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  • P. C. Roberts and Jim Willie

    "The Cold War was a Washington creation. It was the work of the Dulles brothers. Allen was the head of the CIA, and John Foster was the Secretary of State, positions that they held for a long time. The brothers had a vested interest in the Cold War. They used the Cold War to protect the interests of their law firm’s clients,"
    "The Cold War was pointless except for the Dulles brothers’ interests and those of the military/security complex."
    "We had the Cold War because it served the Dulles brothers and the power and profits of the military/security complex. There were no other reasons for the Cold War.
    The new Cold War is even more pointless than the first."
    "Hitlery declared the President of Russia to be the Ultimate Threat—“the new Hitler.”

    Could it be any more clear? A vote for Hitlery is a vote for war. Despite this most obvious of all facts, the US media, united as one, are doing everything in their power to drive Trump into the ground and to elect Hitlery.

    What does this tell us about the intelligence of the “Unipower,” “the world’s only superpower,” the” indispensable people,” the “exceptional nation”? It tells us that they are as dumb as s-h-i-t. Creatures of The Matrix created by their own propagandists, Americans see imaginary threats, not real ones.

    What the Russians and Chinese see are a people too brainwashed and ignorant to be of any support for peace. They see war coming and are preparing for it."
    Rethinking The Cold War -- Paul Craig Roberts - PaulCraigRoberts.org

    "The Too Big to Fail policy has instead assured the wreckage and destruction of the USEconomy. Save the big banks, but ruin the capital base."
    "The USTBond Black Hole is drawing capital from the US land mass and the global centers, just in time for the new currency launch with devaluation. The wealth loss will be magnificent for all the dopey clumsy mindless investors who believed the bond market offered safe haven. No security can be offered by a bond market with almost no legitimate buyers, an annual $1 trillion deficit (huge supply), and deep dependence upon the Interest Rate Swap derivative contract which produces artificial bond demand at zero cost."

    "Nothing displays the failure of modern central bank monetary policy better than the falling Money Velocity chart. They speak of stimulus, when the only benefit is to big banks in redeeming worthless bonds. They puff up the bond market, even the stock market. They neglect the muni bond market. They send wrecking balls into the pension fund system and the insurance company sector, which cannot possibly cope with the nil interest rate yield. No stimulus is given to the USEconomy by sustaining dead insolvent criminal enterprises call the big US banks. The QE monetary policy is destroying capital, seen in the mass of corporate job cuts. "
    Banker Bunker Mentality

    Comment


    • Deutches Bank; grasping at holographic straws

      "And since a legitimate fiscal stimulus is what is needed to re-ignite the economy"
      Wiki; Fiscal stimulus refers to increasing government consumption or transfers or lowering taxes. Effectively this means increasing the rate of growth of public debt, except that particularly Keynesians often assume that the stimulus will cause sufficient economic growth to fill that gap partially or completely.
      The public debt is now reckoned at $19 trillion, though it is actually closer to $ 60 trillion. Unfunded liabilities are at $ 212 trillion and expected to add to the debt burden of the State.
      "As for the conclusion, or why a financial shock is long overdue, Konstam says that "ironically the shock that is needed would require a collapse in risk assets for policymakers to then really panic and attempt dramatic fiscal stimulus. "
      This is critical - and inevitable - as only a shock can lead to an "unwind of the falling yield/rising equity market where all financial assets trade badly."

      WHY does he go on about the equity markets? The bond markets are FAR bigger and more important.
      "Now, Deutsche Bank has taken it to a whole new level, explaining why a financial crash has to happen to purge the system from the toxic aftereffects of 7 years of financial repression, and to kickstart a fiscal stimulus"

      About that "financial repression" ; The financial markets demanded hundreds of $ trillions of bailouts. This "demanded money" flowed into the perceived safest market,,, U.S. Treasuries. U.S. Treasuries are the interest benchmark for all other interest rates. The financial markets demanded the bad medicine that caused financial repression.
      The more money that flows into U.S. Treasuries, the lower the interest rate flows.
      "The last round of economic data does little to suggest any change in this dynamic. As we highlighted last week the conundrum for the US is how an overly strong labor market without meaningful wage inflation"
      These people must be smoking crystal meth laced with PCP and Crocodil. OVERLY STRONG LABOR market.
      "Policymakers aren’t used to dealing with financial repression and that unfortunately is one of the defining characteristics of stagnation." No kidding. The "poison pill" of ZIRP hasn't been used before.

      "Ironically the shock that is needed would require a collapse in risk assets for policymakers to then really panic and attempt dramatic fiscal stimulus. "
      What a total bonehead. Japan tried enormous fiscal stimulus. At one point, they were pouring more cement that the rest of the world combined. While public works projects are much needed, that isn't a long-term solution.
      A Stunning Admission From Deutsche Bank Why A Shock Is Needed To Collapse The Market, And Force A Real Panic | Zero Hedge

      What a bunch of high-paid boneheads. We are sliding down towards a global price for oil; https://www.quandl.com/data/SCF/CME_...ry.png?dataset[collapse]=monthly&dataset[graph_title]=nymex+wti+crude+oil+Full+History&dataset[height]=250&dataset[visible_columns]=3&dataset[width]=500

      Iron ore; https://www.focus-economics.com/data...ry/IronOre.gif
      Wheat; Wheat | 1982-2016 | Data | Chart | Calendar | Forecast | News
      Wages; https://anthonybsanders.files.wordpr...ng?w=585&h=342
      Effective wages; http://pricedingold.com/charts/wages-1965.png
      Private investment has gone way up but profits have gone way down,,, even touching zero. This is true for NON-FINANCIAL companies.
      https://3.bp.blogspot.com/-xpHt5TRv6...divergence.jpg

      OK, so all the investment and money has flowed into the finance sector. BUT, there is no demand for credit. The "financial repression" that they demanded (QE) has killed the host.
      Globalization brings in the lowest common denominator to almost all markets. Currency wars speed up this process.

      Comment


      • Inflationism

        The Western CBs tried their conventional "tools" to save the credit markets after the labor markets crashed. They then moved into unconventional tools to save the financial markets.
        The World Gold Council recently wrote, “Investors are starting to lose confidence in the effectiveness of unconventional monetary policies, following increasingly desperate bids by the world’s central banks to reflate the global economy. In this environment, we believe investors are using gold to hedge portfolio risk as they add more stocks and low quality bonds to their asset mix.”

        There is a small cadre of people who are seeing rising wages but, wages are falling for most.
        http://www.oftwominds.com/photos2016...ality3-16a.jpg
        "Conventional economists look to labor market supply and demand for answers--and have come up empty. They can't explain why labor supply--people of working age that are actively in the labor force--keeps declining in a growing economy.

        They are equally flummoxed by stagnant demand for goods and services: in an expanding economy, rising demand should spur higher demand for workers that should eventually push wages higher.
        These higher wages should attract non-participants to rejoin the labor force"
        The GDP numbers have NOTHING to do with productivity. The F.I.R.E economy is juggling around mountains of fresh debt-money and THAT is counted as GDP.
        Charles Hugh Smith Blog | Here's Why Wages Have Stagnated And Will Continue to Stagnate | Talkmarkets

        “It [currency Inflation] discourages all prudence and thrift. It encourages squandering, gambling, reckless waste of all kinds. It often makes it more profitable to speculate than to produce. It tears apart the whole fabric of stable economic relationships. Its inexcusable injustices drive men toward desperate remedies. It plants the seeds of fascism and communism. It leads men to demand totalitarian controls. It ends invariably in bitter disillusion and collapse.” Henry Hazlitt,
        "Dr. Richebacher argued that of all the various consequences of Credit inflation, the rise in consumer prices was one of the least pernicious. "
        "But how about asset price inflation and Bubbles? Well, there is a powerful proclivity for letting asset prices run. An inflationary bias in asset markets certainly “makes it more profitable to speculate than to produce.” And the larger the speculative Bubble the more powerful the constituencies that arise to demand government involvement, intervention and manipulation to sustain Bubble Dynamics."
        "Misguided policymakers will endorse destabilizing asset inflation as confirmation of sound policies "
        " Accordingly, monetary stimulus had to be ratcheted up to counteract downward price pressures and insufficient aggregate demand."
        "For one, the tantalizing New Age Credit apparatus was inherently unstable. This ensured progressive government meddling. Government guarantees and backstops further incentivized speculation, in the process exacerbating speculative leveraging and Bubble Dynamics. Faltering Bubble mayhem then fostered QE, where central bankers intervened directly in the marketplace with massive buy programs. Central bankers then became hostage to unwieldy global Bubbles dependent upon ongoing massive monetary stimulus."
        Credit Bubble Bulletin: Weekly Commentary: Inflation

        When globalism killed off high western wages, our aggregate purchasing power crashed. The banks (temporarily) avoided a commensurate crash by pumping out giga-tons of fresh debt-money. ALL markets are extremely distorted because this DEBT money had no relationship to underlying productivity. The corporatocracy leveraged third-world wages to drive down our wages and help their bottom line. This worked for a while but the effect has worn off as the consumer goes broke. The TTP and TTIP are efforts to regain the profits they lost when we lost our purchasing power.
        This too is a short-sighted attempt to further drive down wages. ALL economic activity will be driven down.

        As trade shrinks, ALL trade shrinks; Profit At World's Largest Shipping Company Plunges On Collapsing Global Trade, Sinking Crude Prices | Zero Hedge
        Worse than last time; Shipping industry faces worse storm than after financial crisis, warns Maersk boss
        World trade is crashing and currency wars make it worse.
        Economic activity goes down,,, the debt supply goes up.

        Comment


        • A few economic vids

          Shadowstats https://www.youtube.com/watch?v=4xAjR7-QHZg
          International competition https://www.youtube.com/watch?v=uTGc-SxZ2JM
          International competition https://www.youtube.com/watch?v=Ls_uS6z24io
          Molyneux and Griffin https://www.youtube.com/watch?v=SLxVnvCQiUQ
          Sr. Price https://www.youtube.com/watch?v=QRFRBKwleL0

          Rickards and the currency war,,, war games. https://www.youtube.com/watch?v=kdPkaCTdxBU
          Jim Grant https://www.youtube.com/watch?v=CLQsT9BPHpg

          Comment


          • The FED was created as an answer to wildcat banking. The original FED charter was a pretty good design. It was the backstop of last resort. It could lend to banks for good collateral only. During great depression one, thousands of banks went bust. The FED wasn't able to save them. Bernanke claimed that the FED caused great depression one because it didn't provide enough liquidity. The feces-for-brains idiots got a second chance in 2008 and pumped in $trillions of liquidity. You can see how that is working out.

            Comment


            • Pensions and other bumps in the road

              Armstrong discovered cycles in the economy of several different periods. Many of his cycles are tied to π. There is another cycle of 8.6 years. Armstrong discovered it by looking at crashes. https://www.armstrongeconomics.com/a...was-the-first/
              In a traditional "bank run" people pull out their deposits. In a modern
              "bank run", people pull out their deposits and the central bank comes in and refills the bank. 8/15 When will the Bank of Japan own 100% of Japanese ETFs? – Mish It is a battle between levitation and gravity.
              • The Bank of Japan’s Unstoppable Rise to Shareholder No. 1 (BBG)

              • Younger Generation In UK Face Overwhelming Pensions Bill (G.)
              • British Millennials Are ‘Collateral Damage’ as Pension Gap Grows (BBG)
              "This can only go horribly wrong, there is no other possible outcome, but it’s a topic politicians either don’t understand or don’t want to touch. Which is why I wrote Basic Income in The Time of Crisis a month ago. There is not much time left."
              "Caroline Abrahams, the charity director at Age UK, pointed out that 1.6 million older people live in poverty in the UK. “A strong pensions system that provides a decent quality of life in retirement"
              “Postal-service operator Royal Mail said last week it may not be able to keep its program running beyond 2018. That’s because its annual contributions could more than double to over £900 million.”

              "The last few months have seen trillions of dollars of fresh credit puked into existence in China to enable goal-seeked growth numbers to creep lower (as opposed to utterly collapse). The problem is… the Chinese are hoarding that cash at the fastest pace since Lehman as liquidity concerns flood through the nation." "In fact, the hoarding of cash in China corresponded with the top in 1999/2000, and the top in 2007…"
              https://www.theautomaticearth.com/20...ugust-15-2016/

              8/15 Ever-lower interest rates have failed. It’s time to raise them – Guardian Slow suicide by ZIRP or fast suicide by 3% rates.
              8/15 Portugal gaining on Italy in the European banking “doom loop” – Zero Hedge
              "Department of Defense Inspector General’s report was published last week. It revealed that the Pentagon could not provide documentation pertaining to $6.5 trillion in transactions.
              On top of that, the report showed that the Pentagon “did not document or support why the Defense Departmental Reporting System . . . removed at least 16,513 of 1.3 million records during Q3 FY 2015."
              16,513 removed. Space war is EXPENSIVE. "the Pentagon has been ignoring a federal law passed 20 years ago, which mandates regular audits for all government agencies."

              Wyoming says that the State owns the wind and you have to pay them to use it. http://soswy.state.wy.us/Rules/RULES/9052.pdf

              Comment


              • The great power shifts

                "A recent study from Simón Bolívar University found that 9 out of 10 Venezuelans can no longer afford to buy enough food" Venezuela Is Descending Into Chaos. Now This Issue Is on America?s Doorstep. | Mother Jones
                Jim Willie, "Over the last decade, global trade denominated in U.S. Dollars has been cut almost in half, down from about 75% of all trade settling in U.S. Dollars ten years ago, to a approximately 35% of all trade settled in U.S. Dollars today. "
                Wet-ink money from the FED is making up the difference.
                ALL government does redistribution of wealth to it's cronies, be they rich or poor. A gold standard prevents this. GOV is always trying to get gold out of the system. This always eventually collapses because the transactional currency can never be the same as the store of value.

                This fact is always overlooked by writers who disparage the gold standard. Adopt a gold-backed dollar? This is what happened the last time we tried - MarketWatch
                This isn't the only fatal weakness to our system;
                "The reason that so many economists didn’t see housing rolling over and don’t think it will affect the rest of the system in any event is that most Keynesian models don’t pay attention to society’s balance sheet. A given amount of new debt is supposed to increase “aggregate demand” by the same amount whether the government and consumers are debt-free or buried under a mountain of obligations taken on in years past."
                Why Housing Has Stalled - And Why Everything Else Will Follow - DollarCollapse.com

                The PTB would very much like to remain in power. Their weakness is that they want to maintain the status quo at the same time that the world is changing radically. Mysterious Group Hacks The NSA | Zero Hedge

                The writing is on the wall but, they aren't paying attention; https://www.armstrongeconomics.com/i...bias-or-input/
                https://www.youtube.com/watch?v=DF7ssBYyV70

                Comment


                • bumps in the road and rise of China

                  GOV printed mega-tons of new money to avoid the problems of Great Depression One. U.S. GOV created FACTA to make sure that this money was only invested in America. Investors leave the markets and go to cash. GOV institutes zero interest and 6--18% price inflation to keep investors out of cash and IN the markets. "They" tell investors that There is [B]n[/o a]lternative. (TINA) This gigantic blob of debt-money is circling the world like a Roc looking for a safe haven.
                  8/16 Why pension funds are driving biggest bond bubble in history – Zero Hedge
                  Everywhere it touches down, it brings price inflation. 8/16 Is California farmland overvalued by $70 billion – Zero Hedge
                  The lower loop of the economy depends on fundamentals like profit-and-loss. It is the upper loop that drives up prices regardless of returns or profits.

                  • Younger Generation In UK Face Overwhelming Pensions Bill (G.)
                  • British Millennials Are ‘Collateral Damage’ as Pension Gap Grows (BBG)


                  It is true that darn near everybody in Great Britain is screwed by the underfunded pension system. SO, who did what to get where they are?
                  Thatcher took the Scottish oil and; "Thatcher chose to fritter this revenue away on funding her ideological tax cuts for the wealthiest"
                  "Norway used its significant oil boom to create a sovereign wealth fund and prepare public finances for the future retirement of the baby boomer generation."
                  "A report by PriceWaterhouseCoopers states that had the UK government saved its tax receipts from oil revenues, it would have a larger sovereign wealth fund today than Kuwait, Russia and Qatar combined. "
                  Great Britain would be far less "great" without Scottish oil.
                  “There is No Alternative” – Debunking the Greatest Myth of Thatcherism | Scriptonite Daily

                  George Soros made a $billion dollars by shorting the British Pound. The queen called him in and had a talk with him. She told him that if he ever did anything like that again, she would have MI5 hunt him down like a dog.
                  His latest target is the U.S. stock market. 8/16 Billionaire Soros doubles bet against US stocks – RT I think that he is trying to create a self-fulfilling prophecy.

                  Rothschild said "let me print a nation's currency and I care not who makes the laws. That was a long time ago when currency had a positive value. Now that currency is a debt note, it is a completely different story. The CBs are being forced to print currency. Rothschild is now getting out of the dollar and into gold. Rothschild Ups Gold Bets | Kitco News

                  Here is a graph of small cap valuation. The Roc of debt has landed here too. http://static.safehaven.com/authors/hoye/42292_a.png

                  Debt to earnings ratio is the highest this century, http://static.safehaven.com/authors/hoye/42292_d.png
                  "Maybe it is an elitist thing to live in a land of unreal theories." Comic Relief | Bob Hoye | Safehaven.com

                  China is perfectly happy with the global mean wage. "As Trump might put it: “Something’s going on.” That something is a historic shift in economic and geopolitical power that is bringing to an end a 500-year period in which western nations have dominated global affairs."
                  https://www.theguardian.com/commenti...ssures-in-west
                  "By the end of 2008, the US had lost one third of its manufacturing jobs from peak and most of those had gone in the previous decade. Italy, whose industrial heartlands have suffered particularly badly from competition with Asia, has lost 25% of its industrial capacity since 2008. "

                  The China shock caused enormous deflationary pressures in the West and GOV tried to save everythingwith money printing. It didn't work in Japan and it isn't working here. http://dollarcollapse.com/stock-pric...kets-big-fail/

                  8/16 Banks look for cheap way to store cash piles as rates go negative – CNBC
                  Gold and banks, http://seekingalpha.com/article/3999...001fb&uprof=52
                  Gold and deflation; http://kingworldnews.com/expect-to-s...nic-into-gold/
                  D. R. Schoon has a lot of good articles and vids; http://www.drschoon.com/
                  Last edited by Danny B; 08-17-2016, 02:28 PM. Reason: need a link

                  Comment


                  • Gold proxies

                    The U.S. dollar was gold-backed at one time. Running on momentum, people still used the dollar as a reserve currency and store of value even after it lost it's gold backing. The CBs made sure that no currency was gold-backed. NOT because it would be used as a dominant money. NO, they block gold backed currencies to keep all wealth in circulation and available to the State to be stolen by depreciation. It is the store of value function of gold that so confounds the banks and statists. The "first spenders" can't dilute your gold.
                    It was in the interests of these 2 parties that paper-gold was "invented", first in the futures markets. This led to the creation on mountains of paper gold proxies. This mountain of proxies is reckoned as 90--98% of the gold market.

                    Armstrong;
                    "The United States wants to eliminate cash so they can collect every penny they imagine is missing from their revenue expectations. If we are EVER going to really revise the world monetary system, we have to stop the nonsense of picking pieces from history to support predetermined ideas and just follow the facts to understand how this function.

                    The Marxist approach was to try to dictate how the economy should function in his mind and to force that to take place by political decree. That concept was adopted by Keynes and is still with us today manifesting in every corner based upon predetermined biases. The dollar is by no means going to fade away. China will not replace the dollar as a reserve currency until debt is no longer used as reserves by nations. There is a separate and distinct difference between the currency being used in trade and the currency being used to store wealth. They do not have to be the same thing and are entirely two different animals."

                    "Until debt ceases to be money that simply pays interest, the dollar will not vanish as a reserve currency. There is no replacement as of yet. Even when China becomes the largest economy, that will not displace the “reserve” status of the dollar until there is a deep market to park cash. That is separate and distinct from trade being conducted in a variety of currencies. We have to revise the world monetary system. When we reach that point, then we can deal with creating an alternative for a “reserve” currency that is entirely distinct from trade currencies. Even the USA had two currencies during the 19th century – the domestic silver dollar and the international heavier trade dollar on par with international standards. Two tier monetary systems have commonly existed for a very long time."
                    https://www.armstrongeconomics.com/w...erve-currency/
                    This is where Armstrong completely falls down. ALL money was gold. ALL reserve currencies were gold (or silver) convertible. As long as the dollar is no longer convertible, it is just one more fiat currency. Power corrupts so, fiat currencies always get corrupted. Armstrong claims that the dollar can never be replaced as the reserve currency because there is NO OTHER candidate that is strong/viable enough to replace it. Gold proxies have been around for about 40 years. They have diluted the value of gold for an equally long time.

                    The May outflow from the COMEX was matched ounce-for-ounce by imports from Switzerland. Armstrong writes about a "slingshot move or a phase change" in gold, about January. Did it not occur to him that this move could be a return to gold as a store-of-value?


                    Ages ago, by general agreement, all portable wealth was stored as precious metals. The goldsmiths had the best vaults so, they stored much of the gold and issued receipts. These were the first proxies for gold. These receipts were traded as "money". Naturally,. the goldsmiths were often successfully tempted to issue more receipts than they had in physical gold.
                    The State treasury took over much of this function as part of it's responsibility of managing State funds. Gold-convertible notes acted as proxies for gold.

                    All GOV does redistribution and there was never enough wealth to make everybody happy, nor to buy votes. GOV always inflated the currency supply over and above what the gold supply was. GOV bonds were proxies for gold when currency was gold-backed. GOV always inflates the currency supply so, ALL governments eventually default.
                    Rickards talks about the various subterfuges used to create multiple proxies for existing gold. The Gold Hoax

                    Armstrong says that we need to reform the money system. I got news for you. It ISN'T going to be reformed peacefully when everybody is in a currency war. It isn't going to be reformed peacefully when unemployment is crashing so many States. Cyber war is taking down EVERYBODY. The U.S. dollar will still be around but, it will be domestic use only.
                    "75% of all trade settling in U.S. Dollars ten years ago, to a approximately 35% of all trade settled in U.S. Dollars today. "

                    Everybody is dumping the U.S. dollar because it is now pure fiat. Nobody needs the dollar to buy oil now so, nobody is buying U.S. Treasury bonds. The Western CBs are all buying each others debt to keep the party going. They call it "providing liquidity" in times of distress.

                    "China will not replace the dollar as a reserve currency until debt is no longer used as reserves by nations". Jim Rickards claims that the SDR, created willy nilly by the IMF ( a Western institution) will be the new reserve currency. The Chinese are VERY nationalistic. The British gave them a VERY good lesson in why they should NEVER trust the West. If anybody believes that the East is going to store their wealth in a fiat instrument controlled by the West, they are seriously deluded. They have no interest in a Western created proxy for real wealth.

                    Edit;I have more numbers for gold dilution.
                    "By August 2011, 36 of the 56 Full LBMA trading members submitted returns for the new survey, and the results were rather shocking. Quietly, the size of the “paper” gold market had grown to monstrous proportions – successfully creating a tsunami of paper gold flow. In fact, according to the Q1 2011 LBMA Liquidity survey, over 173,713,000 ounces or 5,400 tons of “paper gold” per day (more than 2 year annual physical production) turns over with only 2/3 of LBMA members reporting!"
                    ". As of October 30, 2012 COMEX gold Open Interest equaled 454,742 contracts (45,474,200 ounces of gold). COMEX registered inventory stood at 2,735,041 ounces"
                    “When I talked to the head of deliveries at COMEX NYMEX, I was like, ‘What if 4% of the people want deliveries?’ He said, ‘Oh Kyle, that never happens. We rarely ever get a 1% delivery.’ "
                    https://intelligent-partnership.com/...-gold-volumes/
                    "Continued growth in Q2 2016 (+15%) brought total H1 gold demand to 2,335t – the second highest first half on record. Huge ETF inflows during the first six months (+579t) were counterbalanced by anaemic jewellery demand in an environment of sharply rising prices. In fact, the gold price posted the strongest H1 performance (+25%) for more than 35 years."
                    Gold Demand Trends | World Gold Council
                    Austrian Mint sells 41 tonnes of gold coins and gold bars in 2015 | Zero Hedge

                    BUT, 8/17 Gold’s popularity dims as ETFs shrink by most this year – Bloomberg. Yep, paper gold is losing favor.
                    How does Bloomberg explain; Huge ETF inflows during the first six months (+579t)
                    The 2011 leverage was about 16--1. The current leverage is about 300--1.
                    Last edited by Danny B; 08-18-2016, 01:52 AM. Reason: more numbers

                    Comment


                    • The crash of the (not) noble experiment

                      The IMF is trying to get China on-board with the SDR. They will allow the PBOC to issue SDR bonds. De-Dollarization is Now Assured – SDR Bonds Have Been Approved – The Daily Coin
                      You can bet that China will bolt from western institutions when it best suits them. They are already dumping lots of U.S. bonds. Global central banks dump U.S. debt at record pace - Aug. 16, 2016
                      Everybody is dumping US bonds to prop up their domestic economy. They are presented for redemption instead of being rolled over.

                      "A weaker currency also reduces the purchasing power of citizens. The euro has lost over 30 percent of its value against the U.S. dollar since 2011, effectively slashing the income and wealth of euro-zone consumers. Australians, heavily dependent on imports, have lost a similar amount of purchasing power. Combined with stagnating incomes, this only cuts further into global demand."
                      https://www.bloomberg.com/view/artic...l-currency-war

                      So, the upper loop of the economy fights a currency war to gain market share. The fallout from the currency war diminishes the purchasing power of the lower loop. This results in reduced economic activity for everybody.

                      The credit bubble needs ever-more juice to service the debt load; Bank lending explodes and inflation will be next, Macleod tells KWN | Gold Anti-Trust Action Committee
                      GEAB has a subtle observation about the upcoming elections; US elections: the detonator of the ultimate phase of the economic and financial American crisis | GEAB

                      In the past, when money represented wealth instead of debt, people and groups saved up to do capital projects. In our new world, great mountains of debt are created to finance capital projects. This worked for a while only when bonds were repaid. Bernanke and Japan seem to be enamoured with the idea of "perpetual bonds" that are never paid back. Everybody knows that State debt can't be paid back. It is now apparent that it can't be inflated away either.
                      This has been one huge, gargantuan experiment to see of debt could replace wealth. True wealth can't suffer a wholesale evaporation. The upper loop of the financial sector managed to suck up all wealth. The lower loop where all the production and consumption happens can not redeem/vitiate the mountains of debt created by the upper loop.
                      The experiment does not seem to be working out.
                      http://www.zerohedge.com/news/2016-0...-history-world

                      Comment


                      • SDR holograph of an illusion Birth rate = bond market

                        In Diary of an Economic Hit Man, Perkins clearly explained how the IMF$ crowd raped every foreign economy that it could. The East created the Asian infrastructure bank as an alternative to the IMF. They also created the Asian development bank. The U.S. dollar is rapidly fading and the IMF is trying to force-feed their SDR into the system. Bonehead Rickards suggests that the Asian Infrastructure Bank could use the SDR. The Day The Dollar Died, Part II - The Daily Reckoning

                        "They" want to use the SDR to recapitalize the UPPER loop of the economy after the dollar dies. No mention of the fallout from the total detonation of the entire credit system. No mention of wages or the entire lower loop. No mention of the global mean wage and/or automation. Bunch of hopeless idiots.
                        The SDR is issued by the West and backed by nothing. "From my perspective the SDR is an illusion of an illusion." One World Currency and the SDR Bond – The Daily Coin
                        Rickards was called on by the 16? intelligence agencies to do a war-game
                        scenario with DoD computers. One assumes that the 16 includes the master criminals, the CIA. Rickards assures us that collapse is near. Ichan seems to think the same thing. Carl Icahn Turns Apocalyptic: "I Am More Hedged Than Ever, A Day Of Reckoning Is Coming" | Zero Hedge

                        The safety net
                        "It is one of the most classic examples of linear thinking in a dynamic world you could ever wish to find. Pensions, welfare payments, social security, cash for clunkers, and the myriad other absurd programs which comrade clipboard decided were in our best interests… These are all the natural consequence of a power left unchecked and a populace to ignorant or to self absorbed to understand that there is no such thing as a free lunch."
                        "It all started with an obvious problem of financing a gap in cashflows. No problem, the coiffed haired suits said. We’ll simply forward sell cashflows (i.e taxes) to pay for it.

                        Forward selling cashflows is of course simply a bond. Cashflows based on taxes received and issued as a note are of course government bonds. Extrapolating those cashflows was really a function of extrapolating birth rates. Convert births into tax paying citizens and you can manage your financing. Perfect, until the math no longer holds water. Welcome to the future present." ah yes,,, birth rates.
                        https://capitalistexploits.at/2016/0...graphic-shock/

                        OK, so we financed the safety net by figuring the birth rate and the bond market. The birth rate is not cooperating. We lit a fire under the credit markets to bring consumption forward and keep the economy steaming forward. Interest rates have crashed because they are locked in to consumption. Pension funds need 7% growth to survive. They aren't surviving so, "they" claim that we are going to have to raise taxes WAY up.
                        The $6 trillion public pension hole that we’re all going to have to pay for - MarketWatch

                        BUT, every additional dollar of taxes reduces the producing economy by three dollars.

                        Italian banks have $406 billion of bad debt that they admit to. http://www.bloomberg.com/news/articl...-equity-market

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                        • Socialism vs hard work

                          Man has a natural inclination for survival and providing for the future. He believes in either capitalism or theft. Theft always grows in popularity over time. Hard work just isn't as attractive as theft to many people. Wal Mart reports that it loses $ 1 billion a year. That would by losses of $ 8.29 million a day.
                          Socialism is the antithesis of capitalism and hard work. The two just don't mix.
                          Why Capitalism Works And Socialism Doesn't: Arbitrage — Manhattan Contrarian
                          While China is trying to move from communism to capitalism, America is sliding down into socialism. Too many people just don't want to work. Information Arbitrage - From Capitalism to Socialism to ???: Crossing the...
                          OK, so the PTB have managed to pump up the stock market. BUT, can they keep it levitated? History says NO.
                          3 Standard Deviations Above The Mean! 99.73% Certainty the Stock Market Is Ready To Collapse | Opinion - Liberal
                          The Japanese GOV has bought everything in sight to keep the collapse at bay. Can this "strategy" work in the long term? Doesn't look like it can;
                          8/18 Japan July exports drop 14 pct on-year; imports tumble 24.7 pct – CNBC
                          8/18 What next for Japan if Abenomics fails? – Live Mint

                          Comment


                          • Sovereign debt crisis

                            A search on sovereign debt collapse returns;
                            Sovereign Debt Crisis | Armstrong Economics
                            Inevitable, Global Sovereign Debt Collapse | Miles Franklin
                            Sovereign Debt Crisis - The Economic Collapse
                            What is a Sovereign Debt Crisis? Why is it so Scary?
                            Sovereign Debt Crises - Federal Reserve
                            FRB: Federal Reserve Bulletin 2014: Volume 100
                            European sovereign debt crisis could cause Eurozone implosion

                            Wages crashed....producing economy crashed....GOV printed bonds to make up the difference. Deflation is working it's way up the financial chain. There was a common belief that GOV could never go broke because it has a printing press. The huge deflation pressures have come up against the final "resource",,,,, GOV bonds. And the result is;
                            ",,,, we also note that more than half
                            of world’s sovereign bonds in a key S&P Global Index—the
                            S&P Global Developed Sovereign Bond Index—carry negative
                            interest rates. "
                            https://media.spglobal.com/documents...ugust_2016.pdf

                            "China has been net exporter of DEFLATION for many many years" Bond Alert And Single Most Important Chart This Year - Mountain Vision
                            "China and Japan leads all macro impulses – China PPI and FX devaluation dictates world growth and inflation and Japan’s fiscal and monetary experiments leads ECB and FED into the dark age of ignorance."
                            As we deflate to a global-mean-wage, everything else eventually deflates. They print like mad but, it goes into everything except wages.

                            The sovereign bond market crashed years ago. The central bankers are all buying each others debt so, it appears that bonds are being sold. Levitation fighting gravity. Armstrong, et al claim that gravity will eventually win. So, what is the next step?
                            Rickards and "company" used DoD computers to project the outcome. Reportedly, the crash is assured. History says the same thing. What about after the crash? Will the PTB retain power and control?
                            Here is a very interesting document about retaining control of belligerent populations in history.
                            How The Globalists Will Attempt To Control Populations Post-Collapse

                            The document makes assumptions about the cities being a stable base to attack rural belligerents. This is pure fantasy. Our balance-of-trade deficit is $ 1.5 billion PER DAY. The credit markets will collapse along with everything else. Subtract $ 45 billion a month from goods flowing into America and see what the cities look like. Subtract oil and see what the economy and cities look like.
                            When GOV goes broke, can it force Cargil, Con-Agra and Archer-Daniels-Midland, et al to produce food at low prices? What happens in the cities when the safety net evaporates?
                            The rural populations will not be the major headache. 50% of municipalities are technically bankrupt. When the bond market dies, how will they pay their police?

                            Comment


                            • There is a good reason the negative interest rates are never used

                              The FED has free money and is buying up every stock that threatens to drop in price. This has burned everybody who wanted to short stocks. When you have free money, you don't worry about price. Prices are set at the margin,,, whoever the highest bidder is.
                              " the Bank of Japan now owns over 60% of its nation's ETF market). Putting aside for a moment what an abomination this circumstance is to free and fair markets, having prices set by a central bank is a huge threat to price stability. Why? Because no one else can compete with an entity able to print an infinite amount of thin-air money at will. The gap between what a central bank is willing/able to pay vs the next marginal buyer is tremendous; so if the central bank ever pauses its buying, prices can drop precipitously."
                              The Marginal Buyer Holds The Pin That Pops Every Asset Bubble | Peak Prosperity

                              "The gap between what a central bank is willing/able to pay vs the next marginal buyer is tremendous" Levitation is quite expensive.

                              The Economist magazine is the mouthpiece of many of the self-proclaimed, "Elites". They have come to the conclusion that the Eurozone will fail. On course to fail | The Economist
                              There is a huge difference between the productivity of Germany and the productivity of the Southern Mediterranean States. They propose a wealth-tax on Germany to make up the difference. Something like the Treaty of Versailles but, without the war.

                              "According to Rickards, the next financial and economic collapse will be just another BIG BUMP in the road. Most precious metals analysts, Jim Rickards included, suggest the importance of owning gold to protect wealth during this next financial and economic calamity. Unfortunately, the most important factor they leave out is the “PERMANENT COLLAPSE DUE TO FALLING ENERGY PRODUCTION.”
                              https://srsroccoreport.com/gold-will...rds-forecasts/

                              Energy is the master resource. Peak cheap oil is a fact of life in the 49 states. When our $ 45 billion a month trade deficit becomes unsupportable due to the credit collapse, we will import a lot less oil. It remains to be seen where the price of oil will settle in after international credit has collapsed.

                              China exported massive price deflation in labor and manufactured goods,,, also, in some commodities. This has led to a huge deflation in interest rates. The Financial Times is another "elite" mouthpiece. This is their observation on negative interest rates.
                              "If negative interest rates spread to the wider economy, S&P said it can cause a shift towards a “cash-only economy”,
                              "Using Japan as an example, it said negative rates have not behaved as intended,"
                              "Mr Kingston said: “Negative interest rates were once considered by many economists as a radical strategy or even a mathematical impossibility, but some of the world’s most significant economies are now turning to negative interest rates to arouse moribund economies.

                              “However, moving to a negative rate environment, in every circumstance that we’ve looked at, is a clear sign of desperation "
                              Negative rate moves ‘clear sign of desperation’ - FTAdviser.com
                              "list of potential economic damage from these policies substantial.”

                              Peak cheap oil is behind us.
                              Peak credit is behind us.
                              Peak wages is behind us
                              Peak GDP is behind us.
                              Peak employment is behind us.
                              We are the high-cost market trying to maintain our former standard of living by borrowing to buy $45 billion a month of oil and trinkets. We are 4% of the world's population. Our entire system depends on levitation from the FED.
                              What could go wrong?

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