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Now comes the great unwind - how evaporating commodity wealth will slam the casino

OWON: As we peer into the incoming year, 2016 promises to be a start of a multi year trend that will cause many ripples far beyond collapsing prices, demand and consumption. Whole economies will be forced in time to rethink their purpose and ability to exist as past investments come back to haunt at a fractional value of invested capital. This coupled with wasted labour on social safety nets as necessary skills become redundant, will have a major impact on all societies. Africa may not be such a great investment for raw materials to bring them up as an emerging continent as the demand bubble bursts.

The coming of a new equilibrium of supply and demand will recast many companies and countries providing opportunity for new approaches not considered as they become desperate for new capital investment into industries that will provide both employment and tax base.

In the meantime one can be sure governments will never admit their folly so they will squeeze their subjects to extract the last dollar of tax while muddling through. Will it work in collapsing Western Economies with an evermore burdened of Migrant swarms of scavengers?

As for promises like social security and the like, one can forget it as the money will simply not exist to pay out. Restructuring is a global reality now, and it's likely that people will work longer than retirement age to provide for themselves as all around them implodes, and the 'You Promised' limp brains at last see reality bearing down on them. When will the masses get it and think for themselves. Votes are to rope Dopes.

The truth is, their Cupboard is bare, and without reserve funds, you will go into the night. Truth is, if you can't self feed, you will just become, surplus to need.

Not OWON's view or choice, but a warning. Those in power simply see herd reduction as a viable option. Think Tanks of Wealthy Self-Preservationists see you all as expendable, non-contributors first....

Now comes the great unwind - how evaporating commodity wealth will slam the casino

Contra Corner
By David Stockman
30 December 2015

The giant credit fueled boom of the last 20 years has deformed the global economy in ways that are both visible and less visible. As to the former, it only needs be pointed out that an economy based on actual savings from real production and income and a modicum of financial market discipline would not build 65 million empty apartment units based on the theory that their price will rise forever as long as they remain unoccupied!

That’s the Red Ponzi at work in China and its replicated all across the land in similar wasteful investments in unused or under-used shopping malls, factories, coal mines, airports, highways, bridges and much, much more.

But the point here is that China is not some kind of one-off aberration. In fact, the less visible aspects of the credit ponzi exist throughout the global economy and they are becoming more visible by the day as the Great Deflation gathers force.

As we have regularly insisted, there is nothing in previous financial history like the $185 trillion of worldwide credit expansion over the last two decades. When this central bank fueled credit bubble finally reached its apogee in the past year or so, global credit had expanded by nearly 4X the gain in worldwide GDP.

Moreover, no small part of the latter was simply the pass-through into the Keynesian-style GDP accounting ledgers of fixed asset investment (spending) that is destined to become a write-off or public sector white elephant (wealth destruction) in the years ahead.

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