The Truth About Economic Forecasting

Economics-795601There is nothing immoral about making an economic forecast. It is immoral to base national economic policy on economic forecasts, especially those that are developed quantitatively. Why? Economic forecasts made by professional economists are no more accurate than those made by astrologers, truck drivers or anyone else. The following article is from the Mises Institute which provides information about Austrian Economics and its teachings. If Americans are scared of the word “Austrian” they shouldn’t be. The differences between Austrian Economics and Free Market Economics as explained by Adam Smith are so few, I can’t remember exactly what the differences are. It is kind of like the difference between karate and taekwando. They are both a means to the same end.

The Truth About Economic Forecasting

Can anyone make an accurate economic forecast? Yes, I can and you can to. But, we can’t do it with quantitative models or by claiming one number causes another. Also, we can’t be accurate as to exactly when an economic event will occur. For example, I have been forecasting the collapse of the United States economy for a number of years. It hasn’t collapsed yet, but I am sure it will.

The way I make forecast is the same way human beings make accurate forecasts everyday of their lives. Here is an example, “Uncle Willard has started drinking a fifth of whiskey every day and then drives drives recklessly running red lights and speeding. I predict that Uncle Willard is going to suffer a catastrophic event in his life, the least of which could be getting a DWI and going to jail for a while.” That in my opinion constitutes an accurate forecast.

I know the United States economy is going to collapse because of government policies that cause the nation’s resources to be increasingly mis-allocated with every passing day. Welfare for the rich changes them the same way welfare changes makes poor people less productive. As the Federal Reserve’s quantitative easing continues to line the pocket books of the worlds billionaires, they lose interest in providing goods and services. Innovation dies off. Who needs to run a business efficiently when the Federal Open Market Committee is running up the price of your stock?

My forecasts are based on knowledge of human behavior. An Ivy League economist, if asked what causes inflation would give a tired old answer like, “too much money chasing two many goods.”  If I were asked the same question, this would be my answer. Inflation is caused by the incentive that causes the Federal Reserve to create too much money. By the way the incentive to inflate a currency is always 100% political and has nothing to do with economics.

Hard Times Coming is a timely tune by Curbside Jimmy. Hard Times Coming

Find all Curbside Jimmy Tunes at: Curbside Jimmy’s Free mp3 Download Page

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New Democrat to Announce

c58939cafcd25ecaf307d8559461bafeOriginal thought is rare. Monkey see monkey do is common. Outsider Donald Trump announces as a Republican and surges to first place in the poles.

Who would like to be president? Who has visions of grandeur? We don’t know all of their names. According to the monkey see monkey do principle, we can expect a Democrat, not yet known, to copy Donald Trump and announce as an outsider. Don’t count on either Hilary Clinton or Joe Biden to to be the Democratic nominee. More will announce and there will be a Democrat answer to Donald Trump.

 

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Trump and the Media

x299353078_donald-trump-pres-blogDonald Trump seems to understand things about the media that the public does not yet grasp. As I explain regularly, how people and institutions are defined is different than how they function. Americans have grown up believing that the media’s purpose is to keep people informed. This is fantasy and always has been. But, for most of history, listeners, viewers and readers did get at least some meaningful information.

As it is today, the function of providing information, is incidental to more powerful motives. Accurate news is reported only when it doesn’t interfere with media’s dominate agenda.

News outlets are in the business of managing public opinion. The news part is secondary. Donald Trump, rightly understands that the goal of many reporters is to diminish his candidacy. There is a difference between answering a question and fending off a purposeful attack.

Donald Trump seems to have a good feel for discern who is reporting on his campaign and who is trying to sabotage his candidacy.

 

 

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Comments on the Crash and When to Buy

I am not predicting a 1929 style crash. That doesn’t mean it won’t happen. In 1929, investors were on their own. Today we have constant government intervention in the financial markets. Circuit breakers may smooth out the decline. I am guessing there will be a lot of two to five percent down days.  It doesn’t matter how fast the decline occurs, just know that it will continue. Expect government inspired game changing news that could blow traders out of any short positions. The bear market will last at least two years. Damage from Quantitative Easing and other political initiatives will be so sever, it will take decades to recover. We may not recover completely and the entire political system we live under may collapse.

The situation is very bad and it behoves all to be forewarned. The reasons cannot be reduced to numbers. More than anything the nation’s resources are allocated so inefficiently, real growth is not possible. Quantative easing and other other market rigging schemes replace price as the main resource rationing mechanism. There are no numbers that can be attached to to this problem. We just have to know the damage is there and there will be consequences. Free market principles cannot be replaced with central economic planning in ways where everything comes out o.k.

There are stocks trading at around $500 per share that are not worth $5.00. Amazon.com (AMZN) is one of them. There are many.  Apple (APPL) is a highly profitable company but it is vulnerable to at least two external threats. Tastes and preferences can change in such a way that owning Apple products no longer makes a person the coolest dude on the planet. There is another principle called, “The second rat gets the Cheese.” Apple has developed a lot of technology others can copy and then offer similar products cheaper. There are many companies in Apples circumstances. Corporations which have had by back programs are going to start taking steep losses on these positions.

Count on government initiatives aimed at “saving the market”. Don’t expect short positions to go straight down.  News will be constantly created in efforts to turn the market.

I don’t give direct investment advice. Why? I feel too guilty when it doesn’t work out. I do explain what I am doing. As stated earlier, I am mostly in cash with the rest in bear etfs and just a few short positions.  Mainly I want to go long at once in a life time low prices. The strategy is simple. Here is a chart of Exxon Mobil (XOM). With patience is will be possible to buy stocks as they touch long term trend lines. With Exxon Mobil, I expect to be able to buy the stock at around the red trend line. The idea is to start buying the largest and most stable corporations in the world. These kinds of stocks will survive. Many of today’s most popular stocks will not survive. 082415_XOM

 

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Little Hitlers

55c41fc9169027501c6ef3bb_gop-debate-2015Every sociopath is a potential Hitler. All presidential candidates are sociopaths. There is no way to advance this far in politics without being a sociopath.  This is the most competitive event in the world. As nice as each candidate appears, every one of them is completely ruthless and will stop at nothing to get what they want.

Many forget that Adolph Hitler used the democratic process to become dictator. Mark my words both the economy and the stock market are going to get a lot worse.  Tyrants and despots rise to power when times are bad and voters are troubled.  Mark my words. The stock market is going to get much worse and the overall economy is going to completely sink. Sociopaths smell the blood. That is why there are an unprecedented 16 candidates seeking the presidency.

No, candidates don’t run for office because they love you, although it must be totally comfortable to look at it that way. All run out of self interest. That would not be all that bad if citizens didn’t insist that it is the other way around.

Ostriches are fine with sticking their heads in the sand. Euphemisms are the sand that voters voters stick their heads in.

Treat candidates as messiahs or saviors and you set yourself up to be exploited. You will be and always have been. Treat candidates as delegates and government is completely controllable.  The delegate model of representation has never been tried. It would be nice to give it a chance.

Worship your leaders and you are serving them. Treat them as delegates and they are serving you.

Here are a couple of very timely tunes tunes written and recorded by Curbside Jimmy.

Hard Times Coming
When Times Got Really Weird

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Magic Power of Government

Official_Portrait_of_President_Reagan_1981

Ronald Reagan was the first truly big government Republican and the president who initiated the practice of government tampering with financial markets.

 

 

 

Where ever people live they all have one thing in common. Whether it is North Korea, the United States, Germany, United Kingdom, Mexico, Syria, Iran, totalitarian or democracy, citizens all believe their governments have magical powers. This belief is instinctive because there is no empirical evidence to support such a notion.

Years ago, Kevin Costner stared in a Robin Hood movie. When Robin hood and his men were being pursued by the kings men, the decision was made to exit into a hunted forest. One of Robin Hood’s men said “there are ghosts in that forest.” Ghost were real in the minds of Middle Age European. No one doubted their existence.

Finally humanity got over believing in ghosts. The strong believe in the power and goodness of governments persist today without one iota of evidence a government can do much of anything for the people who live in it. Citizens believe government policy makes the economy good or bad. They believe governments create jobs. The United States, people believe the president has power over the economy. We have all heard about the Clinton economy, Bush Economy and Obama Economy.

Government is expensive. The protection a government provides is at a staggering price. Read chapter 8 of the Book of I Samuel in the Old Testament. This scripture describes what government costs and the enormous burdens it places on citizens. It is also made clear that people are so insecure that they opt for big government anyway.

The cost of protection may be necessary but all of the other stuff is all cost and no benefit.

As the economy tanks don’t expect Americans to see the light and opt for a free market system. Instead, they will ask for more socialism. The free market system here has been dismantled and replaced with Fascism. Very few will make the distinction. Instead. There will be endless chatter about how capitalism has failed, What failed was not capitalism. It was the American people who failed. They did not have enough character to operate a representative government. Had American’s forced their leaders to function as delegates instead of worshipping them.

The few who of us who reject euphemisms and remain aware will fare better than everyone else. Unfortunately, as our fellow citizens go about enslaving themselves, they will enslave all of us.

Here are a couple of very timely tunes tunes written and recorded by Curbside Jimmy.

Hard Times Coming
When Times Got Really Weird

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Search Engines?

Google-search-618x412There are actually no search engines in operation today. Anyone who used search engines before the Google emergence can remember finding all sorts of interesting and useful things. Today all search enterprises try and emulate the Google model.  A Google search provides only results that are profitable for google to show you. What you want is not a consideration. Suppose you were looking for Mom and Pop operations or niche products. You would do better consulting a psychic.

As I have stated countless times. The biggest profits are made these days exploiting the human herding instinct and managing public opinion

Here is an article explaining how Google rigs the outcome of elections.

The Search Engine Manipulation Effect (SEME) and Its Possible Impact on the Outcomes of Elections

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Stock Market Comments

Any time a major stock average breaks through its 200 day moving average, it is a big deal. All major stock indexes suffered 2% declines.  Most years pass without averages suffering such a loss. For years 2% down has been considered a benchmark for what constitutes a very bad day. 2% down days were common during the 2008 drop and during the market weakness of 1929.

In a market free from planned prices I would be shorting tomorrow with both hands. I am now 65 % in cash, down from 70% as previously reported. The change not because of cash added but profits on ongoing short sales and bear etfs.  The next cash I add will occur only after a serious attempt to rebound.  The Federal Resreve will almost certainly attempt to turn the market up. Expect a game changing announcement if the decline continues. Investors are expecting a rate decrease, I am guessing  it may even be a rate decrease and possibly even a promise to support the market outright. Another option would be to offer huge tax benefits to Americans who buy stock. It could be anything but we have to expect it. Don’t forget this is a planned market. Down is not part of the plan and all stops will be pulled out in order to move it back up. These are the reason I am not doubling up on positions.

With the kind of catrastrophic event we are likely to witness, the positions I already have will increase 5 fold by the time it is all over. And, I will have still have a whole lot of idle cash to buy with during a once in a century opportunity.

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Here are a couple of very timely tunes tunes written and recorded by Curbside Jimmy.

Hard Times Coming
When Times Got Really Weird

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In the Eyes of Your Betters

Michael-Bloomberg-wikipedia-665x385View the world without the handicap of euphemisms and genuine insight becomes commonplace. Who are your betters and why are they called betters? Your betters are the sociopaths who make decisions for you. Why are they better? They are your betters because you worship them. Rid your mind of euphemisms and you see them not as they are defined but as they function.
But all people are the same you declare? With a casual glance it would appear that way but an in depth look produces a clearer picture.

A small percentage of the population is born with an elevated ability to herd their peers. You can spot them in kindergarten. They are the ones all of the other children follow around. They tell others what to do and they do it. To the teachers, they are cute as a button. These little children maintain these behaviors for the rest of their lives. They grow up to be presidents, mayors, senators, congressmen and billionaires. They are sociopaths. But the people you mention have consciences you say. They actually have something else that is hard to distinguish from a conscience. They have an accelerated need to keep their self esteem elevated. They do not like to be in a position where others might think less of them.

These are your betters. It is part of nature. In their minds, they are automatically entitled to part of what you have. For them, controlling others is not a choice. They are hard wired to herd and control. If one of your betters is not controlling the lives of others, his own life seems incomplete.

Who are you in the eyes of your betters? You are a human being and you are always a resource to start. As your betters gain more and more power, to them you become more and more like a statue or a chess piece. As power becomes more and more centralized, leaders come to see your behavior and incentives as entirely manageable and predictable. At some point, their expectations of others become unrealistic. What they feel they are entitled to starts going way past society’s boundaries.

As docile as people are in front of their betters, if treated too badly, they will turn on those they have previously worshiped. In the United States today, this is what the situation is. It is the same in Europe and Asia.

Again, why are these people your betters? They are betters with respect to you because you treat them as they if they are.

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Corporations Are Now Levying Taxes

tax-floridaIn Ivy League economic departments, they would laugh if they were told that whole industries were collecting taxes from the general population. They are drunk on dogma and maintain erroneous assumptions about human behavior.

Whole industries can and do pass taxes and everyone in the country must pay them. The Affordable Care Act is a case where entire industries have taxes passed that let them collect dollars from the general population.

Suppose Congress passed a law requiring everyone pay taxes and the proceeds were to be paid to insurance companies, just to give them the money. People understand that kind of tax and object immediately. There is a way to do that without people realizing they are paying a tax. Remember, tax proceeds don’t have to go to a government. Government just has the power to put you in jail if you don’t pay.

There are many laws on the books today that allow companies to tax citizens. The most damaging of these is The Affordable Care Act (ObamaCare.) Under ObamaCare, insurance companies are guaranteed to receive a portion of every health care dollar spent in the United States. Health insurance companies make a profit on taxes (premiums) people pay. The profit is a clear tax but the entire premium is a burden. I will say with complete authority insurance, for healthcare, does not currently exist. What are called health insurance policies are payment management systems and do nothing but insert an expensive bureaucracy between patients and doctors.

One of the destructive facets of Fascism is that it gives this kind of taxing power to any industry large enough to dictate policy to government.

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