Whenever we are discussing the intentionally managed decline of the western countries, it is important to remember the closely connected relationship between multinational corporations and the political leaders of those nations. Specifically, their public-private connections as they run through the World Economic Forum assembly.
An intentionally managed decline of western economic activity should have a direct impact on the private corporations within those economies. If the politicians are collectively going to stop energy development, raise energy prices (inflation), then use monetary policy to shrink the economy down to the level of energy available, we would normally think corporations were going to make less money.
That preceding paragraph is not controversial. It simply explains exactly what is happening; that is the situation. However, for some weird reason the system that evaluates corporate wealth is not responding negatively to the reality of the situation.
Traditionally, we would think destroying the economy would be against the interests of the multinational corporations who benefit from economic expansion. However, in the era of subsidized and controlled economic management, I’m not so sure the corporations are stakeholders in economic growth. Something is profoundly disconnected, or else the corporations would be raising hell with the politicians.
BERLIN, Aug 3 (Reuters) – BMW (BMWG.DE) lowered its output forecast and warned of a highly volatile second half on Wednesday, pinpointing supplies of energy in Europe and chips worldwide as the two crucial factors to the carmaker hitting full-year earnings targets.
New incoming orders were beginning to fall but order books remained filled for the next few months, chief executive Oliver Zipse said. (read more)
All of the basic indicators point in one direction.
Energy prices are squeezing consumers and paychecks. Energy driven inflation is high. Rising housing costs, food costs, gasoline costs and energy costs have hit the consumer hard. Credit card balances have jumped. Consumer sales on non-essential items have dropped. Factory activity around the world (Asia and Eurozone) is slowing or has stopped. Durable goods inventories have climbed everywhere, without customers to purchase them. All of these facets are happening exactly as we would expect.
However, the value of the companies negatively impacted by everything above, is not dropping at the same rate of the financial impact each company is incurring. It’s as if the entire financial system is pretending that things are not as bad as they are. This announcement from BMW is a good example of that.
Consider another example. According to the employment data, and even accepting the data is skewed, somewhere around 3.9 million jobs restarted or were created in the first six months of this year. Yet, despite that job growth the GDP declined -1.6% in the first quarter and -0.9% in the second.
How does an economy add almost 4 million jobs while simultaneously shrinking?
Either people are (1) less productive, or (2) working less hours, or (3) holding multiple jobs…. or a combination of the three.
Trying to filter through the economic noise to see beyond the horizon is becoming more difficult.
So, let’s bring this conversation down to Main Street. What do you see around you? What’s going on economically in your community?
Do you see lots of people in stores and shopping malls?
Do you see a lot of new purchases being made?
How are your family, friends and the people in your community being affected by this economy?
