Economic pressures

[Danny B]

The heavy hitters are running scared

I already posted that the head of the IMF, Christine La Garde has come out and condemned globalism because it is bring so much strife. Now, others are saying more specific negative things. The global-mean wage and resulting lack of purchasing power is slowly deflating the upper loop of the economy.

"The UN's advice to the emerging nations is to retake control of their destiny and turn the tables on the financial elites."
"If trade economists at the United Nations are right, the next traumatic episode may entail the greatest debt jubilee in history."
"Much of the money was wasted, skewed towards "highly cyclical and rent-based sectors of limited strategic importance " Yeah ! the upper loop.
"The extraordinary result is that some countries are slipping backwards, victims of "premature deindustrialisation". Many of them have fallen further behind the rich world than they were in 1980 despite opening up their economies and following the global policy script diligently."
That was the GS asset-stripping script.

"UNCTAD says corporate debt in emerging markets has risen from 57pc to 104pc of GDP since the end of 2008, and much of this may have to written off unless there is a world policy revolution." There will be a revolution, all right.
"We are left with a world in a state of leaderless policy inertia, unable to escape slow suffocation. " Don't worry, the suffocation will speed up because our leaders have NO leadership abilities. I believe that Pres Trump will be as impotent as the rest because congress will be paralysed.
UN fears third leg of the global financial crisis - with prospect of epic debt defaults  

The Organisation for Economic Cooperation and Development (OECD has a similar message. https://www.theguardian.com/business...-guardian-view
"In the long run, this failed globalisation needs to be turned into something more sustainable and more inclusive, built on higher wages, robust tax systems and strong public safety nets."

",,,,such as the Bank of International Settlements issuing a dire warning about the massively over leveraged Chinese banking sector; Donald Trump’s surging popularity; Wells Fargo’s “crime of a lifetime”; the exploding worldwide pension crisis; OPEC’s Secretary General all but confirming “no deal” at next week’s “all-important” crude oil producers meeting; and the U.S. national debt – and budget deficit – expanding at the fastest rate since the 2008-09 financial crisis. And the answer is, I’m starting with Deutsche Bank – as unquestionably, it poses the greatest near-term risk to global political, economic, social, and monetary stability."
"In other words, with each passing day it’s becoming more and more clear that for whatever reason, Deutsche Bank has been “marked for death” by “someone” or “someones” with the power and capital, to make it happen. Even I am clueless to guess why Deutsche Bank is being specifically targeted – which it most certainly is. "

"its stock closing yesterday at an all-time low, down 50% year-to-date, and 91% from its 2007 high.

At this point, I’m not sure there’s much more to add than the reams I’ve already published about my staunch belief that Deutsche Bank is not only going down, but going down soon. And that when it does, it will be the financial, political, and monetary equivalent of the 2004 Indian Ocean tsunami – which killed 230,000 people in 14 countries, the vast majority within a few minutes time."
http://www.24hgold.com/english/news-...y+Hoffman&mk=1

Europe's banks are 3 times the size of America's and are leveraged 26-1. 9/23 EU banks may need rescue funds equalling twice ECB capital – Bloomberg

The CBs failed in their attempts to hyper-inflate away the burden of debt repayment. It was never possible if one understands the dynamics of falling wages, global capital flows and debt-money. Now, we are facing a cascade of default. It is VERY doubtful that the PTB could organize a jubilee in the short time that will be available. The 3 scenarios in order of severity.
1. Endless helicopter money.
2. organized debt jubilee.
3. Uncontrolled cascade of default.

[Danny B]

C. H. Smith,,, after the cascade,,, reality in Texas

In 2008, Lehman Bros defaulted. This caused a chain reaction of default in other banks. The London Interbank overnight rate LIBOR went WAY up because nobody knew who was truly solvent or not. GOV jumped in with $ 800 billion or so. The FED also supplied TONS of loan guarantees. These were logical moves BUT, no remedial actions were take afterwards. Every attempt was watered down. At the same time, banks were required to hold more Tier one capital. They were forced to buy more GOV bonds.

The defaults started at the top of the financial chain. The FED has been working it's way down the financial chain bailing out smaller and smaller entities. The FED started at the top sending money to GOV and banks. Now, it is bailing out all manner of corporations when their earnings are insufficient to keep them alive.
So far, the FED has been able to turn the tide of defaults.

"Every credit boom is followed by a credit bust, as uncreditworthy borrowers and highly leveraged speculators inevitably default."
"Unfortunately, central banks have attempted to outlaw the healthy credit cycle."
"The central banks put out the default/deleveraging forest fire in 2008 with a tsunami of cheap new credit."
"Having unleashed tens of trillions of dollars in new credit since 2008, the central banks have simply increased the likelihood and scale of the coming default conflagration."

"Very few observers explore what happens after defaults start cascading through the system." "Two things happen in a default/deleveraging conflagration. One is that lenders get very wary of lending more money to anyone or any entity other than those with the lowest-risk profiles. That constricts lending to the bottom 95% who are already over-indebted."
Death of credit.
"The second thing that happens is that owners of debt-based, interest-bearing assets such as mortgages and bonds not only lose the principal that will never be paid back--they also lose the future income stream."
LONG, painful fall.
"Without the stimulus of ever-rising credit, the global economy craters in a self-reinforcing cycle of defaults, deleveraging and collapsing debt-based consumption."
Don't forget death,,, lotsa death.
oftwominds-Charles Hugh Smith: Why the Coming Wave of Defaults Will Be Devastating
What happens to the squirrels in the park when the tourists no longer feed them?

Out of Texas;
“This needs to be posted at every school. We use armed guards to protect our money, but do nothing to protect our most precious resource, our children.” https://semperfinews.com/texas-schoo...ill-use-force/
Texas also has had enough of refugees; https://www.texastribune.org/2016/09...ttlement-prog/

[Danny B]

Get rid of accountability

The reality of a currency war is that it hurts everyone. IF we had a one-world currency, there couldn't be a currency war. Factions of the "elites" are trying to crash everything down to bring on one-world BS.
"Special drawing rights (SDRs) are just world money printed by the IMF. The one advantage of SDRs is that very few people understand them, and there’s no political accountability. SDRs can work hand in hand with helicopter money.

If governments want to spend more but legislatures won’t let them, the IMF can hand out SDRs, and governments can spend those without waiting for their own legislatures to act. The IMF acts like the “central bank of the world,” and no one can stop them."
The Elite Solution: Three New Ways To Get Inflation - The Daily Reckoning
The Chinese Yuan was included in the basket of currencies that make up the SDR. I'm still not impressed with the whole idea. The IMF can print whatever amount it wants.

"The (April) climate agreement may have really just been a disguised helicopter money scheme. Spending on emission reduction programs and infrastructure could total about $6 trillion per year, which would be carried out by the IMF through the issue of special drawing rights (SDRs). "
Elites Secretly Plan “Global New Deal� - The Daily Reckoning

"My view is that in the absence of increases in median wages in advanced economies, we are unlikely to see a meaningful and durable increase in growth in those economies. " https://pro.creditwritedowns.com/201...y-wonkish.html

China; "Credit reached 243pc of GDP by the end on last year, double the level in 2008. Banking system assets have grown by $21 trillion over that time, 1.3 times greater than the entire US commercial banking nexus.
Fitch estimates that the ratio will jump to 253pc this year, and 261pc "
Fitch reveals the $2trillion black hole in China's economy that heralds a lost decade

"War spending is considered to lift the USEconomy with trickle down benefits. It is not. In fact, war spending is probably an order of magnitude more destructive than simple welfare payouts."
"Expansion of the USDollar money supply is considered to lift the USEconomy and to enable its development. It does not. The bitter fruits of the Fascist Business Model cannot be seen more clearly in the fast falling Money Velocity graph. It is down almost 50% since QE was installed. The USD money supply has risen easily by double, yet the USEconomy is in tatters. "
Fascist Business Model: Reich Economics

We bought everything from China without a thought about our own jobs; https://www.youtube.com/watch?v=9k7QXeuY9qc

[Ruphus]

Do I have it right?

money flow.png

I can't seem to find what the FED pays the treasury with for printing new bills. I am assuming the treasury will get their bond/securities back from the FED in exchange for making the money. Any clarification or corrections is appreciated.

[wayne.ct]

The graphic supplied by Ruphus

Hey! This is just my opinion and you are free to disagree.

It seems to me that the top dog in this graphic is the Fed. Here is a portion of my reasoning.

The idea put forth in the US Constitution in Article 1, Sections 8 and 10, is that CONGRESS is to be responsible for MONEY and MONEY is GOLD. This would probably mean that an ounce of gold would have a dollar value in the millions, but that is just an aside. If Congress did its job as intended it could print as many paper dollars and electronic dollars as it needed to and business could go on as needed. But that is another what-if.

In the face of the Constitution, the Fed was created (in 1910) to gut the intent of the Constitution and let a small group of BANKERS do the job that founders intended to be done by Congress.

From that time until now, the Fed has been the source of MONEY. With THAT responsibility and power, they have over time come to OWN the entire country and all its assets which makes all of us slaves and puppy dog pets to their elite whims.

It works like this. If either the government or banks need or want something or anything that can be bought with paper promises, they simply make an entry in a ledger somewhere with a balancing debit and credit. They can then spend to their hearts content, subject to whatever rules and regulations that they have all agreed to abide by. This is all monitored and jawboned by the IRS, SEC, FBI, CIA, etc. which gives all this show the surface appearance of being a workable system. They "create" this money and collect interest from the government and all their subsidiary banks, and thereby satisfy their addictions. The subsidiary banks are also allowed to create money, within the limits imposed by their rules and regulations so these minor copycat bankers can play their part in the overall charade. Everybody gets something that they want and so they are basically happy with the game. By everybody I mean the Fed, the government and the "banks".

We, the people, get hammered. This is especially true if we carry any debt and still retain some measure of honor. The crooks and the dishonest live in another world until and when they get caught by the law.

This is just my simplistic opinion, Ruphus, but you sorta asked what thoughts might inform your graphic.

One more comment. When the Fed and the Bankers mess with their powers we get booms and crashes. You don't know when they are going to act stupidly, so you need to be prepared for and expect them to misbehave at any time and in a random and unpredictable fashion. Right about now they seem to be backed into a corner and about to do something stupid.

[Danny B]

C. H. Smith

https://www.youtube.com/watch?v=voH5Q77jzCU

[Danny B]

More debt,, more negative euphemisms

They offer money,,, we take it.
"And the world has now reached a point where combined global government and private debt to GDP is the highest by far in history." "the debt level of the 20 percent of U.S. households with the lowest net worth has grown two and a half times faster than all other households. " " In the United States, total nonfinancial private debt is $27 trillion and public debt is $19 trillion. More telling, since 1950, U.S. private debt has almost tripled from 55 percent of GDP to 150 percent of GDP, "
How to Suffocate Your Economy: Drown it in Massive Private Debt. - Evonomics

Microsoft, et al is going downhill, "To wit, during the last 10-years Microsoft earned net income of $178 billion, but paid out to shareholders even more — $186 billion — in stock buybacks and dividends."
"Even more to the point, real net fixed business investment after depreciation is still 20% below the level it each way back in early 2000. That is, two bubbles ago."
"At the closing price yesterday, the S&P 500 traded at 25X the $87 per share"
Clueless Janet Paves the Way for Bigger Crash - The Daily Reckoning

"But 'dumb' mistakes have become 'stupid', and 'stupid' became 'idiotic', and now 'idiotic' mistakes are piling up, "
"Once the illusion of central bank control is fully lost, the financial markets will implode in a deflationary wave that has been held at bay for far too long. Asset prices will collapse, companies will fail, and millions of jobs will be lost. People will re-discover that partying too hard for too long earns a massive hangover."
"total worldwide debt is more than $60 trillion larger than it was before the 2008 financial crisis. "
https://www.peakprosperity.com/blog/101893/hell-pay
"Plutarch once cautioned that an imbalance between rich and poor is the oldest and most fatal ailment of all republics. "

Wells Fargo Whistleblower: "They Are All Riding the Stagecoach to Hell"
9/25 ECB embarrassment: €18 in QE generated just €1 GDP growth – Zero Hedge We need OxyContin with our Viagra
9/25 Merkel says no aid for Deutsche Bank – Mish Like an Ox to the slaughter.

Not only are we flying blind in a dark casino. we have a new euphemism; " a runaway train down an icy mountain, loaded with nuclear explosives."
"Which sadly, is not only plunging steeply downhill, at a rapidly accelerating rate, but features the triple-barreled terminal dangers of historic oversupply; unprecedented, parabolically-rising debt; and relentlessly hyper-inflating currencies. And oh yeah, 7.4 billion people fighting to survive in a world of rapidly declining employment opportunities; rising inflation; and non-existent savings. "

"As when oil inevitably – and perhaps, imminently – crashes below $40/bbl; and potentially, $30/bbl; the wave of defaults will be at least as devastating as the 2008 subprime mortgage crisis. As this time, not only corporations, but sovereign governments themselves will collapse "
"Deutsche Bank of Germany and Bank Monte Paschi of Italy are literally on the verge of collapse. Which, if one or both go, will be the equivalent of a nuclear financial explosion."
• Merkel Rules out State Assistance for Deutsche Bank (BBG)

"overwhelmed by, the negatives associated with a world of 7.4 billion people gone mad. To wit, there is no precedent for a “debt jubilee” this massive – which frankly, makes the October 2nd expiration of the 2016 “jubilee year” that much more interesting, and terrifying. Or, for that matter, a global fiat currency collapse, in which all 7.4 billion people will be negatively affected – politically, economically, and/or socially. And I do mean all."
http://www.24hgold.com/english/news-...y+Hoffman&mk=1

[quantumfanatic]

A Real Eye Opener - WHY is the USA BANKRUPT? Read this :

We have been hammered with the propaganda that it was the Iraq war and the war on terror that is bankrupting us. I hope the following 14 reasons are forwarded over and over again until they are read so many times that the readers gets sick of reading them. I also have included the URL's for verification of all the following facts.

1. $11 Billion to $22 billion is spent on welfare to illegal immigrants each year by state governments. Verify At : Home | Federation for American Immigration Reform

2. $22 Billion dollars a year is spent on food Assistance programs such as food stamps, WIC, and free school lunches for illegal immigrants. Verify At : The High Cost of Cheap Labor | Center for Immigration Studies

3. $2.5 Billion dollars a year is spent on Medicaid for illegal immigrants. Verify At: The High Cost of Cheap Labor | Center for Immigration Studies

4. $12 Billion dollars a year is spent on Primary and secondary school education for children here illegally and they cannot speak a word of English! Verify At : CNN.com - Transcripts

5. $17 Billion dollars a year is spent for Education for the American-born Children of illegal immigrants, known as Anchor babies. Verify At CNN.com - Transcripts

6. $3 Million Dollars a DAY is spent to incarcerate illegal immigrants. Verify at: CNN.com - Transcripts

7. 30% percent of all Federal Prison Inmates are illegal immigrants. Verify at: https://iowa.slugger.com/owa/UrlBlockedError.aspx (invalid URL)

8. $90 Billion Dollars a year is spent on Illegal immigrants for Welfare & social Services by the American taxpayers. Verify At : http://premium.cnn.com/TRANS CIPTS/0610/29/ldt.01.HTML (invalid URL)

9. $200 Billion dollars a year in suppressed American wages are caused by the illegal immigrants. erify At : http://transcripts.cnn.com/T RANSCRI (invalid URL)

13. In 2006, illegal immigrants sent home $45 BILLION in remittances to their Countries of origin. Verify At : http://www.rense.com/general75/niht.htm

14. The Dark Side of Illegal Immigration: Nearly One million sex crimes committed By Illegal Immigrants In The United States... Verify At http://www.drdsk.com/articleshtml (invalid URL)

The total cost is a whopping $ 338.3 BILLION DOLLARS A YEAR AND IF YOU'RE LIKE ME, HAVING TROUBLE UNDERSTANDING THIS AMOUNT OF MONEY; IT IS $338,300,000,000.00 WHICH WOULD BE ENOUGH TO STIMULATE THE ECONOMY FOR THE CITIZENS OF THIS COUNTRY.

Are we THAT Stupid? YES, FOR ALLOWING THOSE IN THE U.S. . CONGRESS TO GET AWAY WITH DOING THIS YEAR AFTER YEAR!!!!!

If this doesn't bother you, then just delete the message. If, on the other hand, it does raise the hair on the back of your neck, I hope you forward it to every Legal Resident in the United States!!! - More reasons why you MUST vote Trump for President

[Danny B]

Responsibiloity and the State

They offer money,,, we take it.
The modern corporate structure dis-allows personal responsibility to the corporate officers. You can see the results. Things like Love Canal.
The corporation is immortal and beyond the reach of the law. No accountability.
What about, at the personal level? Socialism is a negation of personal responsibility. What happens to a society where nobody has to be responsible?
The Jamestown colony was set up where no private person owned the land. "that which is owned by nobody in particular is cared for by nobody."
"The Starving Time at Jamestown in the Colony of Virginia was a period of starvation during the winter of 1609–1610 in which all but 40 of 144 colonists died?" They didn't raise enough food to survive.

Socialism focuses on distribution AND negates personal responsibility. It always goes bust. What about personal responsibility? What happens to the burden of raising children when the State rushes in with handouts? What happens to society?
https://www.youtube.com/watch?v=FszQelEQ2KY

The Temptations did a song called Cloud Nine;
(Cloud 9) [Paul:] You can be what you wanna be.
(Cloud 9) [Dennis:] You ain't got no responsibility.
(Cloud 9) [Eddie:] Every man, every man is free.
(Cloud 9) [Dennis:] You're a million miles from reality.
(Cloud 9) [Paul:] You can be what you wanna be.
THE TEMPTATIONS LYRICS - Cloud Nine

[Danny B]

more market drama

50% of the cost of anything you buy is for finance,,, on average. That means that our prices are doubled. We can't compete on the world market. This isn't particularly Obummers fault. It's the "market"
26 Incredible Facts About The Economy That Every American Should Know For The Trump-Clinton Debate

9/26 Stocks tumble pretty much everywhere – Fox Business
9/26 Contagion risks rise as China banks fund each others’ loans – Bloomberg
9/26 A weaker currency is no longer economic elixir it once was – Bloomberg The drug of "competitive devaluation" is wearing off.
9/26 Many bankers, bureaucrats and lawyers could become redundant – Finance Two Zero THE SILVER LINING
9/26 BOJ positions for post-Kuroda era with policy for long haul – Bloomberg There is NO POSSIBLE position
9/26 US bond market’s biggest buyers are selling like never before – Bloomberg The rush for the exits.

[Ruphus]

Thanks Wayne. I was just trying to make a flow chart for the creation of money to the return of the created FED dollar. I am still learning this stuff and it's difficult for me to see the cycle go full circle.

The sketchy parts are hard to put in the chart like:

How can the FED require additional payment (interest) on the first dollar without creating the extra money to pay it, thereby creating additional interest payments.

How can someone buy a treasury bond with US FED dollars if the rate of inflation does not equal the interest paid by the bond? This would be a bad sale on the treasury side, correct?

[Danny B]

Money creation

Ruphus, the money supply is a very murky subject. Here are a few links;
https://www.federalreserve.gov/faqs/money_12845.htm

Monetary Base vs. Money Supply | Value Investing Basics

https://en.wikipedia.org/wiki/Monetary_base

When you sign for a loan, your signature creates the money out of thin air as an entry in a ledger. When you repay the loan, the money is effectively destroyed. The bank keeps the interest. In a general sense, all low-power money is created by the banks to be later destroyed. The interest that the bank receives is unencumbered by an interest burden and is now considered high-power money.
The banks do not loan out their reserves. They are set aside for loan-loss provisions. Most money is created by private banks rather than by the FED.

In the United States, total nonfinancial private debt is $27 trillion This is all debt-money. The FED balance sheet is reported to be only $4.2 trillion. Essentially, the private banks create our money. The FED creates the money for the GOV. The money created by the FED for GOV is technically debt-money but, it realistically isn't going to be paid back. The FED can sell the Treasury notes from GOV that it holds BUT, nobody is buying treasury notes from anybody.
The interest that the FED charges the FED GOV is repaid back to the GOV. Both the FED and the Social Security administration are sitting on $ trillions in bonds that they can never sell.

If everybody is dumping treasury bonds, how can we pay for the $1.5 billion a day in imports . We don't pay for them with exports. Our trade deficit is $45 billion a month. Our vendors are doing vendor-financing. This isn't expected to go on much longer.
"The trade deficit exists because U.S. exports to China were only $116.2 billion while imports from China hit a new record of $481.9 billion. "

[Danny B]

Stealing future prosperity to create a smouldering pile of ruins

The Internet is a VERY big stage and some VERY smart people are stepping up to give us the benefit of their wisdom,,, free of charge. That is the main reason that economic movements are nudging up close to light-speed.(c)
This article from John Hussman is a good example of what you get when you join computerized records and a brilliant mind. I'll excerpt the more colorful parts but, the whole article is a must read.

"In recent years, the U.S. equity market has scaled the third steepest cliff in history, eclipsed only by the 1929 and 2000 peaks, as investors rest their full confidence and weight on the protrusions of a structurally deteriorating economy, imagining that they are instead the footholds of a robust investment environment.
Indeed, growth in real U.S. gross domestic investment has collapsed since 2000 to just one-fifth of the rate it enjoyed in the preceding half-century, and has averaged zero growth over the past decade.
All of this may feel good, but it’s only a temporary high in a fatal cycle, and the members of the Federal Reserve Board are just dope dealers on speed-dial.

Unfortunately, like the tech bubble and the housing bubble before it, this gleeful romp into the land of “this time it’s different” is likely to collapse in a smoldering pile of ruins. The reason is that the very things that have created this glorious rear-view landscape have been obtained by ripping prosperity from the future.
The higher investors have driven market valuations, the lower prospective future returns have become. What looks beautiful in the rear-view mirror has been torn from the abyss that lies ahead in the windshield.

Structural Growth and Dope Dealers on Speed-Dial - Hussman Funds - Commentaries - Advisor Perspectives

9/27 Perry Capital closing flagship fund after three decades – Bloomberg
9/27 Draghi increases risk of global trade collapse – Mish
9/27 For Deutsche Bank, the news just keeps getting worse – Zero Hedge
9/27 “The time has come to leave the dance floor” – Casey Research
9/27 Commerzbank to fire 9,000, 18% of its entire workforce – Zero Hedge B of A has cut over 20%.
9/27 Solar power cost down 25% in five months – Electrek
Every watt of renewable is another slash in the death of a 1,000 cuts for carbon energy.

[Danny B]

The fallout from the end of growth

FASCINATING article on the end of growth; https://www.theautomaticearth.com/20...here-is-trump/
FASCINATING article on money and information; http://www.24hgold.com/english/news-...han+Lewis&mk=1
Excellent article on the total idiocy of Merkel; https://www.armstrongeconomics.com/i...ll-of-history/

The oil companies are going bankrupt faster and faster; Oil And Gas Bankruptcies Set To Double This Year | OilPrice.com
The Anglo-American war machine is selling more and more; The Anglo-American War Machine | New Eastern Outlook

[Danny B]

That which must never be spoken

I tried to post this but, it just won't go. I’m going to break it up and see if it will enter.
Nope, I can't even post one PARAGRAPH. You'll just have to read the article without me doing excerpts. It is VERY important.
Joining the Dots: Why the Establishment Hates Donald Trump | Global Research - Centre for Research on Globalization