Retail Death Rattle Grows Louder


[America’s supposed recovery from The Great Recession is a hoax so obvious that only the mainstream news media, too lazy, cowardly and stupid to stray even an inch from the officially approved narrative, could fail to see it. And yet, here we are, so glutted with brick-and-mortar retail space that even if it were to be reduced by half there would still be an economically fatal overhang. Sales are plummeting and malls are dying – a matter of no small consequence, considering that retail business supposedly makes up two-thirds of America’s GDP. In the trenchant commentary below, the intrepid Jim Quinn updates and amplifies an article he wrote four months ago on this subject. With his kind permission, I am reprinting it here because it deserves as wide an audience as possible. The original is copiously illustrated with charts and can be accessed at the link above.  Other powerful essays by Jim can be found at numerous high-traffic web sites, including those shining beacons of truth, and ZeroHedge. Also, you can find David Stockman’s approving comments on Jim’s essay here.  RA]

The definition of death rattle is a sound often produced by someone who is near death when fluids such as saliva and bronchial secretions accumulate in the throat and upper chest. The person can’t swallow and emits a deepening wheezing sound as they gasp for breath. This can go on for two or three days before death relieves them of their misery. The American retail industry is emitting an unmistakable wheezing sound as a long slow painful death approaches.

It was exactly four months ago when I wrote The Retail Death Rattle. Here are some excerpts from that article:

A Warning Siren

The absolute collapse in retail visitor counts is the warning siren that this country is about to collide with the reality Americans have run out of time, money, jobs, and illusions. The exponential growth model, built upon a never ending flow of consumer credit and an endless supply of cheap fuel, has reached its limit of growth. The titans of Wall Street and their puppets in Washington D.C. have wrung every drop of faux wealth from the dying middle class. There are nothing left but withering carcasses and bleached bones.

Once the Wall Street created fraud collapsed and the waves of delusion subsided, retailers have been revealed to be swimming naked. Their relentless expansion, based on exponential growth, cannibalized itself, new store construction ground to a halt, sales and profits have declined, and the inevitable closing of thousands of stores has begun.

The implications of this long and winding road to ruin are far reaching. Store closings so far have only been a ripple compared to the tsunami coming to right size the industry for a future of declining spending. Over the next five to ten years, tens of thousands of stores will be shuttered. Companies like JC Penney, Sears and Radio Shack will go bankrupt and become historical footnotes. Considering retail employment is lower today than it was in 2002 before the massive retail expansion, the future will see in excess of 1 million retail workers lose their jobs. Bernanke and the Feds have allowed real estate mall owners to roll over non-performing loans and pretend they are generating enough rental income to cover their loan obligations. As more stores go dark, this little game of extend and pretend will come to an end.

Retail store results for the 1st quarter of 2014 have been rolling in over the last week. It seems the hideous government reported retail sales results over the last six months are being confirmed by the dying bricks and mortar mega-chains. In case you missed the corporate mainstream media not reporting the facts and doing their usual positive spin, here are the absolutely dreadful headlines:

  • Wal-Mart Profit Plunges By $220 Million as US Store Traffic Declines by 1.4%
  • Target Profit Plunges by $80 Million…as Store Traffic Declines by 2.3%
  • Sears Loses $358 Million in Q1 as Comparable Store Sales Plunge by 7.8%
  • Sales at Kmart Plunge by 5.1%
  • JC Penney Thrilled With Loss of Only $358 Million For the Quarter
  • Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%
  • Costco Profit Declines by $84 Million as Comp Store Sales Only Increase by 2%
  • Staples Profit Plunges by 44% as Sales Collapse and Closing Hundreds of Stores
  • Gap Income Drops 22% as Same Store Sales Fall
  • American Eagle Profits Tumble 86%, Will Close 150 Stores
  • Aeropostale Losses $77 Million as Sales Collapse by 12%
  • Best Buy Sales Decline by $300 Million as Margins Decline and Comparable Store Sales Decline by 1.3%
  • Macy’s Profit Flat as Comparable Store Sales decline by 1.4%
  • Dollar General Profit Plummets by 40% as Comp Store Sales Decline by 3.8%
  • Urban Outfitters Earnings Collapse by 20% as Sales Stagnate
  • McDonald’s Earnings Fall by $66 Million as US Comp Sales Fall by 1.7%
  • Darden Profit Collapses by 30% as Same Restaurant Sales Plunge by 5.6% and Company Selling Red Lobster
  • TJX Misses Earnings Expectations as Sales & Earnings Flat
  • Dick’s Misses Earnings Expectations as Golf Store Sales Plummet
  • Home Depot Misses Earnings Expectations as Customer Traffic Only Rises by 2.2%
  • Lowes Misses Earnings Expectations as Customer Traffic was Flat

Never Reported

Of course, those headlines were never reported. I went to each earnings report and gathered the info that should have been reported by the CNBC bimbos and hacks. Anything you heard surely had a Wall Street spin attached, like the standard BETTER THAN EXPECTED. I love that one. At the start of the quarter the Wall Street shysters post earnings expectations. As the quarter progresses, the company whispers the bad news to Wall Street and the earnings expectations are lowered. Then the company beats the lowered earnings expectation by a penny and the Wall Street scum hail it as a great achievement.  The muppets must be sacrificed to sustain the Wall Street bonus pool. Wall Street investment bank geniuses rated JC Penney a buy from $85 per share in 2007 all the way down to $5 a share in 2013. No more needs to be said about Wall Street “analysis”.

It seems even the lowered expectation scam hasn’t worked this time. U.S. retailer profits have missed lowered expectations by the most in 13 years. They generally “beat” expectations by 3% when the game is being played properly. They’ve missed expectations in the 1st quarter by 3.2%, the worst miss since the fourth quarter of 2000. If my memory serves me right, I believe the economy entered recession shortly thereafter. The brilliant Ivy League trained Wall Street MBAs, earning high six digit salaries on Wall Street, predicted a 13% increase in retailer profits for the first quarter. A monkey with a magic 8 ball could do a better job than these Wall Street big swinging dicks.

Corporate Flunkies

The highly compensated flunkies who sit in the corner CEO office of the mega-retail chains trotted out the usual drivel about cold and snowy winter weather and looking forward to tremendous success over the remainder of the year. How do these excuse machine CEO’s explain the success of many high end retailers during the first quarter? Doesn’t weather impact stores that cater to the .01%? The continued unrelenting decline in profits of retailers, dependent upon the working class, couldn’t have anything to do with this chart? It seems only the oligarchs have made much progress over the last four decades.

Retail CEO gurus all think they have a master plan to revive sales. I’ll let you in on a secret. They don’t really have a plan. They have no idea why they experienced tremendous success from 2000 through 2007, and why their businesses have not revived since the 2008 financial collapse. Retail CEOs are not the sharpest tools in the shed. They were born on third base and thought they hit a triple. Now they are stranded there, with no hope of getting home. They should be figuring out how to position themselves for the multi-year contraction in sales, but their egos and hubris will keep them from taking the actions necessary to keep their companies afloat in the next decade. Bankruptcy awaits. The front line workers will be shit canned and the CEO will get a golden parachute. It’s the American way.

The Old Retail Formula

The secret to retail success before 2007 was: create or copy a successful concept; get Wall Street financing and go public ASAP; source all your inventory from Far East slave labor factories; hire thousands of minimum wage level workers to process transactions; build hundreds of new stores every year to cover up the fact the existing stores had deteriorating performance; convince millions of gullible dupes to buy cheap Chinese shit they didn’t need with money they didn’t have; and pretend this didn’t solely rely upon cheap easy debt pumped into the veins of American consumers by the Federal Reserve and their Wall Street bank owners. The financial crisis in 2008 revealed everyone was swimming naked, when the tide of easy credit subsided.

The pundits, politicians and delusional retail CEOs continue to await the revival of retail sales as if reality doesn’t exist. The 1 million retail stores, 109,000 shopping centers, and nearly 15 billion square feet of retail space for an aging, increasingly impoverished, and savings poor populace might be a tad too much and will require a slight downsizing – say 3 or 4 billion square feet. Considering the debt fueled frenzy from 2000 through 2008 added 2.7 billion square feet to our suburban sprawl concrete landscape, a divestiture of that foolish investment will be the floor. If you think there are a lot of SPACE AVAILABLE signs dotting the countryside, you ain’t seen nothing yet. The mega-chains have already halted all expansion. That was the first step. The weaker players like Radio Shack, Sears, Family Dollar, Coldwater Creek, Staples, Barnes & Noble, Blockbuster and dozens of others are already closing stores by the hundreds. Thousands more will follow.

Not Mere Opinion

This isn’t some doom and gloom prediction based on nothing but my opinion. This is the inevitable result of demographic certainties, unequivocal data, and the consequences of a retailer herd mentality and lemming like behavior of consumers. The open and shut case for further shuttering of 3 to 4 billion square feet of retail is as follows:

  • There is 47 square feet of retail space per person in America. This is 8 times as much as any other country on earth. This is up from 38 square feet in 2005; 30 square feet in 2000; 19 square feet in 1990; and 4 square feet in 1960. If we just revert to 2005 levels, 3 billion square feet would need to go dark. Does that sound outrageous?
  • Annual consumer expenditures by those over 65 years old drop by 40% from their highest spending years from 45 to 54 years old. The number of Americans turning 65 will increase by 10,000 per day for the next 16 years. There were 35 million Americans over 65 in 2000, accounting for 12% of the total population. By 2030 there will be 70 million Americans over 65, accounting for 20% of the total population. Do you think that bodes well for retailers?
  • Half of Americans between the ages of 50 and 64 have no retirement savings. The other half has accumulated $52,000 or less. It seems the debt financed consumer product orgy of the last two decades has left most people nearly penniless. More than 50% of workers aged 25 to 44 report they have less than $10,000 of total savings.
  • The lack of retirement and general savings is reflected in the historically low personal savings rate of a miniscule 3.8%. Before the materialistic frenzy of the last couple decades, rational Americans used to save 10% or more of their personal income. With virtually no savings as they approach their retirement years and an already extremely low savings rate, do retail CEOs really see a spending revival on the horizon?
  • If you thought the savings rate was so low because consumers are flush with cash and so optimistic about their job prospects they are unconcerned about the need to save for a rainy day, you would be wrong. It has been raining for the last 14 years. Real median household income is 7.5% lower today than it was in 2001. Retailers added 2.7 billion square feet of retail space as real household income fell. Sounds rational.
  • This decline in household income may have something to do with the labor participation rate plummeting to the lowest level since 1978. There are 247.4 million working age Americans and only 145.7 million of them employed (19 million part-time; 9 million self-employed; 20 million employed by the government). There are 92 million Americans, who according to the government have willingly left the workforce, up by 13.3 million since 2007 when over 146 million Americans were employed. You’d have to be a brainless twit to believe the unemployment rate is really 6.3% today. Retail sales would be booming if the unemployment rate was really that low.
  • With a 16.5% increase in working age Americans since 2000 and only a 6.5% increase in employed Americans, along with declining real household income, an inquisitive person might wonder how retail sales were able to grow from $3.3 trillion in 2000 to $5.1 trillion in 2013 – a 55% increase. You need to look no further than your friendly Too Big To Trust Wall Street banks for the answer. In the olden days of the 1970s and early 1980s Americans put 10% to 20% down to buy a house and then systematically built up equity by making their monthly payments. The Ivy League financial engineers created “exotic” (toxic) mortgage products requiring no money down, no principal payments, and no proof you could make a payment, in their control fraud scheme to fleece the American sheeple. Their propaganda machine convinced millions more to use their homes as an ATM, because home prices never drop. Just ask Ben Bernanke. Even after the Bernanke/Blackrock fake housing recovery (actual mortgage originations now at 1978 levels) household real estate percent equity is barely above 50%, well below the 70% levels before the Wall Street induced debt debacle. With the housing market about to head south again, the home equity ATM will have an Out of Order sign on it.
  • We hear the endless drivel from disingenuous Keynesian nitwits about government and consumer austerity being the cause of our stagnating economy. My definition of austerity would be an actual reduction in spending and debt accumulation. It seems during this time of austerity total credit market debt has RISEN from $53.5 trillion in 2009 to $59 trillion today. Not exactly austere, as the Federal government adds $2.2 billion PER DAY to the national debt, saddling future generations with the bill for our inability to confront reality. The American consumer has not retrenched, as the CNBC bimbos and bozos would have you believe. Consumer credit reached an all-time high of $3.14 trillion in March, up from $2.52 trillion in 2010. That doesn’t sound too austere to me. Of course, this increase is solely due to Obamanomics and Bernanke’s $3 trillion gift to his Wall Street owners. The doling out of $645 billion to subprime college “students” and subprime auto “buyers” since 2010 accounts for more than 100% of the increase. The losses on these asinine loans will be epic. Credit card debt has actually fallen as people realize it is their last lifeline. They are using credit cards to pay income taxes, real estate taxes, higher energy costs, higher food costs, and the other necessities of life.

‘Recovery’ Is a Scam

The entire engineered “recovery” since 2009 has been nothing but a Federal Reserve/U.S. Treasury conceived, debt manufactured scam. These highly educated lackeys for the establishment have been tasked with keeping the U.S. Titanic afloat until the oligarchs can safely depart on the lifeboats with all the ship’s jewels safely stowed in their pockets. There has been no housing recovery. There has been no jobs recovery. There has been no auto sales recovery. Giving a vehicle to someone with a 580 credit score with a 0% seven year loan is not a sale. It’s a repossession in waiting. The government supplied student loans are going to functional illiterates who are majoring in texting, facebooking and twittering. Do you think these indebted University of Phoenix dropouts living in their parents’ basements are going to spur a housing and retail sales recovery? This Keynesian “solution” was designed to produce the appearance of recovery, convince the masses to resume their debt based consumption, and add more treasure into the vaults of the Wall Street banks.

The master plan has failed miserably in reviving the economy. Savings, capital investment, and debt reduction are the necessary ingredients for a sustained healthy economic system. Debt based personal consumption of cheap foreign produced baubles & gadgets, $1 trillion government deficits to sustain the warfare/welfare state, along with a corrupt political and rigged financial system are the explosive concoction which will blow our economic system sky high. Facts can be ignored. Media propaganda can convince the willfully ignorant to remain so. The Federal Reserve can buy every Treasury bond issued to fund an out of control government. But eventually reality will shatter the delusions of millions as the debt based Ponzi scheme will run out of dupes and collapse in a flaming heap.

The inevitable shuttering of at least 3 billion square feet of retail space is a certainty. The aging demographics of the U.S. population, dire economic situation of both young and old, and sheer lunacy of the retail expansion since 2000, guarantee a future of ghost malls, decaying weed infested empty parking lots, retailer bankruptcies, real estate developer bankruptcies, massive loan losses for the banking industry, and the loss of millions of retail jobs. Since I always look for a silver lining in a black cloud, I predict a bright future for the SPACE AVAILABLE and GOING OUT OF BUSINESS sign making companies.

Comments on this entry are closed.

mava June 8, 2014, 7:21 am

Vlad, why do you think it’s not true? There are likely some folks with hundreds of trillions in their pockets. 18? Small change.

VILE VLAD June 10, 2014, 2:03 am

hey, 18 trillion ussa fiat dollars sounded like a lot to me.
after all, ussa citizens are being now robbed, of 3 or 4 of them.
however, you think ussa is fiat heaven? haha. should try argentina.

paul June 7, 2014, 10:25 am

Hello Rick,
I find myself amazed at the unique blend of combined financial thought and how proper morals are applied, or ought to be applied, each and every single day.
Ive read the same article by Mr Quinn on other sites and here, in my opinion, was most insightful.
Well done RA and all of you who contributed in the reader comments.

VILE VLAD June 7, 2014, 2:55 am

ok, here is some further proof, of an amazing market top. so now I track, rick’s abcd 17622 dji.

first, as I said last week, of an ever narrowing EXTREME, in market breath decline.
example—1 year ago, 100 new stock highs hit, daily. however, today, only 25 new highs hit.

and today, I actually found another article, BRAGGING about it! comparing to the ‘nifty fifty.’
and if you don’t know what they were, don’t bother reading further, go read what mav says.
to me, this reads like a horror story. but then again, as you can see, by his glossy shiny face,
the writer is still quite young, and probably unstrung, by his huge new, ‘nifty fifty’ profits.
however, he well proves, and quite well, the market is being held, by just a few big stocks.
but don’t take me at my word, read it. and if you know anything of markets, you’ll be shocked.


now here is another juicy one, that I can’t even believe myself, since I have never seen it before,
in 30 years of watching markets, on and of. because I have never seen this type of confidence.
again, read it, look at charts. for it is a horrow show. a prelude, of the worst disaster, to come.

example–the writer says current bull/bear rating supercedes 94% of all market history.


as prechter has proven repeatedly, governments, whether national or local,
are the last, to act, on anything.
ergo, they are not trendsetters, they are trendfollowers. thus, they bite the last bullet.

bottomline–government market action, is the sign of a huge top.
(example given–remember 2-1/2 years ago, at top of gold mania, how govs. were buying?
and remember, how they were selling at the bottom, in early 2000’s, that ‘barbarous relic’?)


another major sign of a huge top.
and the ‘big four’ (used to be ‘big six,’ before 2 croaked in 2008),
goldman, morgan, citi and bofa,
are warning of big income drops in future quarters, due to huge drops in trading volumes.

and here’s result–(less wallstreeters employed! but I don’t see any of you, shedding a tear…)

because, apparently, the amerikain people, are not as stupid, as I thought! haha.
the smallest ever percentage represention of stock owners, of alltime! ye of litle faith…–


yet now they are blaming millenials, for not buying! and of being nimble of foot, just to survive…–


and finally, just so you see, that carlin was dead right, and that’s why, he was wiped—

1. look again at the link I provided above, on ‘nifty fifty’, and see, many names are same,
from 40 years ago…
and now, look at this, almost all that’s sold in your supermarket, is sold by just 6 corps…
and they are also part, of those perennial nifty fifty, I bet… so monopoly is alive and well…

but you say, they need us to buy, so they’ll keep us alive, right? well… nostradamus, says otherwise.
plus that silly notion, rotating around the net, of ubers wanting to rid, of 90%. so hum. maybe not.

VILE VLAD June 7, 2014, 1:32 am

ok, now to REALLY SERIOUS world news.

because what is now happening in FRANCE, with the trash ussa harrasing them, bigtime,
is the most serious of all, worldwide, going on right now. and for damn sure.

short story of it—after winning a lot of suits worldwide over last few years, in ussa penalties
to world banks (the latest being to credit suisse, to the tune of 2.6 billion dollars),
the ussa has taken it upon itself, to try to hit the TOP bank of FRANCE, for TEN bil dols.
4 times over what they hit swiss for, and just this year. AND FRANCE CAN’T TAKE IT.
since france is on the edge of ruin. and entire european union, is at stake also, on this.

I mean, I look at this, and I see arrogant custer, riding over the hill– way over his head.
(because I tell you, LAST thing ussa wants, is to lose the alliance of europe, on all matters).

so I see PUTIN AND XI, laughing about all this. watching mistake after mistake, by kenya’s ‘best.’

and I’ll show you who is more important to FRANCE– PUTIN, or the ussa’s kenyan boy.
because hollande had 2 dinner dates this week, one with the kenyan, and other with PUTIN.
same night. and he’ll first take the kenyan boy to a restaurant. and then, for real dinner,
he’s invited PUTIN for supper, at presidential FRENCH palace. so guess, who’s important.
and I shhtt you not.
“Hollande plans to use a working dinner in Paris tonight with Obama to press his U.S. counterpart over potential American penalties faced by BNP Paribas, which had net income of 4.83 billion euros ($6.6 billion) last year.
The two leaders will dine in a Paris restaurant before Hollande heads to a second dinner, with Russia’s President Vladimir Putin, at the Elysee presidential palace.”

and here is rest of the MAJOR top world scoop today, ussa’s extortion attemp on FRANCE,
even while the french economic minister states, that bnp paribas, has broken NO eu laws.–finance.html

and finally, in the ‘i ain’t no harry truman, the buck stops here’ dept.,
sub-headed ‘dah buck don’ eveh stop here, ’cause i is jus’ a kenya boy’ dept.–

“Obama Says He Has No Role in BNP Paribas Penalties”
“As French Government Ratchets Up Its Defense,
President Says He Doesn’t Meddle in Prosecutions”
(question– he meddles in everything else, so why does he not meddle in this?
IMO, he was ordered not to. by his bwana 1%er bosses. so yes’mm, bossman).

VILE VLAD June 7, 2014, 12:44 am

ok, I am just going to dump here all the current new important ussa manure, 1 by 1.

from the ‘better late than never’ dept, latest nastiest news, of your ‘friendly’ obamascare–

(warning–strong ironic humor–this may make host, piss in his pants, laughing)–finance.html

(this goes under the ‘we white folk, even though young, ain’t so dumb as you, kenyian’ dept.)

(oregon’s new sexy chick for senate, tells of all the flaws)

(this goes under the section of– ‘damn, the host will love to read this link’ dept.)
(and also, under my own subsection of– ‘damn, pic does look a lot like tarzan’s pet, cheetah’)

mava June 8, 2014, 7:28 am


Like I had a choice when I first got him?

Good one!

mava June 6, 2014, 7:56 pm

Automation does not affect job opportunities.
This is an economics first grader myth.

Because, the fact that the job exist, is due to the demand for what it does, not for how it does it. When machines do our work, our mind creates more wants, and we begin working (now more efficiently) on satisfying those wants.

How many people were employed caring for horses? Cleaning horse crap from streets? Mending carriages?

Then came automobiles. Do we have the same number of people tied with transportation? Fewer may-be?

I tell you, my 740 employs quite a few people…

The automation factor is a ready-made excuse for why the world economy suffers, in the mind of someone who doesn’t see anything wrong with the counterfeit money.

VILE VLAD June 6, 2014, 11:22 pm

mav, you obviously did not look at, my provided link, with charts showing.
I did not make this stuff up, statistically, it is there for all to read.
for every time there is a recession, over last 2 decades, employers automate.
AND MIDDLE-INCOME JOBS NEVER RETURN. only burger-flipper jobs return.
and you employ 740 people? hard to believe.

mava June 7, 2014, 7:42 am

Middle income jobs are going away, because of the US government, not automation. (Of course, I’d be surprised if the Central Accounting Authority published a report actually pointing out that the US government is the reason the economy crashed and is the biggest obstacle on the way to the economic recovery.). The Ministry of Truth will surely keep pointing at automation.

There is no longer a contract law in these states. I was just discussing a business and it was pointed out to me that no matter the signatures, contracts, disclosures, I would still be sued in US. Think I am going to let it roll in US? Think again.

One can’t have a good life for many good reasons. But some of them a primal. Like honesty. The law here has become dishonest. Everybody loves it that way. Well. You and I, we all are just going to get poorer and poorer as long as we stay dishonest. Interestingly, the smaller one thinks, the more evident is the opposite of this, – that dishonesty works.

That an employer is responsible for an employee other than by his own will, is dishonest. I know, this isn’t a very popular opinion. Thus I forecast, that for as long as it remains unpopular, “why are we getting more poor?” is going to remain a very popular theme!

No curse is without a reason.

ter June 6, 2014, 3:28 pm

Vlad– It’s estimated, because unknown, less than 3,000 braves participated in the battle. It’s improbable they were all armed with Winchesters, but it wasn’t necessary. Even if they had only 500 rifles, their firepower directed at Custer’s men would have been much greater than two to one. Wikipedia–a site I find acceptably reliable for descriptions of historic battles– has a lengthy entry on the subject. Garry Owen was played before the assault on the Ouachita. Roughly a third of Custer’s force were green, as you state. Reno was engaged, as was Benteen, reinforced by Reno’s command. The details of the destruction of Custer’s command remain in dispute. I appreciate your civility.

EVIL VLAD June 8, 2014, 2:46 am

my civility is due to subject, since I find custer story, a microcosm of overconfident arrogance.
I’ll check out what wiki has to say on the subject. however, source I read, was no custer fan.
and I recollect it was the wachita river (not ouachita) custer crossed, to get to indian camp.
hey, as someone else said, and I don’t recall whom, that history is re-written, by the victors.
for there were no survivors in custer’s group. despite what ‘little big man’ dustin movie, says.
only those that watched massacre, from wooded hilly tops, told the story. reno and benteen.

mava June 6, 2014, 6:52 am

Ha-ha, what did I say?

The ECB had announced NEGATIVE interest rates.

May-be not right away, may-be not tomorrow, but the point is: Can the USG actually make money and pay their debts by borrowing more? Why, just flip that interest rate sign!

VILE VLAD June 6, 2014, 11:28 pm

the ecb has been broadcasting their proposed negative % rates, for over 2 weeks.
so wake up, haha ‘you discovered amerika.’ plus, how do you interpret this,
as INflationary? because it is DEflationary as it comes, a screaming fear of DEflation.

EVIL VLAD June 6, 2014, 1:21 am

and here is a link that explains fairly well, the current ussa shrinking unemployment paradigm.

automation. via computer controlled equipment. as kubrick predicted in ‘2001 space odyssey.’

because as the chart shows, every time there is a recession, employers are motivated
to jettison more and more employees, via infrastructure spending in automation, and those jobs
NEVER come back, once the economy comes out of crisis-mode, and somewhat improves.
because besides salaries, there is all that other ussa employer ‘white man’s burden’–
liability, risk, gov. required health insurance, holidays, tax-gathering and matching, etc, etc.

so, bottomline, machines are better, for employers, than people! so those jobs, are HISTORY.

and it’s interesting, that the worst hit are the middle-income folk, and not the low-income.

however, there is that factor, of–all those mouths to feed, with no jobs… hey, ‘soilent green!’
since ‘soilent green,’ is nearer, than you think.

so just pretend you are in españa for a moment. with 25% unemployment. people suiciding.
living illegally in empty unsold apts., with no elec, no water, no nothing. and that is in spain.
spain. a 1st world country. with just as much percentage-wise gov. debt, as the ussa.

so, why shouldn’t it happen, to you too? and that’s what I say. because, the ussa should pay.

here is another good link. half of amerikain currently can’t afford their indebted house.


Maybe you can tell us why Spain’s bonds have rallied so sharply? In the eyes of investors, seemingly, it’s as though the country is solidly on the road to recovery. Can you imagine anyone stupid enough to believe such claptrap? Maybe it’s because The Believers don’t have a 30-year-old Spanish graduate student living at home with them? RA

VILE VLAD June 6, 2014, 11:13 pm

I will tell you why worthless spanish bonds have rallied so sharply, along with worthless italian bonds, and let’s forget the most worthless of all, greek bonds, the ‘most heroic’ role model, for the rest of the thieving, crooked, SOCIALISTIC piigs, that plunder.

because, at the tops of the mother of ALL tops, there is that ‘love’ froth, for– JUNK bonds.
why? because now- ‘all is safe.’ all- ‘is going up.’ all- ‘is recovering.’ so, we are on our way!

YET, all is built on further and further debt. a quadrillion $, you say? it’s MORE.

ackerman, I have so much more added proof, just today, that the entire human race,
is very near, greatest top of ALLtime. the froth, the ebullience, the absurdity– all there.

hey, rick kid, your abcd, may end up being best of all. for you are close, to your 17622 top.
that final spike. that death rattle. where all are happy, before–they are WIPED out.
and I’d say in one day; however, I’ll say, in a week, because, of day market-stop breakers.
so, in only one week, I say—UNDER the prior dji low. what was it? around 6.6 thou?

already forgot. in all this current INSANE debt froth.

I’ll post more later, with links that prove, what I say.

Craig June 5, 2014, 4:59 pm

The empty strip malls/sears/best buys etc will be used as transfer/holding stations to the FEMA camps. You got to hand it to them, we paid to have them built and they profited on the way up and down and oh how convienent we have a use for these old buildings. The insiders will probably buy them for pennies (Buffet etc) an sell to the government at a “fair” market price for another nice profit. Then get the no bid contracts to retro fit them with barbed wire and barrier hardening for another nice profit. We will pay for that too. Nothin like paying for the shovel, the grave, tombstone, bullet and gun to have them kill you with. Everything these monsters do has many purposes and always look like accidents so they have plausible deniablity. They don’t need to thou as the average American is Charlie brown kicking the football everyday. And Lucy (Lucifer) keeps promising more and more.

EVIL VLAD June 5, 2014, 11:49 pm

craig, you made me laugh like crazy on your post above.
empty strip malls, future fema camps?
I am still laughing.
probably, quite real.
when shhtt hits the fan.

and humor comes from,
near no one now, in ussa,
considers this, a possibility.

“Nothin like paying for the shovel, the grave, tombstone, bullet and gun to have them kill you with.”

great line.
and true as death.

Craig June 6, 2014, 6:34 am


They won’t be he camps but the transfer stations. Just look really close at the newer walmarts, they can very easily be “duel” purpose.

There is a motel in West Texas that is now a prison….creeps me out everytime I drive by, didn’t take much work to make it into one either.

VILE VLAD June 6, 2014, 11:33 pm

I agree, craig. motels are very easy to turn into, prison blocks.
and strip malls as holding stations, makes a lot of sense, also.
but–holding stations, for what? and where? 1-bullet death-ditches?

mario cavolo June 5, 2014, 4:36 pm

Let me get this straight…The European Continent just went negative interest rates, and its as if its just another fine day all around the world…the stock market acting as if everything is dandy…historical precedents anyone?

Cheers, Mario

John Jay June 6, 2014, 7:33 am


Even more disturbing was the recent declaration by Ben Bernanke that he “never expects to see rate normalization during my lifetime.”

That’s right up there with LBJ ending silver coinage, and Nixon shutting the gold window.
Our economic system is so bankrupt that ZIRP/NIRP will be necessary in perpetuity, or else the system implodes!
Well, we all knew that, however for him to come right out and say it might mean the Government is ready to tell the proles, you’re screwed, tough luck chumps.
And, of course, it will be “all your fault it has come to this”.
Of course!

VILE VLAD June 6, 2014, 11:37 pm

‘correct-ah-mundo,’ as fonzie said.
all are finally close, to the end, of b.s.
but the truth, will be much much worse.

Andy Gutterman June 8, 2014, 5:22 pm

You guys need to understand what drives interest rates.


If the Market sees slow economic activity as far as the eye can see then interest rates will remain low for a very long time, and Bernanke may very well be right.

The FED can influence interest rates but its the Market that is ultimately in control.

If you don’t believe me read:


VILE VLAD June 6, 2014, 11:40 pm

historical precedents are, hysteric market tops.
where nothing matters, except, market going up.

have tons of new proof, that all lies, are near their end.

ter June 5, 2014, 4:12 pm

A tardy comment. Custer, as noted, was ignorant of the forces awaiting him, and very stupidly divided his forces in hilly country which prevented any visual contact between them. Reno’s men withstood a very powerful attack and were incapable of any counter offensive. Benteen knew only serious fighting was underway nearby and chose to remain where he was. The tribes united by Sitting Bull and led in battle by Crazy Horse were better armed with repeating rifles– Winchesters I believe–while the cavalry had single shot carbines, which the US Army purchased because they would expend less ammunition, a typically foolish false economy. Custer put his faith in surprise, as he had when conducting the early morning Ouachita massacre of women, old men, and children, primarily. Good biography of him is, as I recall, ” Son of the Morning Star”.

EVIL VLAD June 6, 2014, 12:23 am

ter, better tardy than never. I figured they’d be a few custer buffs, in this ussa vet group.

but we apparently read things a bit different, re details, about little big horn massacre.

“Sitting Bull and led in battle by Crazy Horse were better armed with repeating rifles– Winchesters I believe–while the cavalry had single shot carbines,”

you answered my question, for I recalled ‘crazy horse’, but not the senior ‘sitting bull.’

however, the difference in battle, went WAY beyond the few repeating rifles than
the braves had, because remember, there were 10,000 of them, and there is
no way, they had 10,000 repeating rifles.
but yes, the soldiers only had single shot carbines.

IMO, the primary difference was EXPERIENCE. battle experience.
and braves involved, from 7 separate indian nations, were SEASONED warriors.
while the majority of custer’s men, were primarily new recruits off the boats,
and besides, in total, custer’s men, adding benteen’s and reno’s, were a bit over 1,000.
so custer charged, without reconnoiter, into the red camp, with around 600 men.
mostly inexperienced men. and he charged into a trap, prepared by 10,000 braves.

from what I read, reno met no battle. for if so, the 10,000 would have hunted him down.
so he stayed hidden in the hilly woods, watching the slaughter, from one of custer’s flanks.
and benteen watched from the other; as idiot custer, playing garryowen, rode to his scalping.

moral of the story?
under-estimation of enemy. on all fronts. reminds me of films, ‘spartacus’ and ‘zulu.’

and this also applies, to financial enemies.
just look at this link, and see the hated metaphor behind it,
of the french hating to bend to amerikain, yet again.–finance.html

and not just to military might.
but to the dollar.
the power of the dollar, though a fiat, is still extreme, worldwide.
because almost all debt is denominated in dollars. and central bank reserves,
worldwide, are still in dollars. that damn hated dollar. that all still crave.
and bend to.
but a day will come. of reckoning.
and then you all will see, how much you amerikain are truly hated, worldwide.

and it will be your little big horn.
when all the nations band against you.
lead by a china and russia consortium, of course.
and you will ride into it charging, just like arrogant custer, without reconnoiter.

EVIL VLAD June 5, 2014, 1:13 am

host, couple of things to add to your recent soliloquy on market, possibly being at a dying top.

both in my opinion. 1st, incredibly enough, complacency has risen to such an extreme,
that now bigtime selling of out-of-the-money put options, is considered a ‘steady cash flow.’
and not just by individuals. but by big mutual funds, and hedge funds. I kid you not. haha.

[Yeah. When I was on the trading floor during the 1987 Crash, a trader of legend was literally dragged from the floor with his palms facing outward — a gesture by which he had intended to sell more puts. RA]–funds-that-sell-options-164251911.html

and secondly, ELITE top hedge fund managers (that commonly take $1k ‘power lunches’),
and don’t allow anyone into their hedge fund, unless they bring to table at least $10 mill,
guess what– they are now are letting the unwashed masses plebes aboard, for only $1k.
hum. smells like rube spring turkeys are soon to be distributionally dumped upon. haha.


Hedge funds for the working man! RA

Craig June 5, 2014, 4:44 pm

No way that will happen, Ms. Hillary says hedge funds are much too complex and dangerous for the comman man and the cost or net worth to enter should be even higher. She also says they are evil….that’s why she is invested with them and her daughter married the son of an imprisoned hedge fund manager. Ms Hillary also says the market ups and downs each day need to be in full control of the state…along with any profits you make from investment or hard work is property of the state, what they allow you to keep is at her discretion.

EVIL VLAD June 6, 2014, 12:40 am

yes, hitllary clipton know MUCH about evil. she is an expert, with many hits under her belt.

Craig June 6, 2014, 6:39 am

About a year ago on here I quoted Hillary and Bills old hit man who confessed to doing many hits both in the US and overseas to cover up their crimes and he says what scumbags they are and how he was just doing it for the money but they made it sound like he was protecting America to him when it was just cleaning up their mess.

Stephen G June 5, 2014, 12:27 am

Btw Rick, for a future article, I’d be interested to read your take (or that of an esteemed guest writer) on the racket that US university education has become. Soaring tuition may well be the biggest contributor to the retail downturn as it impacts both young people and their parents trying to help them out.

John Jay June 5, 2014, 4:19 pm

Stephen G,

I think the Student Loan program started out with good intentions, just like the FHA and other Government programs created when we were a financial/industrial powerhouse with a stable currency.
But then, right around LBJ time, the serious looting of those programs started.
Match Pack University was born as sharp operators saw the opportunity to accept anyone who applied and if they never graduated, who cares. Uncle Sam is stuck with the bad loan.

Now, the Government can’t rein it in because it keeps 20 million young people out of the work force, and it has pumped over one trillion dollars into the economy over time.
Just another in a long list of Welfare programs using ever increasing debt and our Reserve Currency status to keep the masses quiet and the American Yakuza fat and happy.

The Post Office is probably at least 50% a job creating Welfare enterprise.
If they simply charged first class rates for everything they deliver, junk mail would end, and they would need to lay off 300,00 of their 600,000 employees.
At least 300,000 layoffs maybe more.
I get about 10 pieces of real first class mail a month.
The rest is junk mail.
That’s why you will never see any real reform there.
The same with Federally insured mortgage programs.
If they stop them, bang, housing implodes.
And the 6% R E commission class ends as well as the Property Tax racket and the 30 year mortgage/HELOC scam.
They won’t let happen, rest assured about that.

The same with our entire “State Security” establishment.
High End Welfare that has created an entire artificial upper middle class of workers who produce nothing but a salary and pension burden for future generations.
Oh, they also produce “Mission Creep”, “Snooping” and the “Prison Industrial Complex”.
Welfare, in other words.

Who knows how it will play out, but we are heading for the South American model of a tiny upper class of “Owners”, a small class of “Government Workers” and a majority population on a scale from barely making it to favela dwellers.

Craig June 5, 2014, 4:49 pm


Every evil thing starts out with good intentions, how do you think they sell it. You don’t set a mouse trap with poop you set it with peanut butter. Something unresistable. But you don’t set the trap until everyone is dependent on the peanut butter. Then you can say oh those evil republicans/tea partiers want to take away your rights (free goodies). While they wreck the person getting the goodies with changing the rules of the goodies after they have set the hook and profited greatly on the other end with the increased cost of education which gets worse and worse and doesn’t prepare anyone for the real world or how to think by design.

EVIL VLAD June 6, 2014, 12:45 am

craig, you are 100% WRONG on this. so you are being extremely naive, saying this–

“Every evil thing starts out with good intentions,”

because, I will wager heavily, that almost ALL evil things, start with EVIL intentions.

VILE VLAD June 6, 2014, 11:52 pm

“Who knows how it will play out, but we are heading for the South American model of a tiny upper class of “Owners”, a small class of “Government Workers” and a majority population on a scale from barely making it to favela dwellers.”

jj, in south america, it’s a bit more complex than you present it, but, not bad.
because, currently, there is also a good sized chunk of middle class, similar ussa.
however, that big middle class is also struggling to survive, also similar ussa.
so, all look up to the sky, to their ‘hero’, the ussa. hahaha. boy, are they f*kkd.

moral of story—when the old time commander goes down, so does the whole ship.

Stephen G June 5, 2014, 12:17 am

Let’s see.

There has been ZERO salary growth for the American middle class since 2000, adjusted for inflation. Zero, zilch.

– median house price rose 30% between 2000 and 2010 (with of course a peak in 2006/07 which trapped many homeowners)
– average 4-year university tuition has nearly doubled since 2000
– price per gallon of gasoline has more than doubled ($1.5/gallon in 2000 to an average of $3.5/gallon in 2013)
– food price inflation, while not as striking as the other expenditures above, spiked in 2006-08 and inflation continues at low but easily noticeable (to average consumer) levels

What exactly did the Masters of the Universe think would happen in the above scenario? No wage growth but rocketing price growth in nearly all major expenditures?

Something has got to give, and that “something” is the discretionary shopping habits that have sustained the economy for so long.

RIP Sears, Best Buy, and many more to come.

John Jay June 4, 2014, 6:09 am

JF and dk,
Thanks for your support!
And JF, thanks for the UT link!

Gary leibowitz June 3, 2014, 7:48 pm

Drones. Now that everyone pumps up the rhetoric you can wait it out till your day comes. 5 years of failed rhetoric. I think you just might have to wait another 2. Can you handle it?

dk June 6, 2014, 2:43 pm

Hilarious. The sheep labels everyone else drones.

Still can’t see the forest for the trees.
Denial is not a river in Egypt.

Go ahead, talk “data points” and fudged numbers ad nauseum. Mind you, certain figures may be legit, but what makes them up? The article above puts it right in front of you and many on this board have been doing the same for years.

I get back to the internet and I see negative interest rates being applied now? Ha! Finagle that all you want and try to create separation from the U.S.
See above.

Everyone has acknowledged this has gone on much longer than they expected and they likely knew that that was going to be the case as it developed. It is still shocking.

You cannot see what is right in front of you.

Ready for another conspiratorial rant? It is no wonder people find it so hard to engage you

To that end, it’s amazing how even the President, back in 1914, openly discussed such things happening en masse, but, here, 100 years later you somehow flatly deny such pernicious activity every time in every conceivable form.
Reality is no friend of yours.

Can’t wait for you to give more passes to El Jefe or Hillary. After all, she’s the one primarily responsible for keeping Boko Haram off the watch list for the past 2 years, and we kept arming them.
Sgt. Bowe Bergdahl exchange? I thought he was closing Gitmo? Oh that’s right, another lie. Wonder how that sits with you and the rest of your Lib cohorts?

Yet ANOTHER controversy of this Administration. Add to the list of on-going, they continue to manipulate our “Justice” system and media to their benefit, all with impunity.
The case grows stronger for this Administration being worse than the last.
Your tax (theft) dollars at work.
When will the people grow up and kick the gang of 535 OUT along with the Occupier-in-Chief.
If it hasn’t already happened, it probably won’t.

Taking us down with them

There’s a substantive reason many of this country’s founders wanted to abolish political parties.

mava June 3, 2014, 5:24 pm

Japan’s Abe isn’t really stupid, is he? If you agree that he isn’t dumb, then why does he insist on such a ruinous path for Japan?

My answer is that it is all pretty much known to the governments by now, that there IS.NO.WAY.OUT for the US. He knows, that the US had calculated this fifty different ways and there isn’t even one that has a good outcome. He knows that the US is intending to crash land. He understands that this will take the entire world monetary system out, and all debts will evaporate – the US will insist on that.

Therefore, he is hell bent on making Japan as big of a debtor as he can make her. He is going to burn the world’s savings to the benefit of Japan at whatever the rate, to get a head start in the post-apo world.

This is crazy, but he is doing it, which means he has no other option, which means he knows that the US has no way out.


Interesting idea — well off the beaten path but plausible and logical.

EVIL VLAD June 4, 2014, 1:33 am

mav, I see you have finally come over to the side, of the massive deflationary argument.
agree with all you say above, except for this–“and all debts will evaporate.” I say, no way.

there is no way all debts will “evaporate.” because there is no possible scenario for that.

however, I do agree there will be a ‘reduction’ of debt, worldwide, once massive crash hits.
probably somewhat proportional, to the degree that the deflationary huge hit, hurts all.
50%? 70%? 90%? all depends, on how bad, it suddenly, “out-of-nowhere” gets. ha.

“out-of-nowhere”? nah. it was building there, all the while. but all forgot. that it’s debt.
since this is what you get, when you build all, huge debt upon huge debt, keynes-style.

2 more years of it, as el garo navin says? nah. let’s say 5 more. or how about 10 more?
because it does not matter, how long it takes to break. but break it will. no doubt.

because it’s debt. not growth. not surplus. just debt. more and more debt. worldwide.

socialism. hahaha. what a “great” system. to live beyond your means.
“to each according to their need, from each according to their skill.”

yeah. we will soon see how that plays out.

mava June 4, 2014, 5:02 pm

No, I didn’t. My argument is hyper-inflationary one. Why?

Because, what everyone is doing is called inflation proper (printing and otherwise digitally issuing new claims on already existing goods).

Deflation, is only possible when there is money proper at the base of the system. Gold, or Silver, or steel or anything that has value. In that case, when the inflationary crack-up brings the system to eventual revaluation, the claims without value (paper money) evaporate, leaving only money proper, and the prices of goods fall down to where they had been before the over-issuance began but only for the money proper. Between the paper money and money proper, there will be a following revaluation:
Paper = Zero Buying Power, Money = whatever the Purchasing Power needed to buy all the goods with all the money proper. All purchasing power goes to money proper. To those left holding paper, this is a complete failure, to those holding money proper it is a DEFLATION.

In the case that we will live through, there is no money proper in the system to begin with. Thus, when the system becomes obviously to all unable to account for everything that is being produced and consumed, the system will fail, just like in the example above. However, there would be nothing to revalue to, no money proper. All paper money will attain Zero purchasing power, the money will die. No deflation, because the prices will not fall to any certain point, but they will fall to zero – they will disappear all together. You will not be able to buy anything at all with your cash.

Besides this economic theory argument, there is also a political one. The US will demand with all its military might, that the dollar is to be completely cancelled. Why? Because this will outright wipe ALL its debts, foreign and domestic. So will Japan, judging by its latest moves. So will any state that has debt.

So will any person who has debt. Because most of the population is in debt, this will be nearly unanimous.
There will be no carry over of debts, because such would mean that the biggest debtors, the state, and the US in particular, will remain on the hook. This is why the state will “protect the people” and demand that their debts are wiped out, and so are the debts of the State.

Does this mean that there will be an act of magic, that the fountains of the deep will open up and shower us with goods? No. Most of the people have debt, but no assets (their assets, too, are all paper). They will start from zero. Those who own and hold assets, will have to compete with the hungry states for the ownership rights. Most of publicly traded property (such as gold mines) will be “Nationalized” and will be transferred to the remaining few cronies with enough political power and other assets. To these few, there will be a windfall.

The rest of those who had assets thru paper claims, will be chased down by the hungry population guided by the politicians. They will have to become the enemy of the people, unless they are willing to share in a way that leaves them with nothing.

Will there be a period of hyper-inflation immediately before the system fails? Probably, why not. The US and Japan are doing exactly that part right now, albeit slower and with more awareness to the way it appears to the gullible. If there can be one more dollar printed the day before its value hits zero, you can bet it will be printed and exchanged for some dimwit service.

EVIL VLAD June 5, 2014, 12:25 am

mav, your thoughts above are really radical. thus, I disagree, wholesale, with them all.

because you think that fiats will vanish overnight, and there will be no transition period,
to your shiny metal rocks, and their backed notes, solely used as money, historically.

so I totally disagree. for I am certain there’ll be probably at least a decade of transition.

and in this meantime, fiats, albeit fewer, will rule. and especially–dastarly ussa fiats. ouch.

and that, ever hyper-inflation mav, is called DEFLATION. deflation of FIATS.

and you say it can’t happen? you are dead wrong. because DEBT is denominated in fiats.
and MOST debt, worldwide, is STILL denominated in ussa fiats, to the chagrin of almost all.

dude, when it comes to this transitionary period I talk about, of 1 decade or 2,
you are clueless. because what is coming, DEAD CERTAIN, is HUGE DEFLATION.

and it’s already here, yet well hidden. and it’s all over the world, hid by trinkets of inflation.

“Deflation, is only possible when there is money proper at the base of the system,”
you say.
D-E-A-D W-R-O-N-G.

for it will take at least 1 generation of transition–for MANY reasons–to embrace gold system.

but it goes further than that. it goes to the history of the usa dollar, around entire world.
and meaning of those fiats, PSYCHOLOGICAL WORTH, to MANY around the world.

and even you, present my best argument—gold (and mines) are EASY to confiscate by govt.
I mean, just look at what fdr did, and the future ussa post-crash govt., will be MUCH worse.

and with habeas corpus ERASED, as I expect in the future state, then, torture rules all.

dude, your ussa middle-class brethren are already BROKE, and this is in a ‘bull’ market.
so just imagine what it will be like, in an UNAVOIDABLE, DEBT-CRASHED market.

here is a minimalist link, to the way things already are, for honest hardworking amerikains.
take a lesson from this. for this link best exemplifies, where things ALREADY are, in ussa.

MASSIVE D-E-F-L-A-T-I-O-N is what’s coming to the world, dude, for at least 1 generation.

and after that, yeah, under the ‘new world order’, once THEY own most gold and mines,
yeah, then you’ll get, your desired ‘gold standard,’ once again. BUT NOT, before then.

so, moral of this story is: ‘beware of what you want, for you might get it.’ and then some.

John Jay June 3, 2014, 3:19 pm

George Custer has a very impressive monument in the cemetery at West Point.
All the 2nd Lieutenants dead in 1968 from Vietnam were just filed away under little white headstones in long rows.
I am sure their families would have been very happy if they had been “Cowards” like Benteen and Reno and never gone off to die for nothing.
Now Vietnam is our friend again, hard to believe they forgave us for what we did to them.
Moral of the story?
Just run away from “Organized” anything as much as possible, not much good comes from those “Organizations”.

EVIL VLAD June 4, 2014, 2:06 am

jj, in retrospect, it’s easier to postulate whom is right-er, in following orders (or not), in war.

the vietnam war was an abomination to the youth of the usa, no question about that.
it was a war created by usa 1%ers, to enrich themselves via arms sales to gov.;
so I concur with the movie ‘jfk’ on this matter (along with, I’m sure oswald was a patsy).

however, I did not say col. benteen was a coward, he was a vet. col., and not stupid,
so he never charged into anything, without knowing what he was charging into.

reconnoiter. something custer did not do.

but the truth is, who the hell could have imagined, that the 7 tribes that joined up,
tribes that hated each other, and were murdering each other, continually,
would join up together, to exterminate a common invasive, strange foe?
(can’t recall, was it top chief ‘crazy horse,’ that got them all get together?)
‘long yellow hair,’
I think that’s what they called custer, and they hated him, worst of all.

now, as to maj. reno, I read, that it was possible, he just chickened out, at last moment.
since he saw how outmanned custer’s charging men were. more than 10 to 1, I recall.
and reno saw that he would be slaughtered along with custer, so he–never flanked.
so, maybe reno was wise. however, he had to live forever, with decision he made,
and watch while custer and his men, were butchered.

anyway, my point in answering you this, is that, I totally agree with your moral–
“…run away from “Organized” anything as much as possible, not much good comes from those “Organizations”.

but I would have phrased it ‘evade’, or ‘avoid’, and not ‘run away.’

EVIL VLAD June 4, 2014, 2:51 am

and for those of you navins, that don’t see how this discussion, between jj and myself
is pertinent, to detailed analysis of how ussa is disintegrating, via dead retail or whatnot,
I assure you, it is highly pertinent, conceptually. via the concept of, the ‘black swan.’
why? because once stage is set, with an ‘intrusion’, be it white men, or massive debt,
all bets are off, and anything can happen, at any time, depending on pressure, of situation.
do any of you remember the ‘take over wall street’ movement, from just 2 years ago?
I do. and I think, they are coming back. and I think, they will be that mythical party,
idealistic mythical party, that will return, to take over wall street, and much more,
once the huge UNAVOIDABLE market crash occurs. and guess what, I already
postulated herein, 2 years ago, that it’s leader would be a usa immaculate vet soldier,
that most would follow, for his integrity, purity, and core idealism, of what is ‘right.’
what amerikains love to hear. because they have been indoctrinated, to love to hear.
heroism. oh yeah. we amerikain love heroes. of pure heart. yeah! that is us, in usa.

but back to the point. and the point is, that, is 7 tribes that hated each other,
banded together, linearly unexpectedly, to crush a common strange foreign foe,
can occur, then—ANYTHING can occur. same as with madame defarge. guillotine.
once situation reaches, an extreme. anywhere. anything can occur. to all.
including, to those ever blessedly sleepy, amerikain. and that’s for damned sure.

so, how about them yankees? haha.

JF June 3, 2014, 10:27 am

Hey Rick – I really appreciate the blog.

JJ said: “Inflation over the past 50 years makes GDP/Retail Sales rather like one of the gas giant planets. You have a long way to travel in their atmospheres before you hit anything solid.”

I’m going to put that one on a T-shirt along with a old Romani proverb – “He who is about to tell the truth should have one foot in the stirrup”.

BTW – tremendous archives on Romani history at U-T Austin, the life-work of Ian Hancock.

It’s really interesting to have a ring-side seat to the high-end retail side of the equation here in north Austin’s Domain complex. It’s the bubble on top of the bubble in these parts. My Rasta-influenced buddies call it Babylon, but having lived Detroit since the pre-plexiglas, store-owner open-carry days, I know it’s just a mirage here. Another Roadside Attraction so to speak. It’s extremely cosmopolitan with burqas and bling and one hears five languages each day. Even with ever present security on each block, there’s fairly regular smash ‘n grabs and wheel-theft in the parking structures.

There’s still multitudes of folks staring through windows at Tesla’s and Louis Vitton purses, and there’s 45 craft beers on tap at Whole Foods, but it all reminds me of that powerful Russian Roulette scene in Deer Hunter, only in this case the gun has 5 loaded chambers.
I can’t see the middle class walking away from the table.

Anybody taking the other side of the non-linearity bet at this point just hasn’t been paying attention. People are still smiling, but those are starting to look like Bowman’s cheeks near the end of 2001: A Space Odyssey.

mario cavolo June 3, 2014, 12:50 am

While retail brick and mortar is obviously getting hammered by the online/smartphone world, as noted, its bad because of the double whammy of commercial space real estate inventory.

Related to retail is automotive sales which leads to the purchase of plenty of auto-related retail products, report due out this week. This number does not tell us enough. I wonder what % of auto sales in the U.S. are on credit rather than paid for in cash as this also helps us understand the health of the consumer’s pocketbook.

Cheers, Mario

John Jay June 3, 2014, 4:37 am


It’s all a shambles, and the Government is having an increasingly difficult time to cover it up.
Inflation over the past 50 years makes GDP/Retail Sales rather like one of the gas giant planets.
You have a long way to travel in their atmospheres before you hit anything solid.

Just consider the increases in gas prices, a pair of Levis jeans, movie tickets, car repair labor rates, a quart of motor oil, food prices, new car prices, jet fuel prices, medical bills/insurance, tuition, postage stamps, taxes and utility bills.

So, to wait with bated breath for the latest GDP/Retail Sales numbers is just silly.
Any comparison of those numbers to past numbers becomes increasingly meaningless the farther back you go.
Those numbers are only valid in an era of stable prices, an era we left behind some 50 years ago.

I hate to do it again, but the price of a first class postage stamp is a great measure of inflation including wages, pensions, fuel costs, vehicle costs, and plant and equipment prices.
A postage stamp cost 2 or 3 cents for almost one hundred years, from about 1866 to 1958.
Now it is 49 cents, a 1625% increase in 56 years.
After 100 years of price stability, a parabolic rise.
And the USPS is still losing money due to inflation.

Here is another great link on the inflation subject.
Inflation and the fall of the Roman Empire:

Only the names and dates have changed in two thousand years!

Troll June 4, 2014, 2:28 am

The price of postage has increased 1625% because few people use it anymore, and those who do, haven’t figured out how to use the internet.

Sorry, your analysis in this matter is redundant, like postal service, itself.

VILE VLAD June 4, 2014, 3:39 am

jj, this is the best link I have ever read from this site.

the entire history of roman ‘money,’ mind-boggling, to say the least.

a MUST READ for all serious, about the history of money, and POWER from it.

and of course, as it applies to current trends, in current lesser hegemony, the ussa.


and my 2 favorite points were these, right at the top of 1984’s prof. peden’s speech—

that amazingly, in the fateful year, 1776, 3 great human things were created—
a. the united states of america.
b. the wealth of nations, by adam smith.
c. decline and fall of the roman empire, by gibbons.

and 2.
“Gibbon, in looking at this phenomenon, commented that the wonder was not that the Roman Empire had fallen, but rather that it had lasted so long.”

despite all the profound, OBVIOUS corruption, and for decades.

but now I see, that there is MAJOR precedent.

bottomline–human nature never changes.

dk June 4, 2014, 4:48 am

Talk about redundant analysis…
Looks to me like it’s monetary policy. Oh, and enormous (!) health care costs coupled with mostly unmanageable unrealistic pensions (which they’ve basically defaulted on multiple times).

Speaking of policy:
“The Postal Service is working diligently to improve its finances by streamlining our network to improve efficiency, reduce operating costs and increase revenue, which was up $379 million over the same period last year — the third straight quarter of revenue increase,” said Postmaster General and Chief Executive Officer Patrick Donahoe.

“Despite aggressive cost-cutting actions, however, we will still incur annual inflationary cost increases of approximately $1.2 billion each year, and First-Class Mail volume continues to decline,” added Donahoe.

We’ve only had email since, what, 1993? That’s STILL at 700% increase since 1958 ($0.28-ish increase). Email in 1993 is nowhere near as prevalent as it is now (75% increase since 1995).


‘Incur annual inflationary cost’? This is a load of bull. Like all public-sector budget problems, the source of astronomically rising costs is almost entirely attributable to mounting retirement benefits.

gary leibowitz June 2, 2014, 7:21 pm

Retail Sales year over year in the United States averaged 4.58 percent from 1993 until 2014. In fact the chart is basically a flat line hovering at the 5 percent mark for all those years. Your death knoll has been going on at a steady slow pace for a long time. Looking at this chart you would see the affect of the crash and how quickly it recovered right back towards its 4 to 5 percent range.

I guess you discount web based sales? The times they are a changing. The horse and buggy sales also declined in the 1900’s.

When you analyze the sad retail reports, some of those you mentioned were doing badly forever, and their stock prices reflect this. Wall mart for instance took a hit on the decision to cut food stamps. Are their P/E multiples in a bubble?

I scratch my head when you still insist that retail analysts are fools. The evidence is pretty convincing that we are coming off a bad winter. Unemployed and newly employed are showing solid long term evidence that demand will rise from last quarters miss. Even lending practices are once again loosening. Like it or not if borrowing increases this game continues for a while longer.

So all the web based and brick and mortar companies are shams. Are the retail sales figures just faked? Once again you take the news headlines that fit your hypothesis but at the end of the day it turns out not to be the real “WHOLE” story. If your story were true wouldn’t company earnings be impacted on a steady quarter over quarter basis? Wouldn’t their P/E ratio run high? Wouldn’t they HAVE TO adjust their stock price to reflect this? If future earnings anticipation is too high, the stock will take a hit when the numbers come in. It’s been 5 years with the retail sector stocks holding up, by reducing costs, and running lean, with low inventory. If that hasn’t helped the bottom line than the stock price would reflect that.

Finally when individual companies report earnings, they usually give a low ball future earnings expectation. They also for warn analysts if they think they are way too optimistic on their future growth. The CEO’s do not want to see their stock price get hit every time their quarterly numbers are released.

How many dire warnings from your blog turned out not to be the case? If you leave out small items like total sales, P/E ratios, and current trend expectation using real data, you do a disservice to thorough analysis.

Chuck June 2, 2014, 9:10 pm

musical chairs right? who gets stuck standing up?

mario June 4, 2014, 4:34 am

I would suggest as an answer, “the one with all the cash.”

if we parse that more deeply, that would mean wherever in the system the cash has been hoarded. That would be first of all China. Secondly, whoever in the USA parked $18 trillion offshore according to a Bloomberg report, etc.

In short, if you have 20 million or more when the value of everything collapses 50%, you’re still rich, while the common people and society collapses and rebuilds.

when one considers that many executives have been making 5-10-20 million PER year, we know this group of wealthy will be the barons of post collapse future.

And you can be sure, getting back on topic, they’ll be buying up all that empty commercial retail space for pennies on the dollar, just as the Chinese investors have invested massively buying post apocalyptic Detroit. (I forget the reported amount at the moment, its in a previous post)


Cheers, Mario

EVIL VLAD June 6, 2014, 12:36 am

“…whoever in the USA parked $18 trillion offshore according to a Bloomberg report, etc.”

18 TRI-llion? is this a misprint, and you meant 18 billion?

holy shinoli. who’s got that kind of dough, kid?

or are you smoking chinaman opium, mickey?

mario cavolo June 6, 2014, 11:09 am

nope, trillion….google it….

Chuck June 6, 2014, 8:38 pm

I remember Mario saying 2 years ago that there will be 2 distinct socioeconomic classes in the USA….those that have a lot more and those that have a lot less. This explains whey stocks in Nordstrom and Tiffany is skyrocketing……also Dollar General is as well. Look at 5 year range.

mario Cavolo June 9, 2014, 4:59 pm

Yep, its clear as a bell Chuck. And why then is china doing sooooo well… The wealth/expansion/growth is spread out, distributed far more equitably with a middle class of 300 million plus doing so well, rising sweetly with the tide…while in America….mmm, I don’t need to say it…some things so obvious and simple…

Cheers, Mario

VILE VLAD June 7, 2014, 2:03 am

I will look it up this weekend, mick.
because you said–
“whoever in the USA parked $18 trillion offshore”
you didn’t say rich chineses did this.
you said, ussa.
so, with ussa ‘justice’ sniff hounds searching worldwide, for millions or billions,
hid away, by skimming or skipping or lying or stealing or tricking, ussa ‘cheats’–
you say, there’s a ‘whoever’ parking away 18 TRI-llion, that ussa ‘justice,’ is blind to.
I’ll look it up, china lil.
but it sounds like crapola, to me.
18 TRIL $ hid offshore, by ussa ‘whoever’?
same like manufactured b.s., for whatever purpose.

VILE VLAD June 9, 2014, 3:09 am

I googled it, china lil. you are wrong.
no 18 trillion dollars, ussa parked offshore.

ussa $ ‘corporate’ parked offshore–2 trillion.
but chinese $ ‘private’ parked offshore–4 trillion.

still a huge amount of cash, but not near–18 tril.

Rick Ackerman June 2, 2014, 10:10 pm

Gary, I’m going to cut you off here on this topic. You reach so reflexively for something…anything to contradict whatever is posted that you only make a fool and annoyance of yourself. How does one reply to warped, pseudo-factual twaddle such as you’ve written above? NOTHING — ABSOLUTELY NOTHING, NOT EVEN THE COMMAS, PERIODS AND APOSTROPHES — in this latest post holds water. And don’t bother responding, since, as I’ve noted, you’ve reached your limit on this one.

mario cavolo June 2, 2014, 3:43 pm

Let’s say its a big related to the retail dilemma….

Fascinating to notice that MSFT stock is holding up very well in recent weeks. I continue to believe Windows 8 and related will be a strong wind in their sail

While, FINALLY, today, LNKD is tanking at the open, down $9 from its $164 peak.

Sensible reality for a change…?

Cheers, Mario


I was never a big fan of LinkedIn, Mario. Below is a trading ‘tout’ I put out in February when the stock was hovering around $224. It is currently at 154. off a so-far bear-market low earlier this month of $136. Here’s the tout:

“With Twitter getting hammered yesterday, apparently by investors grown increasingly distressed over the firm’s vaporous revenue model, it seems only a matter of time before they discover that LinkedIn’s business model and methods are arguably even more dubious. I say this from personal experience, since my email box has been filling up lately with daily exhortations from LinkedIn to ‘congratulate’ someone or other on the ‘anniversary’ of that person’s entry into business or full-time employment. It is understandable that LinkedIn should want to keep itself visible with constant reminders of the company’s existence to millions of subscribers whose interest in the service might otherwise wane to nothingness. But how lame can you get? LinkedIn overworks dozens of such messages to serve this end, resulting in perhaps half-a-dozen emails each day to subscribers who couldn’t care less.

“None of this seems to trouble the greedy, malfeasant speculators on Wall Street who have bid the stock above $200 with Other People’s Money. That equates to a capitalization of $25 billion — as absurd a valuation as any the Street has promoted since the dot-com bubble, or perhaps even since Tulipmania. Do these wild-eyed jackasses even care whether a web-based company that purports to be indispensable to businesspeople is really no more than a self-propagating, viral scheme? Evidently not.

From a technical standpoint, the stock appears to have topped out in September $11 shy of a $268 target (see inset). Although I’d like to be able to say that that was the last gasp for LNKD’s undeserved bull market and that Wall Street has finally come to its senses, neither seems likely. Indeed, there is a good case to be made for another bull leg to $296. That would represent a 50% gain over last month’s correction low of 198. It’s clear that investors learned practically nothing from the dot-com collapse of 2000-2002. With LNKD priced at $296, they would get a second chance.”

mario cavolo June 2, 2014, 3:28 pm


Following up on the “retail is supposedly around 2/3rd of U.S. GDP.

This leads to key questions and comparisons. For example, in recent months I’ve been arguing that declining exports in China aren’t alarming because exports are now down to 11% of GDP, where they were 24% of GDP ten years ago. The private sector enterprises and services are now well over 30% of China GDP and rising rapidly, having just surpassed even manufacturing as a % of China GDP.

And so, we are pointed to this very important question in the U.S. As it seems retail consumption will no longer dominate U.S. GDP, what sectors are on the rise? I think we would all benefit from knowing the % of U.S. GDP of various economic sectors. I’ll be doing further research and comparison…

Cheers, Mario

Rick Ackerman June 2, 2014, 4:52 pm

Energy development and the repatriation of manufacturing jobs are the two bullish ‘stories’ with legs right now, Mario, but neither will happen quickly enough to head off Phase II — the ugly phase — of The Great Recession. Retail’s death spiral is too powerful to be offset, however, and the fact that it’s tied to so much brick-and-mortar real estate gives it double-whammy power.

John Jay June 2, 2014, 7:05 am

Yes, the smoke is slowly being blown away by the persistent inflation in the system.
Health insurance, food prices, college tuition, taxes, utility bills, gasoline, etc. all headed up.

And the Fed will have a reason why each and everyone of those increases doesn’t matter, are transitory, contained, caused by Climate Change, whatever.
And the proles will just move back home with mom and dad, and try to join the FSA.
Why not?
What other options do they have?
Jeb Bush or Hillary Clinton come the next election?

I think the 90% will just accept an ever declining standard of living, and accept whatever the Welfare State has to offer them.
Everyday that passes means more Old Timers have died off, and there are less and less Americans alive that remember when this country really was a special place.
Oh well!

But, looking on the bright side, everyone that frequents this forum should be able to make a Separate Peace with the system and avoid the general chaos that is and will be ongoing from now on.
We all share some things in common, namely, situational awareness, and a healthy respect for money.
There is nothing we can do for the 90%, welfare panem and pop culture circenses, has them enthralled.
Nobody listens, nobody cares, amongst them.
Have a nice day, citizens!

mario cavolo June 2, 2014, 3:23 pm

JJ, I don’t even want to chime in cuz its a negative point but yea, it is what it is. Its just another day in history where the average joe and jane have to respond to whatever their society is, with very, very little they can do to alter it. I’ve been a self-made, self-driven entrepreneur my entire life and so I have zero interest in being defeatist in my attitude, but being realistic with clarity is extremely important. If it looks like a duck, quacks like a duck, its a duck. That’s life.

Cheers, Mario

John Jay June 2, 2014, 3:49 pm


Sometimes you need to be able to recognize when you are looking at a Lost Cause to insure you don’t throw away your life for no good reason.

My favorite example of this concept is George Custer at the Little Big Horn.
Benteen and Reno survived because they left Custer to his fate. They knew he was a reckless nut, so they just waited it out on their little hill, and went home to their families.
Mark Twain is another example, one skirmish and he was done with the Civil War.

In the here and now, Perot, Buchanan, and Ron Paul tried to wise up Joe and Jane Six Pack, the mob ignored or ridiculed them for their trouble.
Everyone here is wise enough to financially fortify their little hill away from Custer’s Last Stand.
It’s the smart thing to do.
We are powerless to stop, reverse, or even slow down what is coming.
All you can do is get out of harms way!

EVIL VLAD June 3, 2014, 1:47 am

I read a bit about custer 30+ years ago, found him interesting in his recklessness,
to make bold statements to the press, that he could contain the red devils, easily;
attempting to become the youngest usa president ever, since he was very popular.
also read about benteen and reno. and benteen was wise, plus he also hated custer
(similar to way lbj also hated jfk, and lo and behold, jfk and custer, ended same way);
while reno was possibly… a coward’s story. since he was supposed to be custer’s flank,
but, what the hell, ha, who the hell expected all the tribes to band, vs. a common foe?
because I know of no other story of red tribes joining, to crush a mutually hated enemy.
10,000 strong. so, ‘keep the last bullet for yourself.’ because braves, were top torturers.

moral of the story, as it applies to the here and now–when things get REALLY bad,
NEW UNexpected paradigms, ARISE out of NOWHERE; like, can usa constitution,
ever be fully scrapped? unthinkable, even 10 years ago. yet, after 6 years of the kenyan,
that only studied constitutional law, in order to learn how to ‘redistributionally’ destroy it,
then, anything is possible (just re-read all the presidential orders he has authored;
and they are currently waiting in the wings, to come into effect, in ussa’s, st. crispin’s day).
plus, of course, creation of obamascare, his matador’s blade, into ussa’s white middle class.
so, lack of retail sales, you say, crushing retail corps.? just one more facet of the end, of ussa.
(movie coming soon to your already burned down, friendly neighborhood, ussa theater).

JF June 2, 2014, 5:12 am

yes, we await the thunderclap and lightning, don’t we?
and then, what comes after the storm.

Here’s an insightful post on what that process may look like. I use it as a lens lately when encountering articles that are strident, no matter the factual content.

Rick Ackerman June 2, 2014, 6:08 am

A fascinating essay, JF — and thanks for the link. It should help to dispel any facile notions we might have that the ‘fascism’ so many rant about today is the real thing, or that something far worse cannot come to supplant it.

EVIL VLAD June 2, 2014, 8:18 pm

I am dead certain that the ‘unavoidable-debt-debacle,’ post-financial crisis ‘new-world-order,’ will be FAR worse (and will CERTAINLY at least partly supplant the constitution, and FULLY scrap the current ussa-economic-krap status quo), because no matter how bad it appears right now, to all thinking amerikains (except to, of course, the ‘more-gov.-regs.-please’ bleeding-hearts libtards, like the in-house leibowitz), they can SURELY get much, much worse.

So how exactly this new holocaust will play out, is the only real question.

However, there are enough parallels in history, like in the analogy provided by the archdruid link above, to provide already a working model, of how it will probably occur; and the current MOOD, of general disatisfaction with current world leaders (and NOT just in ussa), and with the everwealthier disparity of 1%ers of each country (just look at India, the situation of their 1%/99%’ers is MUCH MORE blatantly absurd, than in the ussa), is ALWAYS a historical prelude, to a populace revolution, or to a coup–whether it is done within the status quo system (as in the archdruid story above) or outside of it (since hitler was never elected, he just took over by popular demand AND with just a few KEY moves, like burning down the german congressional building, to eliminate their ability to even gather; plus, IMO, at same time, provide a physical embodiment to represent, that all ties with the political past were gone, and also to flagrantly show what would happen to dissenters, from then on).

there is currently a very good link at, on this very same theme,
in which the rising of hitler’s brown shirts party came SUDDENLY out of nowhere,
since they were a 3rd-rate political party, until–the aftermath of the 1929 world crash.

hence, the same will occur in ussa. so prepare for the result, of the mother of all tops.
IMO, the fast rise of the 21st century anti-christ. and he will cheered, as a true idealist–
maybe even be compared to jefferson; all the while he re-writes all of jefferson’s words.

Redwilldanaher June 2, 2014, 2:49 am

Worthy of being published here. Excellent work as usual from JQ.

However …..

Something tells me that .. …. will be a long shortly to…

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