Tuesday, August 24, 2021

Markets Are Focused On The Fed And Tapering, Not Jobs

Markets are not focused on jobs as much as it is about when tapering will begin. Some economists are going as far as calling the last "a remarkably strong jobs report." I beg to differ. Let's be clear, most of these are not new jobs but simply people returning to the slots made when Covid-19 disrupted the economy. A huge X factor here is of course how Covid-19 fear is handled going forward.

The fact is, Covid-19 is not going to disappear completely and we will have to deal with it one way or another. Yes, jobs are being restored and much of this is being pushed forward by some states no longer giving out the "bonus" unemployment benefits showered upon us by the Federal government. This has resulted in a drop in the number of workers claiming they are no longer unemployed. It has also dropped the unemployment rate.  

While jobs and getting people back to work is most likely a key factor in the action the Fed decides to take, in some ways it is far more important. Getting people back to work is key to productivity which is necessary if we want the economy to recover. Paying people to stay home produces nothing and is a burden upon society. This is why investors being preoccupied with when the Fed will taper rather than unemployment is misplaced. Of course, I'm looking at "the long run."

A recent article in Barron's titled; "The big job gains are over, says this economist. But The Fed Is On The Right Track." gave me pause. If almost ten million people that were in the workforce prior to the pandemic don't, or are slow to return to work, the economy is about to lose a great deal of productivity and this means a great deal of pain in coming years. As far as the Fed being on the right track, so far there is little indication the Fed is about to do much of anything.

The structural changes taking place in the economy are very dangerous.  In addition to not enough workers rushing to return to work, the 4% year-over-year growth in wages screams future inflation. With this comes the potential tail risk of soaring inequality which is something we should not overlook. Some people think companies will not continue offering higher wages in the future but it is very possible a self-feeding loop may have begun.

A toxic brew is being created by current Fed policies that highlight its role as the great enabler. If the Fed was not on its current path other countries would be unable to pursue similar pathways without damaging their currencies and economies. This is creating a rather soggy foundation on which to build a solid recovery. The only way to really move forward is to face our problems and clear the zombie companies that are growing in number from existence. 

The whole idea that more job openings exist than unemployed workers most likely ignores the fact many companies are on a "full-court press" to hire workers on many different platforms. This means multiple ads being placed for the same job slot. Another factor is that, for now, companies are looking to hire more workers than they need with the thought that before long many of these workers will quit or they can cull them at any time. It could prove all the misguided interest in tapering is masking the real state of the jobs market.

Something is broken in the economy and the wild gyrations we continue to see in part are rooted in the fact many Americans are still collecting money from pandemic emergency unemployment claims. This has created a strange relaxed environment in which it seems many Americans would be happy to see the current subsidized and artificial version of the economy continue to roll on forever. Since people have yet to see the problems caused when governments run up huge debts from deficit spending, little concern is being generated and reality is being ignored. 

The biggest problem before us is that tapering is easier said than done and politically unpopular. QE has made the wealthy and powerful much richer and they "control the strings." Risk can build slowly and while some people predict a massive deflationary cycle may happen in the future as defaults surge, it is just as likely inflation is being baked into the whole financial system. This makes strong stagflation the most probable scenario we face in the future. 


(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Tuesday, August 17, 2021

Food Stamp Increase Means Higher Food Prices For All

With the stock market banging out new record highs each day and so many jobs available, it is odd the Biden Administration feels the need to boost the Supplemental Nutrition Assistance Program, or SNAP by 25 percent. This constitutes the largest single increase in the program’s history. This significant and permanent increase in benefits will be available indefinitely to all 42 million SNAP beneficiaries.

The increase is projected to cost taxpayers an additional $20 billion per year. It coincides with the end of a 15 percent boost in SNAP benefits that was ordered as a "pandemic protection measure." Agriculture Secretary Tom Vilsack said the change means the U.S. “will do a better job of providing healthy food for low-income families.” It will move the amount of the average monthly per-person benefits for qualified recipients from $121 to $157. Never think for a moment this is all about feeding the poor, it is also about pumping up the GDP and profits of many big companies.

Unfortunately, whenever the government increases its role in any sector of the economy history shows it generally has a profound effect on the prices charged to consumers. For proof, we only need to look at healthcare costs and college tuition. In this case, we should expect the same thing to occur to food prices. What does the big increase in the SNAP program mean to consumers both on this program and the rest of us? It means we should expect a big jump in prices in supermarkets across America.

This is not about just simple supply and demand, it goes beyond hunger and directly towards what people "want to eat" which is not necessarily what is good for them. Of course, there are a lot more people concerned about raising the funding for this program than those that care about the needs of the poor and downtrodden. Some of the biggest supporters of SNAP are the companies selling food to those on the program. A person that has grown cynical about government spending might even go so far as to say SNAP is more about enriching food producers and grocers than feeding the hungry.

Before recent expansions, SNAP dumped out around $60 billion in benefits in 2019. Half of these benefits were spent at superstores like Walmart and nearly 30 percent were used at supermarkets like Safeway but today we are seeing a shift towards online shopping. Currently, more than 258,000 firms are authorized to accept SNAP benefits. When it comes to the government being upfront as to where SNAP money goes, don't hold your breath.

A case can be made that taxpayers and the general public have a right to know how much money retailers get by redeeming food stamps. This extends to companies such as Walmart, Amazon, and even the convenience store down the street. An article in the HuffPost three years ago bashed the lack of transparency and what many taxpayers consider a lame excuse for not disclosing how and where the money is spent. The fact is we need and have a right to know exactly how much was spent and at exactly which stores. The government argues that disclosing dollar figures for individual firms would hurt their business and such details should be exempt from the Freedom of Information Act.

This Woman Is Probably Not On SNAP

An audit of how and where SNAP money is being spent would go a long way in clarifying the effectiveness of this program. Throughout the program’s history, politicians and news reporters have obsessed over just what people were purchasing with their benefits. Decades ago, President Ronald Reagan talked about “strapping young bucks” buying T-bone steaks.  

For years the beneficiaries of SNAP used "actual stamps" but now their funds are put on debit cards that are far less visible in checkout lines. A big reason taxpayers are kept in the dark is that retail trade associations, such as the Food Marketing Institute have swooped in arguing the stigma flowing from negative attitudes toward food stamp recipients can create problems for those on the program. Some even went so far as to argue it might cause landlords to increase rent if they discovered tenants were getting SNAP benefits.

A troubling development for many local grocery stores is that online retailer Amazon has been approved to accept SNAP also known as EBT in most states. It could be said, Amazon has used its purchase of Whole Foods, to backdoor its way into this lucrative market. This really muddies the water when it comes to how and where poor people shop for food. 

While Amazon rushs to claim they will provide products at great prices, the reality on the ground is it puts massive pressure on brick and mortar community grocers located in poor communities and forces them out of business. Grocers located in low-income areas often have a lot of problems with shoplifters making it difficult to be competitive. Online shopping only makes things worse as lazy patrons throw these local stores under the bus in response to the promise of shopping made easier, free Amazon Prime, and more from the predatory behemoth retailer.

The SNAP program has opened to Amazon millions of new customers that previously were unable to get credit-cards because of bad credit. An internet search shows that Amazon has tightly latched onto the program as another way to grow ever larger by feeding at the government teat. It is important Americans understand what is happening behind the curtain of the SNAP program facade. 

SNAP is as much about moving people into purchasing more expensive items than simply feeding the poor. Grocers and food producers love the program because it is another way to tap into the government's spending machine. Of course, when you search for, "Online Grocery Shopping Sites" it should not be a surprise that Amazon is already near the top of the list. As a result of Amazon pushing into these areas, it can be argued we will see a big increase in the number of places where people claim "food deserts" exist.

A big issue is what those on the program buy and how it affects their spending. For example, poor John or Jill that has ten dollars in cash slated for food would use their SNAP card instead of cash. This then allows them to use the money for something they consider more important such as a lottery ticket, beer, or cigarettes. It also translates into people on SNAP being able to afford food items that many hard-working Americans others feel they cannot afford. The fact recipients are able to shift spending or do what could be called "substitute shopping" muddies the issue of just how helpful the program is.

A Lot Of SNAP Money Goes To Buying This

A USDA website while noting the difficulty looked looks into what foods are typically purchased by SNAP households.  An interesting chart on the above site shows that generally less healthy foods are purchased by those on the SNAP program. This includes what is known as "prepared foods" which are often much more expensive per ounce than their unprepared counterparts.

Food Inflation has recently been in the news a great deal and is taking its toll on the working poor who were already struggling well before the virus battered the economy. SNAP was designed to supplement the food budget of needy families so they can purchase healthy food and move towards self-sufficiency. Instead, it has become a generous gift to grocers and the companies that prepackage snacks and foods. Anyone that has traveled to other countries will immediately notice not all foods are packaged in small hard plastic and pumped full of preservatives. 

These packaging practices have been a big factor in driving food prices higher. In 2018 analysis reported the three largest food and beverage companies in the U.S. are PepsiCo., Tyson Foods, and Nestle, all of these are big beneficiaries of SNAP. This is a subject I have written about in the past, when looking at the SNAP program, I contend, a great deal of money could be saved if purchases were limited to a few "approved items" and basic foods. This would eliminate much of the wasteful spending going to items such as snacks and sugary beverages.

From all indications, one group that has not been a huge beneficiary of rising food prices are framers. A new report released on August 4th of 2020 by the American Farm Bureau Federation shows farm bankruptcies have continued to increase. AFBF found bankruptcies rose 8% over the prior 12 months. To be clear, in the past, during times of hardship, many consumers were forced to shop more carefully and buy less expensive foods. This is exactly what the grocers and food producers that love SNAP do not want to happen.


(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Monday, August 16, 2021

Sad Afghanistan, Most Of Us Gave Up Hope Long Ago

When it comes to Afghanistan most of us gave up hope long ago. Below is a post that was published here on August 11, 2013. Being right is not something we cannot always be proud of. The chaos now occurring paints a sad picture going forward for those living in Afghanistan that hoped the Taliban would slip gently into the night.

Do not take anything below as an endorsement of how the Biden Administration has handled this situation. To say they have done a piss poor job is an understatement. This is one of those situations where there is more than enough blame to go around but hiding at Camp David reflects poorly on the President. Of great concern to all of us is the huge amount of arms and equipment that is now falling into the hands of our enemies, we can only pray none of it comes back to haunt us.

                      Afghanistan's very bleak future

Many Americans have recently tried to block Afghanistan out of their thoughts, going forward little exists to be excited or optimistic about. As with Vietnam, it seems that we may have to settle with claims of "peace with honor" as we rush for the exit. This reminds me of the experience the French had in Algeria. After years of effort, the French did not achieve victory, they only proved how difficult and expensive some of these missions can become. The announcement by President Obama that American troops would be departing leaves many people wondering about the void we will be leaving and how it will be filled.

A Place Where Violence Rules

America intends to leave only a small contingency to train and give "U.S. support" capabilities to the Afghans, this would include counter-terrorism operations. NATO says a 187,000 Afghan force is in place to provide security and protection for the Afghan people. A major problem is that the Afghan Army has been plagued by inefficiency and endemic corruption. Training efforts have been drastically slowed by the corruption, widespread illiteracy, vanishing supplies, and lack of discipline, this became apparent when U.S. trainers reported missing vehicles, weapons, and other military equipment, including the outright theft of fuel provided by the U.S.

To say the many problems in Afghanistan can be overcome may be optimistic, death threats have been leveled against U.S. officers who have tried to stop Afghan soldiers from stealing. Afghan soldiers who find improvised explosive devices often snip the command wires instead of marking them and waiting for U.S. forces to come to detonate them. This just allows the insurgents to return and reconnect them. U.S. trainers frequently remove the cell phones of Afghan soldiers hours before a mission for fear that the operation will be compromised. American trainers also have to spend large amounts of time verifying that Afghan rosters are accurate and are not padded with "ghosts" being "paid" by Afghan commanders who quietly collected the bogus wages.

Then there is the issue of desertion and insider attacks. Desertion has been a significant problem in the Afghan Army. One in every four combat soldiers quit the Afghan Army during the 12-month period ending in September 2009, according to data from the U.S. Defense Department. Beginning in 2011, insurgent forces in Afghanistan began using a tactic of insider attacks on the NATO-led International Security Assistance Force (ISAF) and Afghan military forces. In the attacks, Taliban personnel or sympathizers belonging to, or pretending to belong to, the Afghan military or police forces suddenly attack ISAF personnel, often within the security of ISAF military bases and Afghan government facilities.

With Karzai scheduled to step down next year, the Afghan people have reason to be concerned about their future. The challenges facing Afghanistan are both vexing and formidable. Many people are concerned as to the cost and commitments to security going forward and if the Taliban will play a role, their attitude towards women would most likely set back much of the progress that has been achieved. Currently, the future of American's future involvement is not carved in stone, but it looks like a fast exit is coming. According to Obama, any agreement on troop withdrawals must include an immunity agreement in which U.S. troops are not subjected to Afghan law. American is looking to legally protect its troops after a series of damaging incidents and disclosures involving American troops in Afghanistan occurred.

High-profile military incidents like the one involving U.S. troops posing with body parts of dead insurgents and a video apparently showing a U.S. helicopter crew singing "Bye-bye Miss American Pie" before blasting a group of Afghan men with a Hellfire missile, the 2012 Afghanistan Quran burning protest, and the Panjwai shooting spree has created fractures in the partnership between Afghanistan and the NATO troops. These incidents have undermined the image of foreign forces in a country where there is already deep resentment due to civilian deaths. It has also added to the perception among many Afghans that U.S. troops lack respect for Afghan culture and people.

Considering the strained relations between Afghanistan and the United States it may be time to exit. President Obama stated "We achieved our central goal, or have come very close to achieving our central goal, which is to de-capacitate al-Qaeda, to dismantle them, to make sure that they can’t attack us again,” he then added. “At the end of this conflict, we are going to be able to say that the sacrifices that were made by those men and women in uniform have brought about the goal that we sought.” The fact is many Americans may feel this is an optimistic view of the situation by a President who like many of the American people know or are inclined to think we have spent way too much achieving very little. 

 

 (Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Saturday, August 14, 2021

The Value Of Gold And What It Is Worth In Today's Market

While reflecting on the distorted world in which we live and thinking about the woes of owning real estate which weather and time have a way of ravishing I started to think about value. Owning any tangible object seems to have its drawbacks, especially if it has no utility value. Still, they do have at least one thing going for them, they are real. Liquidity is also an issue and unless you can sell an item safely and without a lot of bother, it is difficult to argue it is liquid.

The recent pullback in the price of gold brings front and center the reality no investment is free of risk. When leveraging a position by using borrowed money this risk grows substantially. There is also the issue of where to store it, and even whether what you have purchased is real. Nobody wants to be made a fool of, and that is what a person becomes when they spend their money on what they think is gold only to find out later the item purchased is a fake.

People may claim there is huge demand, that a commodity is rare, and that the cost of producing it is soaring but that does not mean its value is destined to rise. Supply and demand remain king when it comes to valuing a commodity, and gold's role in our future has yet to be determined.

A recent post on AdvancingTime looked into how once magnificent Grandfather clocks have now become obsolete symbols of wealth and conspicuous consumption. The fact these large clocks are hard to move and maintain has led to their value dropping like a stone. In fact, many of them can now be found in storage rooms and the back corner of the garage in homes across America. Value is not a constant and whether something is in vogue matters.

It is easy to adopt the view that with the rapid and huge surge in both debt and the money supply gold and inflation have nowhere to go except up. Gold has for a long time been touted as the ultimate place a person can store wealth. Still, we should ask, do the trends taking place in modern society also undermine its value? While many gold bugs are astounded by such a suggestion, it is a question that should be asked. The rise of a slew of cryptocurrencies has called into question gold's staying power as a defense against inflation. 


We must never forget how gold quickly rose in value several times over the years only to slump in price for long periods of time. As charts showing the value of gold indicate, the precious metal has seen many ups and downs. Without a great deal of utility value, the value of gold tends to often move based on shifts in interest rates and the cost of money. Efforts to magically tie the value of gold to historic relationships with other commodities and currencies generally prove futile. 

The eroding ability of anything to stand up against governments growing ability to confiscate and steal our wealth brings into question the future of gold and its mantle of the best place to store wealth. This means that a person best have the gold they own in their possession and hidden away from prying eyes or it may not remain theirs for long. 

One of the sad realities we face is that gold has become so valuable that today many people that wore gold jewelry for years no longer wear it because it increases the risk they will be robbed. Crooks are everywhere, if someone will kill for a few hundred dollars, it does not take a rocket scientist to recognize that anyone wearing a $2,000 chain around their neck has a bullseye painted on them.

Central banks know that gold is a threat to fiat money and by occasionally causing it to retreat in value they can damage those that hold it dear. Many gold bugs and even silver investors claim this exploitation has gone on for decades and won't stop until economies collapse. They see gold and silver as two of the most manipulated commodities on the planet.

It was recently pointed out to me that many younger people are not as enthralled by gold, many of them are more focused on cryptocurrencies than this precious metal. Also, it must be noted that some cultures and areas of the world hold gold in higher esteem than others. This often has to do with their history and how their ancestors were to the idea gold and wealth flowed together as one.

The reason many young people may not be as captivated and dazzled by gold's charm could be their interests have turned to other things, they simply can't afford gold, or they are not familiar with how inflation can destroy the value of currencies. With all the above in mind, the biggest threat facing those that own gold is that it may at some point be confiscated by governments or that it may be made illegal to sell or owned. 

In no way should any of the things written above be considered a stand that holding gold is not the ticket to a prosperous future or a bad investment. The above is simply a reminder of how fragile and dangerous the investment world is, it is a place where nothing is carved in stone, and if it were, that stone would be sitting next to a giant stone crusher.

 

(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Tuesday, August 10, 2021

Inequality Could Be Addressed By Removing Our Options

Recently I stumbled upon an interesting and informative YouTube video on the environment that gives information on both sides of the question, "is there a climate change crisis?" A fella who has studied this subject indicated there is not and what we are being told by many so-called experts is more hype than truth. An example is that while he agreed that the earth's oceans were being over-fished, he saw the answer to be growing more of our fish in fish farms. As far as the sea rising, he reminded viewers that Holland is nine feet below sea level, surrounded by dikes, and doing fine.

Still, the world is changing, and as I delved deeper into his views of how society should face its current challenges I became a bit disturbed. Conceding he was generally a liberal, he espoused the message it would be a win-win for the environment to bring the rest of the world into the modern world and it is our duty to do so. While he didn't just come out and say it, this would address inequality across the world at our expense it "kinda would." 

Does This Look Familiar?
To me, this equates to putting us in a row of buildings or little boxes, rationing our food and energy use, and providing people with endless superficial entertainment including virtual travel opportunities and calling the experience life. This promise, where they take away your right to drive or own anything in exchange for more leisure time and less work is a trap well set. Unfortunately, it has the potential to gain traction when put before those on the bottom, often, these people have little to lose. 

His enlightened take was that by reducing inequality across the world pollution would be substantially reduced. He pointed to the fact that poor impoverished nations tend to pollute more than advanced nations and have higher birth rates. An example of this is how poor nations tend to allow raw sewage, plastic bottles, and more to flow down their rivers and into the sea. He envisioned a world where people would live in cities with reduced environmental footprints and have fewer children, problem solved.

Big Brother Wants To Control It All
The idea expressed in the title of this article dovetails with the view of many global elites that think they can sell the idea the world will be a better place without so much inequality. Sadly, simply giving people the illusion they have a choice is enough to quell the desire for freedom in most people.
This is a promise easily broken. Often the choice we are given is akin to choosing the shade of grey that you find least objectionable.

Turning our attention to some of the ideas and vision the World Economic Forum (WEF) has floated should heighten our concern. A powerful one became visible when WEF public relations released a video entitled: “8 Predictions for the World in 2030. Its 2030 agenda offers a telling glimpse into what the technocratic elite has in store for the rest of us. The "By 2030 You'll Own Nothing And Be Happy" message is one of total control and reduced choice cloaked in the promise of, you will be taken care of. 

All in all, truth has suffered greatly under the hands of expanded government control during the pandemic and so much money is still in the pipeline that it is far from over. Dollars approved but not yet spent mean the distortions we are seeing have yet to be fully realized. Even as you are reading this a great deal of money is flowing into the hands of people that will go ballistic at any effort to end the giveaway.

Currently, everything is in play, the views of people are being altered across the board. This is affecting how most people feel about vaccines, cash and banking regulations, the lock-downs, melt-ups in the markets, and more. At this point, it appears the promise of free money flowing off the printing press is winning in the game of controlling the hearts and souls of the masses.  

The fact that promises are often broken points to a most problematic future. I base much of my opposition to addressing inequality by taking away our options on the following three points,

  1. Believing in a myth does not make it so, Utopia and unicorns do not exist.     
  2. The road to happiness will not be achieved by making us all alike or by removing our individuality.
  3. At some point, a culling will take place by those in charge or led by artificial intelligence

We have all seen young children grab a toy and scream "mine." Some things fly in the face of human nature and history shows that getting along is not a quality man excels in. The spirit of man does not conform to being boxed in. The fact is we are not all equal and some individuals have far more potential than others, this reinforces the notion any experiment to exhibit control over individuals will end in failure.

Many of us that believe there is such a thing as a "free lunch" take the stand that addressing inequality by taking away the options of individuals is a piss poor way to meet that objective and those creating such a plan live in a, "no cake for thee but cake for me world." I also contend that people will be in no hurry to surrender their materialistic desires, that will only happen when pigs take to flight.

 

Footnote: the two links below relate to this article. The first is the article mentioned in the first paragraph alleging climate change is not likely to be the end of us. The second tells of the vision the WEF has developed. 

 https://www.youtube.com/watch?v=gDFnWjC206E

 https://By 2030 You'll Own Nothing And You'll Be Happy.html

(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Saturday, August 7, 2021

Sagging Productivity Will Fuel Stagflation

People Like Working From Home
For years businesses shouted they were seeing huge gains in productivity but the truth is that productivity can be difficult to measure. Before long, that will bring front and center the issue of how sagging productivity can help fuel stagflation. Covid-19 may shine a bit of light on this with many people now working at home, do not be surprised if companies are forced to ask, what are these employees really doing? 

While it is easy to recognize places where huge gains are being made, productivity can suffer from something akin to the leaky bucket syndrome. I contend that over the last few years society, in general, has seen overall efficiency drop in many areas. This has been papered over by a slew of claims about how this and that are being handled much better. 

The hype we hear often ignores the reality that many of the new systems touted as gains carry with them a lot of negatives. With the onslaught of computers and word processing the garbage in garbage out pipeline has exploded. This has resulted in a simple search for information dropping the person searching into a loop that circles back upon itself at the same time it renders little in the way of helpful information. The effect of this is evident in government, it is not uncommon for laws and bills flowing from Washington to run thousands of pages in length. In hindsight, while the old way of typing and copying was inefficient compared to modern methods, it did limit the number of pages a person could create.

The truth be told, many of us have wasted a full day or more on a machine that is malfunctioning or simply refuses to do our bidding. The idea we save time by not fixing something discounts the cost and waste created when we are forced to throw away an item that still has a great deal of useful value. Sometimes I have to wonder whether people will ever look up from their cell phones long enough to realize a lot of things are not working. 

What You Get When People Don't Care
Saving a few dimes by outsourcing the payment of our local utility bills means those jobs no longer remain in our community. Also, getting answers takes longer for the consumer that ends up paying more in both time and effort. Public transportation based on tax-supported empty buses crisscrossing town on the half-hour does more damage to the environment than many of its supporters are willing to admit. 

Another example is continuing to have the money-losing United States Postal Service rush to every mailing address in America six days a week delivering junk mail that people often don't want. Industries have grown up around this so-called public service. Advertisers exploit this. Where I live, even our tax-funded entities such as the park department, public school system, and state university feed into the waste by putting out glossy notices and thick books touting all that they are offering as a "public service."


The fact is in our current easy money economy a company's value is often no longer being closely linked to productivity. Stock buybacks using low-cost loans and bonds have both led to driving the stock market higher. Still, this is more about how big companies often exhibit a lack of skin in the game mentality. This is also being fueled by employees that don't expect to be with a company for very long in a society where many people move from company to company. These people seldom care if a job holds up over time or what happens after they move on.  

In some ways, society has moved toward a nonchalant attitude towards companies that simply fail to impress. This can also be seen in non-profit concerns and quasi-government agencies, both seem to be having a difficult time finding good leaders to carry out their missions. The one thing most are able to do, however, is to pay these figureheads far more than they are worth. 

The market may be a little bit soggy when it comes to the importance of productivity because so much of what the talking heads are focused on is tapering, tapering, and tapering. The recent flow of free easy money from the Fed has washed away much of the common sense of which Main Street was originally based. Having employees that are, productive, responsible, and knowledgeable has a great deal of merit.

The huge problem before us is that tapering is easier said than done and politically unpopular. QE has made the wealthy and powerful much richer and they "control the strings." Risk can build slowly and while some people predict a massive deflationary cycle may happen in the future as defaults surge, it is just as likely inflation is being baked into the whole financial system. This makes stagflation the most probable scenario we face in the future.

(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Friday, August 6, 2021

Society's Values Reflected In Price Of Grandfather Clocks

And It Is Now In The Garage
This is not an article written to astound the world, it is merely a reflection of fact and modern life in America. How society treats the fruits of its labor speaks volumes about what it considers important. Years ago I purchased a beautiful grandfather clock. At the time these expensive timepieces were being touted as an investment. Today, these large clocks have become inconstant with our modern lifestyles. 

Grandfather clocks are very difficult to move and can be hard to maintain. This has created a situation where as these clocks continue to get displaced from their original homes and are handed off to new owners they soon become a burden. This reality has moved front and center and is apparent when it comes to their resale value. 

These once sought-over status symbols of conspicuous consumption are becoming albatross relics to many of their owners. Not only do many people have no place to put such clocks, but each time they must be moved they become a nightmare. This has created a glut in the market where far more people are selling these clocks than buying.


With people moving more frequently, the fact they simply are incapable of properly moving them or can't afford to has become an issue. Yes, these clocks are beautiful but if damaged in the slightest they often become worth more to repair than they are worth. Not only are the components expensive, many of the companies making them have long since closed which can make getting them serviced a challenge.

These factors have reduced the current value of these clocks to next to nothing which can make selling them a task that can take weeks or months. A large part of the problem is that most people realize that even for one to three hundred dollars it is not wise to buy something that has the potential to bring you more grief than joy. This results in sellers starting with sale prices such as $900 or $2,200 then after a bit of research rapidly dropping the price into the range of $150 to $400 adding a line about, or best offer.

Many of these clocks are truly majestic and should be viewed as works of art rather than large watches, today clocks are everywhere, and getting the correct time is generally not a problem. For many people, this has made even the most beautiful of these clocks unnecessary and obsolete. The appalling lack of respect coupled with a total inability to care for or treat these carefully crafted timepieces is often displayed by those that inherit them. 

With people fleeing states such as Illinois, a glut of sellers has made buying one of these clocks a bargain. Sadly, on the flip side, this many are being miserably treated and devalued. Weights that should not be touched by bare hands are shabbily handled and tossed uncovered into cardboard boxes. People even tape cabinets closed after misplacing the key. It is not uncommon to find many of these clocks horribly misrepresented by owners that post and use pictures taken before dumping a once beautiful clock into the garage. 

The writing of this post was inspired and in reaction to my going to see a few of these clocks that were being sold. I have little tolerance for stupidity or laziness. Out of the five I viewed, all being sold privately, one was treated well, one not too bad, the next a little worse. Two were abused and had been asked to endure conditions beyond anything a responsible person could imagine. 

Seriously, In A Child's Room?
One of the most abused was located in a filthy basement occupied by a couple and their six children. The man had used old pictures of the clock when it had still been located in his Grandfathers living room. After traveling a long way, the last clock I viewed, that was listed as being in good condition was found to be wanting. The owner failed to mention all the damage the once beautiful piece had suffered. The beveled glass covering the face was gone and so was the lock, the door was wired closed and one of the side covers was in pieces, also, the cabinet showed it had been hit in several places. Believe it or not, and pictures are said not to lie, thousands of these once treasured gems now sit in garages next to a lawnmower.

To be clear, these clocks vary greatly in value. This is something many people fail to take into consideration. Many are off-brands or "want to be" imitations produced for the less affluent market. Some even use battery-powered timepieces or clocks. The pictures used in this piece do not represent the most beautiful of these clocks and if you do decide to purchase one a bit of research would be in order. For a hands-on person, this is an opportunity to buy and own something very beautiful for a fraction of what it should, or would normally cost. This is defiantly a case where a patient and wise buyer has the upper hand.

When you own things, if you want them to retain their value, you must take care of them. This is one reason why socialism doesn't work. In some ways, this article could be considered a commentary on modern society and our continual never-ending quest for more while at the same time we forget to value what we already have. For the many people that in the past have said, "I would love to have a clock like that." This adds credence to the saying be careful what you wish for.

(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)