“You know Dasher, and Dancer, and Prancer, and Vixen
Comet and Cupid, and Donner and Blitzen
But do you recall
The most famous reindeer of all?”
~ Rudolph the Red-Nosed Reindeer, Lyrics
Written by Bryan Lutz, Editor at Dollarcollapse.com:
The most famous reindeer of all is he who guides Santa’s sleigh through turbulent times.
It’s the one with the flashing red light for a nose…
The one who was different…
The one who was never allowed to play in any reindeer games…
That is, until he received his reckoning – his real world value became the reason.
How does real world value translate into today’s economy?
Not exactly how people think.
Like Rudolph, it’s different.
Charles Hugh Smith explains:
All Three Pillars Holding Up the Economy Have Cracked
“If we say the three pillars holding up the economy, the conventional list is: 1) consumer spending (i.e. aggregate demand); 2) productivity and 3) corporate profits. These are not actually pillars, they are outcomes of the core pillar, wage earners making enough to buy the economy’s output.
As the statistics often cited here show, the purchasing power of wages has been declining for almost 50 years, since the mid-1970s. This means the workforce’s surplus earnings have bought less and less of the economy’s output.”
No matter how smart our economists are, and no matter how much they attempt to their advanced basket-weaving class into the economic structures…
In the end, all three pillars, consumer spending, productivity, and corporate profits translate real world value into purchasing power.
Here’s an example:
I was having this conversation with my wife over the weekend.
She was helping out a friend’s business at a ridiculously large Christmas party of just under 3500 people. It was a chance for her and her other friends to spend time together.
Anyway, my wife noticed the discrepancy between a blue collar laborers, and white collar office workers.
The office workers were mostly white, while the laborers were immigrants.
Now, this company Christmas party was for a large ship-building, and logistics company.
So, the company paid above average compensation to laborers of all kinds, even the janitor.
Her questions were about equity.
She was surprised at just how different each side of the business was, but my answer was about economic explanation – without consideration of race.
Sure, these laborers could immigrate to Canada, find a relatively well-paying job, and live a better life.
The thing is, that’s it.
They’re never going to have enough money to raise their social-economic status.
Because they need one thing.
They need purchasing power.
Except the money they make only allows them to purchase enough to survive.
When all of the necessities for living cost so much, and your wages can only purchase so much…
There is no extra money to advance you and your family’s status.
So you see, there is a reckoning coming.
And purchasing power is the hinge.
Like Rudolph and the other reindeer, for the longest time purchasing power has been ignored.
Soon people will realize that government distributed money, credit expansion, and systems that are supposedly self-sustaining have a shorter lifespan than thought possible.
That’s when they’ll start asking the most important questions about real world value.
Why can’t I afford hamburger anymore?
Why has the price of fixing my cars’ brakes tripled?
Why can’t my company afford my “inflation raise?”
Purchasing power will become our guiding light.
Maybe not now.
Maybe next Christmas, but eventually Rudolph will have his reckoning…
When what’s considered too different to take notice matters more than ever.
