Investment Rarities Incorporated
History |  Q & A  |  Endorsements  |  Portfolios  | Flatware | Gold Coins  |  Silver Coins  |  Contact |  Home

Products

Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

..Read More »

The Best of Jim Cook Archive

 

Condensed Articles

January 7, 2016

archive print

2015: THE LAST CHRISTMAS IN AMERICA

By Charles Hugh-Smith

(condensed)

The game of enabling more debt by lowering interest rates and loosening lending standards is coming to an end. If we define Christmas as consumer spending going up while earnings are going down, 2015 will be the last Christmas in America for a long time. Christmas (along with all other consumer spending) has been funded by financialization, i.e. debt and leverage, not by increased earnings.

The primary financial trick that's propped up the “recovery” for seven years is piling more debt on stagnating incomes. How does this magic work? Lower interest rates. In a healthy economy, households earn more money, and the increased earnings enable households to save, spend and borrow more. In an unhealthy, doomed-to-implode economy, earnings are declining, and central banks enable more borrowing by lowering interest rates to zero and loosening lending standards so anyone who can fog a mirror can buy a new pickup truck with a subprime auto loan.

The problem with financialization is that it eventually runs out of oxygen. As earnings decline, eventually there's no more income to support more debt. And once debt stops expanding, the economy doesn't just stagnate, it implodes, because the entire ramshackle con game of financialization requires a steady increase in debt and leverage to keep from crashing. The trickery of substituting financialization for earned income – the trickery that fueled the last seven years of “recovery” – is exhausted. The incomes of even the most educated workers are going nowhere, while the earnings of the bottom 90% are sliding. The essential fuel of “growth” – credit expansion – is rolling over. Say good-bye to Christmas, America, and debt-based spending in general.