by
Bill Bonner Another rainy day! More kvetching about the weather, and other things, below... But first, there is the financial world...the world of money, moolah, lucre, cash, dead presidents, bread, green, and dough to be reckoned with. And yes, we are still on vacation...but we spare a little time each morning to reckon anyway. If we weren’t on vacation we’d be wondering how people could still believe in this boom. The other day, the Dow rose 145 points. The believers bought stock. What were they thinking? Our guess is that they are not thinking at all...but reacting to such a long, long run of good news; they can no longer imagine that anything bad could ever happen.
But we digress. This new Theology of Capitalism is based on blind faith...in the dollar...in modern economies...and in the central bankers who manipulate them both. Fortune magazine recently called this boom the "Greatest Economic Boom Ever." Robert J. Samuelson describes it more fully in Newsweek:
Roughly during the same period, the average American homeowner enjoyed a 52% real increase in the price of his house. This increase added substantially to his wealth; too bad he spent the money – all of it – and then some! Yes, take away the net increase in debt, and the poor fellow is actually in the hole for the period. But it gets worse...because his income fell for the first five years of the present century. (These are the only figures we have...we suspect that his real income/hour worked fell during the entire period...but we have no reliable figures to back it up.) How did the average citizen of the world’s most dynamic, wealth-producing economy actually lose ground during the "Greatest Economic Boom Ever"? That is the question no one seems to care to pose...or answer. And how can you have a genuine boom when most people don’t really increase their spending power? Which is why we have to keep reckoning...even on our vacation...! No one else will do it. Samuelson recalled what might have been the greatest economic boom ever, until now:
But that boom was very different. That was the boom that put the United States of America not only on the economic map...but at the center of it. In 1910 – thanks to savings rates and GDP growth rates comparable to present-day China – the United States became the world’s number one economy. Wages rose quickly and average people – not merely Wall Street speculators – became much wealthier. Consumer credit had barely been invented and the dollar was still backed by gold; gains enjoyed by working men and women were substantial...and the boom was real. Maybe the present boom is real for China. For the U.S.A. it is a fraud. We are getting depressed. Maybe it is the weather. Maybe it is the end of summer. Maybe it is personal. "This summer has been the worst I can remember," said a friend at dinner last night. "The only thing good about it is that the rainy weather has produced the biggest crop of plums we’ve ever seen. Everything else is a disaster." Yesterday, we found an old photo where we were standing with our daughter, Maria, our arms wrapped around each other. Alas, Maria seems to have a new man in her life...we worry that we have lost her forever. Our new book arrived yesterday. It is a good-looking book; we are pleased with it. Jules picked it up and began reading in front of the fire; we were pleased, too, to see him chuckle. It is a great book in some ways. In our humble opinion, there are profoundly interesting ideas hidden beneath our usually superficial commentary. How they got there, we’re not sure...accidents, probably. If you write enough, sooner or later, by pure chance, you’ll write something decent. More depressing news: A dear, old friend has been diagnosed with lung cancer. "I think it’s over for me," he said on the phone. "There isn’t much the doctors can do. Maybe I have only a month left." Our friend never smoked a day in his life. He would have been better off as a smoker; at least he would have gotten the pleasure of smoking in compensation for the pain of lung cancer.
No you don’t. Meanwhile, from South America comes happy news. Your editor is going to be a grandfather for the first time. In February, by our rough calculations...
Through one window...we see love bestirring itself... Through another, we see young love bearing fruit...a whole new life coming into being... Through a third, is the product of our middle-aged labor; glorious this morning...it will be forgotten before lunchtime. Through a fourth, we see the inevitable denouement...we see where our death-going tribe ends up...when we finally droop unto death...and make way for new life... ...it is as if we were looking at all the seasons of man...right out of our office windows. August 25, 2007 Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century and Empire of Debt: The Rise Of An Epic Financial Crisis. Copyright © 2007 Bill Bonner |
