Tao Economics

This is the “other shoe” that a lot of people are waiting to drop. Right now we are caught up in a compressive debt deflation as mortgages stop “performing” and loans of all kinds are welshed on. Since money is loaned into existence, and a great many loans are not being repaid, then a lot [...]

We’ll turn around early in 2009 and discover that we are a much poorer nation than we thought because from now on credit will be extremely hard to get for anyone for anything. The businesses that survive will have to keep going on the basis of accounts receivable. This is the area where the crash [...]

There are two realities “out there” now competing for verification among those who think about national affairs and make things happen. The dominant one (let’s call it the Status Quo) is that our problems of finance and economy will self-correct and allow the project of a “consumer” economy to resume in “growth” mode. This view [...]

All voting is a sort of gaming, like checkers or backgammon, with a slight moral tinge to it, a playing with right and wrong, with moral questions; and betting naturally accompanies it. The character of the voters is not staked. I cast my vote, perchance, as I think right; but I am not vitally concerned [...]

I heartily accept the motto,—”That government is best which governs least”; and I should like to see it acted up to more rapidly and systematically. Carried out, it finally amounts to this, which also I believe—”That government is best which governs not at all”; and when men are prepared for it, that will be the [...]

“Global Demand for Oil to Plummet,” screams a recent Financial Times headline.   Huh?  No it won’t.  Who are they trying to kid? Global oil demand is not going to “plummet.”  And for the FT to say so is just plain silly, if not irresponsible.  OK, I know.  There’s an old saying that they teach in journalism [...]

Zounds! Public sentiment toward the accelerating economic fiasco has shifted, seemingly overnight, from a mood of nauseated amazement to one of panicked grievance as the United States moves closer to an apparent comprehensive collapse — and so ill-timed, wouldn’t you know it, to coincide with the annual rigors of Santa Claus. The tipping point seems [...]

One of the most hotly debated topics among financial talking heads these days is, “Deflation or inflation, what is it going to be?”  There is no question that we are currently experiencing asset price deflation and economic slowing. But we, the editors of The Casey Report, see this as a transitional phase. In our analysis, the [...]

Like a giant laxative in the world’s monetary system, the Federal Reserve’s quantitative easing is starting to have an effect. You wouldn’t necessarily call it the desired effect. After all, we’re talking about the eventual destruction of the U.S. dollar and the global monetary system upon which it’s based. But it’s an effect nonetheless. Both the [...]

This past weekend saw the debut of a remake of the classic 1951 film The Day the Earth Stood Still. The original movie was so good that I don’t know why anybody really thought it necessary to make a new version. But much of modern culture has turned into a cheesy imitation of the past. [...]

What if you woke up one day and there was a flying saucer sitting in the middle of Central Park? It would change your view of the world, if not the universe, right? At least that’s the idea behind the newly released remake of the classic 1951 film The Day the Earth Stood Still. And what [...]

The peak oil story has not been nullified by the scramble to unload every asset for cash — including whomping gobs of oil contracts — during this desperate season of bank liquidation. The main implication of the peak oil story is that we won’t be able to generate the kind of economic growth that defined [...]

Gold bulls are going to attempt to raid Comex’s vaults by forcing delivery on their December futures contracts (tomorrow, Dec. 19). Who can tell how that will go? I can’t. But it’ll be interesting to watch. Facts: The open interest in futures contracts on the Comex has fallen to its lowest level since summer 2005, breaking [...]

The late November rally in gold prices wasn’t quite as spectacular as mid-September’s gain, but it was still impressive. There was good follow-through too, though the momentum softened as bulls knocked on resistance near $850. The rally was a no-brainer. There is a strong line of support at $700, which was resistance during 2006 and the [...]

Lately I’ve been discussing concept of scarcity in the energy and natural resource sectors. In one recent note, I discussed how the idea of scarcity has transformed from a “geological” basis to an “above ground” basis. In another note I discussed how the financial system of the world has broken down. This breakdown has damaged [...]

Sometimes you have to just stand back and admire the extremes a real bubble can produce. What you have now, as Bill explained a few nights ago at the Doomer’s Ball, is the last greatest bubble of them all, the bubble in U.S. bonds. It’s reaching staggering levels. How do you measure these things? In yields. [...]

I remember back when I was learning attack planning and tactics during Navy flight school.  One of the key concepts was “time on target.” That is, when there were going to be a whole lot of airplanes coming in to deliver payload, you had to get the timing down just right. There were going to be different [...]

In the twilight of the Bush days, in the twilight of the twilight season, a consensus has formed that we are headed into a long, dark passage leading we know not where. Even CNBC’s Lawrence Kudlow has been reduced to searching for stray “mustard seeds” of hope on hands and knees in a bleak and [...]

I have a good friend named Bill who lives on the convergence of two tidal streams in an area aptly named: Twin Rivers.  Last year his bulkhead was destroyed in a severe storm.  The problem with repairing a bulkhead is that it is underwater, and that presents peculiar challenges.  The easiest way to repair it [...]

Markets are dithering their way to the end of the year. It doesn’t look like much is happening. But some interesting things are going on. Pressure is building. For example, the dividend yield on the S&P 500 is 3.48%. The yield on a 30-year U.S. bond is 3.16%. According to Mark Hulbert at CBS Marketwatch, 1958 [...]