'Why awful is the new normal'

Next time somebody tries to give you a bullish view, accept the fact that it’s really bullshit.

The Slog: Chinese manufacturing slowed in April, exacerbating concerns over the strength of the world’s second biggest economy.

Eurozone deficits are falling, but only because its economy has slumped. Thus if you used to trade badly but now there’s no trade at all,your deficits will fall. Also, you will starve.
Interest rates are low because Sovereigns would quickly go bust if they were raised….so great is their debt.
Unemployment has stopped rising in northern Europe, but this disguises the fact that hours worked are falling. In the UK, only 1 in 4 of the economically active now has a full-time job.
Four bouts of QE from Ben Bernanke have had a steadily reducing effect. None of them has restarted the US economy. 7.6 million Americans would like to work on a more fulltime basis.
The US housing market went into reverse during March. No American recovery in history has ever occurred without a growing housing sector.
Gold prices were forced downwards through manipulation last week, in order to dissuade physical gold holders from starting a run on the metal. Gold coins and bullion continue to be heavily demanded, while huge FOREX warehouse withdrawals were noted at the end of March. Both strongly suggest low trust and confidence in the econo-financial system.
No banks anywhere in the Western world are now doing the job they’re supposed to: viz, lend money to growing small businesses and underwrite new technological growth sectors.  The chicken and egg thing is simple here: they lost all their money, cut small business off without a penny, then used all our spending money to avoid insolvency. The result is no expansion and no demand.

In Asia, it looks like Chinese banks have been overlending to local authorities, who now can’t pay them back. So a China slowing because of reduced Western demand is now also likely to be starved of investment monies too.
There isn’t going to be any good news – and things are not going to get better – until the following actions are taken:

1. Global debt relief, forgiveness, and in some cases write-off.
2. A massively reduced role in the world economy for bourses and investment banking.
3. The near-abolition of government bureaucracy in favour of mutualised services…and a much bigger use of mutual company models in the private sector.
4. The complete deregulation of Western political structures in order to re-establish democratically relevant Establishments.
5. The abandonment for good of Socialist and Friedmanite models in favour of more flexible and less ideologically constipated economic ideas.
6. The abandonment of globalist mercantilism in favour self-sufficiency judiciously mixed with trade in surpluses.

A lot of ugly frogs will ask us to kiss them before we find the sort of people who will change the rules in this manner. Get over it: stop looking for easy ways out and pretending everything is normal. 

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