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The black line shows the annual average of the industrial mining production index (left scale). Note that it recently set a new record.

The blue line shows the annual average gold price adjusted by the consumer price index (right scale, December 2013 dollars). It grew exponentially starting in 2000 and very nearly set a new record. It has recently backed off though.

Let's zoom in a bit.


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September 23, 2007
Productivity Miracle


May 22, 2013
20 Insane Bitcoin Mining Rigs


Mining rocks to hoard? Mining bitcoins to hoard? It's all good if it adds to GDP! Right?

This is not investment advice. As always, just opinions.

And on that note, here are a few bonus opinions. I find it insane that we needlessly waste any of the world's resources to mine bitcoins. Is the world really going to be a better place because of it? Is this the kind of productivity miracle that will lead to future prosperity? It's shameful that bitcoins require any energy at all to create. Good grief. At the very least, they could have made a computer game out of it that's fun to play. But no, it's just automated computers (in ever greater numbers) mining virtual bitcoins (in dwindling numbers). Put another way, it requires ever increasing streams of energy to generate fewer and fewer bitcoins. What a frickin' long-term plan of wasted effort that is (not necessarily from a miner's perspective, but for society in general).

At least gold gives you something shiny to fondle once the mining's complete. I say this as one who owned gold from 2004 to 2006. It treated me very well over that period. No complaints. No desire to buy it again though (at these prices anyway). Your opinions may vary of course.

Source Data:
St. Louis Fed: Custom Chart (Long-Term)
St. Louis Fed: Custom Chart (Short-Term)

The following chart shows the import price index for green coffee, cocoa beans, and sugar.


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Have I mentioned lately that we live in the era of "sure thing" exponential trend failures?



June 19, 2012
Def Leppard’s Joe Elliott Can’t Explain the Lyrics to “Pour Some Sugar on Me”


Hahaha! Damn, I love that band. Seriously. :)

Source Data:
St. Louis Fed: Import (End Use): Green Coffee, Cocoa Beans, Sugar

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As of November of 2013, 3.28% of our population works in the food services and drinking places industry. That's a new record. Can't ever have too many highly compensated restaurant workers in this brave new world!

As clearly seen in the chart (red trend line), it will only grow exponentially higher from here. Just look at that 0.990 correlation!

What's that blue line you say? Oh, that's an old trend that you need not concern yourself with all that much. With a lower correlation of just 0.988 it was surely doomed to fail at some point. And what a pathetic growth rate it had. That 1.78% annual growth rate pales in comparison to the new and improved 2.42%.

And to think, all we needed to get here was a Great Recession to speed things along. It's only a matter of time before every man, woman, and child in America will be flipping burgers for a living! Hurray! What could possibly go wrong?

Motherboard: Meet the Robot That Makes 360 Gourmet Burgers Per Hour


Source Data:
St. Louis Fed: Custom Chart

The following chart shows the number of child day care services employees.


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That's some recovery we've got there. It's strong and resilient. Yes, sir.

In my opinion, the Japanese should have patented massive economic busts and ongoing zero interest rate policies as effective birth control medicines. Just think of the royalties!

April 17, 2013
Japan's population suffers biggest fall in history


January 8, 2014
CDC: U.S. Fertility Rate Hits Record Low for 2nd Straight Year; 40.7% of Babies Born to Unmarried Women


Source Data:
BLS: Employment

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Although we seem very determined to make it to $1000, I'm going to have to go with bust on this one.

1. The blue trend line was a noble effort.
2. The orange trend line offered renewed hope.
3. The red trend line doubled our efforts.

Three attempts. Three exponential trend failures.

Despair.com: Incompetence


I'm told that the economy will soon accelerate from here. If it is true, then I have just one question.


Seriously. At best, the answer seems worthy of a coin toss.

Source Data:
St. Louis Fed: Custom Chart

Click to enlarge.



Source Data:
St. Louis Fed: Custom Chart

I suggest that you watch the following video before reading further. It should really help put you in the right state of mind. Or better still, fire it up and have it playing as the background music for the charts that follow.



The first chart shows domestic financial industry corporate profits divided by overall wages and salary accruals.


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It's looking pretty good lately but let's really get into the details. And when I say pretty good, I mean that it isn't actually crashing again right now (even though it appears to be fully primed for another crash).

Three charts to go! The next chart shows the quarterly change.


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Note the increasing amplitude of the vibrations. In the next chart, let's just look at the absolute value of the quarterly change. This will give us the magnitude of the increasing chaos that is clearly evident in the system.


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In the next chart, let's look at the 5 year moving average of that absolute value and slap an exponential trend on it.


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Epic tank-slapper! Epic exponential trend failure! Epic system failure!

I will end with some good news and bad news.

First, the good news. The chaos appears to be receding.

Now, the bad news. Is it actually receding or does it just appear to be receding? Over the short-term? Over the long-term? Who knows! I have doubts. I believe that the tank-slapper is being managed with illusionary and unsustainable dampening. What we can't see yet, can't hurt us yet! It's the modern and financially innovative ostrich effect!

July/August 2009
This Year’s Battle over Mark-to-Market Versus Mark-to-Model Accounting Was Worth the Fight


There's only one thing that determines value better than the free markets. That's a group of corporate executives tweeking financial models as they look to enhance the value of their stock options. Risk on, baby! Risk on!

Too bad we can't apply this same concept to home sellers. I know that you are only willing to pay $150,000 for this house but my economic model clearly shows that it is worth $300,000! You just need to be patient until the economy returns to its "orderly" peak again!

This post once again inspired by Rob Dawg's tank-slapper concept (as seen in the comments of previous posts). I went looking for an epic tank-slapper chart that could really do it justice today. Found one on my first attempt. I didn't even have to call a personal astrologer. Go frickin' figure.

Source Data:
St. Louis Fed: Custom Chart

The following chart shows portfolio management revenue divided by corporate dividends. Keep in mind that portfolio management isn't just about dividend management, but I think the chart offers a fairly good parasite indication.


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That's one exponential trend failure I won't lose any sleep over. Hurray! Miracles really do happen!

As the bull market goes on, people who take great risks achieve great rewards, seemingly without punishment. It's like crime without punishment or sex without sin. - Ron Chernow

In a bull market, gotta pay the tapeworm to enhance the return that you could achieve yourself! You need professional expert portfolio management!

In a bear market, gotta keep paying the tapeworm to lose less money than you could lose yourself! You need professional expert portfolio management!

That's what I'm told. The only difference is that professionals just don't use the word tapeworm. "Value added portfolio manager" sounds better.

Over the long-term, how's that plan working out? Seriously.

Manager Value Added


Managers with high MVA add added value and can did beat the index. Past performance is no guarantee of future results.


Great question.


Sohisticated is not a word. They would have known this if they would have used one of the many free value added online spell checkers.

Performance tables compare fund results to index returns, leading investors to conclude, in the majority of cases, that fund managers cannot beat the index.

Yeah, that's pretty much what I conclude.


The orange has bite marks and much of the juice is missing. Just sayin'.

Source Data:
St. Louis Fed: Custom Chart