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  • Silver in China & debt saturation

    9/08 China’s foreign exchange reserves fall to their lowest since 2011 – Fortune OK, so where did their pile of foreign DEBT notes get off to?
    "Unlike their opposite numbers in Japan and the West the Chinese banks are not brain-dead. While they also have a large portfolio of dollar-denominated assets, they are probably fully hedged by their holdings of silver and gold. The Chinese banks don’t have to carry the ideological baggage of anti-gold mentality, so prevalent in the United States. Their financial condition is incomparably superior to that of banks in the dollar orbit."

    " Their perspective on the market is entirely different from that of silver investors in the West. Their participation in the silver market is motivated by their desire to earn a return on their holding of silver in silver. "
    "The difference between the Chinese banks and their Japanese and Western counterparts is that the Chinese hedge paper with metal, while the Japanese and their American mentors hedge paper with paper. "
    "By now it is clear that the cause of the crisis is the banks’ inordinate portfolio of assets concentrated in debt denominated in the irredeemable dollar, unhedged by gold and silver. By contrast the Chinese banks, which also have large dollar assets, are hedged in metal. The Chinese banks are in no need of a bailout. "

    "Today, this is the central bankers' final-and fatal-conundrum: Aggregate levels of debt are now so high, credit can no longer induce sufficient economy expansion to pay off or even service capitalism's constantly compounding debts.

    Central bankers' efforts to revive economic growth, e.g. quantitative easing, low, zero and negative interest rates, are like pouring more and more gasoline into an already flooded engine hoping the additional gas will cause the stalled engine to go faster."
    "Today, central bankers are trapped by conditions they created. It was their excessive expansion of the money supply after 1971 that lead to the speculative bubbles whose serial collapse resulted in the reawakening of deflationary forces not seen since the Great Depression.

    To prevent another Great Depression, central bankers desperately tried to revive economic demand and growth by increasing the monetary base to increase the amounts of loans banks could make."
    It is doubtful that the Central bankers started the Viet-Nam war or the "Great Society welfare program.
    "But instead of loaning the money, banks redeposited the excess reserves (AMBSL) with central banks; and the hoped-for increase in circulating money (M1, M2, M3, etc.) and credit and debt (TCMDO)-and growth in economic activity-never occurred." No kidding. I suppose that it never occurred to them that we were already debt saturated.

    ".the increase in the monetary bases was not translated into growth in the money supply because banks have been reluctant to extend loans, choosing instead of accumulate reserves." The money supply increase was locked away in the bank vaults of the upper loop.
    "Today, central bankers are attempting to offset the growing global deflationary riptide by 'inflation targeting', i.e. using cheap credit and inflating the monetary base to artificially induce inflationary demand. So far, deflation is winning; but should inflation gain the upper hand, hyperinflation, not inflation, will result as the monetary base is now too large to limit any inflationary surge."
    That monetary base is locked away in bank vaults.

    Junk bonds are the very-risky sector of the investment world. A lot of money has poured into junk bonds by gamblers who seem to be blind to the high risk. All they look at is the proffered interest rate. Now, even that is going away.
    Draghi's bubble: Negative-yielding junk bonds coming to Europe - WisdomTree Emerging Markets Corporate Bond ETF (NASDAQ:EMCB) | Seeking Alpha


    • Revisiting the 14th century

      Well, that was post 2,000. I guess that this is 2001.
      We are moving towards a complete breakdown in the debt and credit markets at the same time that GOV is prosecuting a war on cash.

      "It is not just central banking, but also globalisation, which is demonstrably failing. The same confused, greedy and corrupt central authorities which have set up the global economy for a major bust through their dysfunctional use of existing powers, are now seeking far greater central control, in what would amount to the ultimate triumph of finance over people. They are now moving to tax what ever people have left over after paying taxes. It has been tried before. As previous historical bubbles began to collapse, central authorities attempted to increase their intrusiveness and control over the population, in order to force the inevitable losses as far down the financial foodchain as possible. "

      "Such attempts at total financial control are exactly what one would expect at this point. A herd of financial middle men are used to being very well supported by the existing financial system, and as that system begins to break down, losing that raft of support is unacceptable.
      Even if the ultimate failure of central control is predictable, momentum towards greater centralisation will carry forward for as long as possible, until the system can no longer function, at which point a chaotic free-for-all is likely to occur.
      Dissent is increasingly being criminalised, with legitimate dissenters commonly referred to, and treated as, domestic terrorists and potentially subjected to arbitrary asset confiscation:

      "The state will make more and more use of “threats of terrorism” to seize financial assets. It is already talking about expanding the definition of “terrorist threat” to include critics of government like myself.
      "Governments do not trust their citizens (‘potential terrorists’) either, hence the perceived need to monitor and limit the scope of their decisions and actions. The powers-that-be know how angry people are going to be when they realise the scale of their impending dispossession, and are acting in such a way as to (try to) limit the power of the anger that will be focused against them. It is not going to work."

      "Without trust we are likely to see throwbacks to the 14th century….at the dawn of banking coming out of the Dark Ages.”. It is no coincidence that this period was also one of financial, socioeconomic and humanitarian crises, thanks to the bursting of a bubble two centuries in the making:

      The 14th Century was a time of turmoil, diminished expectations, loss of confidence in institutions, and feelings of helplessness at forces beyond human control. Historian Barbara Tuchman entitled her book on this period A Distant Mirror because many of our modern problems had counterparts in the 14th Century." Six hundred and fifty years ago came the climax of the worst financial collapse in history to date. The 1930’s Great Depression was a mild and brief episode, compared to the bank crash of the 1340’s, which decimated the human population. "

      "Just as in the 14th century, the cracks in the system have been visible for many years, but generally ignored. The coming credit implosion may appear to come from nowhere when it hits, but has long been foreshadowed if one knew what to look for. Watching more and more people seeking escape routes from a doomed financial system, and the powers-that-be fighting back by closing those escape routes, all within a social matrix of collapsing trust, one cannot deny that history is about to repeat itself yet again, only on a larger scale this time."

      "The advent of negative interest rates indicates that the endgame for the global economy is underway. Governments and central banks would very much like to frighten people away from cash, but that only underlines its value


      • Crash slowly coming to the upper loop

        The working man in the lower loop reached "peak wages" decades ago. He was offered increasing credit to maintain his lifestyle in the face of rising prices and stagnant wages. He has recently reached peak debt. This is only peak debt for honest people. Desperate people continue to borrow.
        9/09 Consumer credit jumps by $18 billion in July – Zero Hedge
        Some of us don't borrow; 9/09 Wholesale sales tumble most since January – Zero Hedge
        9/09 German stats office reports shock drop in July exports, imports – The Street
        That has fallout for the banks; 9/09 European banks have their worst two day stretch ever – Important News

        The mega-bucks of new money is force-fed into the upper loop and they haven't felt the pain yet in their incomes.
        The one-percenters are now destroying dollar stores - MarketWatch
        It will catch up to them later on.

        9/09 ECB’s Mario Draghi has run out of magic as deflation closes in – Telegraph The Central Bankers are producing money, NOT wealth. Inside their little pea-brains, they are all in agreement that currency inflation will produce price inflation. It does to a certain extent. BUT, when you combine price inflation with falling employment and shrinking wages, you get overall deflation. The black-hole of the global-mean-wage sucks in all discretionary spending.
        Fuel consumption per ounce of gold or silver;


        • Antal Fekete, Marketability and the emergence of money

          "translated into English under the title Principles of Economics); one of the discoverers of the concept of marginal utility. He also introduced the concept of marketability upon which the theory of money and credit rests.

          "The differences in the degree of marketability is of the highest significance for the theory of money. The failure to recognize this is one of the essential causes of the backward state of monetary theory."
          "Traders at the Discount House noticed that the bills drawn on and accepted by the goldsmith behaved quite differently from other bills. Although they were, just as any other bill, maturing within 91 days, they were coming back to the goldsmith after a few weeks or even a few days of circulation. Not as if anything about them was suspect. On the contrary: the bills were 'too good'. They circulated too fast. "

          "A bill is considered more marketable if the drawer stands closer to the head of the line waiting for the consumer=s gold coin. Thus the bill drawn on the clothier was more marketable than the one drawn on the weaver, which in turn was more marketable than the bill drawn on the spinner. Now the bill drawn on the goldsmith was more marketable than any one of those for the simple reason that the goldsmith was working with the very material of which the standard of value was made.

          "The maturity date was replaced by the legend "payable to bearer on demand". These were called the goldsmith's "bearer sight bills", the precursors of the bank note.

          The market process promoting the bill of the goldsmith to become the most marketable paper in the bill market was analogous to the market process that had earlier promoted gold to become the most marketable good in the commodity market. The latter was studied by Carl Menger in his seminal paper On the Origin of Money in The Economic Journal, in describing the concept of marketability."

          "certain commodities became universally acceptable as media of exchange.
          The difficulties of barter would have proved insurmountable obstacles to the progress of trade, had there not lain a remedy in the very nature of things, to wit, the various degrees of marketability (Absatzfähigkeit) of commodities. The differences in this degree are of the highest significance for the theory of money.
          The most marketable good that, through the evolution described by Menger, has ultimately become the generally acceptable medium of exchange, is gold.

          In recent decades, oil/energy has replaced gold as the most marketable good. For a barter economy, there has to be a universal commodity. For a long period of time, coal was the most marketable good. This was replaced by oil. Oil was somewhat replaced by uranium and natural gas. Energy is the universal commodity and lent it's demand to oil.
          Wind power and solar power are technologies and NOT fuels.
          If Nikola Tesla had been able to move forward with his magnifying transmitter, coal and oil would have lost importance for energy production.
          9/08 Scotland is constructing one new wind turbine every day – Greentech Media
          9/09 Oil price slides despite US drawdown – The Week
          The UK's Next Nuclear Power Plant Could Collapse Before It's Built
          China warns Theresa May against cancelling the Hinkley Point ...

          The Hinkley Point plant is committed to selling power for far more than the cost of solar.
          Coal is slowly being phased out. Oil can't get up off the floor. This will help gold return as the commodity with universal demand.


          • The FED is out of bullets

            The Eurozone project was doomed as soon as it got locked into a common currency. Sales would always flow to the most productive State;
            "Yellen also agreed that “helicopter money” (really fiscal policy supported by Fed bond purchases to finance deficits) could be useful, but made it clear that it was up to Congress to implement that and the Fed would not lead the charge." Congress will be in deadlock for a long time.
            "What this means is if you go to the bank and withdraw $1,000, the bank might only give you $980 in cash because of the “exchange rate” between your bank account and cash. "
            Get Ready for “Unencumbered” Interest Rate Policy - The Daily Reckoning

            "Economist James Dale Davidson crunched the numbers. Assume the interest on this $200 trillion is 2 %, he says. That means the economy would have to grow by 6% — 300% of GDP — to simply cover the interest charge on the outstanding debt. And that, according to Davidson, implies a $500 billion annual deficit."
            "The Federal Open Market Committee had to cut interest rates by an average of 550 basis points over the last nine recessions in order to break the fall and stabilize the economy. It could not possibly do so right now, or next year, or the year after. Quantitative easing (QE) in its current form cannot compensate, and nor can forward guidance. They are largely exhausted in any case."
            "“The modern world is insane,” said Chesterton, reflecting on anarchy from above, “not so much because it admits the abnormal… as because it cannot recover the normal.”
            Anarchy From Above - The Daily Reckoning

            $200 trillion of money printing and this is what we get;
            Bondmageddon Sparks Crude Carnage & Biggest Stock Slump In 7 Months | Zero Hedge

            " Bank of Japan Head Harihiko Kuroda confessed in January that Japan has a limited GDP potential no matter what policy he employs.

            · European Central Bank President Mario Draghi admitted that despite FOUR NIRP cuts and €1 trillion in QE the ECB won’t hit its inflation targets for a decade.

            · Federal Reserve Chair Janet Yellen has begun implicitly pushing for Congress to step up in terms of policy because the Fed is effectively out of ammunition."

            "This is concerning in 2016, and in particular September, because over the past year the US commercial bankruptcy filings jumped from 3% last year to 29%."

            Reportedly, Hanjin involves 1/2 million containers;


            • Contradictions from Armstrong

              Once again, my post disappeared when almost done. Here is the short version.
              Bonds are crashing; Bondmageddon Sparks Crude Carnage & Biggest Stock Slump In 7 Months | Zero Hedge
              BUT, Armstrong says that the U.S. dollar will come out on top because of our very deep and liquid bond and equity markets.
              He also claims that sovereign debt will have a complete crash. Half of U.S. sovereign debt has to be re-funded very soon. 1/2 of corporate bonds are junk rated. Where does he get the justification to claim that American bond and equity markets will save the dollar?

              "Whatever could go wrong is going wrong in a grand style. True, there are people who see nothing. They will be slaughtered for they form the majority. You cannot tell them anything. They will never acknowledge anything until they lose everything, which will come in the blink of an eye. "


              • Automating banking

                The "London Whale" cost J.P. Morgan a reported $ 6.2 billion loss and a $950 million dollar fine. The actual loss is supposed to be MUCH higher than the $6.2 billion cited. The banks have a plan to get around these problems;
                Obummer looks to be trying to raise some cash to keep things going until the election is over; Oil Markets Brace As U.S. Looks To Sell 100 Million Barrels From SPR |


                • If the system doesn't work for you,,, trash it

                  When a company looks distressed, the investors pull out their capital. That is what happened to Hanjin. It can happen to anybody.
                  “Think of trying to save somebody from drowning by picking them up from the water by their throat, so you get them out of the water so they don’t drown immediately. But you suffocate them over time because they can’t breathe, and that’s what’s happening with European banks,” he said.

                  He said the negative interest rate policy of the ECB and its continuous intervention in asset markets saves the bank’s balance sheet but hurts its income. The higher the interest rate, the higher the margins banks can charge for lending money to companies. The reverse is true for zero or negative interest rates."
                  “Their lending business has minimal margin; they are shrinking. Their transaction business has minimal margin, and it’s shrinking. Their fee business, such as asset management, has minimal margin, and they’re shrinking,” Middleton said.

                  Even the Citigroup of today picked up on this point. The analysts reduced their earnings-per-share estimate for 2016 by 34 percent"
                  Is Deutsche Bank the Next Lehman Brothers?
                  TARP and QE pulled the banks back from the edge of the cliff but, ZIRP strangled them.

                  "Japan’s sovereign debt is suffering its worst rout in 13 years, handing investors bigger losses over the past two months than any other government bonds " Don't worry, this is just the start of the meltdown in sovereign debt.

                  "History has demonstrated that, once commenced, monetary inflations are exceedingly difficult to control – let alone rein in. Speculative markets have been keen to this powerful dynamic. Once the Bernanke Fed targeted inflating securities markets as the prevailing mechanism for post-Bubble reflationary measures, there would be no returning to conventional."
                  "Global bond markets validated my maxim, “Bubbles go to unimaginable extremes – then double!” My view holds that this year’s bond trading has been dominated by historic market dislocation."
                  "Market “melt-ups” create their own liquidity. The extraordinary development this time around was that liquidity abundance turned systemic (combination of monetization and speculative leveraging). A short squeeze and resulting outperformance powered the risky stuff. Meanwhile, the historic collapse in sovereign yields poured gas on the speculative fire that had enveloped everything with a yield. "
                  Credit Bubble Bulletin: Weekly Commentary: Reversals

                  9/11 Low rates are the cause of, not solution to, economic malaise – ETF Daily News Yes but, they temporarily saved the banks.
                  "According to Bloomberg, the firm’s assets slumped to $4 billion as of the end of August compared with $10 billion in September last year. " Iconic Hedge Fund Perry Capital Loses 60% Of AUM As Investors Flee | Zero Hedge Ah yes,,, capital flight.

                  9/11 Interest rates have bottomed, and no one is prepared for it – ETF Daily News
                  9/11 Landmark court ruling has pension holders furious – Birch Gold

                  Yep, ZIRP is like a hand grenade in the punch bowl.
                  9/11 Draghi asset buying deepens the hole in Europe’s pension funds – Bloomberg Draghi is pissing into the wind.
                  9/10 Investors should worry about consequences of negative interest rates – Bloomberg No kidding! This is about 5 years too late.

                  A comparison of debt vs presidents;
                  Here is a great graph showing that the FED funds rate rate is sinking at about the same rate as wages; https://northmantrader.files.wordpre...6/08/fred4.png
                  Your wages are back below 1973 levels;

                  "Hambone" wrote very good articles about this linkage;
                  Here is a good graph showing who is buying treasuries..... nobody.
                  The PTB is trying to maintain the status quo when the world is going through radical changes. The bankers are trying to enforce the maxim that all money is created by the private banking industry as debt and carrying an interest burden. They resist the idea of publicly created debt-free money. The upper loop is dismissive of the problems of the lower loop. BIG GOV doesn't give a rat's a$$ if you can afford to pay all the fines that they have laid on you. The PTB seem oblivious to the fact that the lower loop will take everything down when they go.
                  There are a LOT of people who will vote for Trump hoping that he blows the established powers to smithereens. They don't care where all the pieces land as long as the system is blown up.


                  • How big is the debt?

                    Ellen Brown wants debt-free money. BUT, if sovereign debts can never be paid back,,,, isn't the money debt-free after all?

                    " 5. In fact, the national debt is larger than all of the world’s physical currency, gold, silver, and bitcoin combined.
                    That’s right, if you rounded up every single dollar, euro, yen, pound, yuan, and any other global physical currency note or coin in existence, it only amounts to a measly $5 trillion. Adding the world’s physical gold ($7.7 trillion), silver ($20 billion), and cryptocurrencies ($11 billion) on top of that, you get to a total of $12.73 trillion. That’s equal to about 65% of the U.S. national debt.
                    Visualizing The (Massive) Size Of The US National Debt | Zero Hedge

                    "Caterpillar has not seen a positive retail sales month in nearly 4 years " "Belgium's government announced it was considering legal action against Caterpillar over the U.S. heavy equipment maker's decision to close a manufacturing site and lay off more than 2,000 workers."
                    "Prime Minister Charles Michel told lawmakers Thursday that "we will take action against Caterpillar if necessary." According to AP, Michel described the expected closure of the Gosselies plant in the Wallonia region as "brutal, cruel and heartbreaking."
                    Belgium Threatens To Sue Caterpillar For "Brutal, Cruel And Heartbreaking" Decision To Fire 2,000 | Zero Hedge
                    Market forces.
                    Dell Fires 3000 US, Wants 5000 Visas For Foreign Workers Market forces.. The job goes to the lowest bidder.

                    "However, I have also warned that Social Security and Medicare go NEGATIVE next year in the United States, which of course mainstream media is not bothering to report for fear that would add fuel to the bonfire of political corruption." Wait a minute ! Half of our national debt needs to be re-funded real soon. Who is going to cough up the bucks?
                    "The Guardian [7] reported that Obamacare is nearing collapse. The entire structure was based upon the same scheme as Social Security that has been predicated upon exploiting one generation for the next. But with rising unemployment among the youth, and more than 30% of the youth remain living with their parents into their thirties now combined with the collapse in birth rates, this entire scheme is just a scheme that is unsustainable."

                    "But to get that type of reform we have to clean-house in Washington since 45% of public officials are lawyers compared to just 6% of the work force are lawyers. "
                    Martin Armstrong Explains Why "2017 Is The Threshold To Chaos"

                    Ron Paul explains the difference between martial law and financial martial law;


                    • The redemptions and freakouts are on the rise

                      Reportedly, the recent spell of tranquillity is coming to an end. Nobody can make a profit in times of great volatility so, they withdraw from markets.
                      Nothing can be rolled over when"redemptions" are the order of the day.

                      Reportedly, OZ is facing a big problem; Australia 6 weeks from a housing collapse, US report warns - Business - NZ Herald News
                      Private companies have started to sell ZIRP bonds; Private-sector bonds boldly go where none has gone before

                      9/12 Fed dove frets about asset bubbles, Wall Street freaks out – Wolf Street
                      9/12 CA’s unfunded pension debts may be larger than acknowledged – Sacramento Bee
                      The freakouts are only just getting started.
                      9/12 On Nov 8, Americans decide whether to rescue bankers or consumers – Russia Insider Sorry, that decision was made years ago with TARP. Because of the status as reserve-currency, the American financial industry grew FAR too large for the underlying economy. Insane leverage was the wooden stake through it's heart in 2008. BUT, gigantic infusions of liquidity allowed it to stagger on. Ongoing infusions/transfusions are losing their effectiveness.
                      These are infusions of money, not actual wealth. Investment capital is being withdrawn from all sectors. The financial sector refused to shrink in2008. Now, it is going to take everything down.


                      • Oil, bonds and gold

                        Here are a couple of good articles that deserve a good read. Keep in mind that the "gold bugs" tend to slant their articles in favor of gold.
                        Gold and United States Imported Oil | The Deviant Investor
                        The article talks about the record low price for oil imports. Well,,, yes and no. The Bakken field is running dry.
                        America the beautiful has attacked and destroyed every State that tried to sell oil in other-than-dollars. This has caused the oil producers to band together to a certain extent. When Russia proved that it could stand up to the American military, this prompted the oil producers to look to the Sino-Russian alliance as protection from Pox Americana. They WILL cut off oil-for-credit.

                        Most of the world desperately needs oil for transportation. The low-cost producers can produce oil for $ 6--$12 a bbl. The lower 49 States are out of cheap oil. Even if we were to pump fracking oil, it would cost 10--15 times the cost of the low-cost producers. The economy can't possibly be competitive at that price. We couldn't sell our exports. All of this affects the value of the dollar.
                        The Coming Crash Will Create An Economic Tsunami, Skyrocketing Gold And Usher In A Whole New World | King World News

                        The feces-for-brains socialists at Harvard have elevated their their spokesman to infallibility. The giant circle-jerk in academia has everyone in academia convinced that they are right. NO MATTER that they didn't see the 2008 crash coming. NO MATTER that the Harvard endowment fund lost $ billions. They are STILL right. What a bunch of quacks.
                        Jim Grant Rejects Rogoff's "Curse Of Cash", Warns "Government Wants To Control Your Money" | Zero Hedge

                        The jobs have gone to our low-wage competitors. No money,,, our birth rate is falling. Even the young who are around can't find entry-level jobs. They try to survive.
                        This is also true in Europe. We have cast off the younger generation.
                        Last edited by Danny B; 09-14-2016, 12:46 AM. Reason: smelling


                        • Oil and ZIRP drag down everything

                          The sale of oil generates so much profit that it corrupts everything; https://hendersonlefthook.wordpress....nal-banksters/
                          BUT, as the cost of the "master resource" goes up, more and more people try to find a "workaround.
                          9/13 New technology puts solar power to work all night long – Science Daily
                          9/13 Why solar power is surging in the US – Fiscal Times
                          9/13 Record year for solar expected as installations surge 43% – Oil Price
                          9/10 Feds outline new strategy to scale up offshore wind power –NRDC

                          What about the financial damage to the oil producers?
                          9/13 IEA changes view on oil glut, sees surplus enduring in 2017 – Bloomberg
                          9/13 Oil bankruptcies leave lenders with ‘catastrophic’ recovery rate – Bloomberg
                          9/13 US stocks open lower on oil concerns – CNBC

                          It's not just oil. Nuke power just doesn't appear profitable. That's why the Hinkley Point plant probably won't be built. It's not the only one. US Nuclear Plant up for Sale at Fraction of Cost
                          Solar and wind are eating up the oil industry. ZIRP is eating up the financial industry; 9/13 Some of the biggest hedge funds are bleeding cash – Bloomberg

                          "After weeks of placid markets, the move to a chase for yield became a race to the exits, ending in a spectacular market rout. "
                          Jefferies: Stock market analysis and what not to buy - Business Insider
                          Oil stays crashed. The bankruptcies pile up. The banks bleed cash. ZIRP bleeds everything else.
                          The murder rate goes up; DOJ Study Finds "Real And Nearly Unprecedented" Spike In Homicides Around U.S. | Zero Hedge
                          "Looking ahead to 2020, the Wealth-X/NFP report sees the wealth of the world’s superrich increasing by 54% to $46 trillion."
                          The largest wealth transfer in history has already begun


                          • TARP wasn't the first bailout

                            The wage base went stagnant decades ago but, the finance industry continued to grow. Everybody was selling paper to everybody else. The dotcom crash was a big setback. 10 years later, we were approaching another crash.

                            ",,,,iconic firms on Wall Street (the target of Spitzer’s investigation), had imploded, losing 66 percent of its pumped up value and wiping out $4 trillion in wealth. While it wasn’t yet known at the time, being only officially acknowledged long after 9/11, the U.S. economy had contracted for two consecutive quarters and was looking at another negative quarter of growth."

                            "Thus, it was quite advantageous for Alan Greenspan’s legacy as Chair of the Federal Reserve and what might have been an even worse economic slump that the Fed was given carte blanche to funnel hundreds of billions of dollars to Wall Street after 9/11 with the Federal government pumping billions more in fiscal stimulus.

                            According to a report from the New York Fed, an “unprecedented” amount of liquidity was pumped into the system. The Congressional Research Service quantifies the “unprecedented” amount as “$100 billion per day” over a three-day period beginning on 9/11. But the idea that the bailout lasted only a few days or weeks is misguided. The consolidated annual reports of the Federal Reserve Banks show that the Fed’s balance sheet grew from $609.9 billion at the end of 2000 to $654.9 billion at the end of 2001 to $730.9 billion at the end of 2002 and $771.5 billion as of December 31, 2003."

                            "A handful of the largest, again unnamed, Wall Street banks were dramatically overdrafting their accounts at the Fed, resulting in daylight overdrafts peaking at “$150 billion on September 14, their highest level ever and more than 60 percent higher than usual….” According to other annual reports at regional Fed banks, fees were waived by the Fed for these massive overdrafts."

                            "Coleman reports that “discount window loans rose from around $200 million to about $45 billion on September 12.”
                            The Untold Story of 9/11: Bailing Out Alan Greenspan’s Legacy


                            • Volatility security..Forward progress in our collective suicide

                              " the answer, as we have previously detailed - is the collapse in so-called "risk-parity" funds that force leveraged long positions in equity and bond markets to be unwound en masse."
                              The Last Time This Happened, Stocks Crashed | Zero Hedge
                              "Which forces the funds to dump bonds and stocks... and as volatility increases the selling is exacerbated in a vicious cycle..."

                              "If you’re depending on Social Security, you need to come up with a Plan B today."
                              "In 2014, the Social Security Administration (SSA) took in $786 billion through the Federal Insurance Contributions Act tax… $73 billion short of the $859 billion needed to pay claims." " the government took YOUR hard-earned money and spent it on its bloated staff and military adventures."
                              " Particularly, at the end of 2014, we were told the trust fund owned over $2.8 trillion in assets.
                              This is a lie. There isn’t one dollar in the Social Security trust fund. Nada. Zip. Zilch.
                              Remember, that $2.8 trillion sum is book assets, not actual dollars. The dollars were spent the minute the government collected taxes."

                              "That’s because the government isn’t required to use money collected from Social Security toward Social Security purposes (according to the Supreme Court’s ruling in Helvering v. Davis). So, it’s used that money to fund everything from defense spending to payroll expenses."
                              "Translation: The left hand of the government took money from the right hand of the government and promised to pay it back on “some future date.” When the cows come home.
                              Here’s What the Government Did With Your Social Security Money | Casey Research

                              "The elites operate in their own twilight zone of ignorance, only at a loftier level, flying on wings of sheepskin. "
                              "The results are already in for this experiment: “money” becomes more and more dishonest, that is, it cannot be trusted to represent what it pretends to stand for: an index of account and a store of value. "
                              "Eliminating currency as a medium of exchange can only lead to the repudiation of “money” — which will beat a quick path to the repudiation of all authority. And there is your recipe for really suicidal political disorder."
                              " We hold naval exercises in the Black Sea and wonder why the Russians buzz us. Are we out of our minds? How would we act if the Russians flew their planes over Catalina Island or held naval war games off Hampton Roads? Who does the US policy elite think they’re kidding?"
                              Signs of Desperation - KUNSTLER

                              Chrisrine LaGarde, head of the IMF has come out with a STARK warning. She criticises globalization in that it causes a "groundswell of discontent" . What she CAN'T say is, world revolution.
                              IMF's Lagarde Slams Globalization, Warns Of A "Groundswell Of Discontent" | Zero Hedge

                              9/14 End game nears as central banks buying up gold mining companies – Dollar Vigilante Sell your shares. The miners will be nationalized.
                              9/14 Buffett loses $1.4 billion as Wells Fargo tumbles on scandal – Bloomberg Maybe he isn't an "oracle" after all.
                              Last edited by Danny B; 09-14-2016, 08:01 PM. Reason: short word


                              • Comatose stock market.... currency markets

                                The stock market is the most visible market,,, by design. There are other markets that are more important. The stock market has the fewest trades in 23 years. "The S&P 500 went 40 days without a 1% move. That was its longest stretch without a big move in decades."
                                "Low returns. Earnings for companies in the S&P 500 have fallen five straight quarters. That’s the longest earnings drought since the 2008–2009 financial crisis. "
                                "More volatility. The VIX, which measures how much volatility traders expect over the next 30 days, has soared 45% since Thursday. It’s trading at the highest level since the “Brexit.”
                                Why the Fed Can’t Hold the Stock Market Together Much Longer | Casey Research Nothing new.

                                "The only question is what form the default will take. " "All that happened since the 2008 crisis is that government debt has been used to substitute for some private debt, while private debt has continued to grow on its own. "
                                "There's nothing inherently wrong with debt subject to two conditions: The debt is used for productive purposes and your capacity to repay the debt is growing faster than the debt itself."
                                "Unfortunately, governments have failed both conditions. Much of the money borrowed on sovereign debt markets since 2008 has been wasted. The US used most of its $800 billion "stimulus" plan in 2009 to subsidize government and union salaries."
                                So, how long can GOV keep this going?

                                Not much going on in the stock market. Volatility is going up though. More important is the currency market.
                                1. Globally, the stock market is about $69 trillion in size, trading about $191 billion in shares per day.

                                2. The bond markets are well north of $140 trillion, and trade about $700 billion in volume per day,

                                3. The currency markets are unmeasured as every currency trade is ultimately a pairs trade (meaning to buy one currency you have to sell another). However, we do know that the currency markets trade $5.3 trillion in volume per day.
                                Put another way, the currency markets trade over 26 times more volume than the global stock market every single day. As such they are the most liquid, sensitive markets in the world.

                                So major changes in the markets first hit in the currency markets. And the key item to watch is the $USD.
                                The US Dollar is coiling tighter and tighter into a triangle pattern. If we get a breakout to the upside, the next target is 97.

                                Historically, spikes to this level have resulted in a stock market meltdown soon after.

                                It's not that the dollar is getting stronger. ALL the CBs printed in unison with the FED being the most restrained. The dollar is only relatively stronger. Draghi and Kuroda are ahead of Yellen in the race to the bottom.
                                The Smartest Market in the World Isn?t Buying the Bounce | Zero Hedge
                                9/14 The Bank of Japan unleashes chaos – Zero Hedge
                                If Yellen raises the rates, the strong dollar attracts huge capital inflows looking for return. BUT, the stock market blows.
                                Ignore the stock market and watch the currency market.

                                9/15 “Crazy things” happen with bond math at ZIRP & NIRP – Wolf Street
                                9/15 Americans are drowning in credit card debt – Salon
                                Credit card debt is unsecured.
                                9/15 Self-driving vehicle revolution to wipe out 3 million jobs – Wolf Street Well, those 3 million displaced workers won't be able to buy cars.
                                9/15 UK likely to invoke article 50 in January, Nigel Farage says – Bloomberg
                                Armstrong wrote about the loss of confidence in GOV AND banks. The banks are hard at work to make this come true; Sorry You Can't Have Your Gold Bullion

                                Armstrong also said that the "slingshot move" in gold should be accomplished by January. A slingshot move up in gold is a (mostly) reciprocal move down in currency.