Wednesday, June 10, 2015


The minions at the U.S. Census Bureau released their Monthly Wholesale Trade Report for June 2015, which details activity through April 2015.

Like most other reports, once adjusted for True Dollars™, the Wholesale Trade Report reveals an economy in decline.

Today, one of the not-so-smartest-guys-in-the-room-afterall, Jamie Dimon has been quoted as saying Elizabeth Warren, the law-school egghead cum U.S. Senator doesn't understand the global banking system. Likely, he is right. I've read some words attributed to Warren. She doesn't understand much of reality.

That said, Dimon doesn't understand capitalism, at all. Quantitative Easing has been a disaster for the economy and for capitalism.

When too much credit gets extended, the right action, the action absent intervention is rising interest rates.

You can think of rising interest rates as raising the stakes in poker. Weak hands and the gutless get forced to fold. Only the strongest survive in poker.

The same is with the economy. Those who built businesses upon capital structures paid with credit on expected rising prices that never materialize need  to fold and go out of business.

Rising rates protects profitable extant capital structures, structures of efficiency that can earn profits on falling prices.

However, artificially lowering interest rates, which is what Quantitative Easing does, and is the policy action of Dimon's employees, Ben Bernanke and Janet Yellen, wrecks the return to extant capital. To restore the expected needed return, firms fire workers. This is what happened all during Quantitative Easing.

QE is the worst policy action in the history of commercial banking. It has been the worst policy for Americans, perhaps all-time. It's perpetuating the Greatest Depression.

From last month, there are a few bright spots like Lumber and Construction Materials, Beer and Booze, Oil Products and other Non-durable Goods. Yet, that could reflect the upcoming summer season of deck parties and road trips.

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