth. Since the arrival of the first energy crisis in 1973, the world’s industrial nations have effectively had zero-sum economies: that is, the total amount of wealth—not of money, but of nonfinancial goods and services—remained largely static on average, while the total amount of illth rose to equal it. We are now moving into an age of negative-sum economies, in which the total amount of wealth decreases on average from year to year, while the total amount of illth rises steadily for a while.

In a negative-sum environment, trying to preserve wealth by stockpiling tokens is a fool’s errand, and no, it doesn’t matter what tokens you stockpile. Are there strategies that can deal effectively with such times? Yes, though they’re highly counterintuitive to minds raised to believe in limitless growth. We’ll discuss them in the first October post on this blog.

https://www.ecosophia.net/the-negative-sum-economy/

[Higgenbotham]

All this can be summed up quite simply. During the long era of expansion made possible by the exploitation of fossil fuels, the world’s industrial nations had positive-sum economies: that is to say, the total amount of wealth in those nations increased on average from year to year, and it increased faster than the total amount of illth. Since the arrival of the first energy crisis in 1973, the world’s industrial nations have effectively had zero-sum economies: that is, the total amount of wealth—not of money, but of nonfinancial goods and services—remained largely static on average, while the total amount of illth rose to equal it. We are now moving into an age of negative-sum economies, in which the total amount of wealth decreases on average from year to year, while the total amount of illth rises steadily for a while.

https://www.ecosophia.net/the-negative-sum-economy/

It's because we've been in the maintenance phase of a declining civilization since the 1970s.

Also, I think that once the numbers of births start to decline, that is the point at which the rate of physical expansion of the civilization also starts to slow down and, therefore, traditional male activities like building infrastructure begin to decline and the civilization enters into a maintenance phase before the inevitable decline. The mix of jobs begins to change and women are able to better do many of the jobs that become prominent during the maintenance and decline phase (like health care and education, which really just serve to milk out the surplus of the civilization before it collapses). This shift in the job mix has the effect of accelerating the decline (further reducing births and the effects that result from the further reduction in births).

Since consolidating some of these ideas in this Dark Age Hovel, I've been better able to connect some of the posts.

In addition to the energy crisis, the early 1970s coincided with:
The entry of women into the work force in large numbers
Roe v Wade
End of Bretton Woods

[John]

** 14-Jun-2023 World View: Living without money

The discussion here a couple of days ago
that ancient societies lived without
money or correncies reminded me of
something that Samuelson said in his
economics book, when I read it in the
1970s.

He said that in prison societies, the
prisoners make up their own currencies,
such as rocks or sugar packets. As I
recall, he suggested that there's some
kind of psychological need in any human
society to use some ad-hoc objects as
currency.

So I found the following online:

What To Expect In Federal Prison: The
Black Market
https://federalcriminaldefenseattorney. ... al-prison/

So it's possible that even in ancient
societies, before "currencies" were
invented, some sort of available objects
were always used as ad-hoc currencies.

[Higgenbotham]

** 14-Jun-2023 World View: Living without money

The discussion here a couple of days ago
that ancient societies lived without
money or correncies reminded me of
something that Samuelson said in his
economics book, when I read it in the
1970s.

He said that in prison societies, the
prisoners make up their own currencies,
such as rocks or sugar packets. As I
recall, he suggested that there's some
kind of psychological need in any human
society to use some ad-hoc objects as
currency.

So I found the following online:

What To Expect In Federal Prison: The
Black Market
https://federalcriminaldefenseattorney. ... al-prison/

So it's possible that even in ancient
societies, before "currencies" were
invented, some sort of available objects
were always used as ad-hoc currencies.

Except for hunter gatherers I don't think any societies completely lived without money. The fundamental reason for the use of money in agricultural societies seems to be that grain degrades during storage, so it's beneficial to have a nondegradable medium of exchange so that someone with a more immediate need for the grain can use it. But not all people in agricultural arrangements would necessarily be in a position to store grain or have a need to use money for other reasons. There was the example of a peasant named Higg who had no control over agricultural commodities and no need to use money. During times where goods are mostly in shortage, money would be used less. On the other end of the continuum is our present society where goods have been in surplus for a long time, and it's pretty much required that everyone use money.

[aeden]

A family in South America buried metal and after the revolution and enough survived with many slain of the Family to buy a small grinding mill for flour for the village. They had enough capital to be Bakers that survived the glorious revolution of BISH fools.
Most fun was the craniotome ads on the "secure" systems.

https://finviz.com/insidertrading.ashx?tc=7 skew is all you need to know into august. No rate increase should burn itself out since the consumers has had enough of the uniparty networks not cleaning up the criminal agency issue is simplistic fact. EGG planks are known to what it worships.

[aeden]

https://www.coindesk.com/policy/2023/06 ... aundering/
To the mud hut sprint.

Blackcrack who leads the planet on esg funds butchery has a new loot table.
Markets surged for a second time in the less than 24 hours following the fund management giant’s announcement
that it had filed paperwork for the formation of a spot bitcoin ETF.
Surveillance-sharing agreement in its proposal. The White House visit log should of been a clue also.
https://www.johnreedstark.com/digital-t ... tch-title/
You are not informed since taproot.

[Higgenbotham]

UPS workers vote to strike, setting stage for biggest walkout since 1959

BY IRINA IVANOVA

UPDATED ON: JUNE 16, 2023 / 12:35 PM / MONEYWATCH


UPS workers are gearing up for a potential strike that would be the biggest U.S. labor walkout since the 1950s.

Members of the Teamsters union, which represents about 340,000 workers at the package delivery company, voted overwhelmingly on Friday to strike if no agreement is reached with UPS by the time the current contract expires on July 31.

"If this multibillion-dollar corporation fails to deliver on the contract that our hardworking members deserve, UPS will be striking itself," Teamsters President Sean O'Brien said in a statement. "The strongest leverage our members have is their labor and they are prepared to withhold it to ensure UPS acts accordingly."

Some 97% of voting members approved a strike, although the voting turnout was not immediately known.

The union is seeking higher pay; the elimination of so-called two-tier wages, where newer workers are paid less than older employees for the same job; the removal of surveillance cameras from delivery trucks; and more full-time jobs.

https://www.cbsnews.com/news/ups-strike ... -60-years/