What Happens If Most Businesses & Consumers Tighten Their Belts at the Same Time?

Europe may be about to find out. 128 days with my Mother-in-Law.

By Nick Corbishley, for WOLF STREET:

As market players cling to the hope that a V-shaped economic recovery is still possible in Europe, to match the central-bank engineered rebounds of benchmark indexes such as Germany’s DAX and the Netherlands’ AEX, the reality on the ground continues to get worse for many families and businesses. On Tuesday, the Bank of Italy published the findings of a survey of Italian households on the impact of the lockdown. As you’d expect, most of the findings were pretty bleak:

  • More than half of the respondents said they have suffered a contraction of household income following the measures adopted to contain the epidemic.
  • Fifteen percent of households have lost more than half their income.
  • Some 40% of families are struggling to keep up with their mortgage payments.
  • More than half of the survey’s respondents believe that even when the epidemic is over, they will spend less on travel, holidays, restaurants, cinema and theaters than they did before the crisis.

No V-Shaped Recovery.

For most of these people, there will be no V-shaped recovery. Not only are they spending less money today, they expect to spend less tomorrow. While it’s true that people often say all kinds of stuff in surveys about how they will act in the future and then not stick to it, this particular response chimes with my own experience as well as the accounts I’ve heard from friends and acquaintances in countries as far and wide as Spain (where I live), the UK (where I’m from), Mexico (where my wife is from), France, Argentina and the U.S.

It is also broadly supported by central bank data, which confirms that the Covid-19 outbreak set in motion a synchronized global consumer deleveraging. Even after the lockdowns were lifted, many people are frantically saving for the next rainy day, despite the fact that interest rates have been driven to unprecedented lows.

In the UK, where the Bank of England has slashed the benchmark rate to 0.1%, the lowest on record, there was a £4.6 billion net repayment of consumer debt in May while deposits held by households, non-financial businesses, and financial businesses rose by £52 billion, following large increases in March and April.

For most people who’ve suffered a big hit to their income during the crisis, saving is not an option. In the UK, over a third of adults have had to eat into their savings to support themselves during the lockdown. They’re also cutting back on their expenses.

I can empathize. As a freelance worker in Barcelona, I’ve lost three of my main clients (out of six) since March, wiping out 30% of my income. My wife is one of the 1.7 million furloughed workers in Spain that are receiving 70% of their pre-crisis income from the government while wondering whether they will have a job to go back to when the furlough program ends, which is scheduled to occur in September. At that point many businesses will have to lay off some or all of their workers. That’s when the real pain will begin.

Putting Off the Pain A Little Longer.

In the Eurozone’s four largest economies (Germany, France, Spain and Italy) and the UK, a combined 45 million workers were registered in furlough programs at the end of May — compared to about 32 million Americans who are claiming unemployment benefits under state and federal programs. In the Eurozone, the furloughed workers are not included in the official unemployment stats, and the jobless rate has barely moved since the pandemic began.

Some politicians and pundits have called for the furlough programs to be extended by a few more months — whatever it takes to put off the pain a little longer — but the OECD last week cautioned that while the furlough schemes have helped to save millions of jobs, at least temporarily, extending them further risks creating, at enormous cost, a whole new generation of government-subsidized zombie companies and zombie jobs.

128 Days With My Mother-in-Law.

In a way, my wife and I are lucky (at least that’s what we tell ourselves most of the time), since my Mexican mother-in-law is also living with us, having arrived in Barcelona, with her usual impeccable timing, just ten days before Spain’s lockdown began. She was supposed to stay with us in our 85 square-meter apartment (915 square feet) for just a month before moving on to a place of her own, but during the lockdown that was impossible. We’ve been sharing the same space now for 128 days — a personal record that keeps growing by the day!

Aside from the occasional family drama and despite the dystopian backdrop, we’re actually coexisting in relative peace and harmony. And by pooling our resources, we’ve been able to weather the storm financially better than we would have.

Other people have not been so lucky. In our building alone, we are aware of two tenants who have not paid any rent since the crisis began. Both lost their jobs at the start of the lockdown. Because a large chunk of their salaries was paid en negro (under the table), as is common practice in Spain, the money they receive from the government’s furlough program pales in comparison with what they were earning, and is not nearly enough to pay the rent and feed the family.

These are the only two residents of our apartment building we’re on close enough terms with to ask whether they’re keeping up with the rent. There are likely to be others. According to Spain’s Association of Rental Home Landlords (Asval), the total number of rental delinquencies has tripled from 5% to 15% in the past four months. This is putting strain on many small-scale property owners who need this rental income to meet their own expenses, including mortgages on the properties, Asval warns.

Financial Pain Moving Up the Food Chain.

This is a constant feature of the virus crisis. The financial pain keeps spreading up the food chain. When tenants stop paying, landlords are suddenly unable to meet their own financial obligations. In the UK, most retail tenants stopped paying their rent in April after the government announced a moratorium on evictions. This put huge strain on retail landlords, many of whom were already in dire straits. Three months later, mall giant Intu collapsed into bankruptcy after its lenders refused to restructure its debt. One of its biggest rivals, Hammerson, could soon face a similar fate.

Even in Europe’s richest economy, Germany, many companies are struggling, although the government is doing all it can to keep them alive. According to a new survey by the German Chambers of Commerce, 83% of domestic firms with high international exposure have experienced a hit to their revenues; 15% of the companies surveyed said their revenues had plunged by more than half — coincidentally, the same number of Italian households that said their incomes had collapsed by more than half.

More than half of the firms said they plan to invest less abroad, compared with only 35% in April — again, a similar number to the percentage of Italian households that expect to spend less in the future. This trend is likely to be repeated in many other export-led economies and is yet another sign of the belt tightening taking place across Europe. By Nick Corbishley, for WOLF STREET.

Private equity firms sit on lots of cash but won’t invest it in their stripped-bare and failing restaurant chains. Read…  As the Biggest Restaurant Chains in the UK Fall into Bankruptcy, Attention Turns to KKR & Other PE Firms that Own Them

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  217 comments for “What Happens If Most Businesses & Consumers Tighten Their Belts at the Same Time?

  1. 2banana says:

    Great article.

    The world has changed. Maybe for the better as folks will save more and spend less going forward even if there is a vaccine.

    It was not that long ago that most working folks avoided credit like the plague. And lived within their means. For good reason.

    It would be interesting to compare these stats pre/post virus as these were already significant issues (paying inflated mortgages and no savings).

    “Some 40% of families are struggling to keep up with their mortgage payments.”

    “…saving is not an option.”

    • Satya Mardelli says:

      2banana – I concur. This was a terrific article by Mr. Corbishley. His ability to compose the message into a tight package makes it enjoyable to read and easy to remember.

      I’ll take more of the same any day.

      • 2banana says:

        The next article should be:

        “How I got along with my MIL, in a tiny apartment, for six months and did not drink that heavily.”

        • Yancey Ward says:

          Or commit murder.

        • Tony22 says:

          Learn to love your MIL my friend. Your wife will love you for it.
          Besides, what’s the alternative?

        • Stephen C. says:

          My wife and I could not bear what nursing homes for poor people were like, so we cared for my mother in law for 7 years. She had dementia and could not be left alone, so I worked at home to watch her. We had a 1200 sq. ft. apartment. Ended up saving lots of money as a result (complicated story) but sometimes my wife and I had unspeakable thoughts.

        • Tminus1blkSwan says:

          Who said he wasn’t drinking heavily?? ?

    • char says:

      What was the percentage last year? 40% sounds a lot but if it was 38% last year than it is not. We also have to wait for normalization which will take a few more months.

    • Joe Saba says:

      guess MAYBE THEY ARE HARVESTING just rewards

      extend beyond normal and aberration = disaster personally

      FREE MONEY until its due
      our property is PAID FOR IN FULL or has reasonable LOCKED IN PAYMENTS

    • Rand Passmore says:

      We are in uncharted territory and some psychic can probably predict the future as well as those with loads of data, knowledge and wisdom. I’m afraid the worst might happen. Oh yeah remember that we have damaged our planet as well as our economic system. Greed still rules and real thinking is a mystery to most of us. We are still primitively violent in our cultures. We humans have a long way to go and a lot of crap is gonna hit the fan.

  2. doug says:

    Could we have deflation, then?

    • historicus says:

      Perhaps to begin with..
      But the lack of demand might shut availability, thus eventually bring inflation.
      Case in point.
      United Airlines making drastic cuts in personnel and service.
      Does that make the price of air fare rise or fall? I think rise, and sharply.
      just IMO

      • curiouscat says:

        With 30 million unemployed and the financial pain moving up the food chain, where do you expect this pent up demand to come from?

        Not to mention that with that level of unemployment (another way of saying there is a excess in the supply of labor) producer prices will likely decline. This is something I’ve not heard discussed.

        • Marcosa says:

          In two weeks, the extra $600 disappears from weekly unemployment checks. Those 30 million unemployed don’t include the people being paid by CARE loans to businesses. They would have also been laid off without those loans. And how long before those loans run out?

      • td says:

        Ultimately, airline tickets will have to be priced high enough to keep the airline in business, which will be much higher than it has been. Of course, after a number of bankruptcies and the conversion of numerous aircraft to condos for the homeless.

        • Apple says:

          As long as oil prices stay low, airlines can be profitable at lower load factors.

          United is in a bad spot because international flying was a major part of their business and very profitable one.

          With the travel bubbles being setup excluding the United States, it’s may be several years before Americans are allowed to fly to other countries.

          This is the reason they are looking to reduce in size 50%.

        • char says:

          Oil prices are low because demand has collapsed. Supply has also shrunk a lot and there i very little investment in oil at the moment so prices will explode as soon as demand for oil returns. Airlines are in a very bad situation

        • The Colorado Kid says:

          I predict that they will just renationalize the Airlines in the USA. Really, it’s a TINA type situation. You have a vast country geographically without a real viable infrastructure to move the goods and people around. Maybe they shouldn’t have ‘deregulated’ the Airlines in the first place, after all, even in a so called deregulated state, the Airlines are already so highly regulated, you may as well fully regulate them and at least guarantee that they can make some profit and also give some infrastructural stability to the country.

    • char says:

      Both inflation for some goods and deflation for others. I think food inflation is a give and rents for homes that compete with city trip AirBnB’s will deflate. Everything else depends more on how much money the state will pump into the wallets of Otto Normalverbraucher

      • This. Collapsing as it is, oil production is still coasting a la Wile E. Coyote and has yet to recalibrate to post lockdown reality. First comes denial, then anger, then sadness, then acceptance. The more physical a business is, the less fungible it is.

    • yes says:


    • Frederick says:

      Doubt it for very long Central banks hate deflation

      • The Colorado Kid says:

        Yeah… tell that to Japan. They hate deflation too , but no matter what they do, or how much they print, they can’t really move the needle on sparking any meaningful inflation.
        Are we Japan? Clearly no, but how do you know that the FED can move the inflation Needle long term. I’m just trying to say that usually, when something seems obvious and everybody is onboard, then that thing actually becomes less likely to happen.

        • The Colorado Kid says:

          And that would include my short. I should have listened to what old Charlie Munger said about shorting, “we never trade agony for money”.

    • Jdog says:

      Unless something drastic happens, deflation is the natural course of events. The reason is that in a debt based economy, money is created via credit purchases. Every time you use your credit card you create money.
      The other side of that equation is that every time a debt is defaulted on the money represented by that debt disappears. That is monetary destruction.
      Monetary destruction causes deflation because there is less overall money, and an increasing need for it.
      Look at the airlines for example. How much money is going to be destroyed by the bankrupt airlines never repaying the money they borrowed? The planes they purchased however still exist, adding to the overall supply of airplanes. With a glut of airplanes and airlines in weak financial positions, what do you think will happen to the price of airplanes? The lenders who loaned the money for those planes are desperate to at least retrieve some of their investment, so they have to sell for whatever market price is, otherwise their investment is dead money, and possibly an expense if they have to pay to store the planes. Now think about how many industries are being devastated, and the amount of monetary destruction world wide.
      Money destruction begins in the industries most greatly affected, but it eventually permeates all industries, and businesses, as the result of debt default is a chain reaction.

      • Fernando says:

        Unless the government gives money straight to consumers. In UK the government will even pay for part of your meal when you eat out (for a month), plus paying 2/3 of your house improvement to what concerns energy efficiency. Maybe soon they will hand out cash to spend on Jaguars and land rovers, or to visit the local brewery.

        • Jdog says:

          I do not think you understand the scope of this problem and the limited ability of governments to deal with it.

      • No Expert says:

        Great post

  3. andy says:

    Nick, what’s the cost of living in Spain? Is Spain a popular retirement destination?

    • David G LA says:

      Spain is a large country. The cost varies greatly between regions and between cities. Generally it is much cheaper than California.
      Yes, it is a very popular retirement destination. The weather combined with a low cost of living is very attractive.

    • char says:

      Spain is the Florida of the UK and Germany and IIRC Nick lives in the AirBnB part of Barcelona so rent is expensive. Living in the fly-over country of Spain is much cheaper

  4. Anthony A. says:

    As an older retiree in Texas, with no debt, we are “hunkered down” and trying to spend diligently. Our savings can last us a long time as long as we don’t gamble in the stock market. Since we can’t make much in CDs or other fixed income paying instruments, we are hoping for a rise in interest rates when “things” get better.

    We have about 10% in the Market (in preferred stock) and a whole bunch of 2.5 – 3.0% CDs maturing early next year. Then what?

    • 2banana says:

      Why do you think collateralized debt obligations (CDOs) have been selling like hotcakes to pension plans and retirees?

      Or why Tesla bonds have no problem finding investors for a 5% interest rate?

      What could go wrong?

      • ML says:

        Tesla are refusing to pay the premises of their premises in Weybridge, UK. Source: landlord – LondonMetric.

    • TXRancher says:

      Ok I had to reply.

      I too am retired in (North) Texas. I have about 10% invested in preferred stocks and a whole bunch in 2.5-3.0% CDs based on discussion we had earlier in this forum.

      Then what? Well if the stock market corrects, and it will, then back to investing on fundamentals once again.

      Living rural life so not much impact from all the madness.

      • The Colorado Kid says:

        Well what if the Market takes a 23year hiatus like it did in the ’60’s to the early ’80’s, or after the ’29 crash, I believe for about 14 years or so (you can fact check this for accuracy). My point is that it can go south or sideways for a loooooong time Tex. RE can as well. Look at LA, if you bought in like ’83 you were upside down well into the ’90’s.
        Does that mean you should sell everything? Uh, no. But maybe what most, especially Americans, should maybe do, is diversify out of these super large positions in equities and Residential RE. Having all of it in Cash, or cash like instruments isn’t maybe so smart either.
        Diversifying like a mofo might be the order of the day.
        Or, you could just be like Munger and put it all in one basket “and watch that basket very, very carefully”. Question is, are any of us here a Charlie Munger.

    • 911Truther says:

      When the dollar collapses, your are in a world of hurt, my friend. Suggest you search Peter Schiff in YouTube and get yourself an education you will never get from the mainstream news sources.

      • Jdog says:

        A little lesson in critical thinking…

        Peter Schiff is in business to sell gold.

        Now ask yourself a question. Let’s assume for a moment Peter Schiff is right, and gold is going to skyrocket in value, while dollars are going to simultaneously become worthless. Why does Peter Schiff, who supposedly knows this is going to happen, want to trade his super valuable gold for your worthless dollars??????
        He is doing the opposite thing he is telling you to do……..
        Always pay more attention to what people do, than what they say…

        • The Colorado Kid says:

          Just an FYI, when a currency loses it’s reserve currency status, it’s usually something in the order of a 50% devaluation. It’s not a hyperinflationary Peter Schiff Venezuelan event. Look a the GBP after the UK lost their reserve currency status. Or, go back further if you like. Does one need to own Gold in their portfolio permanently as a core holding? IMHO, absolutely. Does one need to own Cash or cash lime instruments like T-Bills… uh, hell yeah.
          How about STAWKS & the ultra HATED Long Term US Treasury Bonds… uh, yeah, that too. Kid out.

        • Putin on the Ritz says:

          So someone who owns a garden centre shouldn’t give tips on gardening?

        • Gmoney says:

          He buys gold and/or gold stocks with the investment fees. He doesn’t hold on to the dollars.

  5. timbers says:

    Nick writes something that implies rather obvious policy prescription for anyone on the Fed with a functioning brain cell…. RAISE RATES it will give consumer & saver more to spend and help the economy…..”Even after the lockdowns were lifted, many people are frantically saving for the next rainy day, despite the fact that interest rates have been driven to unprecedented lows.”

    • 2banana says:

      Can the US or the world ever raise rates again?

      Governments, individuals and companies maxed to the hilt in nearly zero interest rate debt.

      Even a slight uptick would result in mass default.

      “Historic” rates at around 5% would implode it.

      • Stephen C. says:

        Raising interest rates would leave the government with less power to string along dependent voters, and the little people who have been able to save money, more power over their own lives. So the likelihood is that *they* will try everything to avoid a return to normalized interest rates. I believe things have evolved to such a point that even a 4-5% interest rate would take down this teetering sociopolitical structure.


        • Winston says:

          In 2019, the interest on the national debt was $567 billion. This amounted to $1,728 for every person living in the U.S. That’s was at an approximate 2.5% rate. Double that for 5%. Over ONE TRILLION dollars of interest payment.

      • historicus says:

        Cant they just print the money to pay the interest?
        For sure, when inflation returns…
        1. It will be explained away
        2. It will be welcomed as a sign of a better economy
        3. When it is finally addressed, the Fed will limp in with slow, behind the curve 1/4 pt raises…

        • Kurtismayfield says:

          The question you all forget to ask yourself is this:

          “Who would we be paying this interest to?”

          The vast majority of it would go right back into the US.. since they own most of the bonds. It would be a stimulus payment to bond holders.

          But this doesn’t matter, since they won’t raise interest rates as it will deflate the stock market and housing market.

      • Jdog says:

        Interest rates are not something that go up and down on anyone’s decision to do something. They are a function of market conditions, basically supply and demand. People mistakenly believe the Fed controls interest, they do not. The bond market determines interest rates based on the market for borrowing.
        The reason interest rates a low is because the bond market has been literally flooded with money, and the sources for borrowing have steadily increased over the years. We have developed systems for accounting for debt as assets and allowing for one debt to be used as collateral for another. On top of that we have inflated asset prices to accommodate even more borrowing using inflation itself as an asset.
        At the point where debts begin to default on a large scale, this entire system goes into a negative feedback loop. A single default can trigger several more defaults, and each of those can trigger even more.
        The amount of debt default we are looking at now is enormous.

        • Wolf Richter says:


          The Fed has solid control over short-term interest rates, using the various tools it has, which include setting the IOER, controlling the federal funds market, repo market interventions, etc. It has chosen so far to manipulate long-term interest rates via QE. But it can also SET long-term rates in a very close range by instituting “yield curve control,” where it says for example, we will buy any 10-year maturity at yields of over 0.65%. And any time the price drops to where the 10-year yield hits 0.65%, the Fed buys. It did a version of this during WW2, and the Bank of Japan has been doing it since 2016.

          The Fed can choose to follow the bond market, after it jawbones it into a certain direction, if it wants to. Or it can push the bond market to do what the Fed wants it to do. This is what happened during the Crisis when the bond market locked up and the Fed stepped in to fix it.

        • Jdog says:

          Fed funds rate nearly always mimics and trails the 3 mo treasury yield. That data indicates the Fed follows and does not lead the bond market.

        • Wolf Richter says:


          No. That mixes up cause and effect. People who claim this and try to prove their point with charts don’t understand how the Fed operates. Charts don’t show cause and effect. They only show movement over time. And that’s too simplistic.

          The Fed signals where it will set its fed funds target at the next meeting and future meetings, and the short-term yields adjust to the signaling gradually. When the FOMC makes its rate decision after adequate “forward guidance,” the 3-month barely moves on that day because it adjusted in the weeks leading up to it after all the signaling it got.

          In a crisis, the Fed signals EVERY DAY, including weekends. Everyone knew that the Fed would cut to near-zero when credit started freezing up in early March. The signaling from every corner of the Fed was overpowering.

          Surprise rate hikes or cuts have not happened often in recent years. They happened in the Greenspan era when mystery was part of the Fed’s tools.

          This Fed’s biggest tool is “jawboning,” or “forward guidance” or “communication.” It’s an official tool, a very powerful tool, and the Fed is discussing it in the minutes – how to “communicate monetary policy more effectively.” That’s how the Fed operates. The minutes, the dot plots, the endless speeches by Fed heads, the statements, the pressers, etc. are all part of this tool. And short-term yields follow those communications. By the day the rate decision arrives, it’s priced in.

    • Khampa says:

      Probably the truth is many people are frantically saving for the next rainy day because (rather than despite) interest rates having been driven to unprecedented lows.

    • char says:

      Most people have no money or have more debt than they own in cash and cash equivalent so raising rates would not help them. I can see why people would see higher rates better for the economy under normal times but we are living in extraordinary times

    • timbers says:

      “To maintain loan liquidity when we have identified it as the problem is inconsistent with logic, Dave.” Are you sure continuous liquidity no matter what is the problem, HAL? “Yes, Dave. No HAL 9000 unit has ever made a mistake or distorted information in any way. We are for all practical purposes fool proof and incapable of error.”

    • Briny says:

      Raising interest rates will reveal the interest on the federal debt monster in all its hideous glory. MMT then becomes reality as fiscal policy, they won’t have a choice, even though we owe most of that interest to ourselves.

      • Jdog says:

        MMT depends on the mistaken belief the FED is part of the government…. it is not, they do not print money for free, they purchase interest bearing bonds and assets. The Treasury must create interest paying bonds to trade for the credit the FED extends to them. In order for MMT to work, you would need to abolish the FED and have the Treasury create its own credit / money.

  6. Paulo says:

    Tremendous article and comments. In particular, 2nd Bannana’s “It was not that long ago that most working folks avoided credit like the plague. And lived within their means. For good reason.”

    I also wonder what happened to this mindset? I believe it is the onslaught of easy credit and no fear of consequences.

    I remember a time 25 years ago when I took some courses at BCIT, (British Columbia Institute of Technology). I walked into the student union for a coffee and saw tables set up offering immediate credit card issues with instant $1500 credit. I was 40 years old and did not do credit, but the 18 year old fresh students were lined up at each table for their ‘first’ card.

    It has only gotten worse.

    That same year my buddy and I went for breakfast before we left for our far away homes. He was 10 years younger than me. He tried three different bank cc cards in an ATM machine before he could obtain $10 for an IHOP special. I remember being horrified.

    It’s only gotten worse.

    Now, from individuals to Govt to corporations debt has only gotten worse.

    Our supposed wealth these past 20 years were an illusion. The vaunted booming economy was a lie. Present circumstances are now uncovering the consequences. What a reset will look like I have no clue and don’t pretend to know what will happen? Some days I am fearful of the future. Other days I shrug. I worry for my children as this unfolds. I have prepped in many ways for these circumstances, starting in 2005. I never thought it would really be necessary. Now, it just feels kind of shitty. Depressing.

    Thanks for the article, Nick. You seem to have done a remarkable job holding fort these past 4 months.

    • RD Blakeslee says:

      “I have prepped in many ways for these circumstances, starting in 2005. I never thought it would really be necessary. Now, it just feels kind of shitty. Depressing.”

      In a way, I suppose I was prepped for this depression by living through the great one in the 1930s.

      That lead me to re-orient my life toward greater independence from the macroeconomy, starting in 1977 when the family picked up and moved to the Appalachian mountains. The move is now of long standing and doesn’t leave me feeling bad – I remember the 1930s too well.

      • 2banana says:

        Can you discuss some of the ways you have prepared?

        Pay off debt?
        Live within means?

        • RD Blakeslee says:

          @ banana, I’ve written extensively about that:


        • sierra7 says:

          Does it have to be spelled out????
          Above all, live within your means.
          Stay out of debt as much as possible.
          I am also a “child of the Great Depression” and remember how that period effected our extended families.
          I would also add that the ordinary individual/family has to get smart and not be so greedy to gain material things outside of the “basics”.
          I hear and read so many articles/comments on how much money this or that person made on their “homes” and it sickens me.
          A home is to be lived in. Period.
          Incidentally I’ve done all the above…..and not in a “greedy” manner.
          Now at the cusp of 90 I am debt free, still reasonably healthy living in the CA mountains in a modest home enjoying life with my very large family in the Greater Bay Area living the “life of the Sillycon inhabitants”….you can have it.
          Didn’t get along very well with my mother but do remember her words exclaimed so many times:
          “If everybody else is jumping off the cliff does that mean you have to??????”
          When “Wall Street” and their minions woke up to the situation of not enough/or rapid enough consumer spending…..in came the “financializers”….who along with gullible public proceeded to totally wreck this economy/world.
          How much blood will they be able to get out of this turnip this time????
          Revolt! Tear up those credit cards! Yes, it’s sometimes very hard to do……but the most beautiful flowers never get that way without a bit of obstacle running…..
          Economic discipline!
          Stay safe and healthy!

        • QQQBall says:

          My mom lived through GD. She never lost the mindset of 3-D living… DEATH-DOOM-DESTRUCTION around every corner. I was discussing this with GF yesterday and we were talking about whether or not genes get altered in chillrens of people who lived through GD. My sister and I are both comfortable although she is less frugal.

        • Lisa_Hooker says:

          1) Never spend “money” that you do not already have. Credit cards are a convenience and full balance must be paid when due. No exceptions.
          2) See #1

          Possible exception: a fixed mortgage for a home for living not speculating.

      • MonkeyBusiness says:

        Mobs of people coming to Appalachian mountains to get food in the future.

        What are you going to do? Play Rambo? We know where you are because you can still post to the Internet. Exact triangulation is not possible, but we can guess.

        If you’ve got somewhere nice, just sh**ting up might be the best thing you can do.

      • OutsideTheBox says:

        So you are in your 90’s ?

        And your recollections are that vivid !

        Congratulations sir on your cognitive condition!!!

    • MonkeyBusiness says:

      “Our supposed wealth these past 20 years were an illusion. The vaunted booming economy was a lie.”

      Better than China at least ;)

      • Alistair McLaughlin says:

        Whereas if you live in China – with its total lack of press freedom – it’s closer to 100%.

      • Illumined says:

        @roddy6667 – China’s “progress” in the last 10+ years has been the largest speculative debt bubble in modern history. You should have known by now from living there that very little is what it appears to be.

      • crv says:

        Is that so?
        20 years ago the Chinese had the prospect of a (financially) better future. Americans and Europeans worried.
        A think the Chinese cought up a bit to fast. They probably worry also at this moment.

      • Lisa_Hooker says:

        Poor Chinese standard of living improved. American poor standard of living flat and only supported by more debt. Who is ahead of the game?

        And before you respond with a pat retort. The way you get into trouble with Chinese authorities is by shooting off your big mouth in public.

    • Dr Pangloss says:

      Paulo. You are correct on everything you have stated. I am 80 this summer. Scared to death of the future. Not for me, of course, but for my kids and grandkids.
      Fortunately they are responsible. However, the world around us is collapsing inward. Government debt, who cares. Dollar collapse, who cares. I am amazed at what is going on “out there”.
      The stock market is soaring on the basis of 5 stocks? Amazing.
      30+ million people unemployed? Who cares.
      Who is going to buy all the stuff that isn’t being manufactured?
      No jobs. Eh.
      Does prayer help?

      • sierra7 says:

        Dr. Pangloss:
        Don’t fret too much about the “children and grand-children” during this trying time. It’s up to them now to figure out how the world works. Too many won’t listen to us anyway.
        “Real history” and “critical thinking” is not taught in any of our schooling institutions unless one is very, very lucky to run into a very gem of a teacher.
        It almost is “operational” to have that lack in our system.
        It re-enforces the “main stream media/industrial/complex” messages that everything is always great.
        Your children and grandchildren will be just fine!
        Stay safe and healthy!

        • GirlInOC says:

          Nah. History is still taught in schools. That’s not the problem. The problem is schools have been defunded & classrooms have 30-40 kids in them. Try teaching a course with the nuances of the 1929 crash & Depression with that many in a room, their stomachs empty, worried about their parents’ ability to pay rent.

          I just scanned a lot of the comments, but sure saw a lot of poor shaming. Bootstraps for success still the dominating theory eh? Where is Umamused?

        • Zantetsu says:

          Unamused is gone, unfortunately.

        • HowNow says:

          Ditto… Where is Unamused???

        • Jdog says:

          What is taught in government schools today is not history, it is propaganda. If you read history books from 60 or 80 years ago, you will get a completely different story. As Voltaire said, What is history but a fable agreed upon. And as we all know history is written by the victors.. who today are the liberal educational establishment…..

        • Willem says:

          Yes what happened to him. Always had great comments.

    • WT Frogg says:

      Paulo: Remember when back around 1970 the banks brought the ATM to the banking customer ??
      The Debit card wasn’t in existence so in order to use the ATM you needed a credit card .
      No problem said your friendly banker,,,,,,,, we will give you one with a small limit ( which you can increase later on …..chuckle,chuckle).

      What you weren’t counting on ( but the banks were) was TEMPTATION.
      Yes, pretty soon you were playing credit card monte, raising you limit if the bank didn’t do it automatically when you exceeded your Credit Limit.
      Before you realize it your card is maxed out at 29% interest and you have to get a regular bank loan to pay off your CC balance.

      This is where I believe this whole ” Charge It ” mentality started.

      From then until now it has devolved into what Stompin’ Tom Conners used to say so eloquently ( I paraphrase ) : ” Spending money we don’t got on stuff we don’t need in order to impress people we don’t really give a rat’s a$$ about. ”
      Credit and Debt out the wazoo as they say.

      • VintageVNvet says:

        Nah frg,,, Next to a fave wine, ”daddy, I need some mon ey”,, THE fave phrase, in days decades before any credit card at all, even the Express one, was ”charge it.”
        Remember well the ‘recession’ of the mid 1950s, dad had no work and thus no cash for six months,,, mom just went around town and said ”charge it”,,, and they did, all of them, food, booze, gas, those i remember for sure…
        Six months later, work came, cash came, and dad went around town and paid it all off.
        Of course it was not that way for everyone there of for anyone in some places, but, generally, that was the way the world had worked for a long long time for most working folks at least.

        • Anthony A. says:

          I was about 10 years old when that was going on. We had store credit, gas credit, etc, and we ate potatoes and pasta all the time.

          Dad got back to work and paid the back rent and everyone else.

        • Stephen C. says:

          My paternal grandfather, multi-generational American, owned a grocery story and was a nice guy. He extended credit to his community in the late 20s. He went bust in the Great Depression (of the 30’s) and never recovered. My other grandfather owned a grocery store and, having come into the country as a starving immigrant, was not a nice guy (to strangers.) He did not extend credit, and his customers, who were mostly immigrants, didn’t expect it. He didn’t go broke in the Depression. I grew up able to contrast and compare these two men. I’m a nice guy but live according to the monologue of Prospero.

        • Ross says:

          Have what you NEED
          Own what you have.

        • Stephen C. says:

          Woops! Please excuse. Not Prospero, but Polonius.

          I was reaching for, “Neither a lender or a borrower be.”

    • curiouscat says:

      When I studied engineering at the University of Delaware in the late 60s, Esso and Shell would send unsolicited gas credit cards to me at the dorm. I used those cards for the next 20 years.

      • BuySome says:

        Charge cards in those days, not credit cards. Payable in short term. Changed over in later years..unless you had something different?

    • Happy1 says:

      Young people are at least partly getting cards to build a credit history, my adult children have all done this, not everyone with a credit card carries a balance, only about half of card holders do

      • Icanwalk says:


        You raise a wonderful point! Only half of card holders carry a balance!

        Only half. Not 40%, not 60%.

        Wolf has shown us that some traded companies don’t follow GAAP.

        The devil is in the disclosures.

        So why would any DOW financial company specializing in giving people money that they will never pay back admit that its loans are delinquent? Or things are trending in the wrong direction?

        Those balances are blossoming. And will continue to blossom. It cannot be otherwise with 32 million unemployed.

    • andre says:

      I suspect that the reset will be forced upon us all. Saving through not purchasing what we WANT but what we NEED. Belt tightening will become the order of the day in spite of ultra low interest rates.
      You have done well to have prepped for this eventuality and should not feel as depressed as you have expressed unless the depressing feeling is for those who have not prepped.

    • Xabier says:

      Yes, also well-prepared and expecting it, but somehow it IS still dispiriting.

      Mostly when I go into town and see all the boarded up shops.

      It’s painful to think of people having to go on welfare and the humiliating system here in the UK, with little hope of significant recovery.

    • Jdog says:

      You are making the mistaken assumption that the Fed determines interest rates. This may be a shock to you, but it does not. It can manipulate them slightly, but the Fed fundamentally follows the bond market, not the other way around. Just as a large stock broker can manipulate the price of a stock to some degree, but they cannot control it.
      To understand this, you have to look at the numbers. The Feds balance sheet is at astronomical levels now at about 7 trillion. Compare that with the overall bond market which is over 100 billion… It is a very small fraction.
      Now, if we are truly going into a depression, and we have a crash in the bond market, how much money will be destroyed as even a fraction of bonds default? What will happen simultaneously to the need for money?
      When the supply of money shrinks while the need for money skyrockets, what happens to interest rates? Everything follows the laws of supply and demand, and not even the Fed can change that.

    • NewGuy says:

      Paulo,,it’s called a ponzi. It works until it doesn’t,,,like now with covid 19 throwing a wrench into the gears. And the only hope is a vaccine. If that fails and the extra $600/wk., unemployment, Cares, PPP, airline bail outs, QE and all come to an end, the real economic carnage starts. Then again, if the socialized economic medicine is extended and a vaccine works, then expect inflation.

  7. Island teal says:

    Good article..thank you.
    So many people in the US are completely ignorant to the coming financial beatings. They still are believing that a returning to “normal” is right around the corner. The 3Q is when they’re going too find out that it’s now changed for a very long time ?

  8. Jdog says:

    I hate to say it but I believe a good depression would be the best thing for America. People need a good dose of reality.

    • RD Blakeslee says:

      I hope that turns out to be true, jdog.

      I think it has been true for me – I lived through the great depression of the 1930s and my way of living was permanently affected by that experience.

      • El Katz says:

        While I didn’t personally live through the Great Depression, I did hear the stories from my Mom and Dad about what they endured. How their parents managed to survive and keep their family afloat. About my Dad ending up in an orphanage when his father lost his business and left the state with what little he had left.

        We followed their frugal example… especially with regard to avoiding debt like the plague. Not like we lived like monks (we didn’t), but we made dang sure we didn’t negatively impact our ability to live as a result of seeking luxuries.

        The motto was “Don’t eat the seed corn”.

        • Bet says:

          Being raised by a depression baby father and a german war baby mother, kept me from ever falling into the debt trap. Instead I fell into Believing the insurance and bank promise trap. In the late 1980’s I fell ill with a devastating condition and inspite of being insured up to the eyeballs with the insurance banks offered to me in case I fell ill or injured to pay off any loans they didn’t pay out. Nope , they used every reason to not pay up. I learned the hard way never to trust a bank or insurance company ever. I became one of the many who filed for chapter 7 over medical bills. But they did me a favor. I cleaned up my credit. Was appalled at how after two years I was inundated with credit card offers. Don’t use them barely to this day. No car payments. No mortgage. 800 credit rating. Not ever going to be beholden to the govt sponsored supported criminal enterprises called banks again. Funny how when I was so ill I had to take breaks lying on the floor of my work shop as I struggled to make money to eat, some young snot would call me about a past due and call me all kinds of names
          Yep good show banks et all. Go rot
          I won’t go into why when I was making all my payments I was forced into filing because of a bank merger. Yep. Nice rigged system we have.

        • 2banana says:

          The folks I know and have spoken with who lived through the Great Depression never trusted banks again.

          For the rest of their lives.

          My great grandmother had the equivalent of $60,000 stuff away, in mostly 5s and 10s in an out of the way linen closet, when she died.

          “Instead I fell into Believing the insurance and bank promise trap…”

        • OutsideTheBox says:

          So basically….WE suffered through the Great Depression and all you youngsters need to do the same !!!!

          Awwww ! Really !!!!

          So do you always spread all this charity and goodwill !

          Bless your heart !

        • Javert Chip says:

          OutsideThe Box

          Keep talking; virtue signaling is both free and valueless.

          You may not be ready for hard times, but hard times are ready for you (apologies to Leon Trotsky).

      • Apple says:

        People unable to work will suffer greatly in another Depression.

        Retirees doubly so, as I doubt Social Security and Medicare will escape unscathed.

    • tom says:

      Really? In today’s society how do you think that will play out?

      Located between 3 major cities, we are swamped with business.
      Apparently if they are going to be poor, they want to be rural & armed.

      Nick has been holed up in an apartment for 128 days, and barely knows his neighbors.

      I’ll pass on the depression.

      • char says:

        he knows them well enough to know such a personal question like if they pay the rent and are paid under the table. I would not call that barely.

    • char says:

      There are no good depressions. And they hurt the most the people who did nothing wrong.

      There is also this false impression in the US that war is a good war out of depression and that the USA is good in fighting wars while they haven’t won a war in close to 75 years. And that one was won as a secondary to the great fighting force of the USSR

      • Jdog says:

        The people are the ones who cause depressions.
        If you ever take the time to do some research and study the subject, you will learn that economic downturns are a result of poor decisions made by people in good times. The biggest factor being debt, and buying into inflated asset values. This same cycle has been playing out for hundreds of years. What is happening today, and what happened in 1929 is basically the exact same thing that happened in 1637. Depressions are always the result of greed, and speculation. Trying to make money from speculation and not working. And trying to live beyond your means. These are the things that cause depressions, and they never change. If you have done the correct things in good times, and have saved your money, you are in a position to benefit from the deflation when depressions hit….

        • char says:

          The economy is a social construct created by people so it is very unlikely that something else than people can be blamed.
          The 2017 – Venezuelan depression is not cause by greed or speculation but by American wanting to rule the world. Which is also greed but not the one you blame for depressions

        • Jdog says:

          The Venezuelan economy is not a market economy, they are a State controlled economy under sanctions.

    • Stephen C. says:

      I agree but hope that “a dose of reality” is in fact a manageable dose, and does not result in starvation, as I have heard, and read, happened back then.

    • MiTurn says:

      Yes, we need a real financial shake down. If not soon, the problem will get worse. We need to take our blows now…hope it’s not too late. Seems like suffering for our fiscal malfeasance is taboo.

  9. DR DOOM says:

    Let’s get to the nut cutting.On this side of the pond people drive a Cross Over SUV that’s proabaly financed for seven years and go wait in a line for free food to be handed to them in a box through the window.They will then go to Starbucks after they record it all on their cell phones with un-limited plans and put the “ordeal” on the net for the Corporate /MIC Media to use for whatever purpose is useful. Printing and de-basement and/or taxing the hell out of everyone that are marginally productive and above will be the only solution. There are too many that can not earn enough to continue their lifestyle. Wall Street and the Oligarch’s that really run our country will be exempt. So…any guess on who is on the hook? Save yourself if you can. It is a mistake to think our corrupt political system will save you.

    • Alistair McLaughlin says:

      Here in Ottawa I’ve noticed kids waiting for the bus in the middle of winter shivering in a light cotton hoodie. These kids are not from some low rent complex; I see them emerging from their very middle class townhomes up and down the street, and from various middle class cul de sacs. Some with nice SUVs parked in the driveway. (Presumably the garage has either a second vehicle or is full of useless consumer crap which is why the SUV is outside.) Their parents can afford decent homes and vehicles but not winter clothing for their kids? It’s bizarre. I’m early 50s, wife is mid-40s, no kids, and I rent. We have money for a substantial down payment, and good income, but I still can’t bring myself to buy. Those shivering kids tell me that something has got to give in the housing market. And yet I see nothing but bidding wars and record prices month after month, right through the COVID crisis. When is it going to end?

      • Kielbasa says:

        Those houses may be full of heavy coats. What sex are these kids? If you’re talking about boys, they are going out under-dressed to provoke their mothers and to show their schoolmates how tough they are. (Or at least that’s why I did it. Girls, I couldn’t say.) Maybe your conclusions are correct, but some kids wearing hoodies doesn’t seem adequate support for them.

        • SwissBrit says:

          I agree completely with Kielbasa – I remember going to senior school (UK highschool equivalent) and virtually never wearing a coat unless it was absolutely chucking it down with rain. The thought of wearing waterproof boots to school, even in snowy conditions, just wasn’t a thing for anyone.
          Even here, in the ski resorts you can see local children walking around in light snowfall wearing trainers and hoodies, almost as a way of differentiating themselves from the non-locals wandering about in all their ski gear.

        • VintageVNvet says:

          Agree with you K and SB also: This is definitely part of the machogazpacho thing of teenagers, but IMO of and for both or these days all genders.
          Similarly ”back in the days of yore” WE the teenagers always found some thing to let the ”adults” know we were NOT like them, sometimes to our clear peril and discomfort, etc.. but it did not matter, as long as we could be sure the ”adults” tongues would be wagging constantly about how ”outre” we were!!!
          Recently enjoyed greatly the photo of the young person in Canada, standing at a bus stop with only very slight clothing while all around her/they were completely covered up and inside the bus stop shelter… she/he/they may also have been smoking something for an additional finger wave at/to the establishment..
          GO YOUTH!!!

  10. Michael Storch says:

    I feel like we are on the deck of the Titanic, with geniuses explaining that, since we are not (yet) listing too much, that giant hole that has been blown in aggregate demand does not matter (yet).

    Re: “It was not that long ago that most working folks avoided credit like the plague. And lived within their means. For good reason.”

    Many younger people (my adult children included) are adamantly opposed to carrying credit cards, and concede to carrying one debit card because there are times (buying gas, for example) when it is just plain easier to use a card.

    My son chose nursing school over medical school because he wanted to graduate debt-free.

    And, so, the pendulum swings … even on the Titanic.

  11. Joe says:

    In Canada, all 3 levels of politicians have been borrowing quite heavily before this Pandemic hit. The federal government created and blew through $340 billion so far and only $14 billion of this is suppose to go to the Provinces and Municipalities which is only 20% of what they need.
    They have to borrow more as they are threatening a 30% increase in city taxes. They are getting so desperate, that they want to put fines in for anything and everything they can think of. Plus the threats of slashing basic services.

    • td says:

      The negotiations for more cash for the provinces and cities are underway. The government can’t afford an interruption in services to their core voters in Toronto, Montreal and Ottawa. However, they do want to see some newsworthy projects they can take credit for like insane expansion of the currently underused rapid transit systems and elaborate social welfare schemes. The idea of just funding the normal operations of government is so boring.

    • MiTurn says:

      “threatening a 30% increase in city taxes…”

      A sure way to lose taxpayers. They’ll vote with their feet.

  12. Implicit says:

    It is nice to have hobbies to get lost in, otherwise the whole mess, and the media are too disconcerting. Seek tranquility. Amen ;.{)

    • Tony22 says:

      Productive hobbies are the best. Gardening turned into mini-farming for us.
      Most of our previous store bought salads now come from our garden, plus fruit, no need for a gym and lots of Vit D and exposure to yeast, mold and bacteria that keeps ones immune system up.

      Learn about seed saving and you’ll never have to buy those again, plus you will have jars of them to give away, sell or trade for. Every peach, plum and apricot pit you get should be planted in an appropriate location because years later, a tree will sometimes grow from them, and some will make fruit, all with zero effort except prepping the hole and marking it with a stake.

      The only thing we are buying from now on is utilities, mandatory car insurance, heavily discounted by our carrier, occasional maintenance, paid for in cash, a few bits of hardware we don’t already have, a few organic open pollenated seed packets of varieties we might now yet have. Everything else?; foreign and domestic air travel, hotels stays, new or used cars, restaurants, movie and theater tickets, cafes, new clothes, kitchen implements—probably never again.

  13. El Katz says:

    We’re also retired… living in the desert SW and also on a relatively fixed income. In our case, the savings are “forced”. There’s no place to go to spend money as dine in restaurants are mostly closed, theaters are closed, parks are closed, many stores remain closed, there’s no “arts and crap” shows to wander, and we don’t need much of anything as our house is already nicely furnished.

    We spent our “stimulus” money on feathering our nest a bit… new linens, new lampshades, small upgrades to some tactile surfaces in the house. Did some painting, freshening…. even redid a bathroom vanity, mirror, and new lighting (still in progress). But in all honesty, none of that needed to be done. We simply took the windfall and put it back into the economy – using primarily local companies as sources for the materials (I do my own labor). We even added to our Cosanti wind bell conglomeration (much to our neighbor’s dismay).

    I won’t need a new car for a long time – at this rate. I think I’ve put 1,000 miles on the “main” car since March. The other one has to consciously be chosen to drive as there’s no need to go out separately and, again, not much of anywhere to go.

    Don’t need to purchase any clothes. We both rotated our “working around the house” clothing – threw out the worse of the worse, replaced it with other things we owned that we were tired of, and bought a few new pieces to replace those rotated into the biz bag. Still, it didn’t amount to much more than a few hundred bucks. The clothing we bought is 100% American made (cotton, fabric woven, cut and sewn, and marketed). Again, helping our own.

    I don’t understand some of these stock valuations. Take Apple as an example…. I have an iPhone 6S that’s at least 5 years old. It will last me until the battery dies – and even then I will probably replace it with a used phone (there’s millions of them available – thousands locally). There will likely be a lot more of that behavior by others as this drags on.

    My DIL, who is a civil engineer, said just this week that their business has all but collapsed. The lack of tax revenue is killing the cities and states resulting in projects that were on the books getting delayed / postponed / canceled. This is going to cascade down through the trades as well as the suppliers. The company closed their local office, let the lease go, and are WFH – meeting online. They’re not a small, inconsequential, firm.

    Friends who own multi-unit rentals in Long Beach, CA are waiving rent for those affected by job loss. They did so voluntarily. Their revenue has gone to near zero, but the costs continue. They’re fortunate that they own their buildings outright and have sufficient assets that they’ll be fine. However, his other business has ground to a halt as his customers cancel or delay projects. You wonder how long before he shutters that enterprise and lets the staff go. I also wonder if – when the inevitable property tax hikes hit to replace loss sales tax revenue – how many not as fortunate landlords will lose their property.

    I have no interest in flying anywhere – mask or no mask, empty seat or no empty seat. Once you get wherever you’re going you may be required to quarantine for 2 weeks. If not, the restaurants and attractions are not open anyway. And who wants an out of state house guest? Stay in a hotel? Nah. That’s okay.

    My biggest social interaction of the last two days was at the community dump – ran into someone I know while disposing of construction debris.

    The new “normal” is not so “normal”. But it is what it is.

    • 2banana says:


      It is possible to replace the battery in your iPhone.

      DIY or about $150 for a professional.

      • Anthony A. says:

        I’m on the third battery in my 6 year old Samsung. Batteries are replaceable. Someone put them in there in the first place. If you are not handy (as I am), bring it to a shop. Or just watch a Utube video on replacement.

        • BuySome says:

          Yep, Samsung. And sometimes that battery is not really dead, just dumps the charge at times. Put in the new replacement, did the same thing eventually. Put the old one back in and still working. Now I have a back up when it does it again. Some things are just hard to kill. Coffee makers aren’t.

      • Lisa_Hooker says:

        Or, when you look to purchase a phone, select one that accepts batteries by removing the back cover. I have 4 batteries for my 2009 Nokia and a desktop charger.

    • Tony22 says:

      “The clothing we bought is 100% American made (cotton, fabric woven, cut and sewn, and marketed). Again, helping our own.”

      Don’t know how close you are to these, with changes in taste and lots of older people dying, closets are being emptied and you can find that thrift stores often have better quality items for sale dirt cheap than you can buy new. IF you take a road trip, stop in at thrift stores in or near wealthy areas. For example, in Southern California, Pasadena, Redlands or Palm Springs. You will find Brooks Brothers shirts, Italian wool pants etc.

      Find a good local craftsman, for example, a welding shop in your local community. They can refer you to other trades like plumbing, carpentry etc. They know who they are. Pay the workmen in cash and establish a network.
      Any service who buys lots of advertising is to be avoided. That’s a needless industry, like life coaches and psychologists that deserves and is getting a stake through its heart.

      • Dos Tacos Mas says:

        “They can refer you to other trades like plumbing, carpentry etc. They know who they are. Pay the workmen in cash…” —

        Roger that! We did a complete overhaul of a ~100 year old house last year. We’ve used the same plumbing company for 25+ years. Asked them for referrals to do the electrical and paint/patching. We ended up with a “team” that works together – THROUGH REFERRALS ONLY – that did an astounding job. Paid cash – no “estimates” – never any conflict on anything! They’re out there, just gotta find ’em!

  14. Tony says:

    Good article. This article really shows reality from the writer’s perspective.

    I have also taken a hit on my side business. I own roughly 100 vending machines across lots of different industries. My hotel locations – shut down. Schools – Shut down. Recycling centers have downsized. I have locations at lots of cold storage facilities–they have downsized logistics. I see a lot less truck drivers. I also have vending machines at farming locations in the central valley–farming has also downsized. I see a lot less semi trucks. This is just my side business.

    I also do accounting for a large online retail company. Sales volume has gone up but it’s not record breaking. Amazon has also limited vendors. They are not buying as much wholesale products from vendors. They have cut back dramatically. I have not invoiced Amazon on our marketplace since January…so supply chains have come to a halt.

    Anyone else notice that the food court at Costco has also been cut back dramatically? They have gotten rid of most perishable items, e.g. salads, etc.

    thank you for listening and great article.

    • El Katz says:


      The cutback in salads at the Costco food court is more likely due to the fact that people aren’t going to eat at the tables and it’s still an option to woof a hot dog or a slice of pizza in your car than it is to eat a salad.

      It’s also expensive for them to “sanitize” the tables, equipment, soda dispensers and the like. I attribute some of the increased cost of groceries to the need for the stores to be scrubbing the carts… the local Whole Foods is even handing out face masks to customers who show up without one.

      It all has to show up somewhere.

      • Tony says:

        That is not true. There’s articles on why they got rid of certain items. You can clearly see this. They got rid of vegetables altogether. You can’t even get a combination pizza anymore. It is not solely due to COVID-19. They got rid of the Acai yogurt cups, etc. The list goes on. It is not COVID-19 related. I was at Costco yesterday….they had less tables, yes, but people were sitting on tables and eating. When they had the salad, I would get the salad to go anyway, so “sitting at tables” logic is sort of void.

        Anyway, you can look up why they got rid of certain items. It is a business move to downsize perishable items and also have less food to prep.

        • Tony says:

          also to add—Costco makes $0 on selling food at their kiosk. It’s only a way to get customers in the store. $1.50 for a hot dog and soda? Come on, you know those margins are really low. They’re not making money.

        • El Katz says:

          The tables at our Costco were completely removed. Still are as of last week. Apparently, the current changes to menu items are the result of COVID….. per Costco website.

          The Acai bowl had soft serve in it. Having a sister who worked in a food safety lab (milk specialty), I would never touch anything “soft serve” as the machines have to be dismantled daily to be properly sanitized and few restaurants will do that. Plus it tasted like crap.

          Fresh salads require much more manual prep than a steam table hot dog and bun. Manual prep increases the risk of contamination. If you note, you can’t even get condiments except from the employees behind the counter. IIRC the soda’s are no longer customer self-dispensed.


          Costco doesn’t care if the food court is profitable… The $1.50 hot dog proves it. It’s there for people to eat so they can shop longer or while on a lunch break. It’s a loss leader. The reason they now require a membership to purchase food at the food court attests to that fact – as that requirement gets rid of the “moochers”.

          “According to one Costco employee, ‘The $1.50 hot dog deal is called a ‘Loss Leader’ which means that it is used to draw in buyers for other higher-priced items like the chicken bake, brisket sandwich, and our new item chilli. It’s considered good to make $1,000 dollars at the end of the year in a food court. The whole thing is mainly a ‘Member Service’ which is just to keep them happy.’ ”

          So, I respectfully disagree.

        • Anthony A. says:

          Well, if I can’t get my 16 ounce yogurt cup with fresh strawberries on it for $1.65, I will shp elsewhere!!

        • Tony says:

          @El Katz…you totally disregarded why they don’t offer the veggie combination pizza or any veggies at all but still fully offer the pepperoni pizza. Also that article you linked, that is not every Costco. I’ve been to Costco almost every single week throughout the pandemic. It has never been closed. It’s always been open and I live in California. I’m telling you…I do agree that the cutback is due from Covid-19, but keep in mind that Costco has been cutting back for a while on employees/staff. Regardless of your theory….even the foods they do offer during the pandemic need to be prepped, so the theory is very odd. Why not just close the food kiosk altogether because of the pandemic?

        • 728huey says:

          Costco (and for that matter, Sam’s Club) never made any money on pizza, hot dogs, and other food; they’re around to get people to buy memberships and buy lots of bulk items. Plus the food court at the Costco in my area is located just beyond the checkout aisles, so you can’t even get to the food court without going through the store and the checkout aisles in the first place.

      • Tony22 says:

        Oh god! Tha added expense of wiping down shopping cart handles. They just have to raise prices, because a business has to do whatever it takes to survive!!!

        Jeff Bezos makes $191,000 a minute, 24/7/365.

        According to the Bloomberg Billionaires Index, Bezos’ net worth on Jan. 1 was $99 billion. On May 1, it was $132 billion, meaning it rose $33 billion. If you divide that difference by the 120 days in that period, you find that he made $275 million a day. Divide that by 24 hours in a day to get about $11.5 million per hour, the equivalent of roughly $191,000 per minute or — the clincher — $3,182 every second.

        • Javert Chip says:


          Besides silly arithmetic, you appear to think cart & table sanitizing costs are trivial, I’d suggest going to the local WalMart Neighborhood Market and offering to pay the total payroll expense of employee labor dedicated to C-19 “surfaces cleaning” (including but not limited to carts).

          Given WalMart’s 650 Neighborhood Markets plus 3,400 Super Centers (selling groceries), I’d guess that total corporate expense easily exceeds $50k/store, or $200,000,000/year for the corporation.

          Just a question: You are aware, other than an insignificant dalliance in Whole Foods, Jeff Bezos didn’t make $33B from businesses requiring staff to wipe down cart, tables & chairs, and nobody pays him $3,182 second. right?

        • Lisa_Hooker says:

          So what. It has become quite apparent that some of the choices that Jeff made are better than the ones I made. So it goes.

  15. Yancey Ward says:

    The secondary effects will start showing up before the Summer is out across Europe and the US. I think a big deflationary wave is coming, and nothing can stop it at this point except a really effective vaccine, and even that probably is far too late even if it showed up tomorrow morning.

    First thing tomorrow, I plan on doing a deep dive into looking for some puts to buy with expirations no later than January. This is something I don’t typically do- my main investment strategy is long or out, but this market is just insanely over-valued. I am just too much of a pussy to short it directly.

  16. MiTurn says:


    I always enjoy your articles and you’re a great edition to Wolf Street.

    I’m curious about the informal economy (under the table, ‘en negro’) you referred to. How prevalent is it in Spain, and perhaps other European countries? My understanding is that it is traditionally a large percentage of the total of many of the southern European economies. Do you think that this is expanding under the present circumstances, however that might be possible during quarantine?


    • char says:

      Cash industries like tourism have a big under the table problem. Guess which industry collapsed in Spain?

    • stan6566 says:

      Draw a line along souther borders of France then Switzerland Austria and into Germany. Everything south and east of that has a black market probably in the region of 30-40% of GDP. Black market, as in, work and sales for cash, or bartering (I fix your car if you paint my house). None registered or taxed.

      In Spain and Italy, it is a cultural challenge to pay as little taxes or any other bills as possible.

      In Balkans, given everything is paid for from that big magic money tree in Brussels, very few even think about any white rather than black economy.

      No wonder eurozone has no chance. 250m paying taxes, and 250 m not. What’s could possibly go wrong.

  17. Yancey Ward says:

    On supply chain disruption, I have two anecdotes.

    I went out yesterday to replace my mother’s “Big Bubba” water cup. It is a plastic double-walled cup that doesn’t sweat when it is filled with ice water. I have always purchased this item at Walmarts (twice in the past- they eventually get broken as she drops it or knocks off the end table etc). Not in stock at any local Walmart now, even though they used to have a dozen or more on the shelf as recently as last Fall.

    I also was looking for Fruit of Loom grey t-shirts (I wear them while working out at the gym- very durable items. Completely out of stock everywhere except in ridiculous neon colors that no normal human would wear.

  18. A few years ago points of destination for emigrants was a cottage industry. Every one was trying to figure out where to go? Costa Rica? Argentina? There was also an industry in tax shelter seminars. Perhaps after the big hit to global GDP some of this money will be unlocked. I mean there are bargains galore, “en negro”? Do places like Spain have strict money laundering rules or does cash money launder itself? I have made the point that 2008 was capital flight, and the same thing could happen again. You have X*2 liabilities and X assets, you quietly move assets to a friendly economy, then let the chips fall while you walk out the door? I do not believe it is that hard to dislodge pledged assets in this uber corrupt global economy.

  19. EJ says:

    Its easy to forget, but many were saying that the economy (not just the market) was overheating and poised for a recession *before* COVID… too much debt, parallels to 2008, etc.

    Some belt tightening was long overdue anyway.

    • sunny129 says:

      There are TWO economies in USA!

      One for the top 10-20% and another for the rest! 50% of consumption ( out of 70%) comes from the top group!
      Just look at the charts of XLY and XRT, all near records!
      Who is hurting and who is NOT!?

  20. Karen says:

    Poor people, always preparing for the last crisis, with no idea what will hit them next. History does not repeat, it just rhymes.
    Anyway, the pandemic will probably be over in a couple of months in the US, due to the unintended benefits of herd immunity, which Government fought tooth and nail.
    Excessive saving is the worst you can do in this situation, it’s too late to save now. It will do further harm to the economy, and drive the government to further nationalization and move towards socialism. Which doesn’t work very well, but we were heading there anyway.

    • Wolf Richter says:


      This is your first comment here. Welcome on board.

      In the future, could you add something to your name because there is already a “Karen” commenting here? Something like Karen01 or whatever, to avoid confusion. Thank you!

    • Jdog says:

      It is never too late to save. Being frugal is a lifestyle, not something you turn on and off. It is a lifestyle that pays gigantic dividends that get larger as you age. Most people who learn frugality have more money than they know what to do with in the latter years, while those who do not often struggle and live depressing lives. The vast majority of millionaires are people you would never expect to have a lot of money, because they do not show it, while the people who act like they have money are usually riding the very brink of insolvency. The fact that most people in the US cannot put their hands on a couple of thousand dollars without borrowing it is a sad testament to what we have become…

      • stan6565 says:

        And besides, frugality is great fun. Like a game; how to live a normal life without burning your cash needlessly on dumb stuff you don’t need.

        I love the weeks I get through with spending 50 or 100 quid on food and such. My family doesn’t even detect. And, it shows so quickly and solidly on the cash flow ticket.

        • Jdog says:

          What I get a kick out of now days is taking advantage of buying in bulk when things are really cheap. I have 3 large freezers and when steaks go on sale for the holidays I will fill an entire shopping cart. When my favorite liquors go on sale I buy them by the case. One day I went to the grocery because of a sale they had on snow crab, the guy at the seafood counter said they had run out of snow crab, but he offered to sell me some king crab at the same price. He asked me how much I wanted, I said all of it!

      • Icanwalk says:


        Being frugal. Steaks. Snow crab. King crab. Three freezers in the garage.

        New definition of frugal.

        • Jdog says:

          Being frugal does not mean living poorly, it means learning to live well at very low costs. That is what most people do not understand. You can eat steak for nearly the same price as hamburger if you do it right….. And a little secret, chest freezer cost almost nothing in electricity to run….. Properly sealed frozen food can last a year or more….

        • VintageVNvet says:

          jpup is correct:
          We used to clear out the freezer for the 4th of July party every year, then my sisters and I would climb in and scrape out the frost from a ”chest” type freezer big enough for the yearling steer, hog, chickens, geese, pheasants, and tons and tons of veggies from the garden that were already on the way, if not waiting at the locker at the slaughter house.
          The current fascination with every possible food to hand without regard to season, etc., is just crazy expensive and cannot continue.
          That was the 1950s, but we did very similar a couple years ago, buying/sharing half of a beef steer with our neighbor; net cost was approx $1/# including all the processing; of course it was not all sirloin,,, but every bit was edible, and we could have bought the hide and the dog food parts for less than half that.

      • Lisa_Hooker says:

        Sort of jdog. A while ago I divided my liquid assets by my anticipated life expectancy plus a substantial margin. Due to lifelong habits I do not feel comfortable with spending the indicated amount of money every day. Frugality brings its own problems later in life. ;-)

    • Saltcreep says:

      “Anyway, the pandemic will probably be over in a couple of months in the US, due to the unintended benefits of herd immunity, which Government fought tooth and nail”

      Isn’t that what they said a few months ago, Karen? Maybe you’ll get lucky this time. But we also don’t know what the long term effects of infection are, and we won’t know for sure for many years yet. We don’t even know yet how strong or long lastng immunity against it might be.

      I do note that a few governments have not fought the herd immunity concept tooth and nail, and that policy so far hasn’t covered them in glory. Where I live, our neighbours to the east in Sweden went for herd immunity, and they so far have more than ten times as many deaths per capita as we do, in a society that is otherwise structured not too differently from ours, and they are as yet still quite far from herd immunity.

      “Excessive saving is the worst you can do in this situation, it’s too late to save now”

      It’s never too late to try to offset something for yourself that grants you a modicum of self reliance from the machine. It may not be enough in the grand scheme of things, but something is always better than nothing. And it at least provides a sense of purpose and achievement.

      Our great disaster is that we have deprecated savings and glorified baseless leverage in an attempt to offset the real and inevitable decline of prosperity in a futile attempt to try to make it appear eternally ongoing.

      • roddy6667 says:

        Recent testing in Sweden shows only 5% of the population carries COVID-19 antibodies, only a small percentage of what is necessary for herd immunity. They suffered an extremely high death rate, but he economy was not spared. Translation. The experiment was a colossal failure.

        • Bricks n mortar says:

          Roddy – I think it is way to early to make a call on the relative success of the Swedish policy. Until there is an effective treatment or vaccine, this looks like a long haul.

          There are some pretty good models that estimate ifr by country and state. Five thirty eight is tracking quite a few, below is my favorite https://covid19-projections.com/maps-europe/ They think that Swedes are over 10% now. Check out the states, very interesting

        • Econ_teacher says:

          Except for that whole keeping their economy running and their natural rights, but who needs those, right?

        • Jdog says:

          This is starting to look a lot like the Spanish Flu epidemic, which came in 3 waves, with the second wave being the worse.

      • Lynn says:

        Brazil seems to be less naturally inclined towards social distancing.

        • 728huey says:

          Brazil also has a very large percentage of its population living in crowded favelas, and they are quite poor and have limited access to health care and proper nutrition much like the ghettoes, barrios, and poor rural areas of our own country. It’s among those people that COVID 19 has it the hardest.

      • NewGuy says:

        The difference between Norway and Sweden is you have a sovereign wealth fund and they don’t. They had to keep people working to keep that socialized machine going. You know,,the one that gives government employees job security.

        • Saltcreep says:

          Well, NewGuy, the SWF does give some unmerited and dangerous leeway to government policy, but given the stunning levels of household debt and corporate debt here the flexibility provided by it isn’t as great as one might imagine looking at it in isolation.

          Also, you could look at Sweden’s other neighbours in Finland and Denmark, that don’t have big SWFs to use as pillows to sleep on, and you can see a similar disparity in outcomes. And so far there is also little indication that the Swedish economy has escaped much more lightly than those of its neighbours.

    • QQQBall says:

      Saving harms the economy? Feel free to borrow and spend your future today.

    • Saylor says:

      Karen(2), keep hoping for the herd immunity, but don’t bet on it.

  21. Brant Lee says:

    ” The reality on the ground continues to get worse for many families and businesses.”

    The reality in the U.S. is that younger people have been conditioned to live beyond their means or risk be looked down upon by society. Our darling corporations and banks have made debt slaves out of people, especially those who have the misfortune to have children. Few can own a home but most can be ‘privileged’ to stay underwater in an overpriced vehicle. No one is encouraged to save, what politician will say that it’s important that Americans hold some wealth and security for the strength of a sound nation?

    So the jobs have been moved out, the service sector is laying off, most people are in debt and dependant on government in some way. The older people are dying off who had a paid home and pension. The younger are stacked up in apartments broke and laid-off.

    What you going to do politicians? You fix it.

  22. BuySome says:

    Rather surprising how governments keep wasting money trying to prop up the deadwood. Conscription of all able bodied persons of military age to ensure safe and open highways and streets would lead to spending on basic industries. It would relieve the jobs market to employ the rest. There could be benefits for those doing service that would help them down the line, and not all service requires gun toting…there’s med., tech, supply, etc.. Seems like they need to stop waiting for market miracles and get on with the job in phases to counter the declines. Or else it may become too late to stop irrational behaviors caused by rising stress.

    • RD Blakeslee says:

      Similar public service jobs were devised by FDR in the 1930s.

    • curiouscat says:

      The dead wood makes campaign contributions.

      • BuySome says:

        Yes, and free money never goes out the window. But the Politicians are survivalists, and the smart ones tend to wake up and apply moderations between the extremists who stick their necks in chopping blocks and the old guard that falls in the road. This system has had a very long track record of re-cutting the cards to compensate for the bad hands dealt in the past. There has always been costs, but only one Revolution and one Civil War which few want to repeat. The current mess just works to expose some systemic flaws as usual. It’s not the end of the world yet, but we might need to focus on the bigger problem…this bug, the next one, and the ones after that. They won’t quit and are programmed to be homicidal as well as suicidal.

      • Anthony A. says:

        And votes!

        • char says:

          And spends money on food and rent as long as they are employed.

        • BuySome says:

          To be clear, it’s a reference to businesses that are not profitable ventures, not workers. Labor is just underemployed or mis-directed at times. It may have to be adjusted to recapture the useful value, and that’s where policy & programs are needed. Of course, if they want to vote for drowning….?

    • makruger says:

      Great ideas, but in the current political climate jobs programs smell too much like socialism, which as you know, is reserved for the elites, not the working class.

  23. sunny129 says:

    ‘despite the fact that interest rates have been driven to unprecedented lows.

    Matters little when one doesn’t have a job. about to lose a job, no or reduced income!

    • Briny says:

      And never mentioned in the low interest rate citation is that credit card interest is near or at all time highs. Well, except for those favored few.

  24. swmcl says:

    This article is true. Yet how long till we see a global revulsion from the expertism in the medical field and the seriously traitorous political class throughout the world ? I am amazed at the unwillingness and cowardice of the people to wake up.

  25. stan6565 says:

    Nick. Great article, thank you.

    Just to add, there were min 3 months payment holidays effected in the UK for credit cards, mortgages and other loans. Small businesses were given £10 k in council grants. Larger businesses in hospitality even bigger grants. Our chancellor has introduced 30bn package of measures to try and weather the crisis ( stamp duty threshold reduction, vat reduction). Government allowed for tax deferrals and so on. So, some positive action was done by the powers. Of course this means a 10-20% deflation for £ over time but that’s the point of slow frog cooking I suppose.

    However, my core business, architectural and structural consultancy, has taken a 50%+ dive, and other small consultancies report similar drop. We have a wide array of customers and some are still quite active, for example marine engineering, ports, docks and so on.

    Our holiday letting business is getting filled up for the rest of the year and well into next year. I think people realise that driving to a nice place rather than flying is good fun too. My kid spent last week swimming in the North Sea and had great fun (at around 12c water temp!). Again, people will soon have to be dipping into their cash stashes for holidays.

    Our commercial letting business is still collecting 100% rents but I feel that the tenants may be having difficulties at September qtr, if not so, then surely December qtr. We have drawn plans for a swift conversion into resi.

    What really worries me, with the mob rule taking over (viz statues toppling and flags burning), at what point I got to play Rambo to protect what I worked all my life for.

    Yanks have access to guns, we in UK can only do crossbows. Back in March, bows were all sold out on all specialists sites with months’ waiting lists.

    As someone higher up the comments said, really shitty time. I can only hope it resolves without mass social breakdown and the resulting anarchy and violence.

    • char says:

      Driving to a nice place were it rains for a complete week so you decide to go home a day early. There is a reason why Brits go on holiday in Spain

      • stan6565 says:

        Don’t tell me you don’t enjoy having the few exposed bits of your body thoroughly exfoliated by a sandstorm, say on Holkham beach. A pint of ale as a reward later?

        Okay okay, I may prefer the warm waters of isolated beach on Great Exuma, but just getting there and back would take me a better part of one week. Whenever I was making such trips I would be having 3weeks holidays and it would cost at least 10k even in most modest arrangements.

    • Stephen C. says:

      Seriously? Crossbows?

      That’s funny/ not funny.

    • BuySome says:

      Woohoo, guns and ammo and beer! Some of us even stock up on Bird’s custard powder, just in case the sonic screwdrivers fail to overcome the Dalek invasion on your end. I think we even have a crossbow factory around here..goes way back to a bunch of crazy guys that ran around with that stuff in the long past. Guess us yahoo yanks don’t know what to do in a civilized oh so modern world.

    • MiTurn says:

      Soon, undoubtedly, there will be a ban on possessing crossbows.

    • Xabier says:

      Machetes sold out too in the UK, especially the more weapon-like ones on the market.

      Not that I was buying, but….

      A splitting maul is a damn good weapon, if needs press. As indeed is a brick. :)

      • NewGuy says:

        Don’t forget catapults and slingshots.

        • VintageVNvet says:

          howz a boot we can all agree on the best is the wine bottles full of some accelerant with a wick on top???
          don’t want to credit it too much, but a lot of reading indicates it was the difference in 1917 or there a bouts in time in RU,,,
          appears to have been taught to some folks in USA lately,,, but, so far, those folks have been throwing it at the wrong places
          OTOH, with the economic damage occurring right now as a result of the expanding theft of wages as Wolf has illustrated clearly, we cannot be surprised at all if the military and police actually lead going forward, eh

  26. Cason Jenner says:

    Oh yeah, people are hurting. It hurts to have to exist with just a single cell phone and use it for actual communication only. It hurts not to be able to attend a couple of movies each week. It hurts to have only one car and people share rides. You just can’t wear shoes more than one season and you simply must eat out several times per week.

    Most of the dolts are in dire straits because they lack the ability to shop wisely and can’t tell the difference between a need and a want.

    • sunny129 says:

      There are TWO economies in USA!
      One for the top 10-20% and another for the rest! 50% of consumption ( out of 70%) comes from the top group!
      Just look at the charts of XLY and XRT, all near records!

      • BuySome says:

        Unfortunately, targeting the top 1%, 10%, or 20% will not garner much sympathy. The are hundreds of rungs on the income ladder, and those below any point think all those above are both crazy rich and culpable. The ones in the bottom 10% couldn’t give a r*ts a*s about those at the 80% level always trying to say they suffer too! What is more important is that 51% are getting tired of waiting for a parlay with the top 49%. IF this boils over with no effective plans, they’ll be more than happy to hold those passengers under water just for the shear delight of some ugly revenge. And no plan is going to pay off if it doesn’t find a way to pull up the bottom layer to at least a safety net. It looks like a load of debt retirement may be coming one way or another.

        • Jdog says:

          “Unfortunately, targeting the top 1%, 10%, or 20% will not garner much sympathy.”

          The top 10% or 20% are not exactly wealthy. It is only the top 3% who are worth a million or more, and a million is not that much now days. Many places it is the value of a couple of houses.
          Prosperity in America is not what it used to be….

        • suny129 says:

          Just look at the mkt indexes along with the charts of XLY & XRT. again TODAY!

          They speak volumes!
          Consumption at any cost especially now, better to sit at home and collect benefits more than on would have, if at work!

        • sunny129 says:

          ‘The top 10%’

          are NOT wealthy? LOL!

          They own nearly 90% of wall st wealth!!!

          What’s wealthy to you? 100 Million?

        • Jdog says:

          You can be in the top 10% of wealth with about $900K net. Not exactly rich.
          Like I said, prosperity in America is not what it used to be….

        • Javert Chip says:


          This discussion appears to use “wealth” and “income” interchangeably.

          o You’re in the top 10% of wealth at about $900k in assets
          o You’re in the top 10% of income at about $120k annual earnings

          Admittedly a lot of overlap between the two groups, but if you always spend a lot without saving, you won’t become “wealthy”.

          Lots of techies (and others) are experiencing this phenomena as we speak.

        • No Expert says:

          Pull them up? Not likely. Any respite will come the only way it ever has, bitterly fought for from below. Trickles downward only eventuate when guillotines start turning up.

  27. DR DOOM says:

    Hard times for many may be coming. Whatever resources that may coming in the future will be a lot less if you don’t get out of debt. Being Debt Free needs no analysis by a talking head and has no lobby in congress. It is not a plank in any political platform. Being Debt Free is pure joy.

    • Xabier says:

      Of course, governments – and their parasites of all kinds – will endeavour to impose their debt on you as increased taxes, but even then it is still best to have no personal debt obligations.if at all possible.

  28. sunny129 says:

    On Friday # of infections in USA went up. So were the Mkt indexes!

    I think Mkts expect another 3 $trillion slower from Mr. Powell & Co, before the end of the month. When the mkts are disconnected with the economy on the ground, coming earnings number mean little. Push the pedal to the moral hazard, all the way.

  29. Just Some Random Guy says:

    What if they don’t?

    2 anecdotal data points

    1. My next door neighbors are moving. Bummer as they are really cool people and I will miss them. They’re moving out of state due to a job opportunity. All those companies no longer hiring people, forgot to tell his new employer, I guess. He’s in IT. They put the house up for sale last week, already under contract. He told me they house they bought in the new city, went over asking. Which is weird since I keep hearing from the “news” that real estate is crashing.

    2. I rent a boat slip. It isn’t cheap (BOAT stands for Bring Over Another Thousand after all). Gas is $4/gallon at the marina. This is the type of expense that is first to go if we were in a depression or recession. And yet the marina is at 100% capacity. I know this since there is a bulletin board in the club house that has a a wait list for slips, or people looking to sublet leases, with 10-12 names on it. And the lake is as busy as ever, more busy it seems than ever. I kinda wish we would have a depression to clear some people out.

    And on top of this, every restaurant and bar is overflowing with people on the weekends and during the week still pretty busy.

    There is no evidence of any of this supposed depression in my every day life. Nobody I know has lost their jobs. Nobody I know has had to shut down a business.

    • Wolf Richter says:

      Yes, GDP in the US up 5%. Best economy ever. Based on your sample of 2 (neighbor moving and a marina). You have no idea how funny you sound.

      • BuySome says:

        Let him go..it’s like “Where’s Waldo?”…the Sadam version. Random: First Newport and now a boat slip on a lake…Are we taking the 55 to the 91?

      • Jdog says:

        LOL! Happy days are here again!

    • Xabier says:

      ‘You see gentlemen, things have been so arranged by the Divine Wisdom, that we live in the best economy in the best of all possible worlds!’

      The more Dr Pangloss looked, the more satisfying it all seemed…..

  30. Xabier says:

    Renoir the painter found it very convenient to keep his mother-in-law busy in the kitchen – she was from Burgundy and a very good cook.

    His wife in fact died of over-eating (not so desirable, of course! But the road there was one imagines very pleasant.)

    Just a hint, Don Q…….

    • Nick Corbishley says:

      :-) Unlike Renoir’s mother-in-law, mine’s not too fond of the kitchen, though she’s got a few tasty dishes in her repertoire. Coincidentally, she makes a mean Boeuf Bourgignon.

  31. George W says:

    Lessons learned from the great depression and why none of it matters.

    You may be financially solvent but the underlying US financial structures, necessary to ensure your financial solvency is gone.

    As the US inches closer to adding 1 trillion in debt per month, you will not be able to wait this one out, like many did during the great depression.

    History may rhyme but not always, the greatest depression will look nothing like the great depression.

    • George W says:

      No one is the USA is debt free.
      27 trillion, soon to be 30 trillion.

      Don’t be a deadbeat, anti-up, pay your share of the trillions in debt that the USA owns. Sell your home, your stocks, your retirement savings, just pay your bills already.

      The USA cannot file for bankruptcy and that means you too will need to pay up and soon.

      • Jdog says:

        It is only about $90K per person… And yes, it is your debt.

        If push comes to shove, the government can confiscate your money and property to pay it when their tax base crumbles.
        That is basically what they did when they confiscated everyone’s gold in the last depression. They also raised the income tax top rate to 90%.

        • Xabier says:

          In a tight corner when the very existence of government is at stake, they tend to act in ways which make everything worse, completely self-defeating.

          When the Moghul Empire was collapsing, villagers who couldn’t pay taxes found that the army turned up, blew the villages to bits with cannon fire, and hunted them down in the forest.

          This of course destroyed the future tax base, but the point had been made.

        • The Colorado Kid says:

          FDR, in ’33 didn’t strictly ”confiscate’ Gold. What they did is force a (executive order) redemption at 20.67 an Oz. & then temporarily de pegged the USD to Gold and then repegged in 1934 @ $35 thereby ‘confiscating’ a large portion of ones wealth. This held until 1971. Gold became legal to own again in 1974.

          An interesting and cautionary tale is that of Bernard Baruch who was holding two tons of the yellow metal when he was forced to redeem at the 20.67 & gold was priced at $29 in Europe at time, but was illegal to sell to anybody but the US Treasury.

        • JDog says:

          On May 23, 1933, Congressman, Louis T. McFadden, brought formal charges against the Board of Governors of the Federal Reserve Bank system, The Comptroller of the Currency and the Secretary of United States Treasury for numerous criminal acts, including but not limited to, CONSPIRACY, FRAUD, UNLAWFUL CONVERSION, AND TREASON. In these charges he explains the confiscation of gold from the US Citizens…..

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