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  • Danny B
    Surviving on a housing bubble

    The upper loop meets the lower loop in the housing market. Residential RE is not bought like commercial RE. We buy the biggest house we think that we can afford. We don't think about return on investment. Residential RE is a prime candidate for price inflation because human nature takes over, NOT good business practices.

    "Ultra low interest rates mark a shift away from people’s wealth residing in their savings and pension plans, and into to so-called wealth residing in their homes, which are bought with ever growing levels of debt."
    "home sales, and bubbles, are the only thing that keeps our economies humming. "
    "This is a global issue. Housing bubbles have been blown not only in the Anglosphere, though they are strong there, many other countries have them as well, Scandinavia, Netherlands, even Germany and France. It’s what ultra low rates do."
    No mention of China that has the biggest bubble of all because Chinese put all their savings into RE.

    "What we have invented to keep big banks afloat for a while longer is ultra low interest rates, NIRP, ZIRP etc. They create the illusion of not only growth, but also of wealth. They make people think a home they couldn’t have dreamt of buying not long ago now fits in their ‘budget’. That is how we get them to sign up for ever bigger mortgages. And those in turn keep our banks from falling over."

    "Record low interest rates have become the only way that private banks can create new money, and stay alive"
    "Without the ZIRP rates, the mortgages they lure people into, and the housing bubbles this creates, the amount of money circulating in our economies would shrink so much and so fast the whole shebang would fall to bits.

    That’s right: the survival of our economies today depends one on one on the existence of housing bubbles. No bubble means no money creation means no functioning economy."
    This is a hard-to-believe graph, https://3r8md7174doo44lgpk3kou79-wpe...rice-index.png
    "Most new Zealanders can no longer afford property in major centers, and forcing prices down this way will expose many present owners to margin calls and foreclosures.

    Moreover, because Australian banks own their New Zealand peers, if the Aussie boom is really gone, these banks are going to get hit so hard they’ll take down New Zealand with them. Close your eyes and put your fingers in your ears."

    "Looks like the American housing bubble is back with a vengeance. It’s always amusing to see claims that this is due to a lack of supply. The real problem is not supply, but artificially fabricated demand. Fabricated by low rates. " HOT MONEY
    Various cities, https://3r8md7174doo44lgpk3kou79-wpe...t-to-own-1.jpg
    "Now remember what I said before: millions upon millions see their savings and pensions melt away before their eyes, while at the same time they are forced to spend ever more on housing costs. And when that scheme hits the wall, the economy will remember it’s alive only because of the housing bubble, and then croak."
    "Leaving both renters and owners without jobs and eventually places to live. " There is always FEMA summer camp.
    "you have an economy with either a lot of foreclosures and homelessness in its future, or a bankrupt banking system."

    "Property in China is all on red. In the US about one quarter of household wealth is in housing, in China it’s three quarters. "

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  • Danny B
    Elastic money supply,,, sliding down

    Armstrong excoriates Andrew Jackson for killing the central bank. Armstrong is a speculator. His major blindness is; he demands an elastic currency. Under a gold standard, the currency grows at the same rate as the gold supply. This allows for very little speculation. What he fails to recognise is; any elastic currency will eventually be overstretched by the State and bankers. The original charter of the FED was pretty good. Naturally, the bankers were not happy with this. In general, a State goes off the gold standard when it is preparing to go to war. They need to make war on their credit card. Unfortunately for the R.O.W. America had the huge Bretton Woods credit card.
    The elastic currency ALWAYS brings a credit cycle. The state wants that to buy elections and wars. The bankers want that to suck in the punters and fleece them. We are coming to the end of a credit super-cycle. On a gold standard, this could never happen.
    After the turn of the century, the bankers ramped up borrowing at the same time that wages were falling. They were bailed out. They have needed a continual bailout.

    "taxpayers have written checks totaling $190 billion to Uncle Sam so far this month.

    Yet despite being flush with tax revenue, the US government still managed to pile almost a quarter of a trillion dollars more on top of its already enormous mountain of debt."
    "the US government spends nearly the ENTIRETY of its tax revenue on Social Security, Medicare, and Interest on the Debt."
    The US Government Quietly Added $200 Billion To The National Debt This Month Alone | Zero Hedge

    "The model is forecasting NOT a “recession” in the old terms, but an economic decline. This is why taxes keep rising, for they need money to try to retain power. This creates DEFLATION and not the HYPERINFLATION that so many falsely believe is the only way empires, nations, and city-states crumble into the dust of history."
    "This is all part of the economic decline that began with 2015.75. Even the poverty rate in Europe, the great socialist economy, has risen to 16% and is still rising. "

    "The economy has had three jobless recoveries following the last three recessions" It will only get worse. Most of this article is plain lies.

    Leave a comment:

  • Danny B
    Banks can't skim with BTC

    "Centralized banking and all other forms of intermediary rentier skims are presented as solid. If history is any guide, these supposedly solid entities may well melt into air."
    " 1. It's a form of private-sector issued money. It is not issued or controlled by any government or central bank.
    2. It is structured in a completely different manner than conventional central-bank issued currency: it is a digital form of money that is issued as payment for those who maintain the database (the blockchain) on their privately owned computers. Since the blockchain is distributed over numerous computers, it is decentralized and distributed rather than centralized.
    3. It enables trusted transactions between parties without requiring the services of an intermediary, i.e.a bank which acts as a trusted clearing house for transactions."

    " Many of the functional pieces of modern capitalism were private-sector innovations, starting with banking and credit (some of which was borrowed from Arab traders). In the good old days of the 1500s, if the King of Spain wanted to finance a costly voyage around the world (Magellan's circumnavigation in 1519-1522), he turned to private-sector lenders.
    Insurance, stock markets, futures markets and options were all private-sector innovations designed spread the risk and reward of ventures such as trading voyages to the Spice Islands."
    "The rate of expansion of private-sector innovations is much higher than those of centralized authority. "

    " The private sector, in contrast, is a free-for-all of a multitude of players with an enormous range of ideas, schemes, scams, risk appetites, insider knowledge (i.e. asymmetric knowledge), capital, expertise and so on, all networked through a fast-expanding spectrum of media and exchanges.
    This private-sector ferment is on display in the cryptocurrency space. Scams and brilliant innovations are shoulder to shoulder in a fast-moving mob."
    oftwominds-Charles Hugh Smith: Why Is Bitcoin a Big Deal?

    Leave a comment:

  • Danny B
    Worldwide QE to maintain employment

    A short recap. Cheap Containerized shipping allowed low-wage countries in the East to rapidly cause / export massive price deflation in Tradeable goods. Meanwhile, they slowly exported massive wage deflation. The wage deflation kicked off a cascade of defaults mostly in real estate. RE is a very large part of the credit edifice. The financial institutions with the most exposure to RE, were in deep trouble. They couldn't foreclose because nobody would buy houses off of them for any kind of decent price.
    The taxpayer was forced to cough up $700 billion because the banks were insolvent AND illiquid. The only cash coming in was from their drug business. They brought it on themselves by originating liar-loans. This was done to keep the credit bubble growing.

    Over the years, hot money gradually bought up the RE. The CB tried to stimulate the economy by pumping liquidity into the financial loop. How could it trickle down when wages and employment kept falling? The CB was determined to pump in liquidity until price inflation reached 2%. Keep in mind that their tunnel vision was focused on consumer goods. No matter how high stocks flew, it was not counted as inflation. The CB essentially rescued RE. RE is still rising because it is still attracting hot money.
    Reduced consumption and reduced wages cause deflation in State tax collection. They did the obvious thing and raised taxes to compensate. Higher taxes brought lower consumption. As poverty increases, GOV wants more and more tax.

    "Economic expansions always breed unproductive investments and the role of the recessions is to release the economy from this burden. The creative destruction is a process of purification that occurs during recessions. That is, a typical business cycle recession promotes a more efficient allocation of capital by driving out bad investments"
    "After the crisis, Japan decided to save everyone. Ailing banks and companies were kept in operation with aggressive measures by the government and the Bank of Japan (BoJ). The government gave subsidies to firms so that they could maintain employment and banks were allowed to hold non-performing loans in their balance sheets"

    "Zero and below-zero interest rates have created a situation, where easy credit is keeping more and more unprofitably firms alive " Maintaining employment

    "the next violent VIX burst higher without an immediate slam lower, could be the catalyst that blows up not only half the investing worlds, but unleashes the next QE - as central banks won't just sit there as everything crashes - in the process short-circuiting the cycle and restarting from square one (unless of course a reset is impossible, as Kocic discussed on Saturday)."
    Minsky Cycle 2017: Where Are We Now | Zero Hedge
    "This is also the "nightmare scenario" envisioned by Eric Peters: a world in which central banks inject more and more liquidity and "stimulus", and yet inflation does not rise, resulting in greater and greater financial inflation, i.e., asset bubbles"
    "markets appear to be locally stable, they "are effectively dancing on the edge of metastablity whereby practically any non-trivial shock can be destabilizing" as "people had abandoned any long-term agenda and have concentrated all the efforts on extracting as much as possible in the near term."

    This is a consequence of Central Banks’ complicity and shrinking of the horizons – the future is degrading into an optimized present"
    "What Happens When The Market Can No Longer Pretend": Charting Today's Minsky Moment Dynamics | Zero Hedge

    "China has added more debt in the first nine months of 2017 than the US, Japan and the EU combined" YES and much of this money was used to support foreign economies.
    "Total borrowing climbed to about 260% of the economy’s size by the end of 2016, up from 162% in 2008, and will hit close to 320% by 2021"
    "As President Xi Jinping put it in a keynote policy speech to the Communist Party leadership on October 18: Housing is for living in, not for speculation. " The PBOC can create liquidity BUT, it can't control where it flows.
    "An indication of the ripple effect China can have on global markets came in 2015 when a devaluation of the yuan, followed by other changes to how the tightly controlled currency is traded, sent shock waves through global markets."
    The next devaluation will be much bigger.

    11/01 Kentucky teachers blast pension reform plan – Zero Hedge
    11/01 Charts spell disaster for public pension Ponzi schemes – Zero Hedge

    Pension reform now,,, pension destruction later.
    Contra Corner » A Monstrous Bubble—The Destroyer Called Amazon Bringing price deflation to your doorstep.

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  • Danny B
    Crypto news,,,Armstrong, unglued to bring us socialism

    Bitcoin Just Hit New Record High At$6300 - Over 550% YTD
    There you have it. Crypto assets are just catching on too fast to ignore.
    "Worse Than Tulips..." And Other Enduring Misconceptions About Crypto Assets | Zero Hedge

    Satoshi Nakamoto is the "identity" of the originator of the blockchain. One Satoshi is equal to one hundred millionth of a single bitcoin. There are plenty of gifted people who are expanding the concept.
    "Vladimir Smerkis, is fast turning into a figurehead of this breakout industry with The Token Fund and"
    "At about the same time, a young man who appears quite the opposite of Smerkis began making headlines around the world. Soft-spoken and sleight of build, 23-year-old Vitalik Buterin looks every bit the computer engineer. But he is the engine behind Ethereum, which has set the world alight"

    "However, some newcomers burned their fingers fast on the new and extremely volatile market, whose fluctuations far exceed what investors in traditional funds and markets are used to."
    "The solution stands out because the fund has a high liquidity and no barriers to entry. Smerkis said: “We have decidedly done away with the barriers that hampered consumers in the past.”
    "Tokenbox will come with a complete trading system, and it will also run through any due diligence and compliance issues to ensure every new investment fund is legal. This should help retain confidence in the system."
    "Ukraine, alongside the UK, is arguably the global leader in the blockchain economy."
    "Estonia created a digital residency program back in 2014, has a Blockchain-based voting system"
    "With the residency program already on blockchain and business records to follow, a blockchain-based currency could be the final piece in the puzzle that provides a frictionless taxation system that largely eliminates tax evasion at a stroke."

    "Payspace magazine reckons 41 million people now have a Bitcoin wallet and there are over 80 stock exchanges trading in crypto-assets. "
    Making it Easy to Invest in Cryptos - Russian Entrepreneur Unveils 'Tokenbox'
    Fascinating stuff.
    10/30 Now over120 hedge funds focused on bitcoin, digital currencies – CNBC
    10/30 Warren Buffett unimpressed by bitcoin price surge, ICOs – CryptoCoins News
    10/29 How many barrels of oil are needed to mine one bitcoin? – Financial Sense
    10/29 Watch out, Big Brother is all over your bitcoin, says Ron Paul – Kitco

    "suggesting in 2014 that the Gulf Cooperation Council could benefit from trading oil for bitcoin."
    "even suggesting that the “anonymity” factor could usher in a new era of world peace. The idea is that, using a neutral “petro-bitcoin,” countries would be immune to currency manipulation from governments"
    Stealth socialism,

    Armstrong, "I and my senior staff even are going to private meetings with central banks. Everything we have ever been taught in school is just dead wrong. "
    "The world economy is coming unglued. This is no joke. The sooner people wake up and just follow the money flows and forget the old theories, the sooner you will arrive at clarity. The only economic theories that were spot on were Adam Smith, who had no ax to grind in the observation of the Invisible Hand, and David Ricardo’s Comparative Advantage. Everyone else ever since has been about trying to eliminate the Business Cycle."
    "Both witnessed the economic collapse, but instead of blaming the government and its socialist attempt to control the business cycle which was Marx’s idea that failed, they blame the people for not performing as they demand."
    "Their failure to even recognize the collapse of Russia and China under Marxist theory is a tragedy that will only lead to internal class warfare.

    I thank God I do not have much longer on the planet. I am compelled to watch idiots try to control the world and blame everyone else for their failure."

    Armstrong has another interesting article,
    Saudi Arabia agreed (under duress) to sell oil only in dollars. They agreed to recycle their excess profits into Treasury Bonds. Evidently T-bonds didn't earn enough so, they branched out,
    There is nothing smooth about the petro markets,

    Leave a comment:

  • Danny B
    Gold,,, Ca. pensions,,,Taleb, ignore warnings

    The East is determined to make gold the ultimate extinguisher of debt.
    "Ottawa's gold holdings peaked in the 1960s at more than 1,000 tonnes. But the government has been steadily selling off its gold holdings ever since. By 2003, Ottawa was down to 3.4 tonnes, which it has now almost entirely sold."
    Ottawa sells off almost all its gold reserves, leaving just 77 ounces ? or less - Business - CBC News
    The State wants you to use only State paper as a store of value. The run down gold any way they can. I suspect that they are selling fake gold to try to drive people away from the market, "This Could Be Huge": Gold Bar Certified By Royal Canadian Mint Exposed As Fake | Zero Hedge

    Pox Americana tries to keep investors confident in the markets. The FED announces that it will stop QE. Then the PPT and ESF pump in liquidity. The European Central Bank announced that it would reduce QE by 30 billion Euros. They have already bought 2.55 trillion. BUT, they want another entity to continue to pump in liquidity.

    "62,000 retired California civil servants receive annual retirement benefits that total six figures.
    With roughly 20 cents of every dollar spent by the Los Angeles city government and taxpayers footing an enormous pension system,"
    "the state paid out more than $20 billion in retirement benefits last year. But the biggest shock may be that the state’s so-called 100k Club grew by 23,000 members in 2016."
    "group dominated by Los Angeles police and fire retirees"

    "Los Angeles will indeed have an increasingly difficult time funding the retirements of ex-employees. Last year, the city’s general fund payments for pension and retiree healthcare surpassed $1.04 billion, accounting for nearly one-quarter of operating revenues. This was just 5% in 2002. To help cover the costs, the city has had to shift close to $1 billion from other programs to service retirement incomes, which means smaller budgets for public safety, recreation, or libraries."

    Cute infographic,
    European bond yields are crashing so, we can expect more capital flight,
    Draghi is an imbecile.
    The CBs are talking up quantitative tightening but, the markets don't really believe them. I think it is all bluff.

    "As usual, all of Taleb’s warnings and rational analysis of how the world really works have been forgotten or ignored, as the actions of the captured Fed, corrupt DC politicians, and greedy Wall Street shysters propel the nation and the world toward another historic financial collapse. The “experts” will be proven to be knaves and fools once again."
    "The plan has been to introduce massive doses of central bank and government debt into an already debt saturated fragile global economic system and artificially suppress interest rates in order to prop up stock markets and high end real estate markets, while impoverishing senior citizens, savers and the working middle class. A few million middle class eggs must be broken to make a gold plated oligarch omelet."

    10/30 US homes have never been more unaffordable – Zero Hedge
    RE is where hot money meets the lower loop. It's hard to imagine the GOV doing something about this.

    Leave a comment:

  • Danny B
    Had to break it up more

    “It’s a result of the lobbying process,” he says. “The business interests who fund the major universities – the business schools in the Economics Department – want an economic doctrine that celebrates, not criticises, them. And certainly when you have the University of Chicago’s monetarism that is very deliberately pleading for their financial interests, advocating for the economy’s financialisation,”
    “What happens is that people who criticise financialisation – for instance, modern monetary theorists – find that they can’t get published in the major refereed journals. And without that, they can’t get promoted within academia. Universities are systematically detouring students away from economic reality.”

    "The economist, famed for sacking Alan Greenspan back before the days he was appointed to the Chair of the US Federal Reserve, criticised him for claiming he was “shocked” by the self-interest lending of institutions to protect shareholders equity."
    "The economist says economics was “traumatised” by socialism and Marxism, or at least the way they were perceived by the West under Lenin and Stalin.

    “They said: ‘we’ll say how an economy doesn’t need a government. If corporations run the economy, and banks run the corporations, everything will all turn out optimum, and the optimum means no choice at all. But that’s the way we’re doing it.”

    Leave a comment:

  • Danny B
    Had to break it up

    "economist, Professor Michael Hudson says economics has not failedait all. It is working perfectly well, according to the rules upon which it has been set."
    "The main goal of neoliberalism is to create an economic model for a parallel universe that seems plausible, says economist, Michael Hudson, "

    “Economics has failed,” is a phrase that is becoming more common by the day, the result of the current economic paradigm of neoliberalism. But economist, Professor Michael Hudson says economics has not failed it all. It is working perfectly well, according to the rules upon which it has been set.

    The main goal of neoliberalism is to create an economic model for a parallel universe that seems plausible, says economist, Michael Hudson, Professor of economics at the University of Missouri in Kansas City and a researcher at the Levy Economics Institute at Bard College.

    “It seems that it would work very nicely, if the world where that day,” he tells host and co-founder, Ross Ashcroft. “But economics does not have a relationship to the real world.

    “The function of neoliberal economics is to distract attention away from how the economy really works"
    “There is an enormous amount of analysis, all of it based on history, on empirical analysis, on statistical analysis – and all of that is excluded from the curriculum "
    "The economist says decades of lobbying has caused a ‘selective amnesia’, where great swathes of economic history have been blocked out of economic research.

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  • Danny B
    China against the wall,,, Neoliberalism sinking fast

    The Chinese invented gunpowder but, NOT the cannon. The Chinese junks had an inferior sail & rigging and couldn't sail close to the wind. The British ships could always out maneuver them. Thus, they lost the opium wars. The economic and social experiments of Chairman Mao proved to be a disaster. China was once again facing the prospect of being enslaved and partitioned by the West. With the advent of long-range bombers, China could no longer count on the buffer States that surrounded her. Little Japan brought great humiliation to China by invading easily.
    She had to embrace (her version) of free-market capitalism. Only capitalism would provide the motivation to lash her 1 billion people to work hard enough to stave off attack from the West. China also had to embrace an economic model that history proved was not steady-state. She had no other choice.

    "Chinese total debt has surpassed 300%. In the first nine months of the year, the money supply has increased by 9.2%"
    "China has added more debt in the first nine months of 2017 than the US, Japan and the EU combined"
    "The vast majority of the largest quoted companies (c60% of the Hang Seng Index) have published results with returns significantly below their cost of capital"
    "A glance at the Hang Seng Index shows a leverage of 122% (total debt to equity) and 17.5x debt to assets, with an abysmal return on assets of 1.33% "
    " A surprisingly low non-performing loan ratio of 1.74% is widely questioned, and Fitch, for example, estimates that the real figure is ten times greater than the official one. "
    "China requires 6.5 units of capital to create one unit of gross domestic product growth, double the ratio of a decade ago”
    "China does not have a welfare system that allows a social cushion if a domino of bankruptcies happens in the household sector, and the social crisis would be unmanageable."
    The article goes on to state that China can never de-leverage. This shows a lack of imagination. China needs a huge influx of wealth to liquefy all of it's debt. A huge repricing of it's gold would (will) do the job nicely

    Leave a comment:

  • Danny B
    Tradable vs non-tradable,,, wind/solar vs carbon

    "I’ve long held that if a problem can be solved by creating $1 trillion out of thin air and buying a raft of assets with that $1 trillion, then central banks will solve the problem by creating the $1 trillion out of thin air—nothing could be easier."
    The CB is prompted to print because, the bills and demands of the parasite class never diminish. If $ 1 trillion solves a few problems,,,,, just keep printing and solve all problems. The State turns a blind eye to the negative consequences. No surprise,,, since when did parasites recognise limitations?
    "The mechanism to solve these problems—creating currency out of nothing—is like a perpetual motion machine: there are no intrinsic limits on the amount of new money that can created at near-zero interest, as the interest payments can be funded by new money."

    "The past eight years have created the comforting illusion that essentially all problems in the modern era of globalized, centralized, debt-based, state-cartel capitalism in all its flavors (Chinese, Japanese, European, American, etc.) can be solved by creating as many trillions as are needed (whatever it takes) and buying assets or issuing guaranteed lines of credit with the new currency.

    But there are some structural problems that can’t be solved by this mechanism. Some are primarily economic, some are primarily political-social, but all of them affect the entire system, not just the financial realm."

    "While China may be able to export deflation in goods that are tradable, that is, commoditized goods that can be made anywhere and shipped to markets elsewhere, nontradable goods and services such as local government services, housing, groceries, fast food, most healthcare services, haircuts, education, etc.—the bulk of the real economy—soar in price as the supply of money expands faster than the supply of these goods and services."
    "This is why inflation is already running extremely hot in nontradable sectors (which are often dominated, funded or controlled by the public sector/government), while deflation is still visible in tradable goods such as TVs, software, etc."
    "The consequences of this outcome of central bank stimulus-for-the-already-wealthy can manifest in all sorts of ways."

    "As I have often noted, historian Michael Grant identified profound political disunity in the ruling class as a key cause of the dissolution of the Roman Empire." We certainly have plenty of that.
    "-- The fragmentation of the two political parties into warring camps that have little common ground in a struggle for control of the rising tide of populism."

    "Based on McKinsey scenario modeling, they estimate automation could raise productivity growth globally by 0.8 to 1.4 percent annually."
    NO MENTION of wages.

    "As we get closer to the end of 2017, it's becoming clear that the solar industry will likely surpass 100 GW of solar installations for the year. For perspective, that's up from about 76 GW a year ago, and exponential growth from the 8.1 GW installed in 2009. "
    The U.S. is putting the squeeze on Saudi oil in favor of buying Iraqi oil.
    Exponential growth of solar power is definitely going to affect oil prices.
    As if solar wasn't bad enough for oil, here is the growth of wind power,
    "From 1998 to 2001, capacity factor was 25.4%, and projects built in 2015 had a capacity factor of 42.6%. Each watt installed generated 67% more electricity. "
    It's no coincidence that the states with the largest petroleum reserves are both in financial trouble.

    "The Committee for a Responsible Federal Budget — no laughter please — estimates the tax plan could add more than $2.2 trillion to the $20 trillion national debt."
    "The greatest burglars of America’s fiscal future?

    Social Security, Medicare and Medicaid… with interest on the debt into the bargain.

    If you accept the CBO at its word, mandatory spending — including these budget-busters and a few others — will constitute 78% of federal spending by 2026.

    That leaves only 22 cents per dollar for education, science, transportation and a hundred other things… to say nothing of defense.

    On that note, we learned yesterday that Social Security spending exceeded $1 trillion this year for the first time ever — 76% more than Uncle Samuel spent on defense (or offense)."

    "-- you can't help but notice that, to date, crypto hype and promises outweigh actual tangible real-world adoption and accomplishments by a very, very large margin. Say what you like about Valley VCs, but you can't argue that they don't have a long, proud history of momentous, world-changing success.

    There do seem to be green shoots of future success in the crypto world. I'm on record (see "Blockchains are the new Linux, not the new Internet") as arguing that decentralized consumer apps are unlikely to take off. That said, though, decentralized blockchain apps in many spaces, even non-financial ones, -- such as, say, power grids or reputation economies --"
    A rather odd article, "So when the opening shots of the next American civil war are fired, how will I know with which of my neighbors to affiliate? They all seem nice enough. But when the sirens sound and the grocery shelves are empty, who among them will share their basements or emergency rations from Costco?"

    Leave a comment:

  • Danny B
    Confidence,,, gold,, domestic crypto

    Everybody with half a brain concedes that the system will blow. These 1/2 wits all believe that they will get out in time.
    "I am wondering if, with the ECM ( economic confidence model) turning down on 11/24-11/15/17, if the U.S. stock market could potentially follow the ECM down into 2020?"
    "We have most likely extended the entire process when we passed the 97-month mark last April. The entire Roaring ’20s was only a 97-month bull market. That means we can move to the second type of Vertical Market which I call the Plateau Move."

    "However, money will NEVER shift from the stock market all into gold. Everyone has their pet investment in what they feel comfortable. Gold is a retail product – not institutional. The Institutions can trade ETFs, gold stocks etc., but they will never take possession of gold."
    Armstrong seems to believe that the paper-gold market will never blow. If the R.O.W. refuses our Treasury paper and demands gold for trade settlement, the paper gold market will most certainly blow.
    "What we are facing in truth is a currency reset. That means that ALL tangible assets rise against the currency in whatever country we are talking about."
    Sadly, this is a false statement. Discretionary spending and luxury spending will slow way down. This will hold down the price of luxury stuff. Even more important, if the price of energy goes up, this will drag down the sales of everything except necessities.

    Everybody is scraping around for a little extra money;
    "for Tenex to buy Uranium One had to be approved by nine federal agencies and signed off on by Secretary of State Hillary Clinton, which she did shortly after her husband Bill Clinton was paid $500,000 to give a speech in Moscow sponsored by a Russian bank. The Clinton Foundation also received millions of dollars in “charitable” donations"

    Oregon has some new taxes for people who refuse to adequately support the highway system. The higher mileage your car gets,,,, the more taxes you pay. Electric cars pay a chunk too. They even plan to tax bicycles.

    Repost, "Once each nation has its Cryptocurrencies in place, they can “align” them, and virtually abolish all economic buffers and barriers"
    "At the right moment, the governments will swoop in, regulate, and tax these Cryptocurrencies."
    "The power lies in the receipt, the payment receipt showing where you obtained that product and how you obtained it…all based on POS (point of sale), the electronic monitoring of every expenditure at the register. The “successful” employment of Cryptocurrency will mean that the people have been completely duped and have handed all privacy into the control of the government. "

    The State is an enormous mass of bureaucrats who are perpetually on the prowl for more tax money to sustain their growing numbers and appetites. The West has the capacity to be hugely productive but, it doesn’t have the means to be hugely consumptive. The public debt is growing faster than exponentially. The collapse will cause a currency reset. This is probably planned at some level. It isn't likely to work.
    A low-wage & high-price economy will never escape the economic doldrums. The rising price of carbon energy and the falling birthrate will just drag everything down. If we implemented free energy and got rid of the military, we still have the problem of a falling birth rate. "They" can drag in all the garbage from hellholes worldwide but, many of the people are net consumers and not producers. Without debt-free money, we just continue to slide down.

    The debt is growing exponentially just to keep us "running in place". After the reset, we will have to actually pay for our imports. We may very well have a domestic crypto currency but, nobody outside the country will accept it.

    Leave a comment:

  • Danny B
    Nervous billionares,,,repeat of 1987,,

    The upper loop meets the lower loop in real estate. The hot money has gone into property. This has priced out buyers who aren't in the upper loop. The same things is starting to happen to renters.
    Vacant Property Rates Soar In Over Half Of US
    1 In 5 American Renters Missed A Pmt In Past 3 Months

    A very good article on contagion, "The Nightmare Scenario" Revisited: Albert Edwards Lays Out The Next "Black Monday" | Zero Hedge

    "Billionaires’ fortunes increased by 17% on average last year "
    But, they are starting to get nervous,
    Since the CBs bought up every dip to make everything rise, volatility has died and been replaced by complacency. Albert Edward's investors believe that everything will be great for at least the next 18 months.
    "what my community, nation, and the entire world face: volatility made worse by inertia. In other words, the longer we choose to ignore inconvenient truths the greater will be their negative impacts. "
    "Despite per capita income one quarter that of New Zealand (ranked 38th of 140) and one fifth that of the US (108th of 140) Costa Rica matches many Scandinavian countries in terms of equality, wellbeing, life expectancy and ecological impact.

    As Jason Hickel of the Guardian recently put it, “Costa Rica proves that rich countries could theoretically ease their consumption by half or more while maintaining or even increasing their human development indicators.”
    Keep in mind that in 1948 Costa Rica declared that they didn't intend to have any wars. They disbanded the army. Get rid of the military and there would be lots more for the average person.

    I have to post several comments.
    "That’s interesting. Volatility is, by markets, the lowest ever on record. Volatility for people is also low: it’s a steady, inexorable, unchanging collapse downward."
    "Are people really irrational? We have a name for perfectly rational people: psychopaths. They behave with perfect logic. Is someone in the way of your promotion? Ruin their reputation and get them fired. Want to sleep with someone? Lie to them. Are there too many people on earth? Kill a couple billion with well-planned, perfectly rational policies. Are profits low? Start a war. Obviously. "

    "It’s the “irrational” part that makes humans “human.” The part where we keep old people alive after they’re productive, keeps infants and young disabled alive and their lives better when it costs society and ourselves personally. It’s part of adding that intangible, undefinable “humanity” that drives the panoply of psychopaths at the top crazy.
    It’s why they hate our guts, mock us, and try to kill us every day: we’re stinking up their perfect world, the perfect vision of the Junkers, the Barosos, and Merkels, the Lenins, Che’s, and Pol Pots. They see our irrationality as “weakness”, when in fact it’s part of an innate human culture, innate human strength they can never understand, and causes them to lose to those idiotic, deplorable, mud-stained commoners time and time again. "

    "most people are irrational.” NO! most people behave irrationally and they do so because they have little to no access to the critical, accurate information they would need to act rationally, combined with the fact that they must focus ALL of their efforts to make money or else they and their loved ones suffer and die.

    Absolutely every suggestion or solution that those in the know present threatens ones potential to make money. Even those pointing out the predicaments, making the suggestions and proposing solutions are only doing so if and when they can still make money doing so. This is why eventually everyone gives up on the “DOOM” and goes back to focusing on making money."

    "I know because I have been there, done that, and watched dozens of others do this. I saw it in the 60s, 70s with the conservation movement, ecology movement, Peace & Love movement.

    Until we address the issue of NO MONEY – YOU DIE! "

    "Obama to Pope Francis agree the greatest threats facing humanity are climate change and wealth inequality.”

    The author has identified Obama and Francis as credible sources. By doing so, he undermines his own credibility. Everything said by Obama and Francis is agenda driven. These men never state the truth unless it happens to fit their agendas. That’s the nature of power."

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  • Danny B
    Global pot flows,, ransomware,,hot money

    "Allen said there are more than 50,000 pot farms in California, and as many as 15,000 in Sonoma County. "
    Dozens of pot farms burn down in California wildfires - Oct. 20, 2017
    This big growth in domestic pot production is having quite an effect on foreign competition. The Mexican drug producers are losing market share.
    24,000 Homicides: Mexico On Pace For Most Violent Year In History As Drug Wars Spiral Out Of Control | Zero Hedge

    Malware is growing faster than anyone could have predicted. States are gradually shifting from kinetic warfare to cyber warfare.
    Bad Rabbit Ransomware Spreads: "This Is A Targeted Attack.. On Critical Infrastructure" | Zero Hedge
    10/26 New ransomware linked to NotPetya sweeps Russia and Ukraine – Wired Round up the usual suspects.

    The FED pumped in all that hot money but, ZIRP made it all but impossible to get any returns. As yield disappears, the hot money flows into stocks. Now that stocks have peaked, it is flowing into other asset classes.
    10/27 Luxury homes can’t keep up with high demand – CNBC
    10/25 US new home sales soar to highest level in a decade – ABC News
    10/27 Amazon soars above $1,000 after smashing expectations – Zero Hedge

    Hot money may bump up some areas but, it doesn't do much good for the average person. It gradually bleeds over into prices but, NOT wages.
    "The ashes of wealth consumed by the 2008-09 Global Financial Meltdown are still warm, at least to those who never recovered, and so buying assets at nosebleed valuations in the hopes of earning another 5% aren't very compelling to anyone pursuing common-sense risk management."

    "2. Value flows to what's scarce. As economist Michael Spence and his colleagues have noted, conventional capital--the kind issued by central banks and private banks--is not scarce and therefore has little value. Ditto for conventional labor. This is why the returns on conventional capital and labor are so low."
    "So any investment in health will pay extremely high dividends. It doesn't take a ton of cash to invest in one's health; most of the investment is behavioral."
    oftwominds-Charles Hugh Smith: Where To Invest When (Almost) Everything's in a Bubble

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  • Danny B
    Saving the banks,,, Reaper,,, QT,, 10 year rising

    After Great Depression I, congress passed the Glass-Steagal act separating savings banks from investment banks. Slick Willie came along and pushed the Graham-Leachy bill that allowed the savings banks to reunite with investment banks. Europe has just refused to separate savings banks from investment banks. Banks are just not growing and have reached an apex. They are headed down AND, they are going to take your money as they slip-slide into hell. Your deposit in the bank is considered an investment in that bank. When they go down, you can forget about trying to recoup your money.
    Senate Repeals Rule Letting Americans File Class-Action SuitsAgainst Financial Firms
    "Wednesday’s vote came under Congressional Review Act provisions, letting a House and Senate majority overturn an executive branch regulation within 60 legislative days of its adoption." The long, long reach of the swamp.
    "Neocon Mike Pence broke a 50-50 Senate tie, a giveaway to Wall Street crooks"

    So, just what is the purpose of Reaper? Will it mine BTC? Will it be used to bring down everything?
    The Next Cyber Hurricane Is Coming And It'll Take Down The Internet | Zero Hedge

    "Put simply, the above charts are a MAJOR warning that the bond bubble is in serious trouble. Central Banks are now cornered: either they stop printing money and let stocks collapse... or they continue to print money, unleash inflation, and pop the bond bubble."
    "The problem with this, is that in order to create this bubble, they had to print trillions of dollars worth of money and use this money to buy bonds. And that money printing (now to the tune of $15 trillion) has unleashed inflation.

    Why is this a problem?

    Because inflation makes bond prices FALL as bond yields rise to accommodate the higher inflation rate. And when bond prices fall, the bond bubble bursts."
    "Worst of all, the 10-Year Treasury has already broken its bull market trendline running back to previous credit cycle peak in 2007."
    Central Banks Are Now Cornered | Zero Hedge
    The foreign capital inflows have gone into equities, NOT sovereign bonds. The State drove down interest rates to make their debt service easier. At the same time, these low rates precluded them from attracting capital. Both Draghi and Yellen are talking about Quantative Tightening. The 10 year treasury has broken support. QT will only make it worse.

    The recovery has definitely helped those closest to the money spigot. Income has crashed and with it, the fertility rate. GREAT graphs.
    "Many have a hard time comprehending that if the money supply increases, how can there be deflation? It is always the bottom-line. If you keep raising taxes, you will reduce the standard of living, and that in turn comes back and results in lower economic activity."
    The everything card,

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  • Danny B
    QT... falling credit demand,,,Chinese gamble

    Super Mario Draghi is pumping in Euros2 billion a day into Eurozone bonds.
    "ECB announces that from January its quantitative easing programme will be reduced from a rate of €60bn-a-month to €30bn-a-month"
    "Although profits at the bank more than doubled on last year, climbing to €933m (£829m) for the period following major cost cuts, there was no sign of growth in its investment bank – an area investors are losing patience over.

    According to the lender, revenues in its corporate and investment bank fell almost a quarter on last year to to €3.5bn during the three months to Sep 30 "reflecting muted client activity"
    Lending is down but, profits doubled. Something stinks.

    "The market cap of equities is 139% of GDP. For comparison, it was 66% of GDP in 1987 before the Dow dropped 23% in just one day."
    "But the greatest bubble in the history of bubbles resides in the sovereign bond market. The incredible $8 trillion in negative yielding sovereign debt and the unfathomable $1.6 trillion in corporate debt with a yield less than 0% has pushed stocks and real estate investors into a yield-chasing frenzy."
    "For 2017, the Q1 year-over-year earnings was 14.5%, Q2 came in at 11%, but FACT Set is projecting Q3 will come in at a paltry 1.7% yoy earnings growth." It can only go down from here. It seems that you need consumers to actually have earnings.
    Lemmings in Full Gallup Towards Cliff | Michael Pento |
    "S&P said in a report on Tuesday that consumer credit — which constitutes borrowing like car finance and credit cards — has climbed over £200 billion this year"
    S&P: UK consumer debt boom raises 'red flags' as cre - Business Insider PARTY ON.

    Chinese president Xi at one time worked on a farm feeding pigs. In his quest for power and wealth, he may have overstepped good sense. He will be forced to devalue the Yuan. It remains to be seen if he can maintain confidence in Chinese debt and markets.

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