What Goes Up

Can Go Down!

Economic class is one of the few remaining heresies in America: in the conventional narrative, it doesn't exist or is meaningless due to the tremendous social mobility of the American populace: the working class stiff is one wise decision way from middle class status, and the middle class worker is one wise investment away from becoming wealthy. 

What the conventional narrative purposefully ignores is the potential for downward mobility, in which one bad decision or investment triggers a drop in economic class and future financial prospects. 

The slippery slope from upper middle class to lower middle class is greased by the neoliberal boom-bust nature of the global economy:buy at the top and be forced to liquidate at the bottom and the entire household's wealth can be wiped out.

This dissolution of conventional ideological loyalties terrifies the ruling elites, for it threatens to dissolve their control of the masses.

DYI:  This is why it is so important to understand valuations.  Today the stock market and corporate bond market especially high yield and junk have gone to the moon.  Future returns from here will be anemic over the next 10 to 12 years.  During a much shorter time period of three to five years expect losses from this point forward.

Two huge factors are at play that has resulted in this decline of standard of living for many and the rest who standing still as the chart shows with REAL income since 1970.  The first is continuous and increasing amount of scams, frauds and economic madness that has perpetrated our society costing in the 100’s of billions.

If you have been following my blog I’ve reported this numerous times.  Such as the Medical Industrial complex that colludes in order to price fix – a CRIMINAL VIOLATION – and is moving from local to regional monopolies.  The reason for zero criminal charges is due to massive campaign donations and presto politicians all look the other way.  That is just one of many.  So many that I’ve reported them one at time as a post.

Be as that may be the second reason is net energy.  Since the 1970’s Alaska and North Sea there has not been one new “game changer” discovery of oil.  This ended with the world awash in oil/gas at the low price point in 1998 when infrastructure was in place to deliver those two game changers.  Since then reserves are dropping despite all of the horizontal drilling [fracking] that has taken place [only extends known reserves].  Plus the amount of energy that is needed from in ground to your gas tank has increased with much harder to reach reserves such as deep water or artic conditions.  Along with the infrastructure to deliver [energy dependent] to your truck or car [or anything else even your lawnmower].

What I see happening is a collision of frauds and energy.  If you think politics is wild now to use the old expression “You ain’t seen nothin yet!”  When will this happen no one knows and very difficult to put a timetable to it but when it does it will make the Great Depression look tame!

DYI