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Old 12-09-2018, 04:46 AM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,849
European austerity,,,Why Civilizations Fail

Well, Macron is really a master of bad timing. Public strikes are a national past time in France but, this one is growing and spreading.
12/08 EU support for austerity opens door to far right, Corbyn says – Guardian
With austerity, ALL bets are off.
German Police Shut Down Concert Due to Mass Nazi Salute - Sputnik
The protests are spreading to other countries. Austerity will definitely make it worse.
"The 80 million or so people of Germany de facto rule the 500 million of the Union, or you know, the three handfuls that rule Germany. No important decision can or will ever be taken that Berlin does not agree with. Angela Merkel has been the CEO of Europe Inc. since November 22 2005,"
"The Union appears fatally wounded, and that’s even before the next financial crisis has materialized. Speaking of which, the Fed has been hiking rates and can lower them again a little if it wants, but much of Europe ‘works’ on negative rates already."
"Can Macron allow for French people to be killed in the streets? Almost certainly not. There’ll be pitchforks and guillotines. The only way out for him, the only way to calm things down, may be to announce his resignation. "

Here is a chart of the 30 year treasury bond. It has definitely broken out.
ALL markets have rolled over.
"Returning to our truism “it’s never different this time”. Something else that’s equally “never different this time” is that governments never pay off unsustainable debt. Nevaaahhh!
Which brings up a question:
How much more debt can the world’s sovereigns add to their balance sheets before something falls over?"
"Much like Brexit, the French peasants are saying “non, Monsieur” to the globalists.
They’re saying non to the destruction of their culture. They’re saying non to the eye watering taxes. They’re saying non to what has by stealth been imposed on them. A political union run by a bunch of unelected foie-gras eating pointy shoes in Brussels."
The article talks a lot about what is happening in Europe. It’s other focus is; while everyone is watching the stock market, the far more important bond market is headed down fast.

"The cartel (especially the ECB and the Fed) is hoping it can gently deflate these bubbles it created, but that's a fantasy. Bubbles always burst badly; it's their nature to do so. Economic suffering and misery always accompany their termination."
"Attempting To Replace The Business Cycle With A Credit Cycle

In their quest for power and glory (and accompanied by a dead-flat learning curve), the world’s central banks are now pursuing their third, largest, and most ill-considered attempt to defeat the business cycle by replacing it with a credit cycle. The fact that the prior two credit cycles blew up spectacularly doesn't seem to be deterring them in the slightest."
"So Greenspan and Bernanke created the Housing Bubble 1.0 by offering the world’s credit markets a price of money so low it couldn't be refused. Housing was the story, and the Fed supplied the credit. As predicted by a scant few of us, that all blew up spectacularly in 2008. And no constructive lessons were drawn from that experience, either."
"Paying attention or not, here we all are; stuck together in a world awash with credit. $250 trillion in debt. 4 times that amount in unfunded liabilities. And a mind-bogglingly massive amount of tangled financial derivatives roughly the same size as both those debts and liabilities put together."

"And to add insult to injury, recession indicators are piling up faster and faster now. 2019 is looking primed to be The Year That Mass Layoffs Returned"

"In 2014, a study partly funded by NASA warned that global industrial civilization could implode in the near future."
"Excess resource extraction and unequal wealth distribution were crucial to every civilizational collapse of the past 5,000 years."
"Morris Berman’s trilogy on the American Empire and William Ophuls’ Immoderate Greatness: Why Civilizations Fail offer astute analyses on why America’s problems are irreparable and reminiscent of past empires."
"Simply put, the current monetary system allows America to pay for goods and services with printed dollars."
"All of the “Made in _______” goods being sold at American retailers, as well as American made products using imported materials, should be 2–5x more expensive than they are now. "
"The federal government will downsize drastically. "
"When we can no longer pay our deficits with printed dollars, the 1 in 5 Americans who receive federal aid will see giant reductions in their benefits.
Government employees will be fired en masse."
"Since 2008, they have printed over 12 trillion dollars to prop up the financial system."

12/08 A death cross for the S&P 500 highlights a stock market in tatters – MarketWatch
12/08 This is the end of trump’s economic sugar high – Forbes Maybe
12/08 Russia ready to switch off Visa & Mastercard ahead of tougher US sanctions – RT Putin can't get Russians to make a clean break with the dollar. Trump is helping out.
12/08 Central banks fear they might not rule the world forever – GATA We can always hope.
12/08 Italy adopts hardline immigration law – Gatestone
RIGHT, but they're going to back down on the budget.

Compensation of employees as a percentage of the GDP.
So, we had wage deflation at the same time that we had price inflation. We just couldn't afford to keep the economy going. The State stepped in to buy up enough stuff to make up the difference. The State has too much debt and bond buyers are backing off. Wages had their steepest decline after the dotcom crash when the FED inflated everything out of reach. As purchasing power diminished, the CB had to pump in ever-increasing amounts of liquidity to hold back the defaults. Powell has turned that spigot down or off. He wants to wring some of the excesses out of the system. He also wants to raise rates so that he can lower them in the next crisis. He wants ammunition to fight the recession that he will eventually cause.
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