Juggling Dynamite

The global food system has been hijacked by big corps, strip mining the earth for big food profits. In the process, consumers have lost touch with the food chain, the environment and their own health.

Evidence of the sickness epidemic spawned from bad eating systems and habits is everywhere in the world today.  As mentioned here and discussed multiple times on this blog,  decreasing our meat intake by just one burger a week can result in the same environmental benefit as taking our car off the road for 320 miles (515km). While cutting out dairy can confer huge health benefits, reducing fat intake and slashing risk factors for the chronic illnesses  which are currently plaguing humanity such as cardiovascular disease and type-2 diabetes.

Moving towards a plant-based diet is the obvious solution for carbon reduction, water conservation, environmental sustainability for 7 billion+ people and our own good health.  And yet, the very mention of this fact commonly incites anger.  Try telling people that you are eating vegan and see what I mean.  It’s as though you just stuck a stick in their eye and they come out swinging.  Protest too much?

Yesterday brought next level madness.  Enlightenment about plant-based eating has been spreading in Italy as in other countries, and some law makers (sponsored by the politically powerful dairy and meat producers, do you think?) are proposing to jail parents so “reckless” as to feed their children plants (rather than dead animals and frozen junk).  See Italy proposes jailing “reckless’ vegan parents:

Parents who feed kids a vegan diet would be criminals under a crazy new law proposed in Italy. The bill, introduced by Elvira Savino, a member of the center-right party Forza Italia, seeks to “stigmatize the reckless and dangerous eating behavior imposed by parents” who make children go vegan. No-meat diets are “inadequate,” Savino argues, because they’re “lacking essential elements for healthy growth.” According to La Repubblica, under this law, raising anyone under the age of 17 on such a diet would be an offense punishable by up to six years in prison.

Sure, because you know, Brontosauruses were vegans and look how tiny and sickly they all turned out, right?

Oh wait, they were one of the largest, strongest creatures ever to walk the earth. They were also regularly attacked by aggressive meat eaters.  Hmmmmmm…..

The central bank forced-yield crush continues to wreck havoc in the real world. When will we the people, and real economy, get our central banks and their finance cohorts to heel? The wreckage from this epidemic of policy hubris is inflicting lasting harm on pensions and savers everywhere. Governments do not have enough tax dollars to bail out a world of exploding deficits.  See Fears for pensions as gilt yields turn negative

British government bond yields traded in negative territory on Wednesday, compounding fears that a global collapse in government borrowing costs has tipped the UK’s pension industry into a funding crisis.

Holders of long-dated gilts resist selling, and rally in short-dated paper takes yields negative

The steep fall prompted a former pensions minister to call for a national inquiry into the impact on company pensions of the Bank of England’s new £70bn bond-buying plan, launched to stimulate the economy amid fears of a Brexit-related slowdown.

“The Bank wants to stimulate the economy by bringing down interest rates, but the Bank is not acknowledging the negative impact these measures are having on pension deficits, and neither is the government,” said Ros Altmann, the minister under David Cameron.

Pension funds are some of the largest investors in British government bonds, which they believed would offer a safe and reliable source of income that can be used to pay out future benefits to retirees.

The accelerating collapse of yields has widened already substantial gaps in many large pension funds, which use the rates to estimate how much additional funding they will need to meet benefit payments.

An article from the Wall Street Journal this morning offers some key insight about asset prices today.  The article is speaking about the garish impact that central bank herding is having in driving interest rates to zero and below in many government bond markets.  See Bonds markets: growing ever more bizarre:

Central banks have always been able to make waves in markets. But never have they had such far-reaching effects, nor so quickly. The world of bonds is being turned upside down as a result.

The WSJ then goes on to explain the absurdity of how government bonds in many countries are now priced to deliver zero and even somewhat negative income when held to maturity. All true.

What is not mentioned (conveniently overlooked by the finance-sponsored-stock-promoting media) is that income payments and maturity for government bonds are contractually prescribed. Stocks, on the other hand, have no such promises. Stocks have no maturity date and no capital guarantees or contractually prescribed income payments of any kind. Meanwhile stock valuations today are so excessive they are priced to deliver negative returns for at least the next 7 years, with breath-taking volatility along the way.

How long will today’s holders need to wait to get back their capital presently held in stocks? The answer is however many years it takes. And that does not fit well with finite human life cycles.

It took 25 years to be able to sell assets near the previous secular peak pricing reached in 1929. By then, most of the previous holders had long since died, or sold out of panic or necessity for cash. And even where some were able to hang on for 25 years, only the securities that weren’t written off in bankruptcy were still trading.

Bottom line: extremely over-valued asset prices are toxic to human finances. And the issuers and market owe stock holders nothing.