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  • What do I have that is worth anything?

    I think this is a question people should ask. If you want any personal power or freedom you need to have some resources. As Mr. Wemmick in Great Expectations might say, everyone should have some portable property. (That is a good book, by the way. I recently read it for the first time.)

    You should have portable assets, including tools of your trade, if you have valuable skills. With these portable items of value you can, perhaps, survive in difficult times.

    I bring this up to answer a question from several days ago. The question has to do with government assets and government financial assets in particular.

    As long as people attribute value to paper currency and there is "enough" paper currency to transact business, they will transact business and the government will be able to pay its enforcers and the enforcers will enforce the decrees of the government figureheads.

    Look at what has happened in Zimbabwe in the recent weeks or days. The common citizen has been stripped of cash (the ATMs are empty) but the soldiers and police are paid in US dollars, aka "hard" currency. Never mind the fact that the only real hard currency is gold and silver.

    Note the evil behavior on the part of the powers that run the Zimbabwe state government. They are corrupt and can't hide their unethical behavior.

    OK. Here is what I am getting at. The electronic dollars and the contracts and agreements at the government and CB level are pretty much irrelevant when ethics breaks down at those higher levels. It does not really matter what the Consolidated Statements of Assets of the various States and Agencies say or don't say. The decision makers will do whatever they think is necessary to protect their position or reputation and the accountants and auditors will make whatever bookkeeping entries are called for to cover their tracks. The bankers will move money around, create loans, etc. so things look "reasonable" on the surface. People, by and large, will accept anything as long as they have something to eat and something to entertain them.

    Analysts and commentators will make both reasonable and outlandish statements and a few people will adjust their behavior to protect what they can. The majority of people will "suddenly" wake up and find they are not prepared.

    So, do what you can to prepare.

    I expect the situation to evolve into some sort of police state. Perhaps some public entities will set aside real assets beside guns and ammo. They have land and buildings, but can they act independent of the higher levels of gov? The Federal, State and County levels with their agencies and police are pretty much locked together in one vast interlocking bureaucratic monolith.

    Here and there, there may be a few ethical politicians, but they are rare. Where is the critical mass that can effectively move the needle?
    There is a reason why science has been successful and technology is widespread. Don't be afraid to do the math and apply the laws of physics.


    • Consider the Amish

      Originally, all wealth came from Mother Earth. Some people produced surpluses. Barter was invented. Excess wealth allowed some people to live in towns. Later, priests and kings appeared to steal wealth rather than directly producing it. Hunting and gathering gave way to agriculture and animal domestication. The agrarian lifestyle produced enough excess wealth to support cities. More and more people became distanced from Mother Earth.

      We progressed to an industrial economy. In the early '40s, 44% of Americans worked on the farm. Farming was mechanized and people moved to manufacturing. Post WW II, America had 3% of the population and 50% of the "free" world's manufacturing capacity. Manufacturing has been mechanized and many people have tried to move to the service economy. BUT, our trade deficit is $1.5 billion a day. This slowly bleeds out the money needed to continue the service economy. We start numerous wars to keep our arms exports selling.

      Our basic economy is the "Amish" economy. Everything else has been glued on by the great wealth brought us by plunder and brains. That wealth is slipping away as we send jobs and money out of the country. The lower loop is shrinking considerably. The upper loop is printing to keep from shrinking. That can only go on for so long. Globalization has brought everything down to a common LOW level.
      Backlash to World Economic Order Clouds Outlook at IMF Talks - Bloomberg
      Im characterizing the global economy as something akin to a driverless car thats stuck in the slow lane, said David Stockton. EVERYBODY is focused on trade but, nobody is giving any thought to wages.

      With globalization, ONLY the low-cost producer works. This leaves out everybody else. In a normal corporation, when there is a turn-down in business, they retire productive capacity. This doesn't work very well when productive capacity is people. There is no solution for efficiency.
      The best survival strategy is to position yourself to revert to the agrarian economy. Those who are not prepared will try to revert to the hunter/gatherer strategy.

      Our cities are centers of finance and manufacturing. They are NOT centers of other value-added industries. They are not conducive to the agrarian lifestyle.


      • Useless battle plan against deflation

        "The International Monetary Fund has urged governments to take action to tackle a record $152tn debt mountain before it triggers a fresh global financial and economic crisis."
        No kidding. Just what do they mean by tackle. They've tried everything that they can think of and failed every time.
        "It was (and still is) widely believed that the way to add jobs was to destroy the value of the nations money. This the Fed has done with gusto. " Fed for Hillary
        THAT has never worked so, it was tried over and over.

        "Reducing interest rates to 0% again benefited those with the most debt: Wall Street banks, mega-corporations, and the U.S. government. It destroyed the finances of senior citizens living off their savings, penalized people for saving, and incentivised heavily indebted consumers to borrow more. >How did allowing Wall Street banks to borrow at 0% so they could charge consumers 15% on credit card balances and 6% on auto loans benefit consumers? Dohmen Capital Research, Inc. Is the Inevitable Debt Collapse Predictable? - Dohmen Capital Research, Inc.

        This is a graph of Deutsche Bank compared to Lehman;
        "It is interesting to note in particular that the mainstream media tends to become more over-the-top in its certainty of economic stability the closer the system comes to collapse. That is to say, the nearer we edge towards financial calamity, the more violently the mainstream media attacks people who suggest that danger is on the horizon."
        The Noose Is Tightening Quickly On The Global Economy | Zero Hedge

        Japan, "Lower interest rates were deemed the harbinger of aggregate demand" The feces-for-brains make no mention of wages nor crashing population. As long as they can't see past the veranda of their ivory tower, everything that they do will be wrong.
        RADICAL idea from Ray Dalio in his address to a group of Central bankers,
        "1) Debt growth has to be in line with the income growth that services those debts "
        "2) Economic operating rates and inflation rates cant be too high or too low for long, because if an economy is depressed or too hot for long, that will lead to changes to reverse it, and"
        About that reversal,,,
        "Holders of debt believe that they are holding an asset that they can sell for money to use to buy things, so they believe that they will have that spending power without having to work. Similarly, retirees expect that they will get the retirement and health care benefits that they were promised without working. So, all of these people expect to get a huge amount of spending power without producing anything. At the same time, workers expect to get spending power that is equal in value to what they are giving. They all cant be satisfied. "
        So, what does this portend for the FED et al who hold all this debt?

        "it appears to me that there will have to be greater purchases of riskier assets and more direct placements of purchasing power in the hands of spenders, especially as the previously described squeeze intensifies. " warm up the helicopters.
        Most of the holders of debt are going to get screwed badly,

        10/06 Abusing our trust is the business model of modern finance Financial Sense That's fascism for you.
        10/06 EU readies plan for clearing crisis, the new too-big-to-fail Bloomberg The spectre of this super-bail-in is causing everybody to flee the banks.
        10/06 Goldman warns of upward shock to rates, hints at trillions in losses Zero Hedge
        10/06 Global debt hits all-time high of $152 trillion Telegraph
        10/06 $152 trillion debt simply not enough to stimulate economy! Mish
        Shoot, make it $ 200 trillion.

        Poorer than their parents;
        If a State has a strong currency, it loses market share. When one State devalues it's currency to maintain market share and JOBS, everybody else has to follow. Japan sets the standard for devaluing it's currency to maintain market share. As every State devalues it's currency, it diminishes the purchasing power of it's people. The interest rate at the FED is higher than the BOJ and ECB.
        FED GOV pumps more and more into the economy as legitimate commerce slows down. When GOV prints money, it adds this amount to the GDP. When FED GOV spends money it adds this sum (again) to the GDP. Our GDP is shrinking by about 5%. Almost ALL of the holders of debt instruments believe that they are going to be paid back. This just isn't so. GOV lies about all the figures just to keep these people from trying to dump all that debt.

        The CBs are already buying big gobs of stocks, bonds and miscellaneous debt. BUT, the debt is growing FASTER than exponentially.
        When this all blows, just hope that GOV has enough money to put a jacuzzi in your favorite FEMA camp.
        Last edited by Danny B; 10-07-2016, 03:25 AM. Reason: forgot a LINK


        • Peak bad models, peak credit, peak BS

          Banks have created great monetary inflation. Stocks have no earnings and the money bleed into other areas. Here are real estate prices.
          Monetary inflation from the upper loop creates price inflation in the lower loop. Since the lower loop depends on wages rather than the printing press, we can't absorb higher prices. We just cut back on purchases. One of the World’s Most Respected Investors Predicts 2016 Stock Crash | Casey Research

          Italy is set to crash the Eurozone. The technocrats tried to do away with all voting in the EU. Brexit shows what a disaster democracy is for fascism. Italy is next. The Coming Collapse of the World’s Biggest Economy | Casey Research
          Our wages drop. The corporatocracy tries to compensate for our diminished purchasing power by forcing wages lower.

          "The majority of Venezuelas problems are simply due to catastrophically bad economic management stemming from big-government, Chavismo-style policies. These policies have dismantled private industry and domestic food production over the last two decades. Due to this, Venezuela now imports 95 percent of its food and has the highest inflation rates in the world."
          Homeland Security Chairman McCaul: Venezuela?s life threatening ?Maduro diet? is no joke | Fox News

          Greenspan says that GOV needs to cut way back on entitlements,,, for the poor. He didn't mention that subsidies for the rich are 10 times as expensive. Greenspan "doesnt know what he is talking about and there is a mountain of evidence, including his own words, that show that he never did," Snider, in a recent blog, explained.
          "We are stuck in this economic depression not just because of his past tenure, but more so now because constant reverence prevents acceptance of these facts. The recovery doesnt start until the maestros legend dies, and with it all the confusion and misconstruction about how markets and the economy actually work," Snider wrote.
          Greenspan's Advice to Yellen on Political Bias Accusations: 'Grin and Bear It'

          B of A on "peak everything"
          Yep, America hit peak wages in the early '70s. Credit was increased to paper-over wage stagnation. Now, we have reached "Peak Credit" and "peak jobs". Not to mention "peak BS" from GOV. Actually, we haven't yet reached peak BS. Kuroda is trying to prove that BS is in endless supply.
          The IMF called for GOV to "tackle" the debt problems. I was thinking of a rolling-block
          Now, "BOJ Kuroda calls for quick solution to Europe's banking woes

          No scheiss, Sherlock. A quick solution. He wouldnt dream of studying Austrian Economics. Just because Austrian Economics has been right all along is no reason to "change horses" now. The eventual "solution" is going to be traditional Japanese style, Hari-Kari.


          • Statistics vs fractals...default risk moves up the chain

            The FED and other central banks made it clear that they were going to do away with the business cycle by backstopping all markets. Effectively, this transferred risk from the investors to the central bank. The risk didn't just go away. The central banks bet the farm that, with enough support, the good times would eventually return and they could sell all of their GOV bonds into the open market. They fired up the pixel-presses and waited for the free money to the upper loop to work it's magic.
            They ignored wages and, the corporatocracy actively tried to diminish wages in the lower loop. Things didn't work out because China is exporting massive deflation in manufactured goods and wages. CAPEX investment crashed, profit margins crashed, credit demand from solvent consumers crashed.

            All the risk has been transferred up the chain to the central bank.
            " Unfortunately for the credulous investors who believe this, risk cannot be extinguished, it can only be transferred to others or to the system itself. "
            "In a nutshell: while modern portfolio management is statistically based (all those "standard deviations" you always see referenced in quantitative analyses), the markets behave fractally. Fractals are known as the geometry of chaos, for they describe how seemingly stable systems can quickly, and unpredictably, degrade into chaos. "

            "This is how you get a total systemic collapse of the entire choice architecture. And by this I mean not just the financial markets, but the backstop provided by central banks. " "Central bank market intervention doesn't extinguish risk--it simply transfers it to the system itself."
            Of Two Minds - Sorry, Central Banks: Risk and Volatility Cannot be Extinguished

            The FED is just starting to get an inkling about the importance of consumers;

            10/07 The great debt unwind: Business bankruptcies soar 38% Wolf Street
            10/07 US state public pension unfunded liabilities to hit $1.75 trillion CNBC
            10/07 Central banks wage war on markets: Bill Bonner says they will lose Mish
            10/07 Liar loans surge in Australias housing bubble Wolf Street Good on ya mate.
            10/07 Posen says pound decline may mark shift too big for the BOE Bloomberg They're all "Greek" now.


            • Globalization is on the way out.. TAE

              There is a LOT of trading done by computers. They are FAST;
              Pound Is the Latest Flash Crash That Traders Wont Easily Forget. The article summarized some recent Flash Crashes: May 6, 2010: U.S. Stocks (Dow Jones Industrial Average tumbled as much as 9.2%); October 15, 2014: U.S. Treasuries (37-basis-point range during a 12-minute period); August 24, 2015: U.S. Stocks ($1.2 trillion of market value erased); Aug. 25, 2015: New Zealand Dollar (8.3% intraday); January 11, 2016: South African Rand (9% in 15 minutes); May 31, 2016: China Index Futures (suddenly dropped 10% daily limit). And lets not forget frankenshock, the January 2015 dislocation (39% move) in Swiss franc trading as the SNB untethered the swissy peg from the euro."
              Credit Bubble Bulletin: Weekly Commentary: Matthew, Near Misses and Flash Crashes

              Wed like to see an end to the creeping protectionism in the world and more progress on moving ahead with free-trade agreements and other trade-creating measures, Maurice Obstfeld, director of the IMFs research department"
              "First, do no harm, which above all means resisting the temptation to throw up protectionist barriers to trade."
              At the same time; "EU imposes import duties of up to 73.7% on cheap Chinese steel "

              Back to TAE,
              Im characterizing the global economy as something akin to a driverless car thats stuck in the slow lane, said David Stockton
              "What I think is the appropriate metaphor, is not a driverless car thats stuck in the slow lane, but one of those cars in a carousel at a carnival, a merry-go-round, where you can sit in it forever and you always end up in the same spot. And the only one whos in control in the boss who hollers that you need to pay another quarter if you want to keep on riding. "

              "Globalization is done. And while we can discuss whether thats of necessity or not, and I continue to contend that the end of growth equals the end of all centralization including globalization, fact is that globalization was never designed to share anything at all, other than perhaps wealth among elites, and low wages among everyone else."
              "We are transcending into an entirely different stage of our lives, our economies, our societies. Growth is gone, it went out the window long ago only to be replaced with debt."


              • Smoot-Hawley, trade wars, imported oil

                "In 1930 a large majority of economists believed the Smoot-Hawley Tariff Act would exacerbate the U.S. recession into a worldwide depression. On May 5 of that year 1,028 members of the American Economic Association released a signed statement that vigorously opposed the act. The protest included five basic points. First, the tariff would raise the cost of living by compelling the consumer to subsidize waste and inefficiency in [domestic] industry. Second, the farm sector would not be helped since cotton, pork, lard, and wheat are export crops and sold in the world market and the price of farm equipment would rise. Third, our export trade in general would suffer. Countries cannot buy from us unless they are permitted to sell to us.

                Fourth, the tariff would inevitably provoke other countries to pay us back in kind against our goods. Finally, Americans with investments abroad would suffer since the tariff would make it more difficult for their foreign debtors to pay them interest due them. Likewise most of the empirical discussions of the downturn in world economic activity taking place in 19291933 put Smoot-Hawley at or near center stage."

                "The Smoot-Hawley Tariff Act is a U.S. law enacted in June 1930 which caused an increase in import duties by as much as 50%
                In a sign of disapproval towards this act, other countries retaliated and also increased their tariffs. As a result, banks in foreign countries began to fail and international trade declined drastically, resulting in a world trade decline of 66% between 1929 and 1934."
                Smoot-Hawley Tariff Act Definition | Investopedia

                We're probably looking at new rounds of protectionist measures;
                Beginning of a Breakdown in International Trade-Hugo Salinas Price | Greg Hunter’s USAWatchdog

                "EU imposes import duties of up to 73.7% on cheap Chinese steel "
                Currency wars often degenerate into tariff wars. This would, predictably, cut way back on international trade. NAFTA is being violated to protect Canadian real estate. There are a few other examples.
                The excess steel capacity in China is equal to the total steel capacity in Europe and America combined. They keep producing to avoid layoffs and shutdowns.... JOBS

                The West gave China Most favored nation trading status. WTF did they think would be the eventual outcome? Because of our belligerent actions towards Russia and China, the trade wars should come pretty fast. What will the fallout be?
                In new oil world, Russians win role as honest broker" In new oil world, Russians win role as ‘honest broker’ | The National
                Will Russia End Up Controlling 73% of Global Oil Supply?
                The world respects Putin as being a "straight shooter" I can't think of ANYONE in the West who is regarded as honest.

                The EU fired the first major shot in the trade wars. The GIGANTIC bureaucratic overlay of the Brussels / European Union reduced the GDP of it's members by 20%,,, to support the enormous cadre of parasitic bureaucrats. A trade war WILL bring the end of both NATO and the EU.


                • Fallout from the rising dollar

                  It seemed like a quiet Sunday until I checked Martin Armstrong. I have a lot of excerpts. One thing to focus on now is the rise of the dollar. China moved 300 million+ peasants to the cities,,, the jobs ran out when they impoverished their main best clients. They have to print like mad to keep the peasants from revolution. Europe is sucked dry supporting enormous hordes of bureaucrats and socialists. America is still coasting along on the "fat" of the reserve currency. This has facilitated a flight to the dollar from the Euro and the Yuan.

                  The Russian stock market is the strongest but, most people aren't aware of this. The flight to the dollar is working the opposite of the desired result from the currency war. Also, dollar-bonds are the only ones that aren't yet negative.
                  As the U.S. dollar rises, it is more difficult to sell our exports. Our trade deficit grows faster.
                  Another item; We have a global price for commodities and labor. The Japanese CB ZIRP and NIRP has caused a global price for GOV bonds. Any State that has a higher interest rate than the Japanese attracts hot money,,, the currency rises and exports become too expensive. Any labor market that tries to pay higher wages sees the jobs outsourced to low-wage competitors. The same is true for taxes.; If Trump cut corporate taxes to 15%, then companies would bring their cash home. I testified on that before Congress and explained they had to match the best tax rates of 15% as in Hong Kong and the corporations would all return.
                  We are getting that pop in the dollar now against the Euro, Yen, and Sterling. This has been what the Fed is frightened about.

                  Unquestionably, there remains a risk that we could see a complete monetary reform as early as 2018 going into 2020 or the latest 2032 insofar as a change in the currency base system. This is likely to follow a Sovereign Debt Crisis which should begin to erupt by 2018.

                  "The central banks have been trying to keep the dollar down because a rising dollar will undermine Europe exposing the ECB total failure, and then there is the risk of major sovereign defaults among emerging markets who issued their debt in dollars. The IMF has lobbied hard with the Fed pleading not to raise rates for this fear of capital pouring into the dollar. They do not appear to be able to sustain this policy beyond January."
                  "Gold is not something to avoid. True, institutions cannot buy gold for they earn no income. Gold is really for the individual and it will eventually be the hedge against government and the change in the monetary system which could come as early as 2018 but by 2020 if on schedule."

                  "The hunt for taxes is destroying the world economy and on January 1, 2017, all governments will begin sharing info on foreigners. The assumption is that anyone doing anything outside the USA is hiding money from taxes. With this attitude, world trade will continue to collapse into 2020."

                  "Does the FED actually also see these trends coming (strong US dollar, bond crash) ?
                  ANSWER: Yes. The Fed has sent people to the major banking houses and told them outright that their models are wrong. They have been telling them quietly that there may not be a rush to quality being bonds. Moreover, the selling of US Treasuries by some central banks has been an effort to try to prevent the dollar from rising. Chinas holding of US Treasuries has declined to its lowest level in several years, but it is having little effect causing markets to simply coil." Is that, "coil",, like a cobra?

                  Lowering corporate taxes is a "fascist" move in an economy where GOV is pushing socialist schemes to try to forestall revolution. The corporations pass on taxes to the consumer so, nothing is really improved. EVERYBODY is trying to stash their cash and now, there just isn't enough in circulation.
                  Finance just keeps creating more debt-bonds when there is nobody that can ever pay off a fraction of them.
                  All tangible wealth comes from Mother Earth. As the lower loop creates ever-less tangible wealth, the upper loop creates ever-more debt-wealth. We will come to a point where the upper loop realizes that they can't sell their paper to anybody.
                  Most of the paper-wealth is dependent on profits and taxes from the lower loop. China exported wage & price deflation that wiped out profit margins and the discretionary spending from wage earners.
                  Armstrong writes about a new monetary system. If it does not include debt-free money, it will fail very rapidly. GOV currently has $ 212 trillion in unfunded liabilities. No debt-money monetary system can absorb such a large shock. The alternative is to let many millions of baby-boom pensioners die.

                  We don't have a lot of time left; Stock & Bond Bubbles Much Worse Than 1929-David Stockman | Greg Hunter’s USAWatchdog
                  The dollar is falling but, other currencies are falling faster; "Since the mid 1970s, Salinas-Price points out the peso exchange rate has plunged compared to the U.S. dollar. Salinas-Price says, From 1976 to date, from 12.50 pesos (to $1 US) we are now at 15,100 pesos (to $1 US) and going further down. "

                  Things are slipping away fast and it is doubtful that our cretins in the district of Corruption will do anything in a timely manner. " in August, new vehicle sales (in units) fell 7.2% year-over-year, having plunged 20% year-to-date, with new car sales down a spine-chilling 28.6% year-to-date, and even truck and SUV sales down 13.9%. It takes a lot of headwinds for a Texan to give up on buying a new truck."


                  • $31 trillion in extra debt,,,,, Thermodynamic oil collapse

                    Kunstler is reliably pessimistic about the future of techno-society; "Now its up to natural forces and their galloping horsemen to get the job done. "
                    Sizing Up the Endgame - KUNSTLER

                    " He says that, Forex markets (and many other markets - too) are going to be volatile until a "New World Order" is implemented. Or to quote him
                    verbatim "Price discovery will be an issue as we move to a New World Order." The "NWO" he is referring to, is some sort of market panacea, where price discovery is so efficient, well - that's not a market! "
                    "Fast forward, it's 10-8-2016, and leading FX strategists are telling us that markets are waiting for a "New World Order"
                    " It seems that over the past 100 years really, not much has really changed, it is the same group of banks pulling our nose (historically speaking), whether they're funding Hitler or Clinton, whoever wins, nothing seems to change. In war there are no winners, only victims. "
                    Hitler's New World Order alive in the markets - FX History Lesson 28 | Zero Hedge

                    "Well, let's say by a staggering $31 trillion in the past six years. According to the wonderful folks at the Federal Reserve, U.S. net worth increased from $57.9 trillion Q2 2010, to a stunning $89 trillion Q2 2016:"
                    "I would imagine a lot of wealthy Americans believe they are living life "High On The Hog" today. However, that $31 trillion in additional wealth is a nothing more than a "Digital Mirage." For wealth to grow, more energy must be burned and positive economic activity must be generated. This is the foundation of all economic principles.

                    Unfortunately, Americans did not burn more energy to create this additional $31 trillion in U.S. net worth. Matter-a-fact, total U.S. energy consumption in 2016 will likely turn out to be less than it was in 2010:"
                    "Moreover, total U.S. energy consumption will likely be lower in 2016 (96.5 quad Btu's) compared to 2010 (97.4 quad Btu's). On the other hand, total U.S. net worth has climbed to $89 trillion versus $57.9 trillion in 2010. So, the real question is... where did this extra $31 trillion in U.S. net worth come from if total energy consumption was flat?"

                    "Last week, I spoke with Bedford Hill of the Hills Group about their "Thermodynamic Oil Collapse" model. What an interesting conversation it was. Bedford Hill was the project manager of a group of engineers that put over 10,000 hours in designing their Thermodynamic Oil Collapse model.

                    Bedford told me that after they ran the model, the results were so shocking, they sat on the damn thing for two years before publishing. I asked him did any of the engineers that worked on the model disagree with the results? His answer was, "Not a single one disagreed."
                    The Coming Collapse Of U.S. Net Worth Will Wipe Out Millions Of Americans | Zero Hedge


                    • Powder keg, Italy

                      All over the Western world, we see the same thing; Bureaucrats creating a bureaucratic mess to create more work for bureaucrats. The GIGANTIC bureaucratic overlay of the Brussels / European Union reduced the GDP of it's members by 20%,,, to support the enormous cadre of parasitic bureaucrats.
                      "The European Union evolved, devolved actually, from basically a free trade pact among a few countries to a giant, dysfunctional, overreaching bureaucracy. "
                      " The Eurocrats, instead, created a treaty the size of a New York telephone book, regulating everything. This is the problem with the European Union. They say it is about free trade, but really its about somebodys arbitrary idea of fair trade, which amounts to regulating everything. In addition to its disastrous economic consequences, it creates misunderstandings and confusion in the mind of the average person. Brussels has become another layer of bureaucracy on top of all the national layers and local layers for the average European to deal with."

                      "The European Union in Brussels is composed of a class of bureaucrats that are extremely well paid, have tremendous benefits, and have their own self-referencing little culture. " "All of the Italian banks are truly and totally bankrupt at this point. Who's going to kiss that and make it better? Is the rest of the European Union going to contribute hundreds of billions of dollars to make the average Italian depositor well again? I don't think so. "
                      Doug Casey on “Quitaly” and the Collapse of the EU | Casey Research

                      " Italy has had virtually no productive growth since it joined the euro in 1999.
                      Today, the Italian economy (real GDP per person) is smaller than it was at the turn of the century.
                      Thats almost two decades of economic stagnation." "the IMF is basically saying it has no idea how or when the Italian economy could ever recover."
                      "Prior to joining the euro, Italy would regularly post large trade surpluses with Germany. Since joining, it has posted large trade deficits."
                      "The Italian banking system is insolvent, and now everyone knows it. Shares of Italian banks have plummeted more than 50% so far this year.

                      Italian banks combined have a staggering $400 billion-plus worth of loans that are 90 days past due and unlikely to be repaid in full. These nonperforming loans (NPLs) account for over 18% of all outstanding bank loans and add up to over 20% of the Italian GDP."
                      " Making the problem worse with Italian banks is their financially incestuous relationship with the Italian government and its debt.
                      Italys government has borrowed over $2.4 trillion. "
                      "In Italy, government spending accounts for a whopping 50%-plus of GDP."

                      " A former IMF official speaking to the media put it this way:
                      Both the public debt and the banking sector are on a powder keg, being maintained by a process of non-recognition of accumulated losses in the system that they keep rolling over. The real problem is that somebody has to take the losses eventually."
                      A Mile-High House of Cards | International Man
                      Bureaucracies and the giant sucking sound.

                      Here's Where The Next Bank Deposit "Bail-In" Will Strike... | Zero Hedge
                      "Italians are rightly afraid of bail-ins. That fear is leading them to withdraw their savings as cash and also to buy gold. This further drains the banks capital, making it more likely theyll need to do a bail-in to remain solvent, which fuels even more withdrawals. Its like a self-fulfilling prophecy."

                      "The Financial Times recently put it this way:
                      An Italian exit from the single currency would trigger the total collapse of the eurozone within a very short period. It would probably lead to the most violent economic shock in history, dwarfing the Lehman Brothers bankruptcy in 2008 and the 1929 Wall Street crash."
                      Last edited by Danny B; 10-11-2016, 12:27 AM. Reason: moar info


                      • The coming political gridlock and your survival

                        Deutsche bank claims that we "are past the point of no return." I saw the crash coming in 2005. There are a LOT of people waking up to the coming disaster. What does Mother Nature hold in store for a species that doesn't pay attention to self-survival? Several elements of the PTB are pushing for population reduction and the coming crash may have been orchestrated for that purpose.
                        From 7 Billion People To 500 Million People – The Sick Population Control Agenda Of The Global Elite » Alex Jones' Infowars: There's a war on for your mind!
                        The world is going to need VERY good leaders to try to stabilize the economies when the cascade of defaults hits. Nobody in their right mind wants the job so, we are left with psychopaths. The new leader of UKIP resigned after 18 days. "Diane James quits as Ukip leader after just 18 days "
                        She had no consensus backing her.

                        Charles Hugh Smith; "Regardless of who wins the presidency, a much larger question looms: will the U.S. be ungovernable 2017-2020? For all the reasons that are tiresomely familiar, whomever wins the presidency will remain deeply unpopular with roughly 40% of the adult populace.
                        It's not too difficult to foresee not just gridlock, but angry gridlock. Neither candidate can count on even the slightest shreds of goodwill from the other party, and with bi-partisanship already dead on arrival,

                        "The finance industry has effectively captured our government--a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMFs staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, were running out of time."
                        All the "red button" issues boil down to this: the top .01% make all the important decisions to serve their own interests; the top 5% of technocrats and professionals who have done very well for themselves in the past seven years will support the elites, and the bottom 95% are effectively powerless-- not just politically, but financially.

                        Regardless of who wins the election, the U.S. will be ungovernable in a period of self-reinforcing crises.
                        oftwominds-Charles Hugh Smith: USA 2017-2020: An Ungovernable Nation?

                        Kunstler; "The only good to come out of this sordid election is the certainty that a lot of political debris will be swept away in the Fourth Turning underway. Out of the miasma of idiocy and posture that is this election campaign, the hard-edged realities of our time will emerge and the TV audience will come to the stark recognition that it is not just another mere entertainment.

                        The other major nations of the world are not so much ganging up on America, as Hillary would have it, but reasonably attempting to ring-fence the mad bull that the USA has become as the two candidates vie to start World War Three with China and Russia respectively.
                        In background of it all looms the train-wreck of global finance, which will be the true determinant of what the American people will have to do in the years ahead. During the weeks of the election distraction, the European banks struggle to conceal their insolvency while the politicians of Euro-land desperately try to paper over the cracks in these fracturing institutions.

                        The potential for wrecking markets and currencies around the world is extreme at this moment. It may only be a matter of whether it happens before or after the election.

                        Then well see what happens when financial institutions cant trust each other. Trade stops. Economies crumble. Pretenses evaporate. If it gets bad enough, the shelves of the supermarkets go bare in three days and youre living in a permanent hurricane disaster without the wind and rain. Believe me, that will be bad enough. Hillary, if elected, will not get to play FDR-2. Rather, shell be stuck in the role of Hoover, the Return, presiding over a freight elevator of an economy with a broken cable. Expect problems with the US dollar. Expect emergency actions. Expect the unintended consequences of those actions.

                        Nigel Farage; "The first signs of a political rebellion took the form of the Tea Party. The satirist Ian Hislop once described it as rather like Ukip but with God and guns. They not only railed against the Washington elites, but made the link between big business, Wall Street banks and Washington politics. "
                        Not only did JP Morgan and Goldman Sachs help to fund the Remain campaign but they increasingly give the appearance of owning a whole section of our political class.
                        As the rich get richer and big companies dominate the global economy, voters all across the West are being left behind.
                        The little people have had enough - not just here, but in America too

                        Wages crashed and the 95% had no money. The banks used regulatory capture to pass all the losses and default risk up the financial chain to the GOV and central banks. BUT, the GOV and central banks are financed by our wages. The risk has come full circle.


                        • No rudder on the Titannic

                          Stumbled on; " A $7 Trillion Moment of Truth in Markets is Just Three Days Away. What will Libor do once the dust settles?" Oct 11
                          "Now, analysts are debating whether the looming Oct. 14 deadline will mark a turning point for the interbank borrowing rate, as money markets acclimatize to a new reality. " A $7 Trillion Moment of Truth in Markets is Just Three Days Away - Bloomberg

                          Margin debt has turned; Is this ‘bone-chilling’ indicator really saying ‘sell’ stocks? - MarketWatch
                          Investors have woken up to the fact that earnings just don't happen if you depend on a very poor middle class for sales;

                          " In fact, a paper written by San Francisco economist Vasco Curdia last year argues that the natural interest rate has been so low, the Fed's policies were contractionary rather than stimulative even with the federal funds rate at the zero lower bound.

                          While Curdia's focus was on the level of the equilibrium interest rate, Gagnon and his colleagues attempt to determine why it has fallen.

                          To do so, they cleverly contrasted the modeled equilibrium interest rate that would have resulted from fertility, mortality and employment rates remaining at their 1960 values to the modeled equilibrium rate that results from the shift in these trends.

                          They found that "the entirety of the decline in the equilibrium real [or inflation-adjusted] interest rate that our model finds for the recent decades is a direct consequence of the demographic changes that happened from 1960 onward."
                          The biggest economic horror story is real, according to a new Fed paper

                          The Glass-Steagal act was slowly gutted by the banks and Greenspan until regulation was gone, especially in the case of derivatives. "The day after the Supreme Court effectively decided the fate of the 2000 Presidential election, the Commodity Futures Modernization Act of 2000 passed in Congress, attached as a rider to an 11,000-page spending bill. The legislation, passed without debate or review, exempted derivatives from regulation"

                          "Bastiat & Hazlitt are so clear and concise in their obliteration of the fallacies that socialism and government control of the economy are beneficial to society, that only a brain dead liberal, Ivy League economist, mainstream media shill, or a corrupt politician like Hillary Clinton wouldnt understand. "

                          "Despite overwhelming factual evidence that crackpot Keynesian spending machinations; debasing the currency; interest rate manipulation; globalization; perpetual war; incurring unpayable levels of debt; making $200 trillion of unfunded welfare promises; scorning and ridiculing those who propose living within our means; record levels of wealth inequality; stagnant wages; the loss of good paying jobs; and permanent recessionary conditions for 90% of America; has created a seething anger across the land, Hillary Clinton and her establishment flunkies propose doubling down on those same failed policies."

                          Jim Rogers and Deutsche bank;
                          10/11 Australian property bubble on a scale like no other Acting Man GO Aussie
                          10/11 UBS Weber warns on danger of massive interventions by central banks GATA No kidding. This is after they already printed up an extra $ 150 trillion.
                          10/10 Top central banks are set to double down Reuters
                          10/10 The World Bank and the IMF wont admit their policies are the problem Guardian

                          "Now the IMF is warning that a record US$152 trillion of debt 225 per cent of global GDP poses a threat to the global economy. "
                          10/11 China property bubble could cause $600 billion in bad debts Bloomberg The debts are bad but, they just haven't been recognised as such.


                          • Tug-o-war between Marx and the bankers

                            Barclays says that the party is soon to end; Barclays Warns The Party Is Almost Over As Payouts Exceed Cash Flow By $115 Billion | Zero Hedge I guess that earnings DO matter.
                            Apparently, collateral matter also; Collapsing Collateral, Derivatives, And Systemic Risks | Zero Hedge

                            "I created the chart below for an article I wrote in 2011 when the national debt stood at $14.8 trillion, with my projection of its growth over the next eight years. I predicted the national debt would reach $20 trillion in 2016 and was ridiculed by arrogant Keynesians who guaranteed their stimulus (aka pork) would supercharge the economy and result in huge tax inflows and drastically reduced deficits. As of today, the national debt stands at $19.7 trillion and is poised to reach $20 trillion by the time The Hope & Change Savior leaves office on January 20, 2017."
                            HILLARY: DECEIT, DEBT, DELUSIONS (PART TWO) – The Burning Platform

                            The ruling class, especially the Anglo-American ruling class has consistently worked to destroy collective bargaining and unions. Bringing in immigrant workers and outsourcing jobs to low-wage competitors has driven wages way down for the Western worker. As our wages stagnated and dropped, credit terms were stretched out to keep us buying. The price deflation that was promised by automation was sucked up and handed out as stock dividends.
                            ALL of that floated on the credit bubble because we couldn't afford to keep the consumer economy growing on just our wages.

                            As Payouts Exceed Cash Flow By $115 Billion The PTB can block the price deflation that we so desperately need but, if they also block wage increases, we can't buy stuff. They loaned us LOTS of money but, we can't pay it back. They pump $trillions into the upper loop to make up the difference. Some of this bleeds over into the lower loop as price inflation.
                            We are constantly losing ground on wages and they are constantly losing ground on dividends.
                            The upper loop of the economy (banks) are non-producers. They put the squeeze on the lower loop until we can't consume. Consequently, we have no particular reason to produce. This downward spiral threatened to take down the banks. They print mountains of debt to compensate. Every human on earth owes $ 20,000. These debts are viewed as assets for future collection.
                            BUT, they have starved the goose that lays the golden eggs.

                            They are going to squeeze even more. The End of Social Security (Leaked Evidence Stumps Obama, Stuns Retirees.) - The Sovereign Investor

                            The corporatocracy is looking to take over governments so that they can drive wages even further down. BUT, at the same time, they would like to keep the consumer economy humming along. They can't have it both ways.
                            The corporatocracy would like to get all the deadwood out of productivity and GOV. This is stupid and unrealistic considering the rise of automation.

                            The Marxists are at the other end of the rope in this tug-o-war. They focus on consumption with little thought for productivity. The rope is going to break and both parties are going to go spinning off into oblivion.


                            • Originally posted by Danny B View Post
                              The corporatocracy would like to get all the deadwood out of productivity and GOV.
                              Giggling FEMALE Reporters

                              Women Are Defeating Donald Trump



                              • Shifting risk up the chain. The currency markets

                                The bankers would like it very much if there was NOT a connection between employment in the lower loop and the fortunes of the upper loop. But, that isn't the case.
                                Layoffs; US layoffs jump in September by 38% – WEALTHY DEBATES
                                Stocks; HSBC: There's Now a Very High Chance of a 'Severe Fall' In U.S. Stocks - Bloomberg
                                Exports; China's exports drop sharply in September - MarketWatch
                                Resulting in; One Measure of Investor Worry Just Hit Its Highest Level Ever - Bloomberg
                                More worry; Why Europe’s Biggest Bank Is on “RED ALERT” | Casey Research

                                The bond market is easily manipulated by the FED interest rate. The stock market is a different story. It depends on earnings. Earnings have been flat for about 6 quarters. GOV minimises the rate of inflation to make investors believe that they are actually gaining by speculating. If investors paid attention to the real rate of inflation as reported by Shadowstats, they would leave the markets and go to cash and/or gold. The stock and bond markets are what many people pay attention to. There is a FAR bigger market that many do not look at.

                                1. Globally, the stock market is roughly $69 trillion in size and trades about $191 billion in volume per day.
                                2. The bond market (including corporates) is a little over $199 trillion and trades about $700 billion in volume per day,
                                3. The currency markets are unmeasured in size 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."
                                "I want to also stress that at this size, the currency market is much larger than Central Banks. If the currency market begins to revolt against a particular Central Bank, there isnt a thing said Central Bank can do about it."
                                "Central Banks are losing control of the markets. The next round of the Financial Crisis is about to begin.

                                During the first round banks went bust. During this round entire countries will be going bust."
                                The default risk has been moved up the chain of finance until it arrived at the Central Banks.