Economic pressures

[Danny B]

Creating new money proportionate to the growth in prductivity

If money is pumped in to the economy via the upper loop, the bankers and speculators are happy. If money is pumped into the economy via the lower loop in return for productive work, the welfare of the general population improves. Ben Franklin said that the colonies just printed up whatever money was needed to keep the economy circulating. Adolph Hitler instituted a program that paid for civil works and other productive enterprise. Just as Ben got a war, Adolph got a war.
Socialism never works because it kills motivation. The system used by the colonies paid people to work. You still had to be motivated. If a top-down banking system steals half of the proceeds of your labor, this too kills motivation.
With our current system, the money is pulled away from the producer and, locked away in financial instruments. In recognition of this fact, there are proposals for a universal basic income. The State and the bankers only have whatever money they can squeeze out of the productive loop. This has crashed and, they need to print up gobs of money to make up the difference. The lower loop just can't afford the upper loop. The UBI would reflate the lower loop so that the State and bankers could siphon off enough money to keep them going.

OK, how much money should be printed to reflate and maintain the lower loop?
"In the early 19th century Guernsey was mired in poverty with narrow mud roads, little employment and a declining population. The island had a debt of £19,000 which required the payment of interest amounting to £2,400 out of an income of £3,000 per annum. The Guernsey government printed £6,000, of which £4,000 was used to repair the infrastructure. Each year more money was printed which was used in maintenance and other social improvements such as colleges of education. By 1958, over £542,000 had been printed yet the island did not undergo any inflation."

"The proposal here is that currency should be directly related to the Balance of Payments (BOP), i.e. the productive capacity of the nation. Britain’s BOP was nearly 6% in deficit in 2016. For many decades it has been in deficit and yet, for the reasons mentioned above, the £Sterling has been so inflated that it is less attractive to manufacture in UK as compared with making in China or the East. If in the past, £Sterling had fallen in direct relationship to the nation’s productive capacity, the price of manufactured goods would have remained competitive and businesses would have invested in UK industries. If printing money were carried out to an uncontrolled level, the nation would be unable to afford to import essentials"

"Printing money for investment cannot be carried out indiscriminately and the establishment of a ratio between the productivity of a nation and the amount of capital growth would mean that as money was printed, the currency would be devalued. Devaluation would have the effect that inflation would rise axiomatically which would reduce imports as their costs rose. This would provide a further discipline to limit the excess printing of money."
Why it's time we manufactured money as we manufacture goods - Director of Finance Online

[Danny B]

The CBs arrive at the event horizon

The Central banks, especially the FED have painted themselves into a corner. Their actions have doubled the cost of everything in the West, Competition from low-wage markets like China, India, Brazil, Viet-Nam, et al has gutted the western economies. The Western CBs have bought up EVERYTHING to maintain the price structure of the financial markets.
"By 2017, the Bank of Japan was the owner of three-quarters of Japan’s exchange-traded funds, becoming the major shareholder trading in the Nikkei 225 Index."
"The Swiss National Bank is expanding its quantitative easing policy by including international investments. It is now one of Apple’s major shareholders, with a $2.8 billion investment in the company."

The CBs have tried to hold up the value of all western markets. There was much speculation as to whether or not, the FED was going to throw in the towel. They can raise rates and bring down much of the economy BUT, they will attract investment capital. I have NO idea where this capital will come to rest when the whole economy blows.
There has been endless speculation as to whether or not they will actually raise rates.
3/22 Fed raises rates 25bp – where are we in the market cycle? – CNBC
3/22 U.S. Fed may hike rates up to four times this year – Bloomberg
The FED is a slow learner. They stuck with QE in spite of the fact that it benefited the upper loop at the expense of everything else. US GOV wanted QE to inflate away the burden of debt service, hoping to get price inflation from currency inflation. Nowhere in the rule book did it mention that you can't get price inflation without a WAGE-price spiral.
The FED is taking baby steps but, it is raising. The BIS insists that the CBs must stay the course. Super Mario seems to have misplaced that memo.
The 2008 rescue was a temporary measure that was doomed to failure. It had no way to address the disparity in wages between the East and the West. It had no way to address the disparity in the cost of finance between the East and the West. As transportation and communication got ever-more cheaper, the imbalances got ever-more strained.
The corporatocracy depressed wages to maintain profits. This was short-sighted because they impoverished their customers.
The Central Bank Bubble: It Will Be Ugly - Gold Telegraph

3/22 White House to penalize China for intellectual theft – CNBC
Chinese apply for more patents than U.S., Japan, Korea, Europe ...
https://www.pressherald.com/.../chin...s-japan-korea-...
Dec 6, 2017
3/22 Twitter CEO says bitcoin will become world’s ‘single currency’ – Coin Telegraph
3/21 Bitcoin proving to be nothing more than a con – NY Post
3/21 U.S. mortgage refinancing drops to nine-year low as rates rise – Bloomberg No problem, the hot money pays cash.
3/21 U.S. starter homes scarcer, pricier, smaller, more run-down – Bloomberg

[Danny B]

March 24 and the petro Yuan

When the USSR collapsed, there was a collapse of Russian bonds. This would have taken down LTCM and brought down much of the Western financial system. A rescue was engineered. Jim Rickards was the lead counsel in the group effort to save the system.
A few years back, the US's 14 intelligence agencies figured out that something was wrong with the American economy Intelligence, my arse.
Anyway, they evidently didn't have anybody in-house who knew anything about finance. They called Jim Rickards and asked him to lead a group that was doing a war-game scenario simulation of the economy on the DOD computers. Rickards knows the bond markets. They set the whole thing up on DOD super computers and, came to the conclusion that the economy was going to collapse. I'm absolutely sure that the DOD computers didn't have the depth of information that Armstrong has.

Rickards is something of an attention hound. Just the same, he has a lot of experience.
JIM RICKARDS - End of March, Elites Will Block Your Access to Your Own Money
https://www.youtube.com/watch?v=4EXY0XNCeXY&t=66s
Jim Rickards and David Stockman The Next Financial Crisis on March 24, 2018
https://www.youtube.com/watch?v=emBwSohfvTk
The net is ablaze talking of the crash resulting from the introduction of the Petro-Yuan. Keep in mind that no State can print currency and call this "reserves". They must sell stuff to get dollars. THEN, they have currency reserves. They sell us stuff on credit and take treasury bonds as payment.
The petro Yuan will be an oil futures market. States no longer need to hold dollars to create forward contracts in oil. The only way that States can sell us stuff to earn dollars is; they must undercut our domestic manufacturers. Since US bankers have your savings to front-run everything that you buy, everything is doubled in cost. Many States find it very easy to undercut US domestic prices.

The original and ONLY reason for the bank system is; to promote the productive economy. This has been turned on it's head in America. The productive economy is held in thrall to the bankers. China has a roughshod public banking system that can consistently undercut the price / cost of American finance. We can't compete in international markets.
The introduction of the petro-Yuan will incentivise many groups to abandon the very expensive dollar.
The US military has already done the same thing.

The reserve status has meant that exporters must hold a running negative account balance on their exports to America. We buy about $1.5 billion a day more than we sell. At what point will exporters no longer accept dollars? About 95 million barrels of oil are consumed every day. About 19.5 million in America. Selling oil contracts in Yuan will send shocks through the markets.

At the same time, the U.S. is cutting back the supply of dollars to international markets. They desperately need dollars for dollar-denominated loans. Many States have done currency swaps with China. One could guess that they will use Yuan for oil contracts and, use their dwindling supply of dollars to service dollar loans.
I presume that there will be a big shock to markets. I doubt that it will all come crashing down on march 24.

[Danny B]

RE speculators,,, wages

Here is an article on cumulative advantage & winner take all. It fails to mention that capitalism without morality is (financial) law of the jungle.
https://medium.com/the-mission/the-1...s-d92ca43baa0e
We had the reserve currency but, it was locked into the gold standard. We could not run a trade imbalance. We had to kill Bretton Woods to pump up credit enough to become a war-monger.

Median home prices, https://imageproxy.themaven.net/http...nk66EUSYnca44w
"The median wage rose from $14.15 in 2005 to $17.81 in 2016, a percentage increase of 25.9%.

The median new home price rose from $228,300 in 2005 to $335,400 in 2016, a percentage increase of 46.9%."
https://www.themaven.net/mishtalk/ec...L02q-0HMfgCx3w
There is / was FAR TOO MANY PEOPLE trying to rent out their money in lieu of actually doing something productive. In trying to save the faux economy, the FED tried to save all those people. The hot money flowed into every nook and cranny. I suppose that the FED hoped that the money would remain in the upper loop. It just didn't happen that way. Some of the money flowed into the lower loop. Residential RE was considered a good store of value.

"houses have been turned into popular financial assets for yield and trading — a whopper 37% of all purchases last year were to non-end-users "
"Based on the formations and construction data, rolling oversupply is exactly where is stood at Peak-Bubble "
" Household Formations vs Housing Completions About the Same as Peak Bubble 1.0. If the market was so wildly oversupplied then, why isn’t it now? "
“we need 1.5 million housing starts each year just to keep up with new households being formed”.
It sounds great, but it’s fake news. "
"Bottom line: At peak Bubble 1.0 in 2007 the market was oversupplied by 7.887 MILLION units based on household formations. Today, the market is oversupplied by 7.905 MILLION, as well. "
The article has a great graph showing that people are just not forming new households. They're all living in their patent's basement.
https://mhanson.com/3-17-hanson-hous...re-type-cycle/

There is a 23.2% gap between the trendline and, what people are actually spending.
http://realinvestmentadvice.com/wp-c...ita-031818.png
The rapidly growing gap between disposable income and, the cost of living.
http://realinvestmentadvice.com/wp-c...ing-022718.png
http://realinvestmentadvice.com/rece...l-be-too-late/

3/20 Four days to trade wars: can stupidity be avoided? – Mish Can it be embraced?
3/20 Days before selloff, tech hit a milestone not seen since 2000 – Bloomberg
3/20 Ultimate indicator suggests US never financially recovered – Econimica
3/20 Bitcoin is unfolding like the dot-com crash — just 15 times faster – CNBC
3/20 Tech world experiencing a major ‘trust crisis,’ futurist warns – CNBC Probably because of life-to-death surveillance.

[Danny B]

Which way Russiagate?,,. Collapse of something or other

Kunstler writes about the criminal crescendo created during the final months of the Obummer presidency. As Trump got more popular, the criminals got more desperate and blatant. How will this mountain of criminal actions be treated?
"I suspect there are basically two routes through this mess. One is that the misdeeds of FBI officers, Department of Justice lawyers, and Intel agency executives get adjudicated by normal means, namely, grand juries and courts. That would have the salutary effect of cleansing government agencies and shoring up what’s left of their credibility at a time when faith in institutions hangs in the balance.

The second route would be for the authorities to ignore any formal response to an evermore self-evident trail of crimes, and to allow all that political energy to be funnelled into manufactured hysteria and eventually a phony provocation of war with Russia. Personally, I’d rather see the US government clean house than blow up the world over an engineered hallucination."
If You Come to a Fork in the Road, Take It - Kunstler
Will the deep State take down the world in the fight to avoid castration? Dunno.

Armstrong writes about preppers.
"I have recommended keeping a stash of food, but not for the reasons they put out there by the doom & gloom people. The winters are going to keep getting colder. As they do, this will also disrupt the food supply. I have warned that historically, it is Global Cooling that kills off people – not Global Warming. Additionally, as political unrest rises, there will also be a disruption in the food supply. "
"There is simply a cycle where we all come together to form great societies, the ruling class becomes greedy, and then the cycle turns we migrate back to suburbia."
"The political change we face is the collapse of socialism. Of some people will immediately disagree and say it is capitalism. Sorry, pensions are part of socialism – not capitalism. That DOES NOT mean the socialists go down without a fight. "
https://www.armstrongeconomics.com/w...he-right-page/

Armstrong sees a socialist under every rock. He laments the collection of taxes. He makes no mention of the enormous riches that are channelled to the powerful corporations from these taxes. He makes no mention of crony capitalism that is just socialism for the rich. Socialism for the rich is now costing 10 times what socialism to the poor costs. $1.5 trillion vs $15 trillion. He makes no mention of the horrendous cost of wars that are primarily initiated by the bankers. He laments the public pension system. He makes no mention of the fact that the banks take our money and front-run everything that we buy. We can't save enough for retirement. 50% of the cost of everything that you buy is for finance.

Naturally, he is a fan of Any Rand. "Despite arguing that government benefits constitute an immoral redistribution of wealth, Ayn Rand received Social Security payouts later in life."
Like Ayn Rand, Armstrong sees everything in black & white. Private enterprise is too cost conscious to do R&D in many areas. DARPA and the space program have created enormous spin-offs
https://spinoff.nasa.gov/
https://www.mensjournal.com/gear/dar...ions-20140108/

Pure capitalism is a predatory system when there is no State regulation. Here is a graph of interest rates. https://d33wjekvz3zs1a.cloudfront.ne...Rates-2012.jpg
Interest rates reflect risk. As the world becomes more stable, risk goes down. Everyone benefits from stability,,, except the bankers. They are currently trying to get a big war going to get the money rolling in. The jackals and hyenas of the world thrive on chaos.

Xi is in for life.
Putin has another term.
Trump will probably get a second term because the unfolding charges will taint the dems for the next 1000 years.
Celente states that the bankers are mafioso in suits.
These 3 leaders are NOT looking for war. The unravelling after WW II in Europe brought economic integration. Could you imagine England invading France? It is possible that these 3 leaders can bring enough economic integration to the world to make war a thing of the past.

Armstrong on the rise of interest rates.
https://www.armstrongeconomics.com/m...rates-to-rise/
I think that he is missing the boat here. The debt burden can NOT grow if the population is shrinking. Armstrong's central model is a model of confidence. What would bring a rise in confidence that would induce people to have more children? The muzzies are working on that problem but, it is the dumb ones that are proliferating the most.

[Danny B]

Mixed headlines

Too many things are up in the air to get a clear picture. But, even an unclear picture is pretty bad.
3/20 U.S. expected to impose up to $60 billion in China tariffs by Friday – Reuters They were given most favored nation trading status. This will undo a portion of that.
3/20 Stock market meltdown has to do with a lot more than just Facebook – CNBC The darling tech stocks are NOT looking well.
3/19 U.S. bank derivatives books largest since rescue of Bear Stearns – GATA The banks believe that they have off-loaded risk by selling derivatives. It didn't work last time.

So, why is Facebook doing so badly? Did the word get out?
Snowden - Facebook Is A Surveillance Company Rebranded As 'Social Media'
3/19 65% of Americans save little—half could struggle in retirement – CNBC Not true,, they will die.
3/20 Use fiscal policy, not the Fed, to fight the next slump – Bloomberg To CLARIFY, CUT everything.that the State supports.
3/20 National debt is growing 36% faster than the US economy – Sovereign Man

Very curious. Here are 2 vids that might shed a light on this.
https://www.youtube.com/watch?v=os4CJhvZh5M&t=209s
https://www.youtube.com/watch?v=3cx5sZoSiIQ
3/19 Tech stocks flash warning sign similar to before the dot-com bubble popped – CNBC NO PROBLEM. Put some black electrical tape over the warning light.
3/19 Canadian household debt hits record $1.8 trillion – Financial Post Canada is a peripheral economy. It is far more likely to hyper-inflate than America.
3/20 ECB policy on path to normalisation amid higher inflation – Reuters The ECB has pumped in about $2.5 trillion into markets. Yes, there is inflation in the upper loop. Shut off the bond spigot and you will see deflation that rips Europe apart. Draghi prays every night that normalization will hold off just a bit longer.
3/19 74% of Americans believe the “deep state” is running the country – Zero Hedge

3/18 Russian hackers attacking U.S. power grid and aviation – Bloomberg You have been forewarned. When a solar storm takes out the grid, be sure to blame Russia.
Minsky writes about the 2-price system of the economy. I just refer to the upper and lower loop.
https://pro.creditwritedowns.com/201...inflation.html

Humor https://www.zerohedge.com/sites/defa...n_garrison.jpg
https://www.zerohedge.com/news/2018-...n-fall-hillary
The State and the CBs definitely don't want capital to flow into something that they don't control. Here is a history of the suppression of the price of gold.
https://www.rt.com/business/421618-c...pressing-gold/
There is about $1.6 trillion in U.S. currency in circulation. 60% of that is held outside the country. A freeze in the credit markets would make that paper money quite scarce. The State does not want you to have wealth stored in anything that they can't control and grab. If you're Canadian, get some American cash.

[Danny B]

Weakening bonds,,, insane P/E,,, burn down the economy with corruption

Where to start? Is Armstrong correct about the bond markets because, that is where they are going? Are the bond markets going "there" because Armstrong has predicted it? Just the same, the bond markets are not looking so good. Here is a quick tutorial on the bond market.
"Bid-to-cover ratios typically exceed 2.0, especially for shorter-term securities."
https://www.investopedia.com/terms/b...coverratio.asp
If the bid-to-cover ratio isn't very high, investors can demand more interest. $230 trillion of hot money floating around has insured that bonds get a healthy bid-to-cover ration.

"in credit boom times - get orders for three or four times as many bonds as are for sale, at the beginning of the week order books were barely two times covered. " "fundamentals are starting to shift with the Fed expected to lift rates three (or more) times this year, retail sales falling for third straight month, amid a near contraction in consumer credit growth." "sales volume for new investment-grade corporate debt is at its lowest level so far this year"
Corporate bonds must always yield more than treasuries to make sales.
https://www.zerohedge.com/news/2018-...t-means-stocks
International capital is flowing into equities but, not so much into corporate bonds.

What about sovereign bonds? "Astoundingly, despite the lowest global interest rate environment in 5,000 years of recorded history, Brazil and Greece are paying over 30% of all tax revenues to service their debts. India, Japan, and Ireland are paying over 20%, and Italy, Portugal, and France are paying over 15%."
"Japan, for example, is paying nearly 24% of its tax revenues to service its debt, despite only paying an effective interest rate of 1%! Even a modest normalization of interest rates from 1% to 4% would consume 100% of current Japanese tax revenues."
Sovereign Debt Crisis - Interest Expenses Are Already Consuming Large Portions of Tax Revenue - The Sounding Line
You can see why sovereign bond debt is not attractive.

You can see why the quantity of money theory is bogus. We don't have hyperinflation. Hyperinflation is brought on by a change / lack of confidence. Will we get hyperinflation when sovereign debt crashes?
Dunno.
https://www.armstrongeconomics.com/a...-of-inflation/

Stockman is still hammering on how over-valued the stock market is, relative to earnings. Apparently, equities can go up ,,,even without earnings. The hot money doesn't want bonds so, stocks are a haven.
"That is to say, the next recession is embedded in the stock charts because they are the Bubble tracker in plain sight. And here is the leading indicator at the present moment----the utterly lunatic trading metrics for Amazon (AMZN).

As the current bubble metastized after the immediate post-recession rebound in the stock market, the momo crowd piled into AMZN because the "price action" was just plain awesome. Between the March 2009 bottom and January 2017, the stock soared from $65 to $750 per share or by nearly 1100%. And it did so without any regard for AMZN's profitless prosperity---perhaps signified by its 170X PE multiple at the end of 2016."
"Since the rules of arithmetic apparently have not yet been "disrupted", AMZN's implied multiple on operating free cash flow has erupted from an already frisky 39X to a completely absurd 120X."

"When you set aside AWS' sales and operating income during 2017, Amazon's e-Commerce business generated $160 billion of sales, but posted operating income of negative $200 million.

That's right. The monster of the retail midway posted no profit whatsoever last year!

And it's getting worse. During 2016 the e-Commerce business posted $1.1 billion of operating income on $124 billion of sales; and the year before that (2015) operating income was $2.6 billion on e-Commerce sales of $99 billion.

Stated differently, incremental annual sales of $61 billion over the past three years resulted in a $2.8 billion reduction in operating profit."
" An index of 10 tech growth shares pushed its advance to 23 percent so far this year, giving the group an annualized return since early 2016 of 67 percent. That frenzied pace tops the Nasdaq Composite Index’s 66 percent return in the final two years of the dot-com bubble."
"And there you have it----massive, nearly parabolic PE expansion in what will soon be the longest business cycle expansion in recorded history. That's the real flashing red indicator that tells you the third bubble crash of this century is nigh, and the recession to follow is already baked into the cake."
Contra Corner » Goldilocks, R. I. P. (Part 3)
John Hussman is widely read. He has shown very clearly that the stock market can't expect to have any earnings for at least the next 10 years. All this hot money pouring in is from investors who are only trying to protect their capital. Stockman may be right about the absurd P/E but, that doesn't mean that investors will run away.

Europe has about $1.2 trillion in non-performing-loans. This will eventually bring down the banking system because they just aren't profitable. Their solution,,, pretend that they don't exist and, lengthen the terms. This is excruciatingly stupid because the interest burden still grows.
"After almost 10 years of Quantitative Easing to help banks, nothing has been achieved." "The Quantitative Easing has simply kept governments on life-support while failing to stimulate the economy. Mario Draghi moved to negative interest rates in an effort for force people to spend. Instead, the bought safes and withdrew cash from the banks."
https://www.armstrongeconomics.com/w...ns-until-2021/

TAE, "I’m sorry that this generation burned down the factory, then retreated to the mansion, sold off and burned all the furniture there too, then ran up the credit card with cocaine and heroin parties while yelling “I’m a rock star! I’m a Contender!”, but they did. Now there are only bad decisions, like the ones real adults have. "
"How do you prepare for an Argentina-like collapse and/or up to civil war we are so close to? People who have lived through it say, “you can’t.” If the whole country is mad, which it is, there is nowhere to turn for sense or even allies, to say nothing of dry goods. Co-Americans are now so immoral, so self-serving, so rapacious, so badly thinking, so ill-positioned and ill-prepared that they themselves are the largest single liability, to me, but mostly to themselves. Without basic morality — you know, like do your job, don’t lie about everyone around you, don’t sleep with other people and/or kids at the local high school — there is no “community”

"Only Morality can fix it, where the nation cries out to God and says, “we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the return of justice and order, even if it means paying for my own crimes.”
"Adams said, “Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.” Benjamin Franklin said, “only a virtuous people are capable of freedom.”
https://www.theautomaticearth.com/20...tango-foxtrot/

Armstrong, "The collapse in the rule of law is so vital for sustaining the economy that it is often overlooked."
GOOD article on corruption, https://www.armstrongeconomics.com/w...beyond-belief/

[Danny B]

The FED and the S-400

Armstrong forecast in 1985 that there would be a huge change in the confidence model on 2015.75 On that very day, Russia proved in Syria that it could jam and block American offensive weapons. This has caused various States to see Pox Americana as less than invincible. Later, the Russians deployed long-range cruise missiles that demonstrated anti-ballistic-missile systems to be obsolete. Moving on, Russia followed up on the very successful S-300 missile system with the S-400. The S-300 could arguably take out all naval assets. The S-400 kills planes.
Many States are buying the S-400. One could argue that they want protection from CENTCOM, the enforcement arm of the FED.

Pox Americana can only protest these purchases. It wouldn't look good if they gave their justification for protesting.
"Russian S-400 talks with China, Turkey, India, Saudi Arabia, Qatar, and any other country."
https://sputniknews.com/us/201803171...oreign-nation/
Nato's second biggest army just bought nearly £2bn of weapons from Russia
Filipino President Rodrigo Duterte left for Russia Monday to seek advanced weapons, specifically precision armaments.
Rosoboronexport, the Russian state-owned military company accounting for about 85% of all exports, alone sold military equipment to about 70 countries
Duterte has sinned twice, "Having encountered difficulties procuring weapons from the U.S. due to disagreements over his shoot-to-kill drug war" He's trying to block CIA drug cartels from destroying his people.

[Danny B]

Questions on GDP

Gross Domestic Product has been a VERY slippery number. Advertising is counted but produces nothing.
Study: Ad Industry Accounted for 19 Percent of U.S. GDP in 2014 – Adweek
Sales of financial instruments and stocks are not counted. Un-reported legal business is not counted and, is 2/3 of the underground economy. Illegal underground business makes up the other 1/3 of the underground economy.
Illegal drugs make up a huge part of the underground economy.
https://image.slidesharecdn.com/gros...?cb=1232131866
https://www.slideshare.net/knorman31...s-not-included

"John Maynard Keynes made a plea for more detailed figures on Britain’s capacity to make guns, tanks and aeroplanes. He went on to establish the modern definition of GDP as the sum of private consumption and investment and government spending (with account taken for foreign trade). Kuznets had treated government spending as a cost to the private sector, but Keynes saw that if wartime procurement by the state was not treated as demand, GDP would fall even as the economy grew."

" In a famous speech in March 1968, Robert Kennedy took aim at what he saw as idolatrous respect for GDP, which measures advertising and jails but does not capture “the beauty of our poetry or the strength of our marriages”.
https://www.economist.com/news/brief...ty-it-not-even

"The underlying mistake in the construction of GDP is to confuse accounting with economics. " "GDP really is the cruellest trick played on society. It poses as the yardstick for our collective prospects, but it is a statistical imposter. It is a feint to distract us from what it really is used for, and that is to provide funds for its creator and manager. Yes, the state, wittingly or unwittingly, uses GDP to raise money for itself."
"Not only that, but the extra money injected into the economy increases, other things being equal, the money-total of GDP."

" It the state issues a further ten monetary units, that can be added to the consumers’ total income, less the sums that go into the B2B chain (which is only captured in GO), less the sums that go into financial and other activities excluded from GDP, and less any increase in savings. "
"Let us look in more detail at where this extra money goes, in order to assess the tax benefits to the state, starting with all those intermediate business activities in the B2B chain. This, broadly speaking, is the difference between GO and GDP. It absorbs government spending on the infrastructure and maintenance of government property by non-government entities, as well as defence spending. In theory, all of the government’s supplies of goods and services from the private sector are provided within the B2B chain, with only the salaries of the suppliers’ employees, net of income and employment taxes, recorded as consumer spending in GDP."

"Employees in the whole B2B chain, including myriad subcontractors, have income tax deducted from their salaries. They spend most, if not all of their salaries on goods and services, yielding sales taxes. "
"If the government stops increasing the quantity of base money, the first thing that happens is the commercial banks begin to become overstretched, because all that B2B stuff and consumer borrowing continues, rather like the cartoon coyote unaware it’s just run over the cliff. "
"The extra money the state generates by currency debasement and the associated extra tax gained disappear as well. It is the nature of things that governments get used to spending ever-increasing amounts,"
"For this reason, it is impossible to remove the monetary stimulus of an ever-increasing, ever-accelerating quantity of base money without adverse consequences for the sham statistic of GDP. "
https://www.goldmoney.com/research/g...efcode=dollarc

[Danny B]

Our economic engine is starting to flame out

3/16 Moody’s warns a deluge of retail bankruptcies is coming – Zero Hedge
So, what inspires them to forecast a wave of bankruptcies?
https://i1.wp.com/dollarcollapse.com...50%2C344&ssl=1
yet-another-chart-screams-look-out | DollarCollapse.com

These charts reflect foreign capital inflows. The French GOV spends 57% of the GDP to keep everything going. The U.S. spends 24%. Armstrong warns of sovereign default and everybody sees it coming. Eurozone States do not have an aggregated State(s) debt. The sovereign bond markets of the weakest economies have been deserted. Everybody wants German Bunds. As America raises rates, the Eurozone must match or, watch the money leave. But, there is another problem.

3/18 US gross national debt spikes $1.2 trillion in 6 months – Wolf STreet
So, at what point will trust be lost?
"March 17, 2008 - Financial Times (Gillian Tett): "In recent years, bankers have succumbed to the idea that the credit world was all about numbers and complex computer models. For as anyone with a classical education knows, credit takes its root from the Latin word credere ("to trust") And as the current credit turmoil now mutates into ever-more virulent forms, it is faith - or, rather, the lack of it - that has turned a subprime squall into a what is arguably the worst financial *crisis in seven decades. Make no mistake: what we are witnessing right now is not just a collapse of faith in one single institution (namely Bear Stearns) or even an asset class (those dodgy subprime mortgage bonds). Instead, it stems from a loss of trust in the whole style of modern finance"

"One can age the mortgage finance Bubble period at about six years,"
"We'll soon be approaching 10 years of what I back in 2009 labelled the "global government finance Bubble."
https://creditbubblebulletin.blogspo...thinks-it.html

Stockman, "Goldilocks is a conceit of monetary central planning and its erroneous predicate that falsifying financial asset prices is the route to prosperity. In fact, it only leads to immense and unstable financial bubbles which eventually crash-----monkey-hammering the purported Goldilocks Economy as they do.
To wit, the Fed's serial financial bubbles on Wall Street are falsely celebrated as arising from a booming main street economy. In fact, they are an economic dagger that bleeds it of investment and cash and exposes it to "restructuring" mayhem from the C-suites when the egregious inflation of share prices and stock option values finally gets crushed by another financial meltdown."

Larry Kudlow, December, 2007 "There’s no recession coming. The pessimistas were wrong. It’s not going to happen. At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum). Goldilocks is alive and well. The Bush boom is alive and well. It’s finishing up its sixth consecutive year with more to come. Yes, it’s still the greatest story never told.......In fact, we are about to enter the seventh consecutive year of the Bush boom."
Jobs "That said, our more essential point is that the BLS numbers are generated by a trend-cycle statistical model, not an honest-to-goodness body count, or even sample extrapolation, from the actual main street economy"
" After Q4 2007, the US economy shed more than 15 billion labor hours during the next six quarters."
"So by Q1 2009 the household net worth number was down by the tidy sum of $12 trillion or nearly 20%. And it took four years of madcap money printing at the Fed to reflate housing and the stock markets sufficiently to regain the Q3 2007 level"
"In a word, Larry Kudlow can be counted upon to reassure the Donald that a boom is just around the corner, and that the nation's skyrocketing budget deficits are nothing to worry about."
"That's when the rock of $1.2 trillion in new government borrowing smashes into the hard place of the Fed's $600 billion annual bond dumping program."
Contra Corner » Goldilocks, R. I. P. (Part 2)

Chart of the federal solvency ratio. The tipping point of the ratio.
"They were correct to focus on the relationship of interest expense to revenue. Historical experience in various countries has shown that when this ratio reaches 30%, hyperinflation follows and often as quickly as six to twelve months. Thus, 30% can be seen as a critical “Tipping Point”, which when exceeded leads to hyperinflation."
“Bankruptcy 1995” Revisited

Need to break this up.

[Danny B]

Morality and commerce

Mother Nature does not "do" morality, ONLY survival. From plankton to the brontosaurus, it is all about eating and surviving. Man creates a society to escape the simple "law of the jungle". Agriculture allowed man to produce surplus food and create a peaceful society. Without surplus food, we return to the "law of the jungle". Witness Rhodesia where they got rid of the farmers and, the "law of the jungle" returned.

In a peaceful society, the creation of scientific advancement means that man can get better control of the environment and, his security and future. He can escape a "brute existence".

The "law of the jungle" is simply, the strong killing the weak. The adherence of society to morality allows for a peaceful and productive society / economy. Either we adhere to morality or, we return to the jungle.

When the practical limitations to the expansion of the money supply ended, the bankers were free to spend any amount of money to buy politicians. When the immortal corporation was created with almost complete legal immunity, the resulting monster was almost completely free of moral considerations. Regulatory-capture meant that nothing that the bankers wanted to do was illegal.

Religion was a convenient vehicle to teach a moral code to our children. Society can't exist without ingrained moral guidance. NO law can control a man who refuses to control himself. Because of the nature of the corporation, it has even less self-governance related to morality.

The State is equally immune from prosecution and, equally immortal. History proves this to be untrue but, the State operates as if it were unlimited and immortal.

Society and religion gave us a god who has rules to propagate society and religion. God is all-powerful and doesn't need to lust after power. He gives us 10 major rules for the continuation of a moral society. We must teach morality to our children or, watch the dis-integration of society. Morality is a HUGE hindrance to the "law of the jungle".

The corporate banking "machine" is strictly predatory.

The State is strictly parasitic. Socialism is immoral, in that it is theft. Socialism is impractical in that, it robs reward and incentive from the producer.

South Africa is in the process of taking the farmland from the producers. They can see what resulted when the same thing was done to Rhodesia but, the socialists won't let that stop them.

Moral collapse brings financial collapse. Predations of the State eventually bring revolution. There doesn't seem to be ANY exceptions.

History fails to record a single precedent in which nations subject to moral decay have not passed into political and economic decline. There has been either a spiritual awakening to overcome the moral lapse, or a progressive deterioration leading to ultimate national disaster. Douglas MacArthur

The bankers get a good laugh when the rip off the "muppets". They can salve their conscience by claiming that they did nothing illegal. Maybe they feel a twinge of guilt at killing and robbing MANY millions of people. Here is a vid from a movie about a guy who personally gets revenge on those who destroyed him and his wife.

Assault on Wall Street Best Scene
https://www.youtube.com/watch?v=JtwnQjVBkKA
https://www.youtube.com/watch?v=C56UI1ML9MQ
Putin is doing his best to create a resurgence of the orthodox church in Russia. The West is doing it's best to purge the 10 commandments and any traces of religion from society. Then eventual result will be a further collapse of trust and commerce.

[Danny B]

Capital flight to U.S. equities

On March 26, 2018, China will launch an oil futures market in Yuan. MANY States have already done currency swaps with China so, it will be easy to buy futures on oil markets with Yuan. Almost every nation in the world is tired of pox Americana blowing up everything that it can't steal. They will be happy to stop financing world destruction.
"BofA calculates that equity inflows are outpacing bond inflows for the first time since 2013, with annualized flows of $717 billion."
"And yet, something odd has emerged: the record inflows are out of step with more muted returns from equities: "chart-topping inflows not coinciding with headline returns."

"another record was broken in the last week when $2.6 billion went into tech stocks this week, an all time high, putting the excesses of the dot come era to shame. So far, a total of $9.8 billion has gone into tech funds YTD, making the annualized flow figure a massive $46.5 billion."
"But wait, there's more: there was also a record inflow into US growth ($5.8bn), US small cap ($5.4bn), and US value ($4.1bn) funds.

"Meanwhile, European stocks saw modest outflows of $1.3 billion," EVERYONE in Europe knows that Draghi will fail spectacularly. They are pulling their money out. Armstrong states that the ECB won't be able to sell sovereign bonds. Armstrong claims that they will resort to tax increases. For every Euro of additional taxes, the economy shrinks 3 Euros. After all, taxes reduce the operating capital of the country. So, add in the capital flight to the tax increases.
There are massive inflows to American equities, not so much for earnings,,, more so for protection.
Corporate America is dead in the water. The FED hopes to attract capital to America by raising rates. These rate hikes are destined to kill off corporate America. Corporate America went on a debt splurge to buy up their own stocks. Corporate America does NOT have enough earnings to service their debt. It is doubtful that capital inflows can save a company that has no earnings.

There are lots of States that would prefer to buy oil in Yuan, instead of dollars. DEDOLLARIZATION - Unwanted dollars are coming home to roost. Investors will send their dollars here and hope to lose less than they would have lost if they stayed in European markets. Everybody reads Armstrong and his warnings that U.S. sovereign debt will crash. Not much is flowing into sovereign debt. "Treasuries funds drew in $0.3 billion"
https://www.zerohedge.com/news/2018-...three-warnings

So, America is predicted to be the last to collapse. BUT, when European bond markets collapse, most other markets will die of contagion. The derivatives held by Deutsch bank amount to 6 times the German GDP.
The time between European collapse and, American collapse may be measured in seconds. It is stated that these particular derivatives cancel each other out and, only leave a nominal amount of , perhaps, $1 trillion.
THAT will occur if ALL the counter parties pony up the money.

3/16 UK economy in grip of most feeble recovery on modern record – Independent $11 trillion just doesn't buy what it used to.
3/16 Job openings soar by 645,000 to all time high 6.3 million – Zero Hedge We have to re-train gardeners to write code.
3/16 The world economy risks turning too hot to handle – Bloomberg ONLY the upper loop.
The new FED head says to "buy dollars and, sell gold. Yeah, right.
https://imageproxy.themaven.net/http...akqt6_4cFJsy8A

[Danny B]

Armstrong and cycles

Reportedly, "Only the lightest 3 elements were present when the universe were born, and they were: Hydrogen, Helium and Lithium. All heavier elements were made in the centers of stars, either during fusion or during Type II supernova explosions. All elements heavier than iron are created in supernovae."
We are made of stardust. The galaxies are recycled,,, just as we are recycled. The cycles go on and on,, everywhere. We are somewhat aware of short cycles like night & day,,,, winter & summer. The longer cycles are often too long and chaotic for us to factor into our lives. The State would have us believe that we are in a state of permanent prosperity. It has never happened yet.

"The majority of society ignores history because that is the past and somehow irrelevant because we are more sophisticated today and those people ran around in diapers chucking spears at each other. This merely ensures that history repeats because they are far too ignorant to comprehend that life is like a Shakespeare play. It has been performed for hundreds of years and the only thing that changes has been the actors."

"Human society as a whole expects a linear life of happily ever after and when that fails, they advocate punishing the person responsible. They cannot dare investigate that just perhaps the world works in a far more complicated manner than just that.

Those who think only linear cannot avoid the crash and burn. Those who see the world cyclically understand there is a time and place for everything."
https://www.armstrongeconomics.com/a...l-perspective/

This article is about the power shift in Germany but, it has importance everywhere.
"Stalin did everything he could to take power. This has been the curse of the left. They see themselves in a war against the producers and whatever action they take, it is always for the good of the people. This attitude marks the left who always seek to subjugate the right. They never believe in human rights other than their own and have historically always taken an authoritarian position painting themselves as the victim being exploited by the right."

"When you look around the globe, what you see is a rising intense fight building between the left v right, i.e. Thieves v Producers in terms of Ann Rand."
"The left will make a major stand to seize control globally. They will be VERY OPPRESSIVE and this is what will end up destroying the West as we see the economic epic center move to Asia "
"World economic growth (GDP) peaked in 1973" "However, you can easily see from this chart of world GDP, socialism is dying. The Pension Crisis will be a major event and the failure of that system will spark not just civil unrest, but the left assaulting the right. The left will look to plunder the wealth of the right and justify it in their minds as they are entitled to this because the right got rich by exploiting the left. "

"The more the left seeks to raise taxes and punish the producers, the greater the producers will hoard and not invest and we will see a continued decline in economic growth rates. We can see that we really cannot get world GDP above the 3% level. The decline post-2007 has been profound and 10 years of Quantitative Easing has only caused wealth to contract. Negative interest rates sparked more hoarding of cash even among the middle class.

Draghi is holding on for dear life. He has no prayer in hell to restore the economy of Europe. All he has done is kept the governments on life-support. When they cannot sell their bonds, they will raise taxes drastically to try to stay afloat. This is how history repeats. "
https://www.armstrongeconomics.com/a...ly-collapsing/

Armstrong sees a lot of black & white. He condemns Jackson for destroying the second national Central Bank. He flat-out refuses to admit that handing that much power to an unelected group to create the money supply would invite disaster. He laments that the FED was forced to buy GOV bonds. What did he think that the State would do when it wanted more money? He DEMANDS that America have an elastic money supply,,, not thinking that the non-producers would stretch the elastic.
His thought processes are tainted because he doesn't recognise that there is a finite limit to the number of people who can get rich just by moving money around.
He recognises cycles in climate but, is oblivious to the pole flip. It hasn't been documented in history so, he doesn't factor it in. Earth is moving out of 2 protective fields and out of a dust cloud. This will greatly increase background radiation and mutations. Weather will become much more volatile.
https://ru-clip.com/video/lmaeF9zjrB...shields-3.html

[Danny B]

Financial risk,,FED, brought to you by war,,,Corporate meltdown

I got interrupted by time wasters.
A huge part of economic action is related to confidence. Most of that is related to human nature. There is another area of human nature that enters into all of this; RISK
How much are you risking? Here is an excellent article examining how much the financial sector is risking.

Tue, 03/13/2018
"For the Lebanese-American thinker, their shared sin is that (with some exceptions) they lack “skin in the game”. By this, Taleb means they are insulated from the consequences of their actions: they do not have “a share of the harm” or “pay a penalty if something goes wrong”. This “asymmetry in risk bearing”, he warns, leads to “imbalances”, “black swans” (the rare but high-impact events described in his 2007 mega-seller) and “potentially, to systemic ruin”.
"In Taleb’s universe, the fieriest circle of hell is reserved for bankers and neoconservatives.
“The best thing that could happen to society is the bankruptcy of Goldman Sachs,” he tells me.
“Banking is rent-seeking of industrial proportions.”

"Yet are there times when a lack of skin in the game is defensible? Taleb concedes that an exception should be made for jurors. “You don’t do it for a living, you have a cleaner opinion than someone who gets involved.” Taleb, a philosophical sceptic, influenced by Burkean and libertarian thought, observes: “I’m against universalism right there. Skin in the game is not something universal.”
https://www.zerohedge.com/news/2018-...-goldman-sachs

Comments, "Send ALL warmongers to the front immediately. Boeing, Lockheed, general Dynamics... all board of directors and staff and relatives. and members of congress who voted for "police actions".

Then bankrupt GS and JPM, DB, actually there's a list on https://philosophyofmetrics.com/wp-c...Banks-2015.pdf

"The 2ND BANK OF THE UNITED STATES was 'liquidated' in 1841 (after having been taken private as result of Andrew Jackson standing in the way of its 20 year charter getting renewed, & which, oh by the way, had existed since 1816, which, oh by the way, came about after the FIRST BANK OF THE UNITED STATES, charter had expired in 1811, and whereupon it NOT being renewed right away, the WAR OF 1812 started & Washington, DC was burned to the ground)...

Soon after Andrew Jackson's 'triumph' came to be, the "WAR OF NORTHERN AGGRESSION" (aka ~ The Civil War started), & within 50 years (& 3 Presidential Assassinations occurred ~ not counting the 2 attempts on AJ, and one on Theodore Roosevelt)... THE FED was established.
So yeah ~ LIQUIDATE Goldman Sachs (who is owned by the same banking families who participated in the aforementioned history)..."

1) Too Big To Fail

2) Too Big To Jail

3) Too Rigged To Fail

4) Too Kosher To Jail

Like our war-monger politicians who never get close to the front lines.

Charles Huge smith has a good article about the intersection of 4 cycles.
oftwominds-Charles Hugh Smith: Checking In on the Four Intersecting Cycles
3/16 Moody’s warns a deluge of retail bankruptcies is coming – Zero Hedge No doubt.
3/16 Corporate America’s undertakers prepare for feast after lean years – Reuters So, do you think that employment will be affected?
3/16 JPMorgan moves closer to urging a rotation away from equities – Bloomberg Into WHAT?,,,, maybe housing
3/15 U.S. home prices rise almost 9%, the biggest gain in four years – Bloomberg
3/14 Home prices soar high as federal reserve hopes to avoid big crash – Hill The hot money has priced Joe six pack out of the market.

3/16 Russia conflict could trigger ‘something we can’t control’ – Business Insider
3/16 The Neocon full court press for war is here – Gold Goats ‘n Guns
None dare call it STUPID.
3/16 Guts of U.S. CPI data show key inflation gauge weakest in years – Bloomberg The feces-for-brains just don't understand. You can't raise prices for people who are on a fixed income. They stop buying. If they can't afford food,,,, then, you have a new problem.

[Danny B]

Armstrong,,, corporate debt

Armstrong said that politicians are the WORST people at making economic decisions.
"Extremely reliable sources from Behind the Curtain in Europe are becoming deeply concerned that Draghi at the ECB has created a monumental economic disaster he is just praying to holding off until he leaves next year."
Draghi came straight from Goldman Sachs.
26 Goldman Sachs Alumni Who Run the World (GS) | Investopedia
https://www.investopedia.com/news/26...-run-world-gs/ Both the politicians and the bankers are EVIL,,, just different flavors.
https://www.armstrongeconomics.com/m...-is-beginning/

Armstrong on the disappearance of metal coins. Looks good for gold and silver.
https://www.armstrongeconomics.com/m...ecome-extinct/
Armstrong also writes that the State will NEVER avoid a crisis, https://www.armstrongeconomics.com/f...e-have-panics/

The Economist Magazine is the mouthpiece of the financial PTB. They are now warning that corporate debt is far too high and, dangerous,
https://www.zerohedge.com/news/2018-...nged-companies
THIS is from the article, "The total debt of American non-financial corporations as a percentage of GDP has reached a record high of 73.3%".
THIS is from comments;
"One can only pay debt back out of earnings after taxes. Not GDP.
Corporate debt stands at 6.1 Trillion Dollars. Corporate profits after taxes are 1.644.Trillion Dollars
That's a factor of 3.71 dollars of debt for every dollar of profit after taxes that is available to pay back that debt.
And that makes the ratio of corporate debt to profits after taxes much much more dire than the ratio of corporate debt to GDP makes it sound.
As rates rise, profits decline, and the picture gets exponentially worse."
https://fred.stlouisfed.org/series/NCBDBIQ027S

"Expanding on Minsky’s theory, former Federal Reserve governor Laurence Meyer clarified the concept stating that “a period of stability induces behavioral responses that erode margins of safety, reduce liquidity, raise cash flow commitments relative to income and profits, and raise the price of risky relative to safe assets–all combining to weaken the ability of the economy to withstand even modest adverse shocks.”
The shock will NOT be moderate. With the rise in interest rates, the carry-cost of corporate debt will shoot sky-high.

The more that volatility increases, the higher the interest rates go,,,, to compensate for volatility. Volatility is climbing fast.
http://www.thetechnicaltraders.com/e...d-predictions/

Here are some good articles on how the State will use your bank account to bail in the banks.
http://investmentwatchblog.com/how-t...the-big-banks/
More articles at the bottom. My balance never seems to get over $150, or so.