CRASH 2: a gathering storm, episode 4.

Multiple can-kicking: the metal fights back

As Blockbuster strode robotically into insolvency earlier this week, the German economic march became stuck in the mud resulting from ClubMed and global downpours. Blockbuster Video was a retail outlet squashed between the rise and rise of internet shopping, and technological changes in streamed entertainment. Germany is in turn being squeezed between Euuropean hubris, American debt, and Asian overheating: the country’s key forecaster slashed its outlook by a whopping 60%.

Britain’s retail dinosaurs in particular are falling like flies (as I predicted they would) but now we can see the first signs of social cover breaking down in the face of economic obduracy: over 100,000 disabled people are having their home care reduced or removed, and the Leonard Cheshire organisation describes the system as “on the verge of breakdown”.

The yen languished after a forceful selloff in anticipation of the Bank of Japan taking radical action to tackle deflation. Under pressure from newish Prime Minister Shinzo Abe, the BoJ looks set to buy assets nonstop until 2% inflation is reached.

Japan has been flouncing about trying to escape from its hybrid problems for nearly a decade. This move is yet another turnaround for a central bank that appears cluelessly frozen in the headlights, but is being egged on by political desperation.

The Japanese represent yet another case of multiple problems colliding in a staggeringly pernicious manner: age demography, nuclear accidents, world trade crises, fiscal confusion, and the rise of China. The wages of sleepy can-kicking are death by a dozen boomerangs. Winner, 2013 mixed metaphor perhaps – so here’s something clearer from Mark J. Grant,  of Out of the Box fame.

‘….it is the inescapable conclusion that we have backed ourselves into a corner of our own making and that to escape this dark and dangerous place will be a painful experience….When the economies of Spain, Greece, Italy, Ireland, Portugal and France are in decline and yet their sovereign yields fall as supported by a conditional promise from the ECB, then trouble is in the making.When America spends money like it is without end because the Fed hands out the byproducts of the forest as if it was an unlimited supply, then the valuation of paper overtakes the use to which it is put. We are sitting with our little round plastic toys and blowing bubbles into the sky and when the turn comes, when the bubble is pricked, scant few will be able to run fast enough or get through the door quickly enough when the madding crowd is rushing in a collective push to get out of the burning theatre.’

I endorse every word, and repeat one of The Slog’s more consistent mantras: there is no such thing as a gradual panic. Those ahead of the panic are openly opting for the last place left offering financial long-term and physical short-term safety: top-end property.

Others still obsessed by the attraction of manipulation to gain their end-game money are also, however, at work. Some of the signs on this dirt-road are clearer than they were. I’ll be posting about this later today.

Stay tuned.

Last night at The Slog: Self-demonising Islamism

 

 

 

47 thoughts on “CRASH 2: a gathering storm, episode 4.

  1. Will Germany be able to repatriate it’s gold in time?
    Does the US have or not have Germany’s gold?
    Is the US deliberately rationing Germany’s gold to stop Germany doing something that’s not in the US’s interest?
    Many questions and so few answers…..

      • Herr Hitler as the answer, make Tungsten the new metal Currency on par with Gold? Or shoot the bankers, most likely the first option.
        The game goes on.

    • Good point HB. I wonder if the Germans have opted for a gradual repatriation because this (a) gives the US the time to buy the hitherto non-existent Gold on the world market without embarrassing the Americans, and (b) the Gold they will therefore be getting won’t be plated tungsten. Very cunning, the Germans.

      • The Germans did not opt for anything… they originally requested total repatriation but the Americans are agreeing to give only 50 tons a year… probably to keep them focused on the Euro instead of a new Deutsche Mark.

  2. Pearls of wisdom today from yahoo news. The high street is dead. Digital downloading is the new black.
    Really ? So my high def surround sound audio collection suddenly becomes redundant in favour of Lo def stereo stuff does it ?
    Also bye bye Jessops specialist camera outlet in favour of clueless Tesco selling those box with lens things . Lucky us.
    What happens to nikon and Canon sales without major retailers selling their stuff? Nevermind we can buy iphones that have cameras in them. I fear as result of real shops we are being dumbed down.

    • @bobchewie: The problem for the UK High Street is how we are all starting to use it. For example, I will taste some wines in my local Majestic and then order it online and pick it up 600 metres into Calais. I’ll show a friend one of my books in Waterstones for £22.50 and then advise them to buy it on Amazon for £14.50…(as author, I still get the same royalties)….Tescos bring the monthly shop via an online order and even the local high street supermarket only picks up our inbetween top ups.

      As a photographer myself, there are two or three very specialist shops, (more on Industrial Estates than in High Streets), where I go to put any new kit through its paces. If they can come somewhere near the online price, I’ll buy from them there and then, but the last time I went into Jessups for a tripod screw, the only way I could get the one I wanted was to buy a whole tripod ! I never went back again.

      I used to do some teaching for Jessups School once, way back in the 1980’s. It was an innovative organisation then and very supportive of its customers. The problem with so many of these outfits is in the more recent buyouts, gearing and debt that makes it difficult or impossible for them to invest in any new way of conducting their business and serving contemporary customer’s needs.

      Our local High Street is 90% hair dressers, resturants and estate agents….I can’t afford the first two much these days…and am happy with my present house…so why go there ?

      • Dont forget that most high streets have at least 25% of the shops as Charity Shops, which have more people buying than the retailers next door, they really do very well

      • ‘The problem with so many of these outfits is in the more recent buyouts, gearing and debt’

        Exactly, a very British vice. Every time a leveraged buyout occurs, the principals take a profit (or avoid a loss) and we know that the business will decline, sooner or later, under the above influences and with financially-focussed management. It’s a signal to employees to leave, if they can. Being clever at finance is necessary but not sufficient.

      • “I’ll show a friend one of my books in Waterstones for £22.50 and then advise them to buy it on Amazon for £14.50…(as author, I still get the same royalties)”

        Those aren’t ‘friends’, they’re ‘marks’.

        Why don’t you just give copies to good friends and lend copies to ordinary friends and encourage them to hawk them out to their ‘friends’ ?

      • In response to Ron’s answer the only reason charity shops do well is that they are exempt from business rates and rely on volunteers for staf so there costs are nothing like that of a normal shop. I am not saying change this but when you get whole streets full of chairty shops (as one area near me is) then that is almost as bad as no shops at all

  3. ‘There are over eleven million people with a limiting long term illness, impairment or disability in Great Britain ‘. Source: Office for Disability Issues

    Really? 17% of the population can be defined as disabled? Perhaps if we did not adopt such a broad definition, we could concentrate the available funds on those with genuine, severe disability. The UK definition reminds me of Argentina, where I was defined as disabled for having rather short sight and needing glasses. Something similar is happening here, I think.

  4. John

    ‘Those ahead of the panic AND with sufficient investment funds are openly opting for the last place left offering financial long-term and physical short-term safety: top-end property.

  5. As a small landlord I ask why should investing in a very expensive building which costs millions to maintain be a good investment? If it is possible to get a guaranteed return on capital by renting or leasing it on a permanent basis over a number of years so ultimately the capital investment is returned, fair enough; but if society collapses and hyper-inflation wipes out spending power, what use is owning an expensive mill stone, a port or aerodrome maybe but a 20 million house in Monaco?

      • They may always ‘need’ somewhere to live, but what will they use to pay you their rent ? And when they stop paying (because the Housing Benefit bubble’s burst), and you can’t find any other bottom-end tenants who can/will pay, what do you do then ? Empty properties are a negative asset in this market-place.
        Should be lots of bargain high-street commercial investments available for the unwary…….

      • Interestingly, under the new Universal Credit, payments of the housing element will be to the claimant, not to the landlords. Well at least that’s what I hear, if minds are not changed. That’s a mistake and will result in a lot of people keeping their rent subsidies and clogging up the DWP’s recovery processes. As a whole, UC looks like being a total organisational disaster. Almost by definition as it requires a new IT system. Coming next October to a place near you (or April if you are unlucky to be in the pilot areas).

  6. Pingback: John Ward – Crash 2 : A Gathering Storm, Episode 4 – 18 January 2013 | Lucas 2012 Infos

  7. Mark J Grant,if colourful,isn`t accurate..it is the Banks that have backed us all into a corner! Also the Central Banks are not actually printing paper money..they`re buying Government debt..ie Treasury bonds. So I understand.

  8. If NIKON open their own stores and Canon do likewise a la Apple . Will we see the two rivals duking it out in high street or see them kiss and make up and come to some arrangement ?

    • Oh, come on. Everyone knows there is no real competition at wholesale or retail in the UK. Just look at the pre-VAT retail prices then compare with those advertised in the USA for the same item. Makers even use different names for different markets to make it harder for wholesalers to shift between countries. Imports of all manner of manufactures have soared, often more than doubled in price since 2008, though the £’s effective devaluation was ‘only’ around 30% and has reduced since. Though the example here is cameras, just take a look at the breathtaking differences in car prices. I’m afraid the UK does not have anything resembling an open market for consumer goods. Not for nothing did VW call the UK ‘treasure island’.

      Quite a lot of snow here, so stuck in our rural house today. Hence more comments!

    • Nikon and Canon are stuffed for the average punter. High end point and shoots are getting close to the image of a DSLR. Sony after failing to make a dent in the CanNik DSLR market are now aggressively advertising their P&S’s with the slogan you don’t need a DSLR.
      Even the humble average smart phone captures images good enough for the masses.
      There has been no real quantum leap in advancement of DSLR’s to justify the average enthusiast to upgrade a 2 or 3 years old model.
      Pro’s will always have their own market outlet.
      Pentax – gone
      Konica gone
      etc etc etc

      • Sony is the inheritor of the Konica/Minolta line–the “A” mount lenses interchange. They have in fact come out with a new top-end model of DSLR recently.
        Pentax has merged with Ricoh, but they are not gone–Pentax DSLRs are still made.
        Smartphone cameras have indeed improved much, but their sensors are small and noisy, there is no manual control, they do not accept filters, they do not have interchangeable lenses, they cannot accept remote releases, they do not mount easily on a tripod, etc., etc.

  9. US mint has suspended sales of silver coin until Feb. January was on track to smash all records until they pulled the plug. Demand for all metals is bubbling like a volcano and the ability of TPTB to control real money in favour of the petrodollar is rapidly waning.

    Look at yesterday’s comex “intervention”, stack the smack is rapidly becoming an easy play for anyone.

    • This is all over zerohedge, also bitcoins are up markedly. I think there is a small but active sector of society that has smelt the coffee and are now taking action to protect themselves from what is coming.

      Those who are feeling too happy today can enjoy this little diamond from the 80’s. The nuclear threat from Russia may be largely gone but what is interesting about this programme is how society blithely wanders on until the very moment the mushroom clouds appear, and then they expect help from the government whose response is, as one would expect, woeful, poorly planned and under resourced.

  10. Anybody else note that Obama has ‘issued’ 3 warnings to Cameron now over our EU status? Surely unprecedented eh?
    There’s something much bigger afoot methinks. What will they do (US) send in the drones next if we look like we are going to leave?
    Or, does he want us dragged to the bottom with the rest of Europe?
    It not hard to see why America is the most hated country on the planet, is it?

  11. “over 100,000 disabled people are having their home care reduced or removed”

    Tip of the iceberg looking at our councils budget forecast based on the reductions ordered by the Treasury.

  12. ` Those ahead of the panic are openly opting for the last place left offering financial long-term and physical short-term safety: top-end property.`

    Most of this is is London based. I often wonder what would happen if some of the `vibrant diversity` fanatics got hold of a dirty bomb and detonated it in Central London.
    Eggs and baskets come to mind.

  13. Pingback: THOSE BOVIS RESULTS: a triumph of political sleaze over national need | The Slog. 3-D bollocks deconstruction

  14. What has happened to debts in previous episodes of hyper-inflation ? Have the banks actually repayment of a mortgage with inflated money that would only pay for a loaf of bread ?

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