The "High End" Bubble

07-22-2011 • ZeroHedge.com

First, we all know about the bifurcation in the haves and have-nots in the West. The funny thing is that when you hear Wall Street talking heads speak to this they act as if they just discovered electricity. Sorry guys, this has been going on for decades. The only thing that has happened is that the super, super rich (0.1% of the country) and their puppets in D.C. neglected to use their positions of power during the 2008 crisis to help their country and their fellow citizen get back on their feet and reform the system, but rather they decided to totally raid, abuse and pillage their fellow Americans in an act of unprecedented greed and recklessness. What the “analysts” fail to see is that these “elites” have played their hand way too far. The social crisis facing the country as a result of the most egregious plundering in modern American history will spell the end of the “high end” theme. Buying into this trend now is like getting long Marie Antoinette’s unsevered head in 1792. Moreover, in the BRICS (China in particular) this bifurcation has also exploded in recent years and with inflation spiraling higher we have a cauldron for social unrest and revolution. The haves have already taken everything from the have-nots. When that happens you don’t buy high end retail stocks, you get long guillotines (to be clear I do not condone violence WHATSOEVER, I am merely calling the situation as I see it). Just read this article from Bloomberg this morning to get an idea of how close we are to a total social implosion. http://www.bloomberg.com/news/2011-07-21/consumers-in-u-s-relying-on-credit-as-inflation-erodes-incomes.html. Key quote from the article: “Consumers, particularly in the lower-income end, are being forced to use their credit cards for everyday spending like gas and food, said Tavares, who’s based in Atlanta. That’s because there’s been no other positive catalyst, like an increase in wages, to offset higher prices. It’s a cash-flow problem.” and… “The swings in purchases of fuel and food have been “dramatic,” Tavares said. The volume of gasoline purchases placed on credit cards jumped 39 percent last month from a year earlier, compared with a 21 percent increase in June 2010, he said. Food shopping increased 5 percent after falling 7 percent last year.” Serfs up!