No announcement yet.

Economic pressures

  • Filter
  • Time
  • Show
Clear All
new posts

  • Strangling the war machine to bring peace.

    This article from David Stockman could go in any of 2 or 3 threads. It is particularly relevant to the muslim problem.
    U.S.S.R. gone; "But what General Eisenhower had warned about exactly 30 years earlier—–the deeply entrenched and unchecked military-industrial-congressional complex—–was not about to let world peace breakout. Instead, it launched two maneuvers in 1991 to perpetuate itself and renew its raison d’etre.
    To wit, in a secret national security directive drafted by Defense Secretary Dick Cheney and his neocon minions, Iran was declared the new global enemy to be demonized and contained."
    We removed the force that balanced the area; "Indeed, pursuant to their hegemonic pretensions, the neocon claque which seized power in Washington under Bush the Elder ash-canned a 13 century-old counterforce to any religiously driven outbreak of Sunni expansionism."

    "In short, every single military intrusion Washington has undertaken since the February 1991 invasion of Kuwait has nothing to do with the economics of oil. "
    "So under the false guise of “oil security”, Washington plunged the American war machine into the politics and religious fissures of the Persian Gulf, and launched itself on the path to destroying the very institutions that had kept Sunni extremism in check. Namely, the secular Baathist regimes of Saddam Hussein in Iraq and the Assad clan in Syria."
    "To stop the episodic incursions of jihadi terrorism—–organized or “inspired”——in the west, Washington does not need to make the desert glow in the backwaters of the upper Euphrates valley. It only needs to vacate the region, and invite the Iranians and their Shiite Crescent allies to finish the job."

    "So if the Donald wants to really stop the blowback, eliminate the copycats and lone wolves and reduce the unjustified but palpable fears of terrorism among American voters, he only needs to do what Eisenhower did in 1952.

    That is, go to Tehran, make a deal and then bring Washington’s vast, destructive and unaffordable war machine home."
    Sadly, the war machine churns up a LOT of money for Cheney and friends. It is now rattling sabers in China and Russia.
    No, Donald, It’s Not A ‘World War’ | David Stockman's Contra Corner


    • Keeping the brain alive while the body dies

      GOV is trying to keep confidence going. Every time that some company looks weak and attracts short-sellers, GOV rushes in with tons of liquidity and burns the short sellers. The PPT and ESF have unlimited liquidity and it is no big deal to just pump it in. There have been a LOT of short sellers lately and they got burned. They must now close their positions before they get burned even worse. This has created a lot of demand in the stocks that they must now buy. There is speculation that this will cause a "melt-up".
      Has a Stock Market Melt-Up Begun for a Stock Market Crash in 2016? | David Haggith |

      "Enter Ben Bernanke. In the space of a mere eight years, the former Federal Reserve chief has managed to achieve what Vladimir Ilyich Ulyanov Lenin could barely conceive. He's convinced the United States of America, the United Kingdom, Japan and Europe to embark on a revolutionary journey to completely subvert free market instincts."
      "For the past five years, however, as markets have shot to new records, the global economy has continued to slow. And central bankers, having driven this boom, now find themselves fearful of taking any action that may undermine it. They can no longer control the monster they've created and now are fearful of incurring its wrath.'
      Goodbye Lenin, Hello Bernanke - ABC News (Australian Broadcasting Corporation)
      There is a distinct possibility that we will get helicopter money in time for the election cycle.

      NO telling what the CBs will do next;

      The CBs have pumped in about $ 200 trillion. There is no particular demand for this "money". Lack of demand has resulted in lack of interest-income. Long-term ZIRP is a death sentence for segments of the economy.
      Global Central Banks Are On A Collective Suicide Mission | Zero Hedge
      "As stock portfolios bubble out investors feel better about their lot in life. Some of them even buy flat screen televisions. Others buy wearable fitness trackers and matching gym shorts. Before you know it, gross domestic product goes up – along with wages – and unemployment goes down. An economic boom ensues."
      YES, rising wages; China Average Yearly Wages in Manufacturing | 1978-2016 | Data | Chart

      What about the fallout of ZIRP?
      The bureaucrats of the world see their niche taken by automation. They prefer Marxism to unemployment. Crony capitalism has given capitalism such a bad name that MANY of the young are ready to embrace socialism.
      7/18 More than half of US adults under age 30 reject capitalism – Most Important News

      What a mess.
      The Burning Platform weighs in on gun violence;
      Last edited by Danny B; 07-20-2016, 12:43 AM. Reason: new link


      • Hard times in Venezuela....still riding the debt tiger

        "The right-hand chart above shows global debt growing. Pretty much everyone is in hock to someone. Pay down private debt, and government debt goes up. Reduce government debt, and household debt rises. This is what addictive behavior looks like. Forget heroin and OxyContin; debt is the world’s favorite drug by far. "
        The world is 'addicted to debt' - Business Insider

        "Venezuela‘s situation: Consumer-price inflation is forecast to hit 480% this year and top 1,640% in 2017, according to the International Monetary Fund."
        Forbes Welcome
        Venezuela is PRINTING Bolivars where most States are just growing credit. That makes the difference when it comes to hyperinflation.
        “This is money we had been saving for an emergency, and this is an emergency,” Ramirez said. “It’s scary to spend it, but we’re finding less food each day and we need to prepare for what’s coming.” "But lately, her salary is no match for Venezuela’s 700 percent inflation."
        "kiosks sold products that have become treasures in Venezuela: rice, toothpaste, detergent, and sacks of sugar." Colombia, “But look how different things are on this side. It’s like Disneyland,” responded Ramirez. Not only was the town filled with prized groceries, but everything was much cheaper than on Venezuelan black market,"

        " 76 percent of Venezuelans live below the poverty line, up from 52 percent of the population in 2014, according to a recent study."
        "The country's economy was expected to contract 10.1 percent this year,"
        "Oil accounts for about 95 percent of Venezuela's export earnings and 25 percent of the country's GDP,"
        "Oil production fell nearly 11 percent, from an average of 2.78 million barrels per day in 2015 to 2.37 million barrels per day by in May 2016."
        " the official exchange rate is ten Bolivars to the dollar, but the black-market rate, which is considered more accurate, was more than one thousand Bolivars to the dollar in mid-2016."
        Venezuela's Economic Fractures - Council on Foreign Relations
        "State-oil firm PDVSA reported a 41% drop in oil income when compared to 2015, "
        Venezuela Enters Point of No Return as Oil Revenue Plummets | Economy Watch

        "Even America had debtors prisons until we abolished them at the federal level in the early 1830s. Today's answer is bankruptcy, but can you imagine if debtors' prisons existed today? Some 48 million Americans, or roughly 15% of our population, would be there. Where on Earth would we put them all?"
        "In fact, debt has become the world's answer to global economic problems. Check out the video Crazy: A Story of Debt, by Grant Williams. Unfortunately, we've never in history seen debt solve problems. But this world debt clock shows that global obligations continue to pile up, apparently with no stopping their growth."
        "Frankly, we need leaders to stand up and say: "Enough! Stop the deficits and let's grow our economies and pay our debts back."
        Talk about clueless, 51% of Americans receive a check from GOV. Try yanking out the safety net and see what happens.

        From the "deluded file" "The Fed's mission is accomplished -- unless it has some ulterior motive. Thursday we saw jobless claims hovering near a 40-year low, so employment is thriving."
        Also from Bloomberg; 7/19 Why the Fed can’t and shouldn’t raise interest rates – Bloomberg
        7/19 Fed officials gain confidence they can raise rates this year – Wall Street Journal
        7/19 Europe hedge funds shrink and shutter as turmoil hurts returns – Bloomberg Turmoil!, none dare call it ZIRP

        "Republican and Democratic national conventions taking place in Cleveland and Philadelphia—augmented by a $50 million federal security grant for each city" What happens if GOV goes broke and can't pay it's police State?


        • Socialism at Jamestown

          Socialism is arrested development and the rejection of personal responsibility. A person who demands that the State (or Parents) take care of them is always going to be insecure and ever-demanding.

          Originally, Social Security kicked in at age 65 when life expectancy was 57.
          Trump 'Close Friend' Unleashes Economic Reality Check: America Is "Lost In The Black Hole Of Entitlement"

          Pure Marxism does not believe in private property. BUT " that which is owned by no one in particular is maintained by no one in particular". I went to East Berlin in the early 80s. Nothing much had been cleaned up or rebuilt since the end of WW II. Socialism has a great appeal because MANY people want a free ride. If the ride is free, someone, somewhere has to pay for it. . It didn't work 400 years ago and it won’t work today.
          Socialism at Jamestown | Cato @ Liberty


          • The crash of the Heisenberg

            Long Term Capital Management was an investment group formed with 2 Nobel winning economists on it's board. They quantified risk down to a gnat's a$$ and leveraged up to 200--1? They knew exactly what their risk exposure was. Russia defaulted on bonds and blew them out of the water. NOBODY could have predicted the Russian default. Mises DID but, he wasn't mainstream so nobody paid any attention. The rest of the financial community ponied up the money to save LTCM, AND themselves. Bear Stearns refused to pitch in any money and was later eviscerated.

            Jim Rickards was the attorney from LTCM and the main arbiter in the dissolution. He has this to say; "Jim Rickards pioneered the study of complexity theory and its applications to markets. His conclusion? Markets are indeed more susceptible to “black swans” as their complexity increases:

            One formal property of complex systems is that the size of the worst event that can happen is an exponential function of the system scale. This means that when a complex system’s scale is doubled, the systemic risk does not double; it may increase by a factor of 10 or more… This kind of sudden, unexpected crash that seems to emerge from nowhere is entirely consistent with the predictions of complexity theory. Increasing market scale correlates with exponentially larger market collapses… As systemic scale is increased by derivatives, systemic risk grows exponentially."

            "Meanwhile, the global bond bubble now is a staggering $100 trillion. And over $500 trillion in derivatives trade is based upon bond yields. If that bond bubble bursts…

            Today the global derivatives market is much larger than it was in 2008. And with Jim Rickards’ “complexity multiplier,” could it be that the risk is not just higher… but exponentially higher?

            “Globalization… creates interlocking fragility,” says author and statistician Nassim Nicholas Taleb,"
            WARNING: “Black Swan” Spotted - The Daily Reckoning

            The PTB want total world control and total centralization. This goes against rational planning about "not putting all your eggs in one basket".
            Hans-Hermann Hoppe claims that we need de-centralization.
            Roberto Vaca wrote about the breakdown of super-systems back in the 60s;

            The banks plan to store cash to get away from this NIRP BS; Negative Rates: We’re Gonna Need a Bigger Vault
            The "trial balloon" has been floated. "what if governments decide to cancel the bonds owned by their central banks?"
            The Hidden Risk to Sovereign Bonds - Bloomberg View

            The accepted plan is for GOV to borrow from the Central Bank and drop money from helicopters. Stockman says that there is no possible way that it would work because GOV couldn't get it together in time to pass the legislation. He hasn't mentioned the possibility that GOV could just bypass the CB and print money without borrowing it.
            "Regardless of whether the November winner is Hillary or the Donald, there is one thing certain. There will be no functioning government come 2017. Washington will be the site of a political brawl of deafening and paralyzing aspect—–like none in modern US history, or ever."
            "in short, the market is not trading on a rebound in GDP, revenue growth or a breakout of already elevated profit margins. It’s just high on one more dose of monetary cocaine that in short order will prove to have been not even that."

            The politicians ignore the possibility of creating money directly from the Treasury.
            Thomas A. Edison Quote

            "If the Nation can issue a dollar bond it can issue a dollar bill.
            The element that makes the bond good makes the bill good also. The
            difference between the bond and the bill is that the bond lets the
            money broker collect twice the amount of the bond and an additional 20%.
            Whereas the currency, the honest sort provided by the Constitution pays
            nobody but those who contribute in some useful way. It is absurd to say
            our Country can issue bonds and cannot issue currency. Both are promises
            to pay, but one fattens the usurer and the other helps the People."

            "A few months ago I told you about the remarkable $3.4 trillion funding gap in the US pension system.
            Remember, we’re not talking about Social Security– that has its own $40+ trillion shortfall.
            I’m talking about private companies’ retirement pensions, or public service worker pensions at the city and state level.
            There’s zero mathematical probability that these pensions will be able to meet their obligations."
            7/20 Corporate debt seen ballooning to $75 trillion – CNBC
            7/20 World facing crisis but experts talking to the fairies – Independent
            7/20 Bank earnings: Wall Street is running out of jobs to cut – CNBC Cut throats.
            "The ECB has failed to date to deal with weak banks and €1.2trn-plus (Ł1trn) of non-performing loans " Ah Yes,,, malinvestment.

            " Correspondent Graham R. summed up the situation very succinctly in a recent email:

            "Focusing on the minimum wage is a false flag. The society as a whole is now stressed at every level because Globalism has promised us cheaper prices at the cost of destroying societal structures and their meaning for its members."

            Graham identifies a key consequence of globalization that the mainstream media has ignored: the erosion of social/economic structures that supported communities and provided purpose, meaning and stability to their residents. "

            The corporatocracy forced globalism on us. The PTB are in the process of forcing one-world control on us. We're flying blind in the casino while high on cocaine, oxy-contin, heroin and Viagra. We live with extreme complexity and no viable backup monetary system. We are at great risk of the credit system freezing up. Our uber-corrupt leaders are dancing on the brink of world war. World leaders are talking about stiffing their central banks.
            What could possibly go wrong?

            Hugo Salinas Price

            "Our world is approaching a financial tipping-point, which may be only months away. When we do reach the tipping-point, the financial collapse will be vast in its destructive consequences and in a matter of a few days our world will change beyond our power of description.

            The shadow of the approaching new reality is upon us and we can already perceive its outlines; this allows us to talk of our civilization in the past tense."


            • Progressive problems

              Sr. Price is a real downer BUT, he isn't alone.
              Egon von Greyerz has a lot to say also. None of it is good;

              Mac Slavo has a real dark outlook,,, and he isn't even selling gold;
              What's Starting Now Will Overturn The Entire System: "Complete Collapse of Everything" | Zero Hedge
              The NWO wants total control but, it looks like they will get total chaos; Potential Crisis Triggers Continue To Pile Up In 2016 | Zero Hedge

              Krugman is smoking crack laced with angel dust.
              Krugman's Solution Is "The Fiscal Equivalent Of War" - Japan Agrees | Zero Hedge
              The NWO types have long said that they want a collapse to speedily bring in a new system. It's beginning to look like there will be some "overshoot".

              The population in the west could rise or fall without doing any damage IF it weren't for the demands of Keynesian economics. What would be the harm if the population of Germany fell 20 million?
              George Soros has created a lot of chaos and havoc and made a lot of money off this chaos. He is hard at work trying to destroy Europe.
              Garret/Galland Investment Research You Can Trust
              He is demanding open borders in Europe as the fair thing to do. People who have a good niche in their home country don't want to leave and be refugees. Especially people from MENA. Soros seems to believe that bring the leftover garbage from primitive societies is going to save Europe.

              They can't even let their women out without a guard. Much of Western society is built on self-restraint and self-control. If you allow people to immigrate who come from a society that operates primarily on instinct, the West is just TOO MUCH temptation. They don't try very hard to resist.
              Soros believes that Europe would somehow fall apart if the population decreased. He wants to drag in tons of trash to save it. Effing marvellous.
              A Swiss lawmaker had this to say. BTW, he was censured for saying it.

              Does Soros want all of Europe to sink down to the level of Marseille?
              The Kalergi Plan calls for Europeans to be replaced garbage from Africa. I hope they can stop this.
              Culture is what's left behind after you die. With islam, the only thing left behind is a rotting corpse.


              • Oil debt and oil production crashing

                Japan has a population of 126 million.
                Last year, the Japanese government recorded relative poverty rates of 16% That is the highest on record. Poverty levels have been growing at a rate of 1.3% a year
                The BOJ is currently pumping 80 trillion yen ($671 billion) into Japan’s financial system each year.

                • China Continues To Produce More Steel Than The Rest Of The World Combined (BI)
                Falling prices leave steel companies deep in the red |
                Metals prices fall to multiyear lows -
                OK, it's easy to see that the glut in the steel market is driving the price down.

                What about oil and gasoline?
                European Gasoline Stocks Hit All-Time High As China Floods The World With Flamable Liquids | Zero Hedge
                7/22 Oil prices extend losses, face weekly decline as glut fears persist – CNBC
                U.S. oil production is crashing;
                86% of their profits are spent on debt service;
                "Unfortunately, the coming collapse of the U.S. economic and financial system will be orders of magnitude greater than what took place in 2008. Why? Because we just had a subprime housing market in 2008, whereas the entire U.S. economy today is SUBPRIME…. Subprime Auto, Housing, Bonds & Energy."

                "On average, we are stealing more than 100 million dollars from future generations of Americans every single hour of every single day. "
                "during Obama’s eight years we will accumulate almost as much debt as we did under all of the other presidents in U.S. history combined."
                19.4 Trillion Dollars In Debt ? We Have Added 1.1 Trillion Dollars A Year To The National Debt Under Obama

                "#7 The U.S. economy has lost an astounding 191,000 mining jobs since September 2014. For areas of the country that are heavily dependent on mining, this has been absolutely devastating."
                #9 So far this year, job cut announcements are running 24 percent above the exact same period in 2015.


                • Druckenmiller and the markets

                  Where to start? Y'all know that I try not to burden you with too much reading. BUT, as economic collapse rises in probability and importance, I need to make things as clear as possible.
                  Sra. Ramirez in Venezuela, “This is money we had been saving for an emergency, and this is an emergency,” Ramirez said. “It’s scary to spend it, but we’re finding less food each day and we need to prepare for what’s coming.”
                  Has she yet stopped to think what the next step is? Presidente Maduro told the Venezuelans to grow their own food. She spent her savings. What is she going to do for the next problem?

                  Household net worth / Disposable net income chart
                  Household Net Worth/DPI At 2000 and 2007 Highs

                  Politicians and academia believe that the world will accommodate and conform to their predictions and expectations.
                  "Milton Friedman told Nixon that the gold price would fall to $6 if the US were to “demonetize” gold – once again proving that the forecasts of most economists aren’t worth much "

                  "Druckenmiller said that while the Fed and policymakers have no endgame, markets do - hinting that one is rapidly approaching"
                  Debt to GDP;
                  "At the 2005 Ira Sohn Conference, looking at a more muted but similar deviation, I argued that the Greenspan Fed was sowing the seeds of an historical housing bubble fed by reckless sub-prime borrowing that would end very badly. Those policy excesses pale in comparison to the duration and extent of today’s monetary experiment"
                  " The Fed has no end game. The Fed’s objective seems to be getting by another 6 months "
                  "the growth in operating cash flow peaked 5 years ago and turned negative year over year recently even as net debt continues to grow at an incredibly high pace. Never in the post-World War II period has this happened. "
                  "Again, the current 5-year divergence is unprecedented in financial history!"
                  " this means that since 2012 the Chinese banking sector has allowed credit to grow by the amount of the entire Brazilian GDP per year! "
                  For Stan Druckenmiller This Is "The Endgame" - His Full 'Apocalyptic' Presentation | Zero Hedge
                  Druckenmiller hints that the markets will take control. For several quarters, there have been huge outflows from stocks and bonds. The FEDs just make up the difference. Can we actually have a crash in the stock market if the FEDs just buy up everything that comes up for sale? The smart investors are front-running the FED by selling over-priced assets to the buyer of last resort.
                  What could go wrong?


                  • Maintaing confidence in debt money even after the investors have left the building

                    Ages ago we bartered things of value. Some time after that, we used gold and other metals for intermediaries in a barter system. Other things like wheat and barley have been used as intermediaries but, they aren't durable enough to serve as stores of value. We arrived at a point where we used warehouse receipts for gold instead of actually handing over the physical item.
                    We (the State) kept our gold in our treasury and circulated receipts for our gold as an intermediary. These receipts could exchanged for physical wealth at any time.
                    Those who don't actually produce anything have always tried to live of the fat of the land without doing any actual production. That would be priests and court hangers-on.
                    Under their control, money that represented actual wealth was phased out. Instead of being a receipt for actual wealth, money became a debt note. Paper currency became nothing more than a piece of information rather than a store of value. That dollar bill carried the information that somebody owed you X amount of goods and services.
                    Those who controlled the printing press passed out copious amounts of debt notes to themselves and their court hangers-on. That dollar bill became corrupted information. With limited printing, the dollar bill held general acceptance. Also, we were forced to use it by law.
                    Martin Armstrong's models are models of confidence. In ages past, overprinting caused a loss of confidence and people left the system any way that they could. The system collapsed.
                    Socialism without limit requires control without limit and funds without limit. Gold was suppressed starting back in the early 80s so that interest rates could be crashed down without investors having a viable alternative to run to.

                    This was a long-term plan to gradually accomplish Keynes' dream of Euthanasia of the rentier. Removing interest income is a prime objective of the central bank to squeeze out the investors and fund the court hangers-on. Since only the central bank had free money, it could outlast everybody else. The court hangers-on are first spenders so, they get the greatest benefit from the new money. This new money is actually new debt piled on the next couple of generations.

                    True to form, investors are leaving the corrupt system in droves. The outflows from equities, bonds and bank stocks tell the story. BUT, the CB is pumping in money a bit faster than it is flowing out. The confidence is gone but the transfusions are keeping the system from collapsing.

                    Hemphill, 1936 "If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash, or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless situation is almost incredible — but there it is."

                    FED chairman, Marriner Eccles, " Our money is debt money. This is unsustainable. It is the most important problem of our time" 1936

                    The court hangers on are creating an ever-larger pile of debt notes that they expect future generations to pay off.
                    High-income Americans pay most income taxes
                    45% of Americans pay no federal income tax
                    80% of taxes collected are from payroll and income tax. Most of the wealthy are connected to business where paying taxes is just part of the cost of doing business. It is just passed on to the consumer. It is the actual laborer who is creating the wealth that is the basis for the tax structure. Every consumer is paying every time that she buys something.

                    As wealth creation shrinks ever more, the court hangers-on create ever-more debt to keep the system from collapsing.
                    Our ENTIRE system is based on debt and credit. There is an increasing loss of confidence in the system. Sovereign bond yields go down as money pours in. Bond holders accept negative interest because the expect stocks to do even worse. Only 3 companies in America have AAA rated credit so investors have legitimate reason to avoid stocks. We are in a "twilight zone" of falling confidence without the attendant (apparent) withdrawal of investor money.

                    Previously, every time that money was divorced from value, the money crashed in about 30--40 years. The FED is tasked with keeping Pox Americana and the American empire alive and hard at work on world domination. It remains to be seen of the FED can keep the system going even after the confidence of investors is lost.


                    • Marriner Stoddard Eccles

                      Eccles was the FED chairman many years ago. He wrote very perceptively about similar problems many years ago. It would be best if you read the 2 articles in their entirety but, I will excerpt.

                      ,,,destitution and suffering of fully one-third of our entire population. We have all and more of the material wealth which we had at the peak of our prosperity in the year 1929.
                      Our problem, then, becomes one purely of distribution. This can only be brought about by providing purchasing power sufficiently adequate to enable the people to obtain the consumption goods which we, as a nation, are able to produce. The economic system can serve no other purpose and expect to survive.
                      If our problem is then the result of the failure of our money system to properly function, which today is generally recognised, we then must turn to the consideration of the necessary corrective measures to be brought about in that field; otherwise, we can only expect to sink deeper in our dilemma and distress, with possible revolution, with social disintegration,

                      Too much of the product of labor was diverted into capital goods, and as a result what seemed to be our prosperity was maintained on a basis of abnormal credit both at home and abroad. The time came when we seemed to reach a point of saturation in the credit structure where, generally speaking, additional credi was no longer available, with the result that debtors were forced to curtail their consumption in an effort to create a margin to apply on the reduction of debts. This naturally reduced the demand for goods of all kinds, bringing about what appeared to be overproduction, but what in reality was underconsumption measured in terms of the real world and not the money world. This naturally brought about a falling in prices and unemployment. Unemployment further decreased the consumption of goods, which further increased unemployment, thus bringing about a continuing decline in prices.

                      The debt structure, in spite of the great amount of liquidation during the past three years, is rapidly becoming unsupportable, with the result that foreclosures, receiverships and bankruptcies are increasing in every field

                      Is it necessary to conserve Government credit to the point of providing a starvation existence for millions of our people in a land of superabundance?
                      ,,,extraordinary measures have had to be taken to prevent a general collapse of the credit structure. If such a policy is continued what assurance is there that the influences radiating from a marking down of the claims of creditors will not result in a further decline of prices? In other words, after we have reduced all debts through a basis of scaling down 25 per cent to 50 per cent, what reason have we to expect that prices will not have a further decline by like amount?
                      We have nearly one and a half billion currency more in circulation at the present time than we had at the peak of 1929,

                      From 1923 to 1925 the turnover of deposits fluctuated from 26 to 32 times per year. From the autumn of 1925 to 1929 the turnover rose to 45 times per year. In 1930, with deposits still increasing, the turnover declined at the year end to 26 times. During the last quarter of 1932 the turnover dropped to 16 times per year. Note that from the high price level of 1929 to the low level of the present this turnover has declined from 45 to 16, or 64 per cent.

                      I repeat there is plenty of money today to bring about a restoration of prices, but the chief trouble is that it is in the wrong place; it is concentrated in the larger financial centers of the country, the creditor sections,
                      There could be no waste in post offices or in roads or in schools. You would have something to show for it. With war all you have left is the expense of taking care of maimed and crippled and sick veterans. That is what is left from war. And it is all wastage.

                      WE are suffering from a debt structure. We are not suffering from the waste, (war). it will be necessary during the next few years for the Government to assume a greater control and regulation of our entire economic system. There must be a more equitable distribution of wealth production in order to keep purchasing power in a more even balance with production.

                      It is utterly impossible, as this country has demonstrated again and again, for the rich to save as much as they have been trying to save, and save anything that is worth saving. They can save idle factories and useless railroad coaches; they can save empty office buildings and closed banks; they can save paper evidences of foreign loans; but as a class they can not save anything that is worth saving, above and beyond the amount that is made profitable by the increase of consumer buying. It is for the interests of the well to do – to protect them from the results of their own folly – that we should take from them a sufficient amount of their surplus to enable consumers to consume and business to operate at a profit. This is not “soaking the rich”; it is saving the rich. Incidentally, it is the only way to assure them the serenity and security which they do not have at the present moment.
                      London Banker: Testimony of Marriner Eccles to the Committee on the Investigation of Economic Problems in 1933

                      Eccles, There were some 10 millions seeking work while we
                      were still at peace. Men spoke of the paradox of poverty in the midst of
                      plenty. And today's paradox is that huge defense expenditures appear the
                      only cure for mass unemployment and industrial stagnation.
                      The common fault and cause of these failures of the past lies not
                      in our democratic institutions, not in our ability to produce and distribute
                      goods, but in our thinking. The failure is not due, as yet, to insufficient
                      material resources or to any lack of scientific and inventive genius in the
                      world; it is due to our inability to deal with the basic causes of political
                      and social upheavals abroad that lead to war, in which we inevitably become
                      involved, and to our failures at home to find any answer, except war or prep*
                      aration for war, to the problem of distributing oujp abundance

                      We are too prodigal in diverting our human and
                      material resources to military preparations for war and defense, and too con*
                      servative about using them to alleviate human misery
                      to the tragic conditions existing throughout the world. I noted in a recent
                      New York Times book review the comment that some contemporary authors contend
                      that "life has no discernible direction or purpose, that ideals are illusions,
                      that common values have disappeared, and that a sensitive person is bound to
                      be destroyed or corrupted in a modern society in which common values have

                      Those who
                      complain that the cost of such a program would be exorbitant must remember that we never hesitate to spend for war or defense \<hatever may be necessary,
                      but we become relatively tight-fisted in our civilian expenditures for main*
                      taining the peace of the world.
                      Since we failed in the past to remedy the basic causes of world con*
                      flict, we find ourselves today confronted with an immediate and pressing need
                      for providing more adequate national defense in an effort to forestall the
                      outbreak of another world war. However, we must recognize the fact that our
                      defense preparedness program is at best a temporary and transitional solution
                      of a more permanent
                      solution of the fundamental problems that lead to war. Another global war
                      would mean total war with atomic and all other weapons of destruction, and
                      likely could not be won by anyone;- on the contrary, it might well lead to
                      the destruction of civilization itself. X believe that the people of the
                      world, including the Russian masses, are against war.


                      • Credit creation and human nature

                        Benjamin Strong was a FED chairman nothing like Marriner Eccles. He was elected chairman of the FED in 1914. BUT, he was a New York banker and greedy to the core. By 1920, he was illegally selling discounted U.S. treasury bonds on the secondary market and creating currency inflation for his banker buddies. This currency inflation brought the roaring 20s. This inflation plus the new regulations regarding margin debt created a huge bubble in the stock market. This was money and not wealth. It severely distorted the system. Big, Bad, Bald Ben Bernanke claimed that the FED had caused the Great Depression 1 by not pumping in money and saving the system.

                        BUT, the best way to cure a bubble is to NOT create one in the beginning.
                        W-h-o-r-e-s will be w-h-o-r-e-s and bankers will be bankers. They gave themselves the ability to create bubbles and create they did. Great Depression 1 was a liquidation of that debt. The current crop of FED-heads is trying to forestall the liquidation of current debts.
                        During the upswing in the RE bubble, the FED penalized responsible bankers who refused to do liar-loans to unqualified borrowers. Socialism needs lots of mal-investment to keep the punters happy. Divisions of both the FBI and the SEC warned GOV that an unsustainable bubble was forming in RE. Both divisions were disbanded in '03 & '04.

                        The bankers want bubbles so that they collect fees and interest. Later, they scoop up the bailouts. GOV wants bubbles so that they have more happy punters. Those who voted to rescind the Glass-Steagal act won't be around to get the blame.
                        The current FED is trying to do Bernanke pumping BUT, it is going to the wrong places,,, just like last time.
                        GOV is quickly running out of options. The treasury could cancel the FED debt. The FED/treasury could send ?$ 80,000 to every bank account. FED GOV could create a basic monthly stipend for everybody.
                        Once the regulator of gold was removed, the CBs and private banks created debt with wild abandon. Eccles argues that the bankers must be saved from themselves. The coming credit collapse has the potential to wipe out much of the developed world. You can bet that most of the PTB want to avoid that.
                        Last edited by Danny B; 07-24-2016, 06:30 PM. Reason: link


                        • The death of credit

                          There’s no doubt that we are going to crash. It's just a question of what the results are going to be. During Great Depression 1, America was a net creditor and not a debtor. 44% of Americans lived on the farm. Only 5.4 million Americans starved to death.
                          Today, we are a net debtor. Only 1% of Americans live on the farm. Today, we depend on credit FAR more than we did in the 30s. The problem comes in that; You just don't know who to trust and who is broke. The same is true for banks. The London interbank Overnight Rate LIBOR is the rate that banks charge each other. In the 2008 crash, this rate went WAY up because nobody trusted the other party. Credit disappears.

                          Greece; "Comparisons with a decade ago are staggering: The number of mortgages issued in January-June 2016 – also affected by the lawyers’ strike – came to just 800, against about 80,000 in the same period in 2006."
                          "Mortgages issued by Greek banks declined 99 percent in past decade"
                          Everything slows to a crawl.

                          JFK & LBJ over-printed. Gold was leaving the treasury at the rate of 100 tons a week in the summer of '71. When the British rang up to say that they were going to drop by and take 3450 tons, Nixon closed the gold window,. "Money creation took off like a rocket. Price inflation shot up. Wages remained sticky because our global competitors were willing to work for less. The bankers extended our credit terms WAY out to preserve the consumer economy.

                          In the 80s, money was flowing into gold. Volker raised interest rates to about 23% to pry investors OUT of gold. Historically, money flowed into gold when interest rates were too low and inflation too high. In the early 80s, paper gold was created to massively increase the apparent gold supply and keep interest rates down.
                          Driving interest rates down to stimulate the economy with cheap credit is like lighting the end of your boat on fire to keep warm. The runaway money drove interest rates down to zero. Everybody honest was either debt-saturated or unwilling to borrow. It was left up the the dishonest people.
                          ZIRP wiped out interest income to EVERYBODY. We now have a GREAT deal of debt overhang.

                          Bill Bonner; "According to our friend Richard Duncan’s latest estimate over at Macro Watch, world debt has climbed to $300 trillion. That’s up from roughly $200 trillion before the 2008 financial crisis."
                          "The Parasitocracy – led by central banks – pretends that adding more money to the system will make people richer. That’s why they have lowered interest rates to zero and below: to make it easy for people to borrow money.

                          But adding money is a scam. It’s like slowing down the clock to make the day seem longer. "
                          "The only real wealth is knowledge, says Gilder. And the only real growth is learning. Anything else is a fraud."
                          "Money responds to the law of supply and demand like everything else. As the money supply fell, the price of money (interest rates) rose. Higher interest rates then reduced spending… bringing the economy back in balance.

                          In the pre-1971 economy, it was Main Street – productive U.S. industry – that produced wealth and accumulated real dollars. After 1971, it was Wall Street that controlled access to the new counterfeit money… and made sure it captured much of it.

                          The new system gave the feds the “flexibility” they were looking for. But it completely changed the nature of our money… and our economy.

                          Instead of rewarding the people who produced wealth, the new economy gave its hugs and kisses to the people who mongered debt and shuffled financial claims"
                          Celebrating 45 Years of Phony Money

                          Fracking was started with money from the high-yield market. (junk bonds). The price of oil went down and the frackers are spending 86% of their profits for debt service. Oil is going to continue down because of a glut.
                          • Beware, Oil Bulls: Demand Is About To Fall Off A Cliff (BBG)
                          • Peak Oil ‘Demand’ & The Duelling Narratives Of Energy Inventories (ZH)
                          7/25 Oil bulls headed over demand cliff as refinery shutdowns loom – Bloomberg
                          7/25 Oil falls to two-month low as US drilling climbs amid surplus – Bloomberg
                          More drilling,,, less profit.

                          7/25 Japan’s exports decline again in June, for ninth straight month – BloombergConsumption is falling and Kuroda can't do anything about it.
                          7/25 Italy has ‘no banking problem’: finance minister – China Post You now have the official denial.


                          • Problems vs symptoms

                            The demographic crash and the The Debt Time-Bomb.
                            An Upside Down World | Chris Puplava | FINANCIAL SENSE
                            We are on final approach for peak oil-demand, peak debt and peak growth of the young population. Probably, peak jobs. Probably, peak confidence. The most expensive investment you can make is a family. Nobody has the confidence to start a family if they are going to live in poverty.
                            The Generation Who Refuse to Grow Up – Dotted Dragonfly

                            "IceCap is fully expecting a crisis in the government bond market"
                            "Ironically, today the main problem is that governments and central banks will not admit that they are the problem."
                            "To really understand how serious of a problem this is, just know that a mere 1% rise in long-term interest rates, will create losses of approximately $2 Trillion for bond investors."
                            The whole system of interest income is in grave danger. Reverting to historical interest rates is an equally grave danger.
                            "However, when long-term rates go higher – it is an explosive move. Long-term rates ratchet up VERY quickly making the sudden loss instant, while exponentially increasing the funding cost of the borrower.

                            Most investors today have no idea what is happening in the bond market today and have exposed themselves to incredible amounts of risk. "
                            "Champagne Supernova" - IceCap Asks What Happens When The Bond Bubble Finally Pops | Zero Hedge

                            The CBs are hard at work trying to forestall this explosive rise in interest rates. They just keep pumping in the money and hoping to keep rates down. By keeping rates down, they are starving huge segments of the financial sector.


                            • Automatic Earth,,, the all encompassing crash

                              Our entire economic system is wrapped around the idea of pushing future consumption to today. Out entire credit system relies on un-ending growth. There is NO growth in consumption and credit when the producing population is falling. Japan is showing us the way forward. Japanese public debt is just south of 300% BUT poverty is on the rise. Poor people have no confidence to start a family. Kuroda just keeps printing. Bernanke just convinced him to issue perpetual bonds that would never be repaid. You can print money but, you can't print wealth or confidence,,,, or babies.
                              America forestalled the demographic crash by throwing open the southern border back when the birth rate in Mexico was 6.2 It is now 2.6

                              Obummer is looking for a new source of warm bodies. The obvious answer was to ask UPS.
                              Every facet of our economic system requires population growth. Birth-control and poverty are eroding away the entire system. Importing rabble, flotsam and jetsam from MENA isn't going to fix the system. It is TOO FAR gone.

                              ",,,,the political system is toppling over in line with the economic one. As I’ve argued before, this is inevitable, because they are one and the same system. If one part falls, so must the other."
                              "Associations’ like the EU, and perhaps even the US, with all the supranational and global entities they have given birth to, NATO, IMF, World Bank, you name them, depend for their existence on an economy that grows. The entire drive towards globalization does, as do any and all drives toward centralization. But the economy has collapsed. So all this will of necessity go into reverse, even if there are very powerful forces that will resist such a development."

                              "These are the death throes of a system. All parts, as separate as they may seem, or want to seem, fall apart together. Maybe not at the same time, but certainly in rapid succession." "I see people saying the system is unstable. Fine, as long as they realize it has no chance of regaining stability, not with its present components. There will have to be a big clean-up. But it will be messy. A very limited number of people, with all of their minions, control the entire now unstable edifice, and they’ll fight tooth and nail to keep their power.

                              Nevertheless, they’ll lose. It’s just that they’ll drag a lot of other people down with them. They’re fully prepared to go to war just to keep the illusion of power alive. The ultimate hubris."

                              "Debt is future consumption brought forward. Once debt is incurred, consumption that might have happened in the future won’t happen. And it should come as no surprise that at a certain debt level, growth and income begin to diminish. That is exactly what we are seeing in the real world.

                              There are basically two categories of debt: debt used to purchase or create productive activities (like tools for a carpenter or a new factory for a business) and debt used to consume.

                              We forget that debt used for consumption doesn’t create new supply. It simply pulls supply forward in time. The problem is that debt can’t do this forever. Pulling your consumption forward to the present means you will consume less later.

                              Read more: John Mauldin: We Can't Borrow from the Future Anymore
                              Important: Can you afford to Retire?
                              John Mauldin: We Can&#39;t Borrow from the Future Anymore

                              UUmmmm, about your pension plan;
                              "Last year, our research showed that for fiscal year 2014, states had a total of $80 billion of reported unfunded pension liabilities, but states' actual pension debt was $628 billion. The difference was a result of accounting rules that required states to hide the vast majority of their unfunded pension liabilities off their balance sheets. "
                              PIOnline : Subscription Center
                              OK, so we crash. What is the plan for those who make it to the other side? Only 1% of Americans work on the farm. The farm gets more automated every day. If we're working for a global-mean-wage and competing with robots, what are we going to buy outside of food? What are you going to do when the consumer economy goes away?
                              To end persistent poverty, a guaranteed job or free money? - The Boston Globe


                              • Big bumps in the financial road

                                Several writers are claiming that we are going to experience a total crash. Evidently, GOV has a fear of the same thing.
                                Armstrong; "Rather than reform the political economy, they are digging in their heels and getting ready to fight the civilian population"

                                " There are more than 200,000 non-Defense Department federal officers authorized to make arrests and carry firearms. The federal government has tripled the number of agents carrying weapons to defend the government in the past 20 years. They know what is coming. They know the socialistic system they constructed is collapsing. Instead of reform, they are digging in their heels, prepared to plow down any domestic uprising. "
                                "They know what is coming. The establishment by no means wants to see Trump in the White House. His is not one of them and they fear he will side with the people and reform government, right down to the pervasive nepotism. "

                                "Money drives the world. The flow of capital dictates the trend and within that trend lies the rise and fall of empires, nations, and city-states."
                                China had a capital outflow last year of about $ 681 billion. China Capital Outflows Rise to Estimated $1 Trillion in 2015 - Bloomberg Capital flows are all about confidence. "They" wanted globalization and unlimited capital movement. As goes confidence, so goes capital.

                                "The biggest hedge fund in the world is the Federal Reserve, with almost $4,500 billion dollar under management."

                                So, the Yellen hedge fund buys up tons of stocks with free money and drives up the price. She can't very well drive up profits so, companies simply lie about earnings. How the biggest companies in the S&P 500 use made-up earnings numbers
                                Four possible ways to execute Helicopter money.
                                Assange brings us the only good news;

                                "A recent analysis by US economist Michael Synder compared business debt delinquencies in 2008 just before the Lehman Brothers collapse. Then, delinquencies were rising at a very frightening pace he notes, “and this was a very clear sign that big trouble was ahead. Unfortunately for us, in 2016 business debt delinquencies have already shot up above the level they were sitting at just before the collapse of Lehman Brothers, and every time debt delinquencies have ever gotten this high the US economy has always fallen into recession.”

                                "The European banking crisis is spreading rapidly. There are now concerns in Italy and in Portugal as well. The ECB cannot even understand why people would not want to keep their money in banks with negative rates. They are simply incapable of managing the economy. The ECB is bringing Europe to the brink of a widespread banking collapse. Once this crisis becomes a contagion, there will be no stopping it.

                                Low rates will NOT encourage borrowing when banks have too much bad debt to begin with. The negative rates are sending savers to hoard cash outside of banks. It is amazing, but the ECB is in complete denial and unable to see that it must reverse its policy to prevent disaster."

                                I can't leave out Britain;