Is This the Beginning of the End for the Bubble Economy?

By Chris Black

Markets shivered on Tuesday, and everybody on Wall Street panicked for a moment, as investors realized that debt is unsustainable and yields will have to stay artificially low for a very long period of time.

Tesla stock also took a beating as yesterday’s selloff intensified.

The problem with Tesla is that there is no innovation after the first model. The Model S refresh changed a couple fender lines and turned the giant tablet glued to the dashboard sideways.

The Model S design is a decade old, when other luxury cars change every two years with major updates. The fit and finish and interior quality would be bad on a $25k car, let alone a $100k one. The Model X is one of the worst automotive designs since the Aztec.

You can claim the interior of the Model 3 is sparse by design, but it is really just to be cheap.

There are no gauges, just the giant tablet.

Not only have the “legacy” automakers leapfrogged Tesla in design and quality, but they are more competitive on a cost and performance basis as well. Take a look at the new Audi E-Tron GT. It makes a Tesla look like a Yugo with 500k miles on it.

We are approaching the bidless economy, where nothing gets consumed at any price. Nearly everything is being bought as an investment to gamble on, with very little of the purchases actually being used for its intended purpose.

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99% of oil and commodity contracts are traded by speculators. They can’t use the commodity to make profit off what is made from it. They can only profit off selling the contract to another speculator who is willing to pay more.

That is how the housing bubble was re-blown: flippers selling to other flippers. I don’t care if you painted the walls white, put $500 worth of shiplap on one wall, and refinished the kitchen. That used to not increase the value of a home, as those things were expected by buyers.

Thanks to HGTV, people think they can buy a home for $185k, put $15k into it and sell it for $500k. But also thanks to HGTV, idiot millennials actually think the house is worth that.

Cryptos are the same thing, i.e. people buying in for massive paper gains because they can’t make money working.

Essentially why we are where we are. You can’t earn a living working anymore.

Not unless you are in the top 15% of wage earners. Nothing is affordable other than a few electronic trinkets. The iPhone isn’t affordable anymore. If it weren’t for carrier subsidies and bundled payments, Apple’s sales would collapse 95% in a few months.

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Nobody would ever pay $1200 for a standard phone. But they’ll pay $20 a month forever as a payment for one.

If you live in New England and make $100k a year, you are practically living in poverty. You aren’t buying a home in any formerly middle class town outside Boston. You can barely afford to live in Lawrence or Lowell. Garbage dumps where you’ll live next to meth dealers and gang members.

English is no longer the first language. The lower class can live there thanks to generous welfare subsidies. Did you know there are programs in Massachusetts where mortgages are subsidized by the state? Make $18k a year and get a $300k house for $250 a month.

It is just a complete perversion of the American lifestyle.

The Fed has one of two options.  They can crash the system and save the currency or they can crash the currency by exponential money creation in an effort to save  the system.

If they go the second route, the money dies and the system still crashes. Pick your poison.

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