Economic pressures

[Danny B]

unloved economists... pressures in the bond market

Somewhere, I posted a summation from Jim Rickards of exactly which economic "rules" most accurately represent true economic activity. Austrian Economics is the runner-up as far as accuracy. WAY down the list is our current body of economic "law". Not only has much of it been incorrect, much of it has been opposite of reality. The FED completely controls academia as far as remuneration and publishing go. The economists just had a big pow-wow in Chicago. The humor should NOT be lost that they had their pow-wow in a completely corrupt and bankrupt city. The corruption is, of course, centered on GOV employees. https://mishtalk.com/2017/01/09/expl...ea-one-person/

The feces-for-brains economists lament the fact that nobody listens to them. A big part of the problem is that they believe that they live in a capitalist system. It's actually crony-capitalism mixed with a good dose of socialism. They had their big Pow-wow and are now ready to lead America out of the economic dol-drums. Not surprisingly, America has lost faith in them.

"endless discussion about how to rebuild trust in the discipline."
"left many at this conference questioning their place in the world."
"But a road map for regaining trust is elusive…"
"A separate survey from Marketplace-Edison Research, conducted in October, asked U.S. adults how much they trusted data about the economy that is reported by the federal government. A quarter of respondents said they “do not trust it at all” while another 19% said they somewhat distrust it.

That is difficult to comprehend at a conference like this, where 13,000 attendees assembled for more than 500 presentations, many of which are built around findings that heavily use that government data."
Feces in the cranium syndrome.

"This year, academics are out in the cold. During the election The Wall Street Journal contacted every former member of the CEA, including those going back to President Richard Nixon. None had been tapped as an adviser to Mr. Trump’s campaign, nor did any publicly endorse him.

The president-elect is “not particularly interested in hearing from the academic economist club,” Mr. Davis said."
https://libertyblitzkrieg.com/2017/0...t-credibility/

Academia has their collective heads up in the clouds. These clouds are brown and smelly
According to Martin Armstrong, the only people who truly understand the economy are the multi-national hedge fund managers who understand global capital flows. This makes sense because everything moves all over the globe. Academia is just too self-serving. As long as the follow the program from the FED and the bankers, they can't be counted on to have any objectivity.

The gold-bugs present a different story than the bankers but, you have to take into account that they too are biased. Just read everybody and come to whatever conclusion best seems to fit the facts.

Andy Hoffman writes very well even though he is centered on precious metals. The Death Throes Of ?Money? | SilverSeek.com
He writes about the "death of money". Money isn't likely to die as long as there is supply-and-demand for things that are needed for survival. The bond market is a different story.
Hoffman also writes about the death of the European Union. https://www.milesfranklin.com/death-...plosion-hence/
THAT is going to be very messy.

"Financial Repression – “Put inflation aboutabove? interest rates and to maintain them there” .. it’s being done by the central banks, and it could be forced by financial institutions upon investors by governments .. it’s all about governments trying to maintain & reduce the burden of government debt .. but now the need to repress is higher than after World War II, since there is also a lot of private debt as well" Financial Repression Authority

There is something like $ 13 trillion in negative-yield bonds. The bond loss is the percentage loss between inflation and yields. Normally, investors would sell the bonds and go to greener pastures. This forces the CB to raise offered rates. If there are no markets that offer a better return, investors move to gold to preserve value. It has been well-proven in the courts that precious metals have been suppressed.
If the sovereign bond markets melt down as Armstrong predicts, capital would have to move somewhere else. Stocks are over-valued by about 70% so that doesn't look good. Commodities depend on consumption from a consumer base that has falling wages.

The U.S. dollar has a great utility value because it is so widely recognised and accepted as a currency. It's pretty sucky as a store-of-value. In the role of store-of-value, gold is more widely accepted than the U.S. dollar. Turkey is the number one buyer of gold per-capita. The stash of private gold in India is about 20,000 tons. The State is adamant that all wealth remain IN the system so that the bankers and the taxman have access to it. BUT, the system just isn't that simple. If all "money" is debt money, how can it be considered wealth?
Bonds are debt-notes. Their value depends on the wealth of the State of issuance. GDP is a measure of the money in circulation at a given moment. Actual wealth is a different story. The wealth of America is falling and bond holders are scheduled for a big squeeze.

[Danny B]

The reserve currency= slow poison

States generally go off the gold standard any time that they are planning to go to war. That way, they can wage war on their credit card. America unwisely went to war in Indo-China while it was on the gold standard. In the summer of 1971, the gold outflow from the treasury was 100 tons a week. We went off the gold standard. Great Britain passed the baton of empire to America after WW II. Out of necessity, we have stayed off the gold standard.
https://srsroccoreport.com/u-s-empir...gold-standard/

As explained by Triffin's dilemma, the owner of the reserve currency holds a special position in the financial world. The whole world demands that we run a trade deficit so that they can hold our bonds as a store of wealth. They have financed our war-mongers.

Bloomberg says that cheap money is here to stay, https://www.bloomberg.com/view/artic...e-here-to-stay
Mac Slavo says that cheap money is coming to an end, The Era Of Cheap Money Is Ending: "This Is The Calm Before The Storm" | Zero Hedge
The Bank of England is out to lunch,,, still. Why modern monetary policy doesn't work – the models it uses are horribly out of date - MoneyWeek
Not surprisingly, internet sales and general poverty is killing retail outlets, "Sears is currently more than 1.6 billion dollars in debt, and they are losing more than a billion dollars a year. " "As you read this article, more than 95 million Americans are not in the labor force, and that number has grown by 18 percent under Barack Obama. "
It?s A Retail Apocalypse: Sears, Macy?s And The Limited Are All Closing Stores
I don't think that this is the "hope and change" that obummer had in mind.

1/10 The Mexican peso is crashing (again) to record lows – Zero Hedge I guess that they won't be able to pay for the wall.

Here is an excellent graph showing paper reserves in central banks. http://www.plata.com.mx/mplata/articulos/Res2016.png
Sr. Price writes an excellent article on the movement of wealth and currency from the reserve currency (RC) state(s) to the rest-of-the-world (ROW) States. The article is somewhat convoluted but, it is important to understand it.
http://www.plata.com.mx/mplata/artic...idarticulo=299
"International Reserves have been falling because they are made up of Bonds issued by RC, and these bonds are being sold off for cash; the purchasers may be either the banks of the RC or the RC Central Banks. In other words, Bonds held as Reserves are being liquidated by ROW Central Banks hungry for RC cash"
This is a very important concept to understand. Cash IS in demand. Bonds are NOT in demand.
"Inflation is always and everywhere, the result of governments and their banking systems working together to increase spending; inflation can be a long drawn-out process, little noticeable by the population. Deflation on the other hand, is the result of actions on the part of the public, and deflation can take place at great speed"
"There is an undesirable consequence for the RC in doing this, because the advantage for the RC of running a permanent trade deficit with ROW brings with it the inevitable demolition of RC industry, as imports, necessarily cheaper, overwhelm local industrial activity." Check

The State can easily bring about currency inflation, usually resulting in price inflation. Currency inflation to the State is as natural as water is to a fish. The State stands at the outlet of the printing press and spends it on whatever it wants. The State controls currency inflation. The public control currency deflation. The money supply includes currency AND credit. If the public refuse to utilize credit, the State can't do much about it. Cash is a debt-note just like bonds BUT, cash can be traded in the lower loop. Bonds can only be redeemed in the upper loop.

The reserve-currency status allowed us to wage LOTS of wars. It also allowed us to shut down domestic industry. We could buy anything and pay with confetti. The reserve currency allowed us to go around the world making war on anything that moved but, it is slow poison to the producing economy. We could have done things differently and enjoyed the "Peace dividend". BUT, money corrupts and attracts the already-corrupted. We are a nation focused on endless war and maximum killing. What does that do to us as a people.

U.S. military suicides remain high for 7th year - USA Today
Soldier Suicide Statistics In Israel: More Israeli Fighters Kill Themselves Than Die In Battle
I'm sure that the psychopaths don't lose any sleep.

[Danny B]

Latin socialism, slow meltdown of the Eurozone,, fear of the CB,, black magic

Chavez and Maduro in Venezuela showed that you can't make everybody rich by printing more money. Socialism just doesn't work that way. That's part of the reason that U.S. FED GOV only pushed "money" into the upper loop. The other problem with socialism is; the socialists tend to give jobs to their cronies regardless of their qualifications. This showed up in Venezuela where the radical lefties were given jobs running the oil industry. They screwed up so bad that oil production fell way down. It doesn’t matter that they have more oil than Saudi, they still have to get it to market.

VZ had so much income from oil that they started handing money out like it would never suffer an interruption. The interruption hit and the GOV tried to keep everything going with the printing press. Nobody wanted to export to them when they were killing their currency. While they had tons of income, they let their agricultural sector wither away. Now, they can't afford to import food. They've sold off half their gold because nobody wants Bolivars. It is fated to get worse.

Mexico has a LOT of oil but. "This deterioration is the result of “decades of bad management, lack of vision, negligence, abuse and in many cases, corruption.” The Mexican daily La Jornada went further, arguing that the company has been systematically “plundered” during successive administrations, including, of course, the current one."
"The Mexican government had used Pemex as an endless ATM, but now the oil company is stewing in a toxic mix. Read… Shrinking Oil Giant Pemex Starts 2017 on Wrong Foot"
Hideous Constellation of Threats and Challenges Facing Mexico | Wolf Street
GOV raised the price of gasoline by 20%. The result; "Hundreds of people were arrested and a handful of people killed over the past week as peaceful protests against the government’s hike of gasoline prices (by as much as 20% in some states) descended into widespread looting and rioting."
What will they do when things really get bad? The Mexicans have a basic socialist mentality. I travelled around there by road for 10 years. If you have nothing, they will generously help you out. If you have a lot more than you need, they will "share" with you. It's an attitude of cooperation that helps the survival of society. Sometimes it goes too far and the GOV expropriates a lot of private property.

The Eurocrats proposed various treaties to form the Eurozone. Lisbon, Maastricht, Rome, et al. When a State's voters rejected a treaty, they were forced to vote again and again until they got it "right". Knowing that the constriction of the Eurozone would produce more and more resentment, the Eurocrats maneuvered to squeeze out any vestiges of democracy. The whole idea was poorly conceived because it ignored human nature and precedent. So, a few years later, the problems come bubbling to the surface.
https://sputniknews.com/europe/20170...m-euro-demise/
https://sputniknews.com/europe/20161...isintegration/

The State creates monetary inflation and the public creates monetary deflation. The investors vacillates between greed and fear. The Central bank only knows fear. Fear of deflation. The investor can lose money but, the CB can't. Every time that fear creeps up on the investor, the CB pumps more free money into the system. Out of habit, the CB tries to stop ALL cleansing of the system. BUT, debt grows too high and fast when it is compounded. http://www.plata.com.mx/mplata/articulos/Res2016.png
Gold is the governor on the system but, gold has been pushed aside.

China "won" the currency war. This causes capital flight. Fleeing capital takes along with it, CONFIDENCE. Most of what keeps the bond market going is confidence.
China's S$5.5 trillion wealth products reel as bond binge unwinds, Banking News & Top Stories - The Straits Times

"The virtually bankrupt investment banks like JP Morgan and Goldman Sachs told the Fed and thus all central bankers what they needed to do to save the system and another massive dose of Black Magic was created to the extent of around $25 trillion. This made it possible for the bankers to hold onto their global financial empire and maintain control of the money."
"Since the crisis started in 2006, global debt has gone up by 70%."
"not due to a real improvement in productivity but mainly to global debt going from virtually zero one hundred years ago, to $230 trillion today. "
"The market which has gone up a massive 35 X over a 42 year period. This is a compound annual growth rate of almost 9%. That means that on average a stock market investor has doubled his money every 8 years. "

Yeah, on the backs of out falling wages.
https://www.linkedin.com/pulse/black...-title-publish

Recognising the demographic crash, the IRS pays you to have kids. "As one of the largest anti-poverty programs, the earned income tax credit paid out $72 million to 29 million families in 2014. In that same year, the additional child tax credit provided an additional $27 billion to 20 million families."
https://www.rt.com/usa/373275-irs-de...-returns-2017/

[bistander]

That much?

Recognising the demographic crash, the IRS pays you to have kids. "As one of the largest anti-poverty programs, the earned income tax credit paid out $72 million to 29 million families in 2014. In that same year, the additional child tax credit provided an additional $27 billion to 20 million families."

$2.48 per family average?

[Danny B]

000000000000000000000000

You would be amazed how often I find figures that are considerably OFF. I try to correct them. I didn't catch that one.
"During the 2015 tax year, the average EITC was $3,186 for a family with children (boosting wages by about $265 a month), compared with just $293 for a family without children. "
Policy Basics: The Earned Income Tax Credit | Center on Budget and Policy Priorities
million---billion,,, what's the difference?

[Danny B]

France, the drawbacks of globalization, GOV employees

The French election is coming up and things are getting hot.
1/12 Le Pen LEADS in poll for first round of French voting – Daily Mail
1/12 French newspaper ditches polls after failing to predict Trump or Brexit – Express
1/12 Macron gives speech in English and Le Pen blows her top – Local
1/11 Le Pen says all French banks have refused to meet with her – Bloomberg

The papers have long claimed that Le Pen was un-electable because she was too far-right,,,,, hoping that it would become self-fulfilling prophecy.
She would take France OUT of the EU. France is a beautiful country with several growing islamic hell-holes.
https://www.gatestoneinstitute.org/7...e-islamization
"An estimated 40,000 cars are burned in France every year "
"Boubakeur said that 2,200 mosques are "not enough" for the "seven million Muslims living in France." He demanded that unused churches be converted into mosques."
"Those who denounce the illegal behavior of fundamentalists are more likely to be sued than the fundamentalists who behave illegally." – Marine Le Pen, "

" Figure 5 above suggests that, on average, the paychecks of workers in 2017 will tend to purchase fewer goods and services than they did in 2016 and 2015. "
"In economic language, the world economy is becoming a “Zero-sum” game. Any gain in the production of goods and services by one country is a loss to another country. Thus, it is in each country’s interest to look out for itself. This is a major change from the shift toward globalization we have experienced in recent years."
https://ourfiniteworld.com/2017/01/1...-coming-apart/

" paychecks of workers in 2017 will tend to purchase fewer goods "
1/12 BofA finds consumer spending tumbled in December – Zero Hedge
1/12 Food prices rise as inflation returns to British supermarkets – Telegraph
Yep, price inflation in necessities cuts down purchases of everything else.
1/12 Those hostile to negative rates are ‘ignorant,’ Rogoff says – Bloomberg That would include, pension funds, hedge funds, insurance funds, retirees, savers, banks, et al, et al. There are a LOT of ignorant people and institutions.

1/12 Hawaii pension fund shortfall hits $12 billion – Civil Beat
1/12 Public pensions out of control in Texas’ biggest cities – Watchdog
Chicago public employees demanded raises of from 19---26%. If you think that GOV employees are not a big part of the problem, you should do further reading. If you are a GOV employee, you are probably painfully aware that you could never survive in the private sector.
1/12 Little done to rein in China debt – MSN Try dragging your feet to stop a runaway freight train.

[Danny B]

various headlines,,, various BS

1/12 German GDP grew 1.9% in 2016, strongest rate in five years – Economic Times That growth includes all the new money (bonds) printed.
1/12 China credit growth exceeds estimates, lending remains robust – Bloomberg Robust lending to service previous debt.
1/12 Senate opens Obamacare repeal drive with overnight marathon – CNN The fur is flying.
1/12 Massive VIX warning for all traders – Active Trading Partners VIX is the "fear index". They don't have a "greed" index.
1/12 Fiat crashes, EPA accuses carmaker of cheating emissions tests – Zero Hedge Pox Americana is looking high and low for anybody they can fine the snot out of.

1/12 Bitcoin collapses, Chinese latecomers get fleeced – Wolf Street Ah, did Chinese gold collapse?
1/12 Perils of the Icarus Trade as the world runs short of dollars – Telegraph Ah yes,, demand for cash, not for bonds.
1/12 Stocks extend losses on Trump policy disappointment – CNBC She is a tempestuous slut.

Kunstler has something to say, America Versus the Deep State - KUNSTLER
"For more than thirty years, we’ve been borrowing too much money so we can pretend to afford living in a blue-light-special demolition derby. "

[Danny B]

Trying to force price inflation when there is no wage inflation

I still have a business card that a guy gave me in 1971, "will paint any car, any color in Urethane for $35". He painted my '65 Impala with a 2-tone fade-in of ralley green and Camaro green for $35, materials included . That was then, this is now. Motel 6 now charges more than $6.

Those closest to the money spigot have to keep the money flowing. Otherwise, their income would be commensurate with their actual contribution to productivity. This includes just about everyone in the finance industry. Of course, it includes most of GOV also.

Mish has written a good article about the subject.
"Under President Obama, the percent of income going to the top 1% went from about 18% to about 21%.
The entire jump from under 15% to 21% of income going to the top 1% occurred under Clinton and Obama.
Under Reagan, start to finish, the percent of income going to the top 1% went from about 10% to over 14%"

ALL GOV is socialist and the demands and needs of socialism grow without self-imposed limits. The only way to finance this is to pump up the banking sector and slurp up whatever can be squeezed from the bankers. Socialism is the firewall between non-producers and Darwinian pressures. Gold is "Kryptonite" to socialism because it prevents unlimited expansion of State give-aways. While a social safety net is a good idea, it ALWAYS breaks the bank eventually. Unfunded liabilities in America are about $ 213 trillion so, America has travelled down a well-worn path.

The CB inflates everything in sight until the system breaks. All socialist and democratic systems in history have crashed. The inflation from the CB eventually outruns the actual productivity of the State and the bond market blows up. All the gains from the inflation have gone to the people who already have lots of money but, the eventual losses will hit them also.

"Gold Window Synopsis

1. Total credit exploded from $1.7 trillion to $63.5 trillion at the end of 2015.
2. To service that growing pile of debt, the Fed had to keep slashing interest rates.
3. Instead of allowing consumers to benefit from technological advances that are inherently price deflationary, the Fed sought to increase inflation. This is to the benefit of the banks and already wealthy.
4. A policy of 2% inflation coupled with no restraints on trade deficits (thanks to removal of the gold window), encouraged the outsourcing of jobs.
5. After the dot-com bubble burst in 2001, the Greenspan Fed stepped on gas blowing the biggest housing bubble on record. Then the Fed bailed out the banks, the asset holders and the wealthy. This chain of events left the median person being worse off than before.
6. Given that executive pay is based on performance, rising share prices further benefited the top 1%.
7. Fed policy itself, coupled with rampant expansion of credit thanks to Nixon closing the gold window is totally responsible for the rising income inequality from 1971-present."

"There is no answer because history and logic both show that concerns over consumer price deflation are seriously misplaced.

The BIS did a study and found routine deflation was not any problem at all.

“Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive,” stated the BIS study."

"A good starting point is “why” income inequality is rising as opposed to investigating ridiculous wealth-transfer schemes and government stimulus projects in a fool’s mission to fix a problem that Summers, DeLong, Bernanke, and Krugman all fail to understand."
https://mishtalk.com/2017/01/12/secu...ion-challenge/

The CBs are terrified of price deflation because the credit airplane can only stay aloft of there is systemic inflation,,, usually resulting from price inflation.
In a healthy economy, there is a natural price inflation driven by demand. In our fully automated system, there is no limit to supply so, we rarely see price inflation driven by supply constraints. To keep the credit airplane flying, the CBs must create price inflation artificially.
The "benefits" of CB inflation have only reached a small percentage of the population. The remainder of the population is experiencing WAGE deflation so, demand is shrinking.
The less we see of demand-driven price inflation, the more that the CB has to try to force artificial price inflation. They have had MAJOR successes in the upper loop. They have failed in the lower loop. As they drive up prices of basic necessities, they have driven down consumption of everything else.

As more investors abandon the bond market, the CB has to buy more and more. This extra printing leads to more price inflation in the upper loop. Part of this bleeds-over to the lower loop and diminishes the purchasing power of the bonds. The "bond vigilantes" demand higher interest. The CB prints more
to meet the higher cost of debt service.

[Danny B]

Sliding down, Armstrong, Roberts and China

There is no shortage of BS statistics from GOV.
"However, the BEA calculates the saving rate as the difference between incomes and outlays as measured by their own assumptions for interest rates on debt, inflationary pressures on a presumed basket of goods and services and taxes. "
" What it does not measure is what individuals are actually putting into a bank saving or investment account. In other words, the savings rate is an estimate of what is ‘likely’ to be saved each month."
"As more evidence of consumer’s struggling to maintain their standard of living, while consumer credit has continued to climb, retail sales remain weak as shown below." Yep, we are increasingly living on credit.
BUT, our delinquency rate is approaching 20%.

"Not surprisingly, since the election, “expectations” of increased sales have surged. However, “actual sales” have been on the decline for several months due to the constriction of consumer demand due to increased debt and weak wage growth as noted above. "
We're slowly spending ourselves down,,, charging and defaulting all the way.
https://realinvestmentadvice.com/3-t...y-uncertainty/

The CBs removed risk and started a big party. The party has gotten out of hand because nobody ever lost any money. They just kept gambling.
"Capitalism without bankruptcy is like Catholicism without hell. And right now, we need to audit and abolish the Fed, the Bank and the ECB, which started this mess, and slay the zombies. "
Mitchell Feierstein: Abolish central banks and slay the zombies | London Evening Standard

Rense; Beijing Warns US Only 'Large Scale War' Can Stop
China From Accessing Its South China Sea Islands
1/12 China should be barred from South China Sea islands? – Reuters
China-US WAR May Be Inevitable - Chinese Media
"China has not declared the Gulf of Mexico or the seas off the California coasts to be “areas of Chinese national interest,” but the killer witch Hillary in the regime of the Nobel Peace Laureate declared the South China Sea to be “an area of US national interest.” This is provocation beyond provocation."
Ten Aircraft Carriers Aligned in a Row -- Paul Craig Roberts - PaulCraigRoberts.org
The article has an interesting report on copper.

The BIS is buying hundreds of tons of the "barbaric relic" Gold swaps by BIS exploded in 2016 from nothing to record level | Gold Anti-Trust Action Committee
"Your liberty and human rights are in the hands of every petty government officer because they get to do whatever they desire and it has become your burden to go to court to PROVE you have any human rights. This is what happens in all republics. Whenever you have a political class, they always exert their power against the people. There is ABSOLUTELY NO HISTORICAL EXCEPTION!"
"Politicians often promote the least ethical people to various positions to ensure that they will have no loyalty, except to the person of their benefactor."
"They can say whatever they desire and the likelihood of you prevailing in a court of law is somewhere below zero. There are no fair trials. They do not exist anymore. All that is left is the Crash & Burn. Then we will get the chance to restart.
It was Ben Franklin who warned against this legal system. He proposed that the legal community should nominate all judges. They will always nominate the best so they get rid of the competition. That was the Scottish system. The Constitutional Convention overruled Franklin to ensure government would control the courts. This is what we get – total corruption and no rule of law."
https://www.armstrongeconomics.com/i...eir-employees/

[Danny B]

Debt that won't go away,, PBGC,,Pensions WILL go away

This is what Trump inherits; http://i0.wp.com/money.visualcapital...art.png?w=1360
"Back in 1979, the debt-to-GDP ratio was a modest 31.8%, and the federal government only had an outstanding tab of $826 billion. Fast forward to today, and the perpetual borrowing has added up.
The debt-to-GDP is now 104.2%, with the total debt burden nearing the $20 trillion mark." NOT including unfunded liabilities.
"On a “per person” basis, each person in the U.S. owes $61,300 – the second highest in the world. Per taxpayer, however, that amount balloons to $167,000."
Visualizing Donald Trump's $20 Trillion Problem | Zero Hedge

1/13 Trump will soon be begging the Fed for QE4 – CNBC It's NOT that simple.
"Next up is a redo and revamp of those economic systems, but that is not going to be easy, and may not get done at all. The resistance may be too strong, warfare -economic or physical- may seem like a way out, there are many unknowns. We could, ironically, get quite far in that redo if we simply cut all the waste for our economic processes, but then again, that would have us find out that much of the system runs entirely on wasting stuff, and wasting less kills the system."
"It’s not even complicated. This week there was a report from Elevate’s Center for the New Middle Class that concluded that half of Americans, 160 million people, can’t afford to have a broken arm treated (at $1,400). And sure, you can say that perhaps that number is a bit too high, but there have been many such reports, that for instance say the majority of Americans have less than $1000 in savings, and can’t even afford a car repair."
https://www.theautomaticearth.com/20...an-be-a-*****/

The Economist is the mouthpiece of the elites. They are all excited that inflation is returning. They are definitely out of touch. Inflation is on the way back in the rich world, and that is good news | The Economist
Here is something that is a more accurate portrayal. The Psychology of Soft Slavery : Waking Times

Multiemployer plans are insured by the US Federal Government’s Pension Benefit Guaranty Corporation (PBGC). But PBGC is itself in danger of going broke.
"In the fiscal year 2015, PBGC paid out nearly $6 billion in benefits to participants of failed pension plans, increasing the agency’s deficit to $76 billion. The PBGC now has $164 billion in obligations and just $88 billion in assets.

When this was reported to Congress, it passed the Kline-Miller Multiemployer Pension Reform Act of 2014, allowing pension plans to ask permission to cut benefits to its plan participants."
They're not only cutting, they're actually taking back money that they paid out.
"The ripple effect could be enormous: PBGC is the ultimate backstop for some 22,000 single-employer pension plans and another 1,400 multi-employer pension plans covering 40 million participants."
Here is an important detail. "And this, remember, is happening at the tail end of a 30-year bull market in bonds and a 7-year bull market in stocks, which took the main asset classes held by pension funds to record valuation levels. So the rubber truly meets the road during the next recession when stocks will, if history is a reliable guide, drop by 20% or more (probably 50%). The current gaps in thousands of pension funds will become gaping holes"
http://dollarcollapse.com/pension-fu...ing-gets-real/

"Unfortunately, there is as yet no known cure to this virus. ‘The WHO therefore recommends complete avoidance of “Reality” as the only effective strategy for those wishing to remain as Mainstream Economists’, Dr Cahuc concluded."
https://www.elgaronline.com/view/jou...2017.01.08.xml

[Danny B]

Obummercare and other gifts to the cartels

Roughly 45% of Americans don't pay any federal income taxes because they don't make enough money. As we slip farther and farther down to a global mean wage, fewer pay taxes and more are supported by GOV. 51% of Americans receive a check from GOV.
The same falling-wage problem affects the upper loop of the economy. We just don't make enough money for the finance industry to survive. The TARP money was a gift to the banks when our wages were insufficient to keep them in business. ZIRP was a huge gift to the banks because they didn't have to pay interest on the depositor's money that they held. This lost income to depositors amounted to about $ 400 billion a year. BUT, ZIRP had a poisonous side to it too.

Not only did the depositors have to go without interest-income, the banks did too. Hedge funds, pension funds and insurance companies also need interest-income to stay solvent. There is plenty of literature about the death of the pension funds. LOTS of hedge funds are closing.

What about the survival of insurance companies?
" And now, thanks to the "Affordable" Care Act, you can now be fined for not forking over whatever insane price increases the healthcare cartel decides to dream up from their government protected boardrooms."
"healthcare insurance options in many states have been vastly reduced as carriers claiming losses, while massive premium increases have been justified also on the basis of losses and reduced profits"
"top five health insurers — UnitedHealth, Anthem, Aetna, Humana and Cigna — have doled out nearly $30 billion in stock buybacks and dividends from 2013 to 2015. (The Supreme Court ruled in favor of the Affordable Care Act in 2012.)"

"Fun fact: during the first 26 years of its existence, the US income tax code grew by 104 pages. Over the past 30 years, it has grown by 50,000 pages."
"Obamacare Benchmark Premiums to Rise 25% in Sharpest Jump Yet"
"the electorate anger is that the same government that forced Obamacare on everyone is also the same government that swears that health care inflation is running at only 2.5% to 3.5% per year over the past few years"
"In total, US health care premiums have fully tripled since 1999."
https://www.peakprosperity.com/blog/106107/mad-hell
Obamacare was just a big gift to the insurance companies to keep them solvent when their customers were/are all broke.

Wages have gone nowhere for the last 20 years.There is no more "fat of the land" to keep all the parasites going. Millennials earn 20% less than Boomers did at same stage of life
The State is the friend of the rich who control it. It is NOT your friend. 1/15 Fed may step in to protect corporations from Americans’ rising wages – Birch Gold
As wages in the lower loop slipped away, the upper loop was forced to print more money to keep things going in the upper loop. Here is an article with EXCELLENT graphs that make it very clear about the new "highs" that we are achaiving. RealVision's 15 "Killer Charts" For Q1 2017 | Zero Hedge
The upper loop doesn't want to shrink no matter what happens to actual wealth production by the lower loop. So, what will the result be?
1/15 Are you prepared for the great financial enema? – SRSrocco Report

1/15 What if the natural real interest rate is negative? – Seeking Alpha Yes grasshopper,,, what if population growth is negative? Ref Japan
The PTB just have no idea whatsoever of how scientific and cultural changes are going to play out. They want to maintain the status quo when, it just isn't possible. https://medium.com/abundance-insight...f74#.ls1yuvs59

1/13 The utter stupidity of the new Cold War – Zero Hedge It's not stupid if it makes money for the offence industry and their bankers.
1/15 Investors are bracing for a massive stock-market selloff – MarketWatch Don't worry, the FED will buy everything.
1/15 Be prepared for a violent Fed reversal – Daily Reckoning Are they going to cram the monetary gearbox into reverse at 60 mph to screw Trump?

1/15 6 in 10 Americans don’t have $500 in savings – CNN No problem, uncle Sam will take care of them for the rest of their lives.
Our wages went away but, the financial industry grew and grew. In the balance between greed & fear, the FED always managed to wipe out fear. With moral and financial hazard removed from the markets, money flowed into bad investments. Bad investments climb and climb. The FED has to buy up defaulting paper more and more.

[Danny B]

Marginal productivity of debt.,,, reproductive strategies

Retail sales have fallen to online sales. Retail banking has fallen because of online banking. http://i2.cdn.turner.com/money/dam/a...es-780x439.jpg
Wells Fargo is closing over 400 bank branches - Jan. 13, 2017

Long explanation;
"But soon enough some banks joined the conspiracy and started sheltering the fictitious bills in their portfolio of assets. For the Acceptance House and the conspiring banks this was a lucrative business. It allowed them to pocket the spread between the higher interest rate and the lower discount rate, to which they were not entitled. They wanted to profit but without taking risks. Not only did they take no risks, neither did they provide a service to society that might have justified the profit. The business of selling fictitious bills against buying bonds is called illicit interest arbitrage."

"The speculator has no right to shift his risks onto the shoulder of society"
http://www.24hgold.com/english/news-...ntal+E.+Fekete

It won't post so, I'm going to try to break it up

[Danny B]

second part

"The key to understanding the problem is the marginal productivity of debt, a concept curiously missing from the vocabulary of mainstream economics. Keynesians take comfort in the fact that total debt as a percentage of total GDP is safely below 100 (no longer)in the United States while it is 100 and perhaps even more in some other countries 300% in a few). However, the significant ratio to watch is additional debt to additional GDP, or the amount of GDP contributed by the creation of $1 in new debt. It is this ratio that determines the quality of debt."

"If, as in the worst-case scenario, the ratio falls into negative territory, the message is that the economy is on a collision course and crash in imminent. Not only does more debt add nothing to the GDP, in fact, it causes economic contraction, including greater unemployment. "
"Keynesians are watching the wrong ratio, that of debt-to-GDP. No wonder they constantly go astray as they miss one danger signal after another. They are sailing in the dark with the aid of the wrong navigational equipment. "

"the marginal productivity of debt has fallen below the crucial level 1. When marginal productivity fell below $1 but was still positive, it meant that total debt (always 'net') was rising faster than GDP. For example, if the marginal productivity of debt was ˝, then $2 in debt had to be incurred in order to increase the nation's output of goods and services by $1. An increase in total debt by $1 could no longer reproduce its cost in the form of an equivalent increase in the GDP. Debt lost whatever economic justification it may have once had."
"The decline in the marginal productivity of debt has continued without interruption thereafter. "

"As long debt was constrained by the centripetal force of gold in the system, tenuous though this constraint may have been, deterioration in the quality of debt was relatively slow. Quality caved in, and quantity took a flight to the stratosphere, when the centripetal force was cut and gold, the only ultimate extinguisher of debt there is, was exiled from the monetary system. Still, it took 35 years before the capital of society was eroded and consumed through a steadily deteriorating marginal productivity of debt." (Spending ourselves down)

[Danny B]

Third part

"The year 2006 was the watershed. Late in that year the marginal productivity of debt dropped to zero and went negative for the first time ever, switching on the red alert sign to warn of an imminent economic catastrophe. Indeed, in February, 2007, the risk of debt default as measured by the skyrocketing cost of CDS (credit default swaps) exploded and, as the saying goes, the rest is history."

"Why is a negative marginal productivity of debt a sign of an imminent economic catastrophe? Because it indicates that any further increase in indebtedness would necessarily cause economic contraction."
"In view of the fact that the marginal productivity of debt is now negative we can see that the damage-control measures of the Obama administration, which are financed through creating unprecedented amounts of new debt, are counter-productive. Nay, they are the direct cause of further economic contraction of an already prostrate economy, including unemployment."
http://www.24hgold.com/english/news-...ntal+E.+Fekete

Big cracks in the system; These 8 men are richer than 3.6 billion people combined - Jan. 15, 2017

We suffered price inflation but, NO wage inflation. Home ownership is WAY down. The other big-ticket item is , children. So, we cut that out too. GOV opened the southern border because it is cheaper to poach people from a high birth-rate State than it is to grow them at home. Mexico's fertility rate dropped from 6.2 to 2.6. Most of the flow stopped. GOV pumps money into programs to help finance the production of children but, it just isn't enough.
$1/4 million to produce a child for just 17 years does NOT include higher education.
Cost of raising a child: $233,610 - Jan. 9, 2017

[Danny B]

Fourth part

Apparently, GOV is experimenting with bringing in warm bodies from societies that still have a high birth rate. BUT, they have an entirely different reproduction strategy that runs counter to what rational, thinking societies use as reproduction strategy.
"There are two basic reproductive strategies according to the r/K Selection Theory.* r is the reproductive strategy used by populations with high mortality and abundant resources. The strategy is basically to reproduce as quickly as possible, with quantity over quality of offspring, and little or no parental support."

"K is the reproductive strategy used when there is competition for limited resources among members. The strategy is basically to delay reproduction, select mates carefully, and monogamy, with quality over quantity for offspring, e.g. long maturation of offspring and delayed sexual activity"
The Rabbit, the Libertarian, and the Wolf: The Truth about r/K Selection Theory – TRUTH IS JUSTICE