Economic pressures

[Danny B]

10 days til the FOMC meeting

December 14 is the next meeting of the FOMC. The FED is hard at work trying to justify raising interest rates.
"Unemployment is at just 4.6 %." Forbes Welcome

"Angry country, angry world – The wealth effect is dead " A pensions time bomb spells disaster for the US economy - Business Insider
Pension funds and other funds are dying. The FED desperately needs to raise rates. Rates are creeping up on their own. The result, 12/04 Higher interest rates crush mortgage application volume, down 9.4% – CNBC
Somebody / everybody will get massacred.

[Danny B]

The unfolding Chinese empire

Soros was kicked out of Russia and soon to be kicked out of America. SO, now he is trying top cozy up to China.
George Soros Announces China Must Lead The New World Order
China is trying to break America and create an eastern empire. Trump plans to make things tough for them,,, up to a point. I don't know how far he can go.
"The U.S. president-elect told his 16.6 million Twitter followers that he wouldn’t be told by China who he should or shouldn’t talk to, and reiterated some of the grievances about China used in his winning presidential campaign. The yuan reacted by declining for the first time in three days.

“Did China ask us if it was OK to devalue their currency (making it hard for our companies to compete), heavily tax our products going into their country (the U.S. doesn’t tax them) "
I'm sure that Killary made a real killing on legislating the tax imbalance.
https://www.bloomberg.com/news/artic...outh-china-sea

This page talks about China's plan for empire; Next Big Future: China's $4 trillion OBOR will span 65 countries with 70% of the world's population
America only has 4% of the world's population. China,,,, http://i.imgur.com/CK6aONG.jpg China has to survive the upcoming credit crash before they can claim any economic crown. Discretionary spending is never going to get up off the floor as long as automation continues to erode job niches.

[Danny B]

Quiet and still in flux

12/06 Venezuela to introduce bigger bills amid soaring inflation – DW Sadly, you can't save a country that imports most of it's food.
12/06 Market bears smell blood as China scrambles to plug capital outflows – Daily Mail The PBOC weakens the currency and then wonders why people want to get rid of it.
12/05 Vancouver housing tax pushes Chinese to $1 million Seattle homes – Bloomberg Just a part of the capital outflows.
12/06 Don’t assume western democracy will last forever – Guardian It never does.
12/06 Financial wizardry alone won’t stave off Chinese debt crisis – Conversation The crash will destroy confidence and trust worldwide. China plans to substitute gold for the dollar. The world will always need a store of value. China will introduce gold-trade notes that are fully convertible. They still have to get to the "other side" without total destruction from revolution. They desperately need the cooperation of the food-exporting countries. That is why there are over a million Chinese in Africa trying to get food production up to speed.

12/06 The US’ debt $100 trilliion of unfunded liabilities – ValueWalk Kotlikoff reckons it to be $212 trillion.
The social contract of the family was; the family takes care of the young. In turn, the young take care of the elders in turn. The State interceded and said that the State would take care of the elders. The State discovered that this is a very expensive proposition. It didn't help that the Social Security fund was raided to pay for wars. It didn't help that GOV allowed and promoted bad health.

The State has worked to put itself at the forefront by destroying societies roots. The State now wonders why society is so fractured that it can't function.
12/06 Mayor seeks to “target those who got rich from system” – Mish
Howard Hughes, Henry Ford, George Westinghouse,,, these are the people who create wealth. Does GOV go after entities like the Clinton Foundation. Nope, they're too important. Parasites instinctively don't go after other parasites. They go straight to The Fountainhead.

[Danny B]

Merkel OUT,,, taxes IN ,,, public debt

Armstromg; "We are witnessing what a Private Wave is all about. The Italian Referendum came in on point with the NO vote at 59.4% against 40.6%. Our model is now four for four with BREXIT, Trump, Hollande in France exiting the election, and now Italy. We will see the same defeat for Merkel.

What politicians do not grasp is that they have destroyed the world economy with taxes and regulation. Enough is enough. In Europe, the single currency has totally failed because it required a single debt. The refusal to consolidate the debts has been the death of the Euro.
This is all playing out into a major dollar rally for like a game of musical chairs, it’s the last place to park money."
https://www.armstrongeconomics.com/i...rend-votes-no/

The dance tax; https://www.armstrongeconomics.com/w...ust-pay-a-tax/
The E.U. has created a new way to squeeze out more tax; https://www.armstrongeconomics.com/w...or-government/

The cash ban in India is working EXACTLY OPPOSITE to what was predicted; The Mainstream Media Goes "All In" On Promoting a Cash Ban | Zero Hedge

Well, the globalists and investors wanted unfettered movement of money. It must not have occurred to them that it could move OUT as well as in.
"The US maintained ZIRP for seven years, spent over $3.5 TRILLION in QE and generated the weakest recovery in the last 80 years.

In Europe, FOUR NIRP cuts (going well below the zero bound) and $1 TRILLION in QE failed to generate significant growth.

And in Japan 16 YEARS of ZIRP combined with QE programs equal to 50% of GDP failed to generate a sustained recovery."
12/06 World facing first ‘lost decade’ since 1860s – Bloomberg No kidding, maybe that is because all of our cash got squeezed out. They plan to keep squeezing until there is no more.

The Outstanding Public Debt as of 07 Dec 2016 at 03:31:52 AM GMT is:
$ 1 9 , 8 8 8 , 6 5 0 , 5 6 9 , 1 2 9 . 0 6

The estimated population of the United States is 324,291,243
so each citizen's share of this debt is $61,329.59.

Stanford Study Reveals California Pensions Underfunded By $1 Trillion Or $93k Per Household
So, dig deep for the bucks that GOV needs. This HUGE burden of taxes reflects the desires of legions of bureaucrats. The spit out reams of regulations for everybody to follow to justify their sinecure.

[Danny B]

Sleepwaking into the future

The old paradigms are being swept away with little notice or appreciation from the finance industry. The French GOV spends about 54% of the GDP. American GOV claims that it spends about 24%. This is only the start. GOV goes to the bond market for financing.
"According to some estimates, the global bond market has more than tripled in size in the past 15 years and now exceeds $100 trillion."
“The real elephant in the room is not the U.K. vote or a Trump presidency,” Major said. “The real elephant in the room is we’ll have low and negative rates for a very long period of time.”
https://www.bloomberg.com/news/artic...ns-than-brexit
Here is the 30 year rate; https://si.wsj.net/public/resources/...1123142858.jpg

Most interest rates are linked to the 10 year treasury note, REGARDLESS of the risk of the original note. The high yield market is the main exception.
Our entire economic system is built around collecting interest for the use of money. Bazillions of electronic dollars are whizzing around the casino. There is no demand for them in the lower loop of the economy. Close to 95 million Americans of working age are not employed. The banks loan money for a bit of spread only by getting free money and loaning it out cheaply. The banks created $ trillions of liar-loans just to keep moving "forward".

The lower loop is dying and nothing can stop it. Consumption and employment are considered as peripheral problems when they are actually the CENTRAL problem.
Rise Of The Machines: Millions Of American Jobs Will Be Wiped Out In The Next Five Years

There have long been propositions for a “universal basic income”. The finance industry is very much against it. They are just too short sighted.
The f-117 is called the "woblin goblin". It is just too complex and unstable to be controlled by a human. "We" are finding out that so many of the economic laws and theories are just bunk. Many of them are exactly opposite to what the dreamers/designers planned. Martin Armstrong's program, Socrates, has proved to be very accurate.
A free-market economy depends on information from millions of consumers every day. The Marxists and fascists want to micro-manage the economy so that they get unearned support.
If Steven Major is correct that interest rates will remain low or negative for a long time, there is NO POSSIBLE WAY to save the system. 'ECONOMICA" has done a pretty good job of proving that interest rates are locked in to the % and number of 15---62 year olds,,, the consumers.
That means that all the funds go bust. Everybody who depends on interest income,,, gets NONE. With falling income and falling consumption mean that equities go bust.
While the economy depends on the feedback from consumers, it is just too big, unstable and complex to survive without some kind of projection and planning. Instant movements of capital can leave a State drained of capital in minutes.

GOV borrows spends into the economy to keep things going. By proposing 100 year bonds, GOV has acknowledged that it has no intention of repaying it's bond load. Our entire system of charging rent for money has no future in a shrinking economy. The collapse is coming. We will be forced back into gold settlement for imports. That is when those who are not productive will find themselves cast out from gainful employment.
When the bureaucrats cry for universal basic income, it may get a good hearing. It isn't that UBI is the best solution. When we are cut off from imports that we can't pay for with gold, there will be a resurgence of American manufacturing. That still won't stop the march of automation. UBI will cause huge parts of the population to be lethargic and useless. Without UBI are some sort of assistance program, there will be mass deaths.

Trickle-down no longer works. Rental of money no longer works. The poorer we get, the lower our birth rate and the more dysfunctional the system. The dollar will continue to rise and lead to the grand crescendo. The imports will stop. The revolutions will start.
GOV may build lots of camps and prisons. That won't revive the economy. GOV can't bring back a rising birth rate.

[Danny B]

The State is ALWAYS after your gold

The Indian government said, "turn in your gold to our banks". Gold Monetisation
The Indians thought, "if the GOV really wants my gold that badly,,, maybe I should keep it." They turned in almost nothing.
Modi bumped up the game and now says, " TURN IN YOUR GOLD !" India Confiscates Gold, Even Jewelry, In Raids On Hidden Money | Zero Hedge The Indians hold about 20,000 tons of gold. Modi also forced Indians to declare their cash notes of 500 and 1,000 rupees. Modi probably didn't figure on investors running away either; https://www.bloomberg.com/news/artic...-deutsche-bank
If there is any GOV that is nothing more than a mass of useless bureaucrats, it has to be the Indian GOV. I travelled by road through India from Pakistan to Nepal.

"The sequestration of Turkish citizenry's traditional store of wealth by forces of finance and state, is a story unto itself "
"When Kalkan brings in her coins, she’ll be joining a wave of Turks responding to a drive to lure an estimated $302 billion of hidden gold into the economy to help ease the nation’s current-account deficit, the world’s biggest after the U.S. " " And while I could put my real gold into the bank, I would not be able to receive the same tangible form of it back again"

"The State Mint has produced gold coins since 1452, and is unique in the as the only State Mint remaining which produces coins on demand for anyone who brings in gold in the LBMA standard kilogram form. They have minted more than 150 million Meskuks and Ziynet since 2002 alone - making them the most popular gold coins in the world! This represents 404 tonnes, 13 million oz used in production of the two coins, and puts into perspective the fallacious reasoning and undeserved attention placed upon the topic of retail coins sale of Western nations. Turkeys' citizens in fact purchase more gold than any other country in the world except for China and India - whose populations dwarf its' mere 70 million by magnitudes!"

"Notice that I mentioned that Ziraat Bank is government owned. That is true of several of the largest operating banks in Turkey,"
https://storify.com/SuaveBel/the-dev...urkish-banking

During the Asian crisis, the Koreans were asked by GOV to turn in their gold to save the country. They turned in 8 tons in the first week. BBC News | Analysis | Koreans give up their gold to help their country

[Danny B]

The weakening Euro

12/08 Draghi says $2.4 trillion stimulus may not be enough for ECB – Bloomberg That tells you pretty much everything that you have to know.
This article is a good writeup on the disintegration of the European Union. It talks about reverting to national currencies like the Lira and Mark. When the Western Roman Empire disintegrated, most of the Romans just melted off into the countryside to do subsistence farming. Most of the members of Western society can NOT shed layers of complexity and still survive.
The EU Meltdown - The Sovereign Investor

It is now PAINFULLY clear that gold did FAR better than the Euro. Euro Devaluation Accelerates – Millions Of Europeans Wishing They’d Bought Gold - DollarCollapse.com
The ECB must pump out free money to keep the economy pumped up and keep investors out of gold. BUT, the more free money that it pumps into the system, the better that gold looks.

12/08 China’s banks are hiding more than $2 trillion in loans – Wall Street Journal Just one small piece of the puzzle.
12/08 The great middle class revolt gets bigger – SafeHaven You ain't seen nothing yet.
12/08 Wall street’s calling the sheep to the slaughter — again – Daily Reckoning
12/08 How to counter doomsters who say China has too much debt – SCMP Simple, just send your money to China.

12/08 China capital flight intensifies, US Treasury reserves plunge – Mish No problem, they're buying Canada.
12/06 United States is turning into a factory farm for China – Mercola I'm sure that we would never cut them off,,, to spite them.

There are too many writers and pundits who talk blithely about a return to national currencies. The woblin-goblin that we call our economy can't just shift gears without a SERIOUS crash. A lot of people will die when commerce crashes.

[Danny B]

A note on Italy

"In Italy, government spending accounts for a whopping 50%-plus of GDP. A more accurate debt-to-GDP ratio would exclude government spending from economic output."
"It’s borrowed over $2.4 trillion, and its debt-to-GDP ratio is north of 130%. (For comparison, the US debt-to-GDP ratio is 104%.)"
"I don’t see how it’s possible for the Italian government to extract enough in taxes from the productive part of the economy to ever pay back what it’s borrowed.
Yet Italian government bonds are trading near record-low yields.

It’s a bizarre and perverse situation.
Over $1 trillion worth of Italian bonds actually have negative yields. That’s completely insane.
Given the huge risks associated with lending money to the bankrupt Italian government, the yields on Italian sovereign bonds should be near record highs, not record lows."
BAAAAaaaa

"The collapse now appears imminent. It could start as soon as this weekend."
The Next Domino Falls As Predicted... Here's What Comes Next | Zero Hedge
There is just so little appreciation for how badly the demographic crash is bringing down everything else. Italy was the first to experience the death-cross; Demographic 'Death Cross' Looms As World "Plague" Of Elderly Population Grows | Zero Hedge

[aljhoa]

"The collapse now appears imminent. It could start as soon as this weekend."
The Next Domino Falls As Predicted... Here's What Comes Next | Zero Hedge
There is just so little appreciation for how badly the demographic crash is bringing down everything else. Italy was the first to experience the death-cross; Demographic 'Death Cross' Looms As World "Plague" Of Elderly Population Grows | Zero Hedge

EX-Elite World Bank Member - The COMING Economic Collapse


Al

[Danny B]

The Eurocrats ignored human nature... the strong dollar

The Euro experiment was bound to end in tears because it started out in falsehood and deception.
"These same operatives bent the rules they themselves had originally set to allow countries to join the euro. Under the Maastricht Treaty, budget deficits were to have been less than 3% and government debt to GDP less than 60% for a state to qualify for membership. Neither Germany nor France qualified at the outset. And when it came to Greece, the Greek government simply lied, with the full knowledge and encouragement of the other members. No, Lord Hague, it was the policy makers that were at fault, not the currency itself.

But he continues: “Membership of the euro has put the Italians on a permanent path to being poorer”. Not so. It was the Italians who used cheap euro-denominated money to borrow profligately. They, and they alone are responsible for the mismanagement of their economy and their debt problems, which incidentally now exceed the Maastricht 60% limit by a further 75%."
Ignore human nature at your peril.

"It recycles the money spent by Italians so that it can be spent again, or even hoarded outside Italy, ad infinitum. TARGET2 is living proof of the ridiculousness behind the euro project.

Lord Hague provides an exception to his argument and conclusion, by citing Germany’s greater productivity and suggesting that the only way out was for Mr Renzi to enact bold reforms to raise Italian productivity to the same level as Germany’s."
https://wealth.goldmoney.com/why-eur...efcode=dollarc

The Strong Dollar
"The problem is the ability/cost for regional banks and borrowers (especially in EM) to continue rolling over the funding of more than $10 trillion of offshore dollar debt when the value of the dollar keeps rising and big Eurodollar banks (e.g. Citi, JPM, BoA, HSBC, etc) are less willing to offer dollar balance sheet due to regulation/risk aversion.

Since the problem is being exacerbated by policy divergence between the Fed and other major central banks, more stringent regulation they are implementing and the lack of a dollar swap facility between Fed/PBoC, we leave it up to readers to decide who will be responsible when something goes wrong. "
The FED has no dollar-swap agreement with the PBOC and the emerging markets can't get enough dollars to service dollar-denominated loans. As China experiences capital outflows, dollar get ever-more expensive.

"So one might ask…what is the best measure of risk? The answer? It’s the dollar…and it’s something we’ve argued in detail twice in only the last three weeks.

Firstly, in “The VIX Is Dead: According To The BIS, This Is The New "Fear Indicator", we highlighted the BIS report, “The bank/capital markets nexus goes global” BIS' head of research, Hyun Song Shin, argued that the negative relationship between leverage and the VIX had broken down and:

“The mantle of the barometer of risk appetite and leverage has slipped from the VIX, and has passed to the dollar."

The following day in “Dollar Illiquidity Getting Critical: A $10 Trillion Short Which The Fed Does Not Understand”, we discussed a report from ADM ISI which argued that:

“The price of the dollar acts like a ‘Global Fed Funds Rate.’ A rising dollar tightens economic conditions globally, adding considerable deflationary pressure…”

"I sometimes feel like ‘The Grim Reaper’, scouring the research savannah in a ghoulish quest to harvest bad news with a forceful sweep of my scythe. Imagine then my perverse delight when our credit team produced what is one of the scariest charts I have seen for a very long time. Markets shrugged off the Brexit vote in a couple of days. They shrugged off Donald Trump’s election in a single day. They shrugged off the Italian Referendum result in a couple of hours. Heck, in this mood they would shrug off an alien invasion of planet Earth. But global political risk is now at such elevated levels that investors must surely be on another planet."
Presenting SocGen's "Most Frightening Credit Chart" | Zero Hedge

The Central banks have had everybody's back for so long that investors just ignore risk. The CBs are trapped in a position where they can't back off. Everything is supported by printing rather than actual wealth creation.
Presenting SocGen's "Most Frightening Credit Chart" | Zero Hedge
Without a dollar-swap line to China, the whole world deflates. The East has created alternatives to the World bank, The IMF, SWIFT and other Western institutions. I suppose that the deflation will continue until the system pops.

The Central Banks printed up mega-tons of electronic money. Human nature being what it is, investors threw caution to the wind. Individual and groups did the same and borrowed money that they couldn't pay back. Irresponsible lenders had no trouble finding irresponsible borrowers. The private losses of the bankers were to be made good by laying the load on the backs of responsible, working people. Responsible, working people who make a good, taxable income are getting hard to find. The CBs print to hold back the wave of defaults. GOV taxes and prints to keep it's over-subscribed safety net from breaking.
The CBs cry that they have reached the limits of monetary easing and that GOV must cut back it's expenses.


12/09 2016 marked end of biggest bull market of our lifetimes – Yahoo! Maybe that had something to do with the population-growth crash.
12/08 AAA grades return for securities backed by riskier mortgages – Bloomberg Seems that there is no limit to "dumb money".

[Danny B]

The Eurozone is just a suicide pact.

The Germans consider the Italians to be lazy and indulgent. The Italians created an enormous bond market that is now melting.
12/09 ECB denies Italy’s plea for more rescue time – Investors
12/09 Europe’s comfort blanket is being pulled away – Telegraph
12/09 Monte Paschi stock, bonds collapse after ECB rejection – Zero Hedge
12/09 Market insanity reaches record highs – SRSrocco Report This is pre-collapse insanity. Wait til you see post-collapse insanity.

France has an enormous exposure to the debt of Italy; http://cdn.theatlantic.com/static/mt...nkExposure.png
"The euro zone isn't what economists call an "optimal currency area". In other words, it was a bad idea."
"Germany is contemplating new budget-saving measures. In other words, the euro has become an austerity suicide pact."
"phase Charles Smith and I labeled as the "Dis-Integrative Winter" in our analysis of long wave cycles: CYCLES - ANTI-GLOBALIZATION & THE END OF THE DEBT SUPER CYCLE.
There is a "Dis-integrative Winter" stage to all of our cycles."

"The eurozone has no such rule. This is a burning building you are never meant to leave. What is more, you are barricaded in. If you contemplate leaving, you have to face not having any notes and coins of your own; the need to default on debts that will be even bigger when your new currency goes down in value; and the collapse of your banks because being in the eurozone means they were able to borrow money they should never have been lent. "
The central banks were able to remove moral hazard from borrowing too much money. Did they even give any thought to what the result would be?
https://matasii.com/in-depth-the-soo...ro-experiment/

Locked in to the single currency, Greek debt was rated the same as German debt even though Greece was a serial defaulter. Right from the beginning, there was no hope of success. The Eurocrats planned to force a political union after the inevitable collapse. Apparently, they never entertained the idea that the collapse would drive the member States FAR apart. A lot of people are going to die from this experiment. NOBODY will be in the mood to form a political union.

"The cycle has changed and all of this is beyond government or banks to control the outcome. They are not intentionally doing this, for they cannot even understand human behavior no less manipulate it.

"The dollar is on the rise after the victory of Donald Trump in the U.S. presidential election but the computer projected this long before Trump said he would run." "As the dollar rises, those commodities will decline unless there is a real shortage in supply that dips below demand. It is all coming together and you better understand the trend or you will not survive."
https://www.armstrongeconomics.com/m...to-the-dollar/

Armstrong; "Everything is still on target for the move under $1,000 into next year." (gold) https://www.armstrongeconomics.com/m...nto-the-abyss/

"The elite and bankers can assume they have the power to manipulate, but they are just fools; drunk with their own importance. When they were wrong, and our forecasts were correct, like the collapse of Russia in 1998 which resulted in the Long-Term Capital Management collapse, they said I manipulated the world economy because I had more people than they did and my clients won while they lost."
https://www.armstrongeconomics.com/w...to-manipulate/

[Danny B]

Our approaching utopia

The self-appointed "elites" have lots of plans for us,,, for our own good. They envision a much better world. But, it is a world of pablum where everything works smoothly and nobody has to work hard.
Proof That The Elite Really Do Want A Global Society With No Possessions, No Privacy And No Freedom – InvestmentWatch
Their plans seem so much in contradiction to human nature.
One step on this road is to get rid of cash so that every person has access to the wealth that you created. Cash Is No Longer King: The Phasing Out of Physical Money Has Begun

It has long been postulated that the people at the apex of the pyramid of power initiated the looming crash. All they had to do was set the stage where bankers would be overcome by greed and cause a crash. The resulting scream for more inflation to rescue the banks was easy to predict. All moral hazard was removed by the backstop of the Central Bankers. After that, they just let nature take it's course. The Federal Reserve was key to getting the CBs to print in unison. Is it just coincidence that a member of the tribe is always in charge of the FED?
Are We Being Set Up For A Crash? Stocks Hit A Level Only Seen During The Bubbles Of 1929, 2000 And 2007

Greenspan and Bernanke created enormous inflation purportedly to save the banks. Because of the compounding nature of debt, the banks can't really be saved. BUT, it did give cover for all the CBs to put the presses in hyper-drive to save the bond markets. If a digital currency can be forced on us, you will have exactly as much money as they say that you have. There will be no need for private banks. The one bank will have every bit of data about you. The State isn't leaving any of this up to chance.
All Israelis will have to join biometric database from next year, minister says - Israel News - Haaretz.com

There was/is a test run in Kenya; Cashless Africa: Kenya’s smash success with mobile money
Sweden thinks it's great; https://www.theguardian.com/business...leading-europe
If you've seen "The Net" with Sandra Bullock, you don't have to imagine the total control over society that biometric ID and a cashless society would bring.
"They" envision getting rid of 90% of the population.

The Japanese show us what happens when you beat the people down and take away all confidence in the future. They refuse to breed and bring children into a dystopian world. The Europeans are doing much the same. They refuse to bring children into a world without hope.
This fits in well with the plans of the "elites". They will just repopulate The West with dumbed-down people who are easier to control and breed like rats. The Kalergi plan has been around about 80 years. http://www.theoccidentalobserver.net...design-part-1/
Angela Merkel recently won the Kalergi Prize. This isn't fiction.

Merkel will soon be gone (Armstrong). Renzi is gone. The West is voting against self-suicide at the hands of the elites with the generous help of the muslims. http://www.disclose.tv/news/the_kale...d_trump/131637

Socialism - Jewish Virtual Library
https://www.jewishvirtuallibrary.org...8_0_18779.html
For a variety of reasons Jews were attracted to socialism as it developed in Western Europe. Some regarded it as the building of a "just society" based on the ...
SOCIALISM - JewishEncyclopedia.com
http://www.jewishencyclopedia.com/ar...3822-socialism
Jews have been prominently identified with the modern Socialist movement from its .... While in Germany socialism has attracted individual Jews

There is NO POSSIBILITY of the left's view of a just society. People are born with wildly different amounts of talent and motivation. Herbert Hoover could write classical Latin with his left hand while he was writing classical Greek with his right hand. There is NEVER going to be general equality,,, above ground. Socialism works on the premise that all people are equal and should share equally in the fruits of productivity.

The West is suffering a terrible bout of Marxism at the same time that it is coming unglued from automation and general job loss. If the "elites" get their way, they will get control and WE will lose this; https://www.youtube.com/watch?v=mtB_K6ElacY
The world will descend into chaos worse than the ingrained chaos in the muslim home countries because, there will be no societal anchor.
https://www.youtube.com/watch?v=kyyYOF4r5NA

[Danny B]

GOV gets it wrong,,,, as usual

ALL States try to squeeze more and more money out of the productive sector of the population. Modi of India figured that he could scoop up $45 billion by cancelling most of the currency.
"Theoretically, by having a large amount of cancelled banknotes going unredeemed the Indian government could essentially pocket the balance, which was estimated to be as high as 21% of the currency being recalled — or roughly $45 billion."
He figured that people who held undeclared cash would just let it rot rather than declare it.
"Unfortunately for Modi and India’s central bank, this payday never materialized. As of now, over 82.5% of the recalled notes have been turned in, and it is estimated that by the time the redemption period is over on December 30th essentially all nullified notes will have been collected — white and black alike.

How the black market was able to take such large amounts of black money and redeem it via the demonetization program is not yet fully understood"

China, "Despite the government's best efforts, capital continues to leave the country at a brisk pace, with a balance-of-payments deficit through the third quarter of $469 billion. "
"Enterprising Chinese figured out that while they couldn't officially move money abroad to buy a house via the capital account -- individuals are barred from moving more than $50,000 out of the country each year -- they could create false trade invoices that would allow them to deposit money where they needed it. The result was a huge discrepancy between payments recorded for imports and the declared value of goods passing through customs, amounting to $526 billion in hidden outflows last year."

"The problem has only worsened in 2016. French investment bank Natixis SA estimates that outflows will total more than $900 billion this year, despite new restrictions on yuan movements"
"China's rickety banks, with delinquency rates of 30 percent, are receiving regular liquidity injections from the People's Bank of China." 30%, you don't say!
"It has been talking about deleveraging for more than a year, yet total social financing has grown by 15 percent year-to-date, about twice the rate of gross domestic product." 15%,, you don't say!
https://www.bloomberg.com/view/artic...pital-outflows

The miracle of free global capital flows is not looking so miraculous lately. GOV makes plans and the market shreds them.

What's going on lately with variable-rate loans?
The Variable-Rate World Stares Into The Abyss – Again - DollarCollapse.com
What about equities? 2007 All Over Again, Part 6: Stock Valuations Enter “Crash” Territory - DollarCollapse.com
"So is it no longer possible to make predictions based on pre-QE history? Or are there financial and economic laws that apply no matter what crazy new tools the world’s governments decide to employ?

Almost certainly the latter. Manipulating one part of the system – by, for instance, buying equities with newly-created currency – just shifts the pressure of financial imbalances to a different, harder-to-control place. "
2007 All Over Again, Part 6: Stock Valuations Enter “Crash” Territory - DollarCollapse.com
Commerce was augmented by ZIRP. But, ZIRP killed interest income. Manipulating one part of the system throws everything else out of balance. It was never very balanced to begin with. The woblin goblin looks to the next meeting of the FOMC to see what new instability is added.

[Danny B]

Moral hazard, labor tax, the dollar black hole

"But the gain won’t be worth the eventual pain. All the extra debt we’ll have to take on to generate even modest growth will have to be paid off somehow, and that will require an aggressive devaluation of the dollar. So…today’s strong dollar will give way to currency crisis in the future. "
John Rubino: Before the Storm | Phil's Stock World
The one unyielding mantra of the finance industry is that ALL debts must be paid back. The State usually tries to inflate the currency supply to diminish the actual cost of repayment. They usually knock off 50% by inflation.

It isn't working this time. There is "benign" inflation where prices and wages rise in tandem. There is bad inflation where prices rise but, wages don't. At one time, the purpose of the stock market was; to raise capital for commercial endevors. Since the State can now just print up money for commercial endevors, the stock market has no legitimate purpose. It exists just to raise the final price of goods and services.
BUT, when the CB/State creates money to finance the stock market, it negates market discipline and moral hazard. The same is true all through the finance industry. No moral hazard and no discipline.

Then, there is the question of taxes. Traditionally, man was NEVER taxed on his labor because that was all he had to survive. Commerce was taxed. The stock market exists to make money for investors. They don't actually add anything productive. It is often proposed that investors pay tax on their investments (Tobin Tax). This is a far more legitimate tax that a tax on a man's labor but, it is always rejected. Labor's share of the financial pie continues to shrink. Finance's share continues to rise.

For the last 4 decades, wages have been stagnant. America lost it's lock on manufacturing and had to compete with low-wage labor markets. By abrogating the gold standard, finance was able to keep the money rolling in,,, even though it was of deflated value. Since the finance industry was closest to the money tap, inflation affected it less that it did the working man.
The cumulative effect of the "inflation tax" and the labor tax continued to erode the purchasing power of the average man.

Finance needed ever-more inflation to make it's balance sheet look good. In a globalised world, this initiated a currency war. The whole point of the Bretton Woods agreement was to forestall future currency wars. A currency war is just a trade war by a different name. Currency deflation is substituted for protective tariffs.

"This time around it is nothing more than abject monetary devaluation. The Bank of Japan has accomplished in SIX WEEKS what previous took $260 BILLION and SIX MONTHS.

This is absolute madness. And it is going to ANNIHILATE US corporate earnings."
http://www.24hgold.com/english/news-...x+Capital&mk=1

OK, so, nothing new. Inflate/devalue to hold on to part of the manufacturing sector. China has had some big devaluations also. The flip side of the coin is; the FED isn't devaluing enough to keep the dollar from rising. A $ 900 billion outflow from China has to go somewhere.
12/12 The eurodollar market: it’s not working! – Capitalist Exploits
As the Euro goes into it's death throes, money flees to the dollar. The more money that flees, the more that the ECB has to print,,, the weaker the Euro looks. The ECB can only print EUROS and the markets need dollars to service dollar-denominated debt. There is a $ 10 trillion shortage of dollars.

The strong dollar becomes self-perpetuating.

[Danny B]

Only bad inflation in sight... Modi screws the pooch for the bankers

12/12 Shilling: strong dollar very deflationary for U.S. – Bloomberg
12/12 Inflation could be biggest market driver in 2017 – Market Realist
12/12 Good for the economy?: Inflation is finally perking up – USA Today
12/12 Oil prices soar on global producer deal to cut crude output – CNBC
Until you read about wage inflation, everything is deflation papered over with credit creation. Inflation is the only thing keeping the upper loop from crashing.

Modi has really screwed the pooch. He is trying to force millions and millions of Indians to put their money in a bank. Heaven forbid that they should just keep it safe under their own control.
"Modi's gamble is that the majority of workers will be compelled to open a bank account as sub-contractors refuse to pay in cash, bringing them into the formal economy and expanding the country's low tax base."
Ah yes, the tax base.
"India's decade-long construction boom created one in three new jobs as tens of millions of people made the journey from the rural hinterlands to seek employment in towns and cities.

For Modi, a healthy construction sector is vital if he is to fulfil his promise of boosting job creation for the one million Indians joining the workforce every month." 1 million a month!
Headed home: workers abandon building sites after cash crackdown | Reuters
Millions of Indian workers just packed up and walked off the job.