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  • Wild capital flows

    I'll start with Kunstler. He rightly points out that; if Trump is going to lay claim to an economic resurgence, he will also have to shoulder the blame for an economic collapse.
    "Perhaps he has not noticed that the money system is crumbling all around the world at the margins. If he does not understand that this rot eventually must reach the center, then he has washed down too many cheeseburgers with his own Kool Aid. Having taken ownership of all this lock, stock, and barrel, then he is perfectly situated to be blamed when the honey-wagon of algo trading robots turns south and whatever remains of the world’s hot money, including the US dollar, goes up in smoke. If it coincides even bluntly with the mid-term election, then we will find ourselves living through Civil War Two."
    Slouching Toward Okeefenoke - Kunstler

    There won't be a civil war. There is no place to draw the battle lines. It will be constant civil insurrection.

    9/08 COMEX silver to test 2015 lows-Craig Hemke – Sprott Money
    9/08 Surge in silver demand leaves U.S. Mint with no Eagle Silver bullion coins – Kitco

    Yep, record low prices at the same time as record low supply.
    9/09 Turkey ripples hit Korea as record money-market funds pulled – Bloomberg
    Yep, you're going to be reading a lot about money-market funds running hither and yon.
    9/08 The pension crisis is bigger than the world’s 20 largest economies – Sovereign Man
    Close your eyes and, click your heels three times.
    9/08 China’s record trade surplus with U.S. adds fuel to trade war fire – Reuters
    The only way that they can get more dollars to do loan service is to sell us more stuff.

    9/09 Japan eyes extra budget, challenging efforts to rein in debt – Money Control
    There are NO reins on that horse.
    9/09 The new fear for stock investors is an emerging-market meltdown – Yahoo
    It is a little bit late to start worrying about that. The exit will be closed pretty soon.

    "That companies would be scrambling to repurchase their stock last month was not lost on one particular group of investors: the corporate insiders of the companies buying back their own stocks.

    According to data compiled by TrimTabs, insider selling reached $450 million daily in August, the highest level this year; on a monthly basis, insiders sold more than $10 billion of their stock, the most of any month this year and near the most on record.
    corporate insiders are ramping up share selling as the major U.S. stock market averages are at or near record highs," TrimTabs wrote in a note.

    In other words, as insiders and management teams authorized record buybacks, the same insiders and management teams were some of the biggest sellers into this very bid, which one would say is a rather risk-free way of dumping their stock"

    John Hussman once again shows excellent data to predict a 50-60-70% decline in the stock market. The data is great. I can't take issue with it. Armstrong shows sovereign debt completely collapsing. So, a 50% collapse of equities is a better deal than a 100% collapse of sovereign debt. Not only that, corporate bonds are looking TERRIBLE. There is a shift out of emerging markets. The money has to go somewhere.

    The banks made a killing before and after the 2008 collapse. They were in NO way motivated to reform. There was even more regulatory capture. Not surprisingly, this has set the system for an even bigger collapse.
    "Securities ended Q3 2008 at $8.070 TN, having about doubled from year 2000. The government agencies were integral to the mortgage finance Bubble - fundamental to liquidity excess,"
    "$7.544 TN during Q1 2012. Since then, with crisis memories fading and new priorities appearing, GSE Securities expanded $1.341 TN to a record $8.874 TN. Of that growth, $970 billion has come during the past three years, as financial markets boomed and the economy gathered momentum. A lesson not learned."

    "But overall global debt has surged: last year it was 217% of gross domestic product, nearly 40 percentage points higher - not lower - than 2007."
    "The big beasts are even bigger: at the last count America's top five banks controlled 47% of banking assets, compared with 44% in 2007, and the top 1% of mutual funds have 45% of assets."
    "Regulators pledged to clamp down. So did the shadow banks shrink? Not quite: a conservative definition of the shadow bank sector suggests that it is now $45tn in size, controlling 13% of the world's financial assets, up from $28tn in 2010"
    "I've never viewed the 2008 fiasco as a "failure of the free markets." It was instead an abject failure of policymaking - of government policy and central bank doctrine and methods."
    What do you expect when the parasites run the show?

    "The allies wanted to prevent this ever happening again. So, at a meeting at the Bretton Woods resort in New Hampshire in 1944, they negotiated the details of an economic architecture that would – in perpetuity – stop uncontrolled money flows."
    Feces-for-brains ignore the real problem. It is NOT uncontrolled money flows. It is uncontrolled money creation. THAT was the whole idea behind Bretton Woods.
    9/09 Trump administration discussed coup plans with rebel Venezuelan officers – NYT
    America will be in there sooner or later.

    Obama's Friday Attacks on Trump Were Purposeful He Knows He Will Soon Be Exposed in Spygate
    9/08 Obama breaks his long silence and finally condemns Trumpism – Rolling Stones

    Secret Grand Jury Proceedings Underway Against Andrew McCabe; Witnesses Summoned
    The entertainment looks to be improving.

    U.S. GOV has cut way back on tax collection to give the economy a temporary boost. This has cut way back on FED GOV income.
    "The U.S. Government paid $40.5 billion in interest expense this July versus $28.7 billion for the same month last year. "
    "Total U.S. interest expense in 2017 was $458 billion while the amount paid this year is $455 billion and we still have two months remaining."
    Wait til Powell really gets the bit in his teeth.


    • The spread of monetary sepsis

      The Central banks printed up an extra $250 trillion to temporarily rescue their member banks AND, all the various things that were considered to be stores of value (except gold). The problem came up that; how could all this wet-ink money be invested at a profitable rate of interest?
      ZIRP had been instituted so that the State could carry the public debt burden more easily. The extra $250 T created extra price inflation that wore down the returned interest on all investments. You had to get a few % interest just to preserve the value of your principle.

      This pushed a lot of liquidity into risky asset classes like junk bonds and emerging markets. Pension funds were especially fried because they had bought safe U. S. government debt. Some pension funds bought riskier public debt in EMs. The currency crash in places like Turkey has come back here to haunt / wreck domestic pension funds.

      #1 Forbes: “Disaster Is Inevitable When America’s Stock Market Bubble Bursts”...
      This is a long article of doom-porn from many well known writers. BUT, the crash of the stock market has been imminent for years.

      EVERYBODY who is anybody reads Martin Armstrong. Uncle Sam is cutting his income and increasing his debt. Armstrong predicts that it will all crash down (public debt). No matter how high the stock market goes, it's crash will be less than the bond market. Making crash predictions based on valuation is risky when there are $trillions of capital flight.

      The Chinese mistrust "flying money" (paper). They much prefer tangible things like property. The good thing about gold is; it just sits there for eternity. Houses do not do that.
      “China is building 20 million apartment flats a year. It needs about 6 to 8 to cover both urban migration and depreciation of existing stock. So 60% of that 25% is simply being built for speculative purposes, for investment purposes. And that’s 15% of China’s GDP of $12 trillion. Put another way, it’s about $2 trillion. That $2 trillion is 3% of global GDP.”
      It [Chinese residential real estate] is the single most important asset class in the world.”

      " The heart of the Chinese model is malinvestment. It’s about building up non-performing loans and figuring out what to do with them.”
      “Chinese leaders know that their country suffers from massive over-investment in construction and manufacturing, [and] that its real-estate market is a bubble that makes the Dutch tulip frenzy look restrained. Chinese debt is the foundation of the system.”
      Remember that, at one time, China was printing more that the FED, ECB and BOJ combined. The Western CBs are slowing down, forcing China (PBOC) to speed up. There is huge capital flight from China and, Uncle Sam is attracting a lot of capital to these shores.

      "Corporate and consumer debt, which has accumulated over the last decade far beyond its capacity to be repaid, will go bad all at once. Then, as layoffs rise, consumer confidence – the last fortification against a recession – will roll over in short order."
      The Chinese have abandoned thriftiness, "grew nearly 40 per cent last year to Rmb6.8tn, according to the Chinese investment bank CICC. Consumer loans pushed household borrowing to Rmb33tn by the end of 2017, equivalent of 40 per cent of gross domestic product."
      “As much as the macro stuff has intrigued me … what’s so interesting about China is the lower down you get, the more micro you get, the worse it looks, in that the companies don’t seem to be profitable, the accounting is a joke.”

      "When the debt spigot turns off, it means the only “safe” assets are cash and precious metals. When the sparks fly, it’s hard to tell where they might land. And it means that whichever market has the highest debt and the fastest credit growth will be the “most important asset class in the world”.


      • Employment from the BS,,, Collapse of socialism

        Notes on employment. Here is an article with tons of graphs.
        "It currently takes 31 days to fill a vacant job, up from 23 days in 2006
        Businesses are very worried about tight labor market
        Almost 7mn job openings at the moment; was 2mn in 2009
        In 2010 there were 7 unemployed workers per job opening. Now it’s at 1
        Labor market slack declining across different measures
        Unemployment duration still trending lower, we have reached full employment"
        "Labor force participation rate marginally down to 62.7% in August
        Fall in people not in the labor force who want a job"
        Aug 2018
        Total not in the labor force (in thousands) 94,494 96,157
        Do not want a job now(1) 88,641 90,622
        So, it is very difficult to find workers and, there are 90 million who do not want a job.
        Just imagine what would happen if we had universal basic income.
        9/10 40% of Americans struggle to pay for at least one basic need like food or rent – MW
        The graphs point out lots of wage increases. I call BS.

        You have to get 1/2 way through this article before it makes relevant sense.
        "Central banks don’t care about Value. Central banks don’t care about Trend or Quality or anything else that rewards “good” investments and punishes “bad” investments. No, all they care about is lifting the price of ALL financial assets, which means – let’s be real here – if central banks have a bias on Quality, their bias is to protect low quality companies. Particularly European low quality banks."
        "Every policy decision made by China and Europe and Japan and the US in the wake of the Great Financial Crisis was made with a singular goal in mind – to prop up and inflate financial asset prices. Originally, it was to keep the status quo financial system from imploding. But soon after … and still now … it was to keep the status quo political system from imploding."

        "For 46 years, from 1951 to 1997, we were no more and no less rich than our economy grew. "
        "For the past 20 years, however, we have had a series of wealth bubbles – first the Dot-Com bubble, then the Housing Bubble, and today the Financial Asset Bubble – that have made us (temporarily) richer than our economy grows.
        And yes, that’s what a bubble IS … it’s when you’re richer than your economy grows."
        "Rock-bottom wealth ownership by the very rich coincided roughly with the Jimmy Carter administration, and it’s been a nice ride for the 1/10th of 1% ever since Ronald Reagan came to the White House."
        "What I’m saying is that wealth inequality in 2018 is greater than it has been in 3+ generations. I’m saying this is a fact. I’m saying that wealth inequality has been exacerbated by the inflation of financial asset prices. I’m saying that if you don’t think this is a problem for political fragmentation "

        "This brief article will explain why the world’s banking system is unsound, and what differentiates a sound from an unsound bank. I suspect not one person in 1,000 actually understands the difference. As a result, the world’s economy is now based upon unsound banks dealing in unsound currencies. "

        World trade is starting to seize up. That weakens both currencies and bonds.
        "Goldman estimates that the fading credit impulse and associated debt service costs will shave goods consumption growth by a whopping 3% in 2H 2018, resulting some time in late 2018 and early 2019 in the most negative print since the financial crisis. This, as shown in the chart below, would lead to the fastest slowdown in Chinese consumption this decade."
        Yep, just one more facet of the credit collapse.

        "tariffs could trigger a domestic slowdown in shipping that would ripple through the transportation industry."
        Just part of the slowdown.

        "Contrary to those continually predicting a stock market bubble and crash over the past 8-9 years, well-known market forecaster Martin Armstrong has been telling listeners that systemic problems overseas would continue to drive capital into the US, ultimately pushing the Dow and the S&P 500 to much higher levels.

        Famous for his long track record of accurate calls, Armstrong predicted on our show in years past that Trump would likely win against Hillary Clinton, that the US dollar would strengthen, and that the Dow could possibly swell to 40,000 before hitting a final peak."
        "We caught up with Martin again to get an update on his outlook, including his belief that we are witnessing the global collapse of socialism,"
        "For example, constant predictions of a collapse in US stock market, US economy, and US dollar fail to understand that conditions in other countries are actually much worse, Armstrong explained.

        Because of this very fact, capital continues to concentrate into—and not away—from the US in times of crisis."
        "biggest predictions Armstrong has been making for years is that we are witnessing the collapse of socialism on a global scale, particularly in Europe, "
        "Ultimately, entitlements and pension promises are falling apart, Armstrong, an avid historian, stated (see Pension Crisis on the Horizon for more info on this"
        "Right now, the amount of money in government bonds and debt is distributed at a ten-to-one ratio against equities,"
        "The United States is the only game in town, said Armstrong. There is ultimately no safe place for large investors to park money to ensure a return of principle, Armstrong stated, other than the dollar and US-related assets. As a result, a massive amount of capital is flowing into the US right now."

        Originally, social security was created to support widows and orphans. It supported people over 65 y.o. back when average life expectancy was 58.
        What started out as a good idea was a misunderstanding of human nature.
        Capitalism Encourages More Personal Responsibility - WSJ
        Socialism discourages personal responsibility.
        History shows that socialism brings misery to nations that adopt it ...
        You really can't argue with this conclusion. All government is socialist because the State is a non-producer. If we take Armstrong's claim at face value, what happens to the people who currently depend on the state. How many people were born just because their parent(s) knew that the State would support them?

        How Socialism Destroyed the Family Structure | Armstrong Economics
        5 Ways Socialism Destroys Societies - Townhall
        Black Jobs Matter: How Socialism Has Destroyed Black Communities
        Why socialism always fails - AEI - American Enterprise Institute
        Socialism at war with marriage, family - Washington Times
        What Has Government Done to Our Families? | Mises Institute

        Socialism and the State have destroyed the family structure for a great number of people. A large part of our population is so insecure that they blindly follow anything or anybody. Witness the recent resurgence of the flat earth "phenomenon." Don't forget Niburu.
        The State promised to be our benefactor and our "security blanket" That job has gotten far too expensive. The collapse of socialism will leave many millions of people cast adrift. Moral relativism will give millions of lefties the justification to grab anything that you have.
        'Morality test' on topics like incest and puppy-killing judged 'not OK' by students' parents

        The pension crisis is bigger than the world's 20 largest economies
        This will be the biggest facet of the collapse of socialism.
        Plant a garden for your granny. BlS


        • BS from the BLS,,, technostructure,,,

          This is a repost of 40 charts showing that employment in America is doing great.

          Paul Craig Roberts throws a barrel of cold water on the BS reports.
          "The great mystery is how these jobs can possibly have been created when the Bureau of Labor Statistics Household Data (Table A) reports that the civilian labor force declined by 469,000 in August from the level in the previous month (July); that employment declined by 423,000 in August from the previous month; and that 692,000 Americans dropped out of the labor force in August. Year over year (August 2017-August 2018) 1,531,000 Americans have left the labor force. This is inconsistent with a booming economy at full employment."

          Did GOV LIE ?

          The economy is SO strong that the FED needs to raise rates to cool it off.
          9/10 Stronger U.S. economy may warrant ‘restrictive’ rates, says Fed’s Rosengren – Reuters
          Raising rates wipes out U.S. corporate debt,,,, wipes out RE sales,,, increases the debt-service cost to FED GOV,,,, it can also massacre interest rate swaps in the derivatives market. So FED GOV blatantly lies about employment to raise rates and attract foreign capital inflows. This crashes down Europe, China, et al. It's called beggar thy neighbor.

          Yanis Varoufakis has an excellent article that is pretty hard to understand in it's entirety..
          "In summary, what had happened, globally, was that imbalanced dollar-denominated financial flows, which had initially grown on the back of the US trade deficit, ‘succeeded’ in de-coupling themselves from the underlying economic values and trade volumes. "
          They only succeeded in decoupling because of regulatory capture.
          "From that moment onwards, politicians went into overdrive to shift the losses from those who created them (the bankers) onto the shoulders of the innocent (middle class debtors, waged labourers, the unemployed, those on disability payments and the taxpayers who could not afford to set up off-shore accounting units). In Europe, in particular, one proud nation was turned against another by political elites determined to disguise: (A) a crisis caused by an alliance of Northern and Southern bankers and other rent-seeking oligarchs, into (B) a clash caused by the profligate Southerners and ant-like Northerners or as as crisis of over-generous German, Greek, Italian etc. social welfare systems."

          "Back in 1967, John Kenneth Galbraith described how capitalism had shifted from a market society to a hierarchical system owned by a cartel of corporations: the Technostructure, as he called it. Run by a global elite that usurped markets, fixed prices and controlled demand, the Technostructure replaced the New Deal’s full employment objective with that of GDP growth."
          Ah, without full employment, you can't control demand in the long run.
          "In the end, this financialised Technostucture was brought to its knees by the weight of its hubris. That’s what the Crash of 2008 was all about. Two powers proceeded to save the financialised Technostructure from itself: The US government, and in particular the trillions of dollars that the Federal Reserve pumped into European private and central banks (through what is known in the trade as ‘swap lines’)."

          "Based on the toxic fantasy of apolitical macroeconomic management, the Technostructure is, to this day, shrouding in techno-bubble the undeclared class war with which the establishment has been shifting all the risks and all the losses onto the weak, instructing them to “suffer what they must”,"
          "And so, here we are: At our generation’s 1930 moment. Soon after the Crash and with a fascist moment upon us. The pressing question facing this generation is a harsh one that, while no young person deserves to face, none of us have the right to evade: When and how will we rise up against the Nationalist International bred across the West by the Technostructure’s inane handling of its inevitable crisis?"

          Varoufakis leans towards socialism in his writings. For all his brilliance, he is blind to the corrosive effects of socialism on the body politic.

          9/10 Emerging markets increasingly locked out from access to capital – ZH You can thank Powell for that. China in particular has a desperate need for capital to service it's enormous bubble. This will bring about bubble deflation.
          Blockchain, YES... Crypto, NO!
          9/10 Crypto-mania collapse update: $638 billion gone – WolfStreet
          Former Chief Economist of IMF Wants the Fed to Buy Stocks
          If you read the CAFR 1 website, the GOV informs you that they own $trillions in stocks. CAFR1 Home Page

          The bankers set up investment vehicles and draw in investors with money.
          The bankers use regulatory capture to get changes to the law.
          The bankers spring the trap on the investors and clean them out.
          The investors get cleaned out by a market crash that nobody could have predicted.
          The laws protect the bankers.


          • Taxes and inflation to keep it ALL going

            I'm trying to find my way across untrodden ground,,, untrodden, at least for me.
            I must start with some notes from J.M. Keynes.
            In 1930, economist John Keynes predicted we'd only work 15 hours a week
            On a recent episode of Planet Money, hosts Robert Smith and David Kestenbaum discussed why Keynes was so far off-base — and what really motivates us to work so much.
            "thank heavens Keynes was wrong about the strength of human devotion to work. There is so much to learn and produce and improve that we should not spend more than a dribble of time living as if we were in Eden."
            How Keynes’ vision of the future could soon be forced upon us, but probably won’t be — we just love work too much.
            He thought that by 2030 we’d have 8 times the standard of living as in the 1930s, and we’d be able to fulfil our wants and needs with a mere 15 hours of work per week

            There is no"devotion to work". About 75% hate their job. We work to survive.
            Walter Burien uses mandated financial reports from every government agency to show that they cumulatively hold a couple hundred $ trillion that they have squeezed out of us in the way of taxes, fines and fees.
            CAFR1 Home Page
            Jack Ma made the claim that U.S. GOV debt is about equal to what we spent on wars.
            Paul Craig Roberts, "I have explained that the leftwing lost its bearings when the Soviet Union collapsed and socialism gave way to neoliberal privatizations. The moral fury of the leftwing movement had to go somewhere, "
            "The purpose of “Russiagate” is to prevent President Trump from normalizing relations with Russia. In these times when so many Americans are hard pressed, normal relations could adversely impact the budget and power of the military/security complex by reducing the “Russian threat.” If there is no real Russian threat, only an orchestrated perceived one, the question arises: why does the military/security complex have a taxpayer-supported annual budget of $1,000 billion dollars? "
            Why indeed?

            Roughly, 37,000 public agencies have roughly $233 trillion stashed away. For example the University of California system reports that it holds $90.1 billion in investments AND has many millions in income from various licenses and patents. BUT, free education is a radically expensive pipe dream.

            Burien also claims that GOV has no need to tax. So, GOV squeezes out taxes. GOV spends $trillions on wars. Part of the $trillions circulates in the economy. Much of the wealth created is dedicated to warfare where it will be destroyed.
            Shumpeter wrote about the "broken window" theory. If we go around breaking windows, this will stimulate the economy by necessitating repairs. This is also covered in the idea of "creative destruction'. We build things to keep people employed and then, we destroy these things to employ the people once again.

            As war gets FAR more dangerous, it isn't safe to have hot wars. We have cold wars where we do the SAME military buildup but, the hardware is abandoned, rather than blow up.

            What Paul Craig Roberts is missing is this; a cessation of warfare would change the entire economic picture. The fruits of industrial production would accumulate in the general economy, NOT be blown up. We would get closer to Keynes' nirvana where we didn't need to work more than 15 hours a week.
            Remember that the lower loop of the economy is where all the productivity happens. IF we could meet our needs with just 15 hrs. of labor, where would the upper loop of the economy get it's wealth?
            A cessation of creative destruction would result in FAR less production to be taxed and stolen by monetary inflation.
            If Trump, Xi and Putin should show that there was no particular need to have a perpetual arms race, this would greatly reduce overall economic activity.

            Moving on. Historically, it was absolutely anathema to tax a man on his labor. Not today. The working man is squeezed from every side to keep him working. The FED GOV doesn't need the tax money. The State can NOT afford to let the tax donkey take an extended rest.
            This whole paradigm is changing. 96.2 million Americans of working age are NOT in the labor force. Productivity has not suffered.

            "There is so much to learn and produce and improve” that voluntarily we just won’t ever give up working."
            "But what if we have to?

            As automation takes hold, we’re on the cusp of a revolution in how we work and specifically, how much ‘work’ there is to go around.

            As a January 2016 Oxford University study boldly states, 47% of US jobs could be lost to automation, along with 69% of jobs in India, and 77% in China, with similarly devastating job loses occurring in most countries (an average of 57% worldwide)."
            "Soon, without the creation of new, uniquely human forms of work, there simply won’t be enough jobs to go around.

            So what happens when what we currently think of as work disappears, given that we love work too much to give it up?"
            "If automation presents the challenge of our time, then the solution is simple: we have to radically re-think what ‘work’ is in order to survive."
            There is (and will continue to be) a huge disparity between the jobs that emerge, and the skills of existing job-seekers. Across Europe and America we’re seeing that trend emerge."
            There are now more job openings than workers to fill them - CNN Money https://money.cnn

            The article is upbeat about us figuring a way out of this problem. Previously. machines had replaced man's arms. Now, machine are replacing his brain. I do not see any answer that is compatible with human nature.

            As far as support for all these displaced workers, there are only a couple of possibilities. Universal basic income or a Tobin tax. Both of these are heavily resisted by the corporatocracy. sadly, both of these are incompatible with human nature.
            A great number of the PTB have seen this coming for a long time. THAT is why we see such a widespread push towards socialism.
            Socialism too is incompatible with human nature as far as maintaining a viable economy.
            The State has maintained productivity in the working class by constantly reducing our effective wages with taxes and currency / price inflation. The end effect was; the corporatocracy increased automation and, we reduced our reproduction rate. The looming default cascade will not settle the problem of the falling birth rate and increasing automation. It will not change human nature to be more robot like and, work without motivation.
            Even a robot tax will not solve the problem.
            Last edited by Danny B; 09-12-2018, 10:59 PM. Reason: mistook


            • Rolling out the blockchain to enforce morality

              Probably the biggest problem today is that far too much of the economy is run by organized crime. The swamp is a loosely organised group of people, both elected and appointed and self-promoted. Morality is an easily ignored stumbling block. Douglas MacArthur said that without morality, it all comes tumbling down.
              Since so much of the world is controlled by the corporate mentality, there is no chance of morality making a reappearance.
              We're slowly moving into a post-colonial world. The war-mongers don't want to let go of control.
              How can the world institute accountability as an acceptable substitute for morality?
              The Bretton Woods agreement was a wonderful arrangement to prevent a State from hyper-inflating their bond market to finance a war. It failed because it depended on the honesty and morality of politicians.
              Gold previously served the role of limiting expansion of the bond market as a prelude to starting a war. The war-mongers will never willingly let gold make a reappearance. The East has it in mind to do exactly this. They must tame the bond-inflators.
              Various States regularly cheated on bonds and went off the gold standard when they were in the runup to war. The only way to prevent this is to institute instant accountability. This is where the blockchain comes in. I believe that the blockchain can bring accountability to all finance. That is what the East is concentrating on.
              How Beijing is building a blockchain empire | Asia Times

              Future-facing South Korea moves to full blockchain adoption | Asia Times
              Reading everybody including Jim Willie and FOFOA, et al, et al, one gets the idea that gold is an un-stoppable idea.
              OBVIOUSLY, there will be no gold-backed currencies. Gold can no longer serve that purpose. The gold needs to quietly come to rest in the bond market.
              The blockchain is like "double entry book keeping" It is just too useful to ignore. It ferrets out corruption. I'm sure that the Italians will be the last to adopt.
              The private markets are STRICT about efficiency. Eventually, the accountability demanded by private entities will be demanded in public entities.
              The more corrupt the institution, the more that they will resist the transparency of the blockchain.
              This is where the collapse of fracking comes in. We managed to fake it when we hit peak-cheap-oil. No longer. The R.O.W. wants to end our military adventurism. If we want oil, we will have to have accountability. The Pacific Northwest already depends on Russian oil. I believe that Trump is trying to lay the groundwork so that we don't have a huge interruption is petroleum deliveries.

              LOVE those tax cuts;
              "The federal deficit hit $895 billion in the first 11 months of fiscal 2018, an increase of $222 billion, or 32 percent, over the same period the previous year,"
              "revenue only rose 1 percent, failing to keep up with a 7 percent surge in spending" "Revenue from individual and payroll taxes was up some $105 billion, or 4 percent, while corporate taxes fell $71 billion, or 30 percent."

              "The finance industry runs almost entirely on Other People’s Money (OPM). That creates an immediate problem. The finance industry likes to present itself as a steward of OPM, from institutional investors to individuals. Instead, it more often cares about getting as big a chunk of that OPM as it can"
              "That incentivises the creation of complicated, fee-heavy products. It incentivises the expansion of balance sheets. It incentivises short-term behaviour."

              Rahm Emanuel is getting out of Chicago as fast as he can,,, before it blows up.

              The Fed has burst the everything bubble – Gains Pains
              The FED is desperate to raise interest rates that it can lower them later.
              9/12 Cryptos’ 80% crash is now worse than dot-com bust – Bloomberg
              9/12 How bitcoin will make you big money again – Technal Traders


              • GDP,, France,,, Italy,,sucking in the dollars

                GDP is a measurement that was "invented" in the '30s. It is now used as a measurement of all economic activity. The guy who invented GDP claimed that advertising and finance should NOT be included because they produced nothing. When US GOV prints money, that is included in gdp. When it spends this money, it is counted a second time. The French government spends about 57% of the gdp. How is that possible?
                Many European States were serial defaulters because they over-printed their currency. Along came the boneheads with the idea of a common currency for all European States. The feces-for-brains world improvers blocked European States from printing currencies. They did NOT block them from selling unlimited bonds.

                "EU rules says that member states' debt should not exceed 60 percent of gdp"
                "France is also the only country in the eurozone whose debt to GDP ratio will rise over the next two years to 96.9 per cent"
                Now you know where France got the money to give a free ride to all those "migrants'
                "France recorded a government debt equivalent to 97 percent of the country's Gross Domestic Product in 2017. Government Debt to GDP in France averaged 57.16 percent from 1980 until 2017, reaching an all time high of 97 percent in 2017"
                Socialism is EXPENSIVE.

                That brings us to Italy.
                "Nick Giambruno: We had a European sovereign debt crisis, focused on Greece, a couple of years back. That sent shockwaves through global financial markets.

                But Italy is not Greece. Greece is a marginal economy. Its annual GDP is $200 billion. Italy has the ninth-largest economy in the world, with an annual GDP of about $2 trillion.

                Even more important, the value of Italian debt dwarfs Greece’s debt pile. Italian governments have run up the equivalent of about $2.6 trillion in debt—or about 130% of Italian GDP."
                "Nick Giambruno: That’s the point. Italy’s new government wants to leave the euro so it can finance its budget by going back to the old Italian currency, the lira, and printing money.

                That’s how it’s going to pay for its universal basic income and its extravagant pensions. "
                "Nick Giambruno: Italy’s new government is on a collision course with the powers that be in the EU. Its spending plans are completely at odds with the EU’s rules on deficits. And it’s already called on the European Central Bank [ECB] to forgive €250 billion in Italian debt. The ECB owns €341 billion worth of Italian bonds,"
                "It knows a blowup of Italy’s $2.6 trillion debt pile would make the fallout from the Lehman Brothers collapse look like a picnic. And folks in Brussels understand all too well that this would be a mortal blow to the EU.

                The EU has a choice to make. It can accept Italy’s demands and create a moral hazard that will eventually unravel the euro and the EU… or it can reject them, at which point Italy’s government will have no choice but to leave the euro. "
                "Nick Giambruno: Italy’s debt-to-GDP ratio stands at over 130%. But GDP isn’t a worthwhile measure—especially in Italy’s case.

                Government spending—no matter how wasteful or counterproductive—is counted as a positive in the calculation of GDP. And trust me, Italian government spending is not having a positive impact on the productive part of its economy."
                "If you want a more honest reflection of the indebtedness of the Italian economy, strip out government spending. It accounts for about half of Italy’s GDP. Do that, and Italy’s debt-to-GDP ratio doubles. It’s really 260%, not 130%."
                " The next big crunch will be when the Italian government unveils its new budget. And it’s almost certainly going to be at odds with EU spending rules.

                So we’re talking about a crisis—that would dwarf the 2008 global financial crisis—happening as soon as later this year. The EU is in an impossible situation. No matter which way it goes, it’s in trouble. "

                So, what is the French debt to GDP if you take out government spending?

                "Due to the high dependence of many economies around the globe on the US dollar, the Fed can no longer gear its monetary policy to the needs of the US economy alone. It can no longer ignore the consequences its monetary policy is most likely to have on other economies around the world. While the US economy may well need higher interest rates, many countries will have significant problems coping with US borrowing costs going up."
                USAGOLD's NEWS & VIEWS newsletter
                THAT is the whole idea and, it isn't an accident.

                The U.S. is doing a tax holiday to repatriate overseas funds. Keep in mind that the whole world needs dollars to service dollar-denominated debt.
                Some US$2.6 trillion of offshore funds are in the process of taking advantage of a one-off 14% tax holiday.
                Repatriation or, sucking the dollars out of the R.O.W.

                "The Fed’s monetary policy would become, more than ever, a ‘bail-out policy’ for the rest of the world, that is coming to the rescue of foreign borrowers who have overstretched themselves by taking on US dollar debt. Printing great amounts of money and providing it at artificially low interest rates would become the hallmark of the ‘new Fed policy’."
                USAGOLD's NEWS & VIEWS newsletter
                Where do these idiots get the idea that America is going to save the financial world?

                "The Bank for International Settlements (BIS) says offshore dollar funding has risen to US$10.7 trillion since the early 2000s, with a further US$14 trillion of global dollar debt hidden in derivatives."
                Powell is going to put them up against the wall.

                The strong dollar is crashing CBs and economies around the world. China said that they would refuse to take part in a new "Plaza Accord" where the CBs would sell dollars and buy weaker currencies. There is speculation that Trump could declare a national emergency and cheapen the dollar unilaterally. I really don't think that would be successful.

                While Italy and France will blow up in 12--18 months, it looks like Turkey will beat them. Erodgan has gone totally nuts. Maybe, he plans to just default anyway.
                This will make all the Turkish bonds held by Spanish and Portuguese banks

                Edgy investors are retreating from risky economies – New York Times
                America is the best looking horse in the glue factory.

                "In 2018, total high and upper middle income population growth will be +22 million persons or just half of that of the 1988 peak"
                "'88 when over 85% of the growth was among the under 65 year old 2018, just 21% of the consumer nations population growth will be among the under 65 year olds,"
                So, the potential workforce is crashing. This, at the same time that pensions are shooting up. This is where the rubber meets the road as far as socialism is concerned. Socialism is financed through the bond markets. Social Security is holding non-negotiable U.S. Treasury bonds.
                U.S. public debt is slated to crash going in to 2020.
                Needless to say, the European States will be crashing first.

                9/14 Australia’s banks may be the “big butterfly” which triggers next “financial storm” – GC
                I'm betting on Italian banks.
                9/14 Albert Edwards: Why we are destined to repeat the mistakes of the past – ZH
                This can be expected every time that the parasites get control of the printing press.
                9/14 World is sleepwalking towards another financial crisis, warns Gordon Brown – Reuters
                9/13 This will be the mother of all Minsky moments – John Mauldin

                9/13 New trade war “shockwave” has FAANG companies bracing for impact – Birch Gold
                9/13 Interactive Brokers defects from Nasdaq to IEX as “dominoes start to fall” – ZH

                Forget the dominoes. I want to see heads roll. Starting with politicians.
                9/13 Fed fears it may have been too successful at whipping US unemployment – CNBC
                So, raise the rates even faster.

                I'm glad to see Frau Merkel get kicked in the teeth.
                9/14 Germany ready to sign migrant return deal with Italy – DW
                Merkel walks out of parliament as AfD leader slams her migration policies
                9/12 In fiery speech, Hungary PM slams EU immigration policy – Zero Hedge
                Brussels thinks that they are going to fine Hungary. The MEPs are cheering Hungary on.
                9/14 Tesla just lost its head of global finance – Tech Crunch
                He came on board just 3 weeks ago. He took a look at the books and, ran away as fast as possible.


                • Breaking windows around the world

                  J. M. Keynes advocated perpetual war as the best means to keep the economy stimulated. Keynes became a celebrity before becoming one of the most respected economists of the century when his eloquent book The Economic Consequences of the Peace

                  "Keynes wrote it to object to the punitive reparations payments imposed on Germany by the Allied countries after World War I. The amounts demanded by the Allies were so large, he wrote, that a Germany that tried to pay them would stay perpetually poor and, therefore, politically unstable."
                  Keynes claimed that the Treaty of Versailles sowed the seeds for the next war.
                  Every country England has invaded
                  Among this select group of nations are far-off destinations such as Guatemala, Tajikistan and the Marshall Islands, as well some slightly closer to home, such as Luxembourg. The analysis of the histories of the almost 200 countries in the world found only 22 which have never experienced an invasion by the British.

                  Churchill, World War could have been avoided but, the bankers wanted it.
                  Winston Churchill: "We will force this war upon Hitler, if he wants it or not." - Winston Churchill (1936 broadcast)

                  "Germany becomes to powerful. We have to crush it." - Winston Churchill (November 1936 to US-General Robert E. Wood)
                  "Germany's unforgivable crime before WW2 was its attempt to loosen its economy out of the world trade system and to build up an own exchange system from which the world-finance couldn’t profit anymore. ...We butchered the wrong pig." - Winston Churchill, The Second World War
                  "Hitler and the German people didn't want this war. We didn't answer Hitler's various petitions for peace"

                  "Neither the French nor the English would have made Poland a motive for war if they hadn’t been continuously spurred on by Washington..." US defence minister J. Forrestal 27.12.1945 in his diary

                  Bankers Extended WWI By Three Years -

                  "Keynes' most successful policy initiative, the proposal that Britain and the U.S. finance World War II by taxes rather than by borrowing, came directly out of Schumpeter's 1918 warning of the disastrous consequences of the debt financing of World War I."
                  Schumpeter advocated the "broken window" policy of stimulating the economy by destroying existing infrastructure.
                  General Wesley Clark: Wars Were Planned - Seven Countries In Five ...

                  You see where this is all going. ISIS has gone around wantonly destroying every bit of infrastructure in the Middle East that it comes in contact with. The "secret" is to destroy other people's infrastructure,,, not your own. Washington pushed England and France to attack Germany. The end result was that America got the job of rebuilding Europe with the Marshall plan. General Clark said that we were going to attack seven countries. It is simple. They ALL have oil and, can pay for rebuilding.
                  This is Shumpeter's creative destruction carried out on an international scale.

                  This isn't anything new. We let Iraq know that we would turn a blind eye if they attacked Kuwait.
                  Superpowers unite over Iraqi invasion of Kuwait- archive, 3 August ...
                  Aug 3, 2018 - Superpowers unite over Iraqi invasion of Kuwait
                  Feb 22, 1991 - It is a job that eventually could cost as much as $100 billion, and Kuwait has promised the contracts to countries that are supporting the war ...


                  • Continued

                    We got a Central bank in 1913, and, shortly thereafter, we got a world war. This is a very convenient way to enslave the State to the bankers. This eventually brought regulatory capture where the State had to do the bidding of the bankers if it wanted to avoid bankruptcy. The tables have turned somewhat. In the runup to WW II, FED GOV demanded that the FED buy GOV bonds to support the war. This hasn't stopped. The FED is now locked in to buying government debt. The wars are a waste of money but, they keep the bankers happy AND, people working.

                    China wanted to get all it's people working too so, they industrialized. The end result was that China exported unemployment.

                    The massive currency inflation brought on by the inception of the FED in 1913 had crashed the economy by the 20s.

                    Roosevelt felt that a war would drag America up out of the Great Depression One. Keep in mind that the '29 crash was not all that bad. When the Rothschild bank, Credit Anstalt crashed in 1931, that is when the banking crash really got going.

                    Roosevelt blockaded Japan (and act of war) and then, acted surprised when they attacked Pearl harbor. Admiral Kimmel of Pearl Harbor testified to congress that military intelligence knew 2 weeks ahead of time when / where the attack would come. Roosevelt was more concerned about getting the economy going than he was about many millions of dead Americans. The New York bankers pushed Roosevelt into war. Just as the London bankers pushed England into war.

                    When presidents lie to make a war | DD Guttenplan | Opinion | The ...
                    Aug 2, 2014 - Fifty years on we know the trigger for war with Vietnam was a fiction. ... secrets, is that the attack on 4 August may never actually have happened.
                    The Gulf of Tonkin incident never happened but, it was a good excuse to get the war industries running at full capacity.
                    This kind of provocation now happens on a regular basis with things like weapons of mass destruction.
                    The current "La Guerre du jour" is an attempt to destroy Syria. They have LOTS of money for rebuilding. Will Trump resist the temptation to go to war to stimulate the economy?
                    Trump's Choice - WW3 Or Saving Face In Syria
                    Ex-US Intel Officers Warn Trump Over Syria Attack 'Don't Be Surprised Russians Fire Their Missiles'

                    The bankers are doing their best to hold Trump's feet to the fire to get a war going. The swamp is gearing up for war.
                    "As a reminder, just yesterday we reported that the US fiscal deficit has resumed its surge, rising 40% Y/Y to $898BN for the first 11 months of the year, following the biggest monthly outlay by the US government in history."
                    " with a recession in 2020 (or sooner) now inevitable, the question then being just how and where will the US government find the room to add on the trillions in extra debt needed to bootstrap the economy out of what is likely to be the most severe contraction in decades,"
                    GREAT graph,
                    "if the current or future administration will eventually "grow into" the contextual situation that Goldman laid out as justifying the current fiscal outlier state of the US economy, namely entry into war."

                    The chosenites, neocons and Sauds are all frothing at the mouth because Trump only threatens to attack Syria. He is trying to break the cycle of war. War is justified as an economic stimulus. Is there an alternative?
                    Japan tried to stimulate it's home economy with infrastructure spending. At one point, Japan was pouring more cement than all the rest of the world combined. It didn't seem to help.
                    What must the world do differently to avoid using warfare as the only stimulus? China used massive infrastructure spending to get their economy going. That is now crashing because of huge debt loads combined with a falling population.

                    The stimulus is used for the most part to cure unemployment. U.S. GOV now spends about 32% of the GDP. (Armstrong). What happens to employment when the federal bond market collapses? 51% receive a check from GOV. 44 million receive direct assistance. In it's attempt to fight unemployment, the State may very well have met it’s match,,, the silicon chip.

                    America was a high-wage... high-cost State. As aggregate wages sank down, Americans could no longer support the things that were considered as a store-of-value by the middle class. Greenspan jumped in with price support for real estate. Bernanke and Yellen jumped in with price support for all asset classes. Keep in mind that money-printing hasn't fixed anything. It artificially supports prices. Just the same, this is the only plan that the CBs know.

                    FED GOV is spending money like crazy.
                    America is considered the least-worse place as a destination for fleeing capital. How much longer will this be true?
                    Starting next year, debt service to the bankers will surpass the cost of the defense department. The cure for the expense of debt service has long been known.

                    The bankers claim that the State can't possibly create the money supply because they will print so much that terrible inflation will result. Just another fairy tale.


                    • 10 years after the inception of the crash

                      10 years on from the 2008 crash, everybody is looking back to examine what happened.
                      In 1908, the bankers precipitated a panic that was later used as a justification for creating the Central bank in 1913. Since then, we have had a succession of crashes. The history of modern crashes should begin with the dotcom crash. Great gobs of money were thrown at anything that had to do with computers. The 2001 crash resulted. This sowed the seeds for following crashes.
                      In 2004, units from both the SEC and FBI warned of a RE bubble. Both units were disbanded. The sheep had to be shorn and, the show had to go on. The shearer was to be the banks. Banks take a financial risk when they loan money. This brings financial prudence to the loan originators. With securitization, the loan is immediately resold to an investor. All financial prudence went out the window. The loans were rated AAA and, the investor was sucked in. The banks generated fees whether the loan was good or bad. The banks were actually motivated to make loans to the more numerous deadbeats.

                      "Oct 20, 2009 - As head of the Commodity Futures Trading Commission [CFTC], Brooksley Born became alarmed by the lack of oversight of the secretive, multitrillion-dollar over-the-counter derivatives market."
                      Everyone from Born to Buffet warned about derivatives but, few people listened. It was just a matter of time.
                      Here is an article about 4 prominent people who tried very hard to sound the alarm to the financial world. It is well worth the time to read the whole article.

                      The bankers had a great degree of control over the various regulatory bodies like the FED, SEC and CFTC. Here is a list of the lessons to be learned.
                      The State needed to inflate the money supply to make up for the liquidity that had vanished in the crashes. How could they do that when all money was debt? Simple, they created more debt to re-inflate the economy. All this debt carried an interest cost. The interest cost is eating into everything. It takes a LOT of productivity to service a debt of $250 trillion. BUT, productivity is falling. More printing is the only thing available to do debt service.

                      The State forced ZIRP as a means to lift the load of debt service on State debt. ZIRP severely distorted everything else. It was particularly bad for pensions. The State reduced it's carry costs for sovereign debt but increased it's effective costs for pensions. Powell has reversed this. He has made the carry costs for sovereign debt go up. He is attracting fleeing capital but, he is only buying a bit more time.
                      FED GOV debt is increasing massively. How long before investors get scared away? How long before they flee to gold?

                      "Capitalism as we know it is over. So suggests a new report commissioned by a group of scientists appointed by the UN secretary general. Conventional capitalist economic thinking can no longer explain, predict or solve the workings of the global economy in this new age.
                      Conventional economic models, the Finnish scientists note, “almost completely disregard the energetic and material dimensions of the economy.”


                      • Tug-o-war between bankers and producers

                        Here is a longish article recounting the travails pictured in Steinbeck's book," The Grapes of Wrath". The author compares that period of time with what we have today.
                        "As long as you can have endless growth, the system of money we have in place today is perfectly fine. But if you can't, then once growth peters out, the entire system crashes into nothingness. There’s no in-between territory.

                        We could choose to have a different monetary system. We could embrace a 'sound money' system, where money can't be conjured out of thin air, at no cost, the way it is today"

                        Armstrong says that we see today is a collapse of socialism. The thin-air money has kept legions of non-producers from starving. It has nurtured millions of babies that have no future job niche. It supports many millions of retired people who are unable to work.
                        Socialism is a system that distributes the fruits of labor to everyone, including the poor non-producers.
                        Capitalism purportedly distributes the fruits of labor to the people who produced the wealth. Using the intermediary of un-sound money, this wealth is handed over to the non-producers who are rich enough to buy favorable legislation.
                        The poor vote to try to get enough of the wealth that they have produced. The rich take a shortcut and just buy politicians.
                        The well-off rent out their excess wealth that they have earned, to gain profit. The rich rent out their money that they got for free to gain profit.
                        The Central Bank is the enabler of this arrangement. Wealth and capital is something that you earn or create.
                        The sins of crony capitalism are laid at the feet of honest capitalism.

                        The banking fraternity may claim that they are staunch capitalists but, they actually produce nothing.
                        Ten years after the crash, we’ve learned nothing – Matt Taibbi, Rolling Stone
                        The bankers only have one game. They don't plan on doing anything that is actually productive.
                        9/16 Next financial crash imminent; China’s resource crisis could be the trigger – Medium
                        9/16 A boom commodities boom for the ages starts now – Casey

                        Doug Casey is the master of bad timing.
                        Here is a claim that $30 trillion in notional value will just evaporate. I expect that to be a very low number.

                        "Geithner found mechanisms, all of them very technical—and well-reported in Adam Tooze’s new book Crashed—to throw unlimited amounts of credit at institutions controlled by financial executives in the United States and Europe. (Eric Holder, meanwhile, also de facto granted legal amnesty to executives for possible securities fraud associated with the crisis.)

                        Second, Geithner chose to deny money and credit to the middle class in the midst of a foreclosure crisis. The Obama administration supported this by neutering laws against illegal foreclosures."


                        • Economic weak points at risk

                          The Central Banks tried to rescue with the printing press that which could no longer be supported with productivity and consumption. They were doomed to failure but, they managed to extend and pretend for an extra 10 years. I already posted writings from 4 people who clearly saw the crash coming. Something that Central Bankers claim is impossible. Even the big brains at the Harvard endowment fund got taken to the cleaners. That is what happens when everybody embraces the wrong economic theory.

                          Just as those 4 made accurate predictions, here are a couple more. Keep in mind that most investment bankers are using other people's money. They are a lot more likely to be reckless.
                          "The worry that got my attention was echoed by the second billionaire. When two billionaires with their own money invested in their own funds have the same major concern, it is time to take note. These guys are active investors. "
                          "Their biggest worry is the epic shift of investment flows from active management to passive management.

                          Having over 40% of all the money in the market being managed by computers gives a huge boost to returns during a bull market. But when the selling starts, computers don’t think. Their algorithms will automatically sell and flash crashes will abound. Once fear replaces greed, the wave of computer selling will overwhelm those trying to actively manage their portfolios. Then the record level of margin debt will result in margin calls and a further wave of selling. "

                          "It’s not a matter of if, but when the tsunami of selling will make the 2008 crisis look like a walk in the park. There are numerous other potential triggers which could cause or exacerbate the next financial crisis. Excess leverage always creates catastrophe. When you have $8 trillion of emerging market debt, a rising dollar, rising interest rates, and record low risk premiums, the fuse on the fireworks has already been lit."
                          "We know the 2008 crisis was primarily driven by the implosion of subprime mortgage debt and derivatives of mass destruction tied to those mortgages"

                          "What they fail to acknowledge is the immense issuance of subprime auto, credit card, corporate, and student loan debt to borrowers incapable of repaying that debt.

                          High yield corporate debt has grown from $781 billion in 2010 to $1.3 trillion today. Subprime auto debt has grown from $18 billion in 2010 to $50 billion today. Student loan debt has grown from $800 billion in 2010 to $1.53 trillion "

                          The CB tries to maintain the value of all debt. When enough people default, it can't be maintained. The banks are made whole again by printing.
                          "These investing titans were clearly scared at the time, but they chose not to pontificate about how Paulson and Bernanke saved their Wall Street asses while throwing Main Street under the bus. Nine million foreclosures later, with virtually no real wage gains in nine years, money market funds paying .15%, a national debt 122% higher (versus 38% increase in GDP), and global government debt $63 trillion higher (triple 2008 levels), we again stand on the precipice of another crisis created by the Fed, Wall Street, and your benevolent government."

                          "Near the end of the discussion they were asked what keeps them up at night."
                          "According to one of the billionaires (he was looking at bug-out real estate in Queensland in 2009), the first potential trigger is Italy. They are the 3rd largest economy in the EU. The debt market has issued a warning, with yields blowing out. Political chaos, massive debt, weakening economy, and animosity towards Brussels over migrants has created a perfect storm. An Italian debt default would trigger a global contagion."

                          Back in the '90s, Armstrong told the Eurocrats that the EU would blow up because it didn't have a common debt market. They went ahead anyway. It is now a race to the finish line. Who will blow first. Will it be Deutsche bank..... Italian bond markets.... Turkish debt?

                          just two more rate hikes would put the central bank above the neutral rate - the interest rate that neither stimulates nor holds back the economy
                          These boneheads seem to believe that there is a perfect / neutral interest rate. They ignore falling population. All that old debt was rescued by creating $247 trillion of new debt. They ignore the fact that the debt bubble has grown enormously.
                          "This broader overvaluation makes things "considerably more dangerous" for investors, as BCA estimates that the total value of global risk-assets is $400 trillion"
                          "The takeaway is that any inflationary impulse would - through higher bond yields - undermine the valuation support of global risk-assets that are worth several times the size of the global economy. Thereby, it could unleash a potentially much larger disinflationary impulse. Or stated simply, the higher yields go, the lower they will eventually drop during what Albert Edwards has dubbed the next deflationary "ice age."

                          "The fake money system – a system centered on debt based legal tender and centrally fabricated interest rates – produces booms and busts of greater extremes with each progression of the business cycle. This century alone we’ve experienced two iterations of these boom and bust scenarios. First the dotcom bubble and bust. Then the housing boom and crash."
                          "On a glorious day, much like today, when everything appears to be unfolding according to plan, all of the suddenly, out on the margins, an emerging market economy will be stricken by a debt crisis and go kaput. Moments later, during much confusion and panic, another two or three more emerging markets will also croak."
                          " Any and all ideas, ranging from the absurd to the ludicrous, will be put to the acid test so long as they meet two very critical criteria. They must preserve the status quo and further concentrate wealth into the hands of the few."
                          Honest Work for Dishonest Pay |

                          "It now appears that China’s escalation will be even more targeted, and that some Chinese officials involved in advising the leadership are proposing to step up the trade fight a notch by restricting China’s sales of materials, equipment and other parts key to U.S. manufacturers’ supply chain."
                          Here is a graph of world stock markets compared to U.S. stock markets.
                          This shows the effects of capital flight.
                          There are always side issues. North Korea is looking at drought and famine.
                          China has some serious issues also.
                          “China’s industrialization has also resulted in significant environmental damage, which greatly limits domestic production capacity. Industrial pollution has tainted as many as 13 million tons of crops with heavy metals. It is estimated that almost one-sixth of China’s land has been affected by soil contamination due to toxic runoff. Water scarcity is also a concern, as the government reported in 2014 that nearly 60 percent of China’s underground water is polluted and unfit for drinking without treatment. In 2013, widespread contamination of soil, especially in southern areas like Henan province, prompted the government to prohibit the farming of 8 million acres of contaminated agricultural land until it can be rehabilitated. . . . .”
                          "Over the past ten years, China’s food imports have increased from approximately $6 million in 2005 to $300 million in 2015. China’s food imports make up 6.7 percent of its total merchandise imports, placing it ahead of the United States (5.7 percent), India (5.6 percent), and Brazil (5.1 percent).”


                          • The Noosphere,,, gold & peace

                            Since it has no value, debt money is easy to create. Commodity money has to actually have a commodity linked to it. At one time, FED GOV required gold reserves to be 40% of the value of paper money. This proved to be very inconvenient to speculators and other non-producers. When paper money was gold convertible, there was really no question of confidence. Un-backed money lives & dies on confidence. A few years ago, the FED quit reporting the most important aspect of the money supply. They said that it was too expensive and, too troublesome. You see BS statistics everywhere. All done in the name of preserving confidence.
                            Most of you have heard of The Hundredth Monkey.

                            Some of you may have heard of the Princeton Egg.
                            The Global Consciousness Project
                            "When human consciousness becomes coherent, the behavior of random systems may change. Random number generators (RNGs) based on quantum tunneling produce completely unpredictable sequences of zeroes and ones. But when a great event synchronizes the feelings of millions of people, our network of RNGs becomes subtly structured. "
                            Professor Jamieson got a Nobel prize for proving quantum tunnelling.
                            In short, we are all connected to a certain degree at the quantum level.

                            There are a lot of people who know that the economy is going to crack up. Maintaining confidence is much more difficult. Quantum tunnelling is what allows the whole flock of birds to wheel and turn at once. What has our impending credit collapse done to our national psyche?
                            Besides this, the constant hate programming from MSM is driving a lot of lefties flat-out crazy. Like most people that I know, I did NOT like obummer. That didn't mean that I was going to go out and physically attack obummer supporters. The lefties are talking revolution and mayhem.

                            "The left has always been the most violent in politics mainly because they blame others for their own failure. Already we are starting to see a trend where threats are being made against political rallies for the Republicans. Police have had to respond to threats of violence against Republicans but perhaps the most serious threat was targeting the Trump International Hotel in Washington DC. An anonymous threat to pull off a mass shooting there was made on Twitter account that supports the Democratic Socialists and the far-left political group. The Twitter read: “I am coming with a gun and I expect to get numerous bloodstained MAGA hats as trophies,” Of course, that is the Make America Great Hats."

                            "I have just never seen such outright hatred for a president of any party as we are witnessing against Trump. I fear the computer is forecasting something important with an unbiased and objective analysis that is unsettling. Trump is the false move or counter-trend against the swamp (corruption) but the trend in motion will revert back and conclude with the destruction of the West as we have known it. It will certainly not be politics, as usual, anymore."

                            We just can't have a civil war. Where would you draw the battle lines? In India, they demonetized the largest denomination note. It completely paralysed the economy. We can't have widespread martial law. That would paralyse supplies to the cities. The State is trying to maintain confidence while the contagion is spreading at the quantum level.

                            "Repo 105 was a multiyear scheme by Lehman to defraud the government and its own investors by falsifying the actual amount of loans it had on the books, making Lehman look safer than it actually was.

                            It worked like this. A few days before the end of the calendar quarter, Lehman would “sell” billions of dollars worth of loans to another bank. I put “sell” in quotation marks, because Lehman ALSO had an agreement with these other banks to buy the loans back a few days after the quarter ended for the same price as they were sold, plus enough money to cover whatever the going interest rate was on that cash for the few days it was in Lehman’s hands. This is what’s called a repurchase agreement, or repo, hence the name Repo 105 (the 105 refers to the 5% over-collateralization that counterparty banks required to lend the cash to Lehman even for a few days – they knew Lehman was in trouble)."

                            "Surely, you say, no law firm would bless this blatant attempt to cook the books? I say, well … no US law firm would bless this, so naturally Lehman found a UK firm, Linklaters, to say that this was, in fact, technically a “true sale”. Even then, to pull this off Lehman had to run Repo 105 through their offshore subsidiaries, not through their US-chartered entities. "
                            "What about Lehman’s auditors, you ask, surely no auditor would go along with this scheme? Again , Lehman found that Ernst & Young would indeed sign off on the program, in exchange, of course, for a sharp increase in fees. "

                            9/17 China’s stocks drop to lowest level in nearly four years – Bloomberg
                            Powell is fighting the confidence battle.
                            Here are some vids from the doomers.

                            This article starts off with a long rant against Trump. Later on in the article, they have some worthwhile observations on gold. This is from a PDF that is very tedious to copy. You should read it starting at page 4.
                            With the Gulf of Tonkin incident in late 1964 and the acceleration of the Vietnam war in 1965, US Military spending exploded. This was compounded by President Lyndon B. Johnson's Great Society project spending and not raising taxes.
                            The ramping up, in early 1968, of the Vietnam War-because of the Tet offensive and President Johnson’s agreeing to General Westmoreland’s proposed troop surge-brought renewed pressure on the dollar.
                            Since Johnson refused to raise taxes to pay for the social welfare reforms
                            undertaken earlier and the war in Vietnam, the US was now running massive balance of payment deficits with the world.

                            Fed chairman William McChesney-Martin said the US would defend the US$35 per oz gold price “down to the last ingot.”Several planeloads of gold were emergency airlifted from the US to London. Gold demand continued to escalate with the London Gold Pool selling 175 tons one day and the very next day selling an additional 225 tons

                            "This broke the back of the London Gold Pool. Members were tired of draining their countries’ gold reserves to pay for the US’s Vietnam War and social reform policies."
                            That was our Bretton Woods credit card.
                            "Johnson was forced to reverse his decision to send hundreds of thousands more US troops to crush the Vietnamese resistance-instead he opened up peace talks"
                            There is no clearer link between gold and peace.


                            • More China,,, non-linear unwinding,,, macron=merde

                              Trump and Powell are attacking most of the world. China in particular is the main target. The collapse is coming and, America intends to be last in line. China loses 15% of it's GDP to pollution.
                              They have a real debt problem.
                              "To doomsayers, China's $34 trillion pile of public and private debt is an explosive threat to the global economy. Either way, the buildup has been breathtaking, with borrowing quadrupling in seven years"
                              "Chinese borrowing rose 14 percent in 2017, ballooning to 266 percent of gross domestic product, from 162 percent in 2008. "
                              "More than half of China’s debt is held by state and private corporations.) , former central bank governor Zhou Xiaochuan warned in late 2017 of a buildup of financial risks that are “hidden, complex, sudden, contagious and hazardous.”

                              9/17 China’s stocks drop to lowest level in nearly four years – Bloomberg
                              9/17 China “won’t just play defense” in a trade war with the US – CNBC
                              9/18 Trump unwisely escalates trade war: expect a “rare earth” response from China – Mish

                              Buy your Neo magnets now before the price increase.

                              Here is a good article comparing linear and non-linear dynamics.
                              "The linear stage of maturity is followed by a decline phase that’s non-linear.Linear means one unit of input yields one unit of output. Non-linear means one unit of input yields 100 unit of output."
                              "The previous two bubbles that topped/popped in 2000-01 and 2008-09 both exhibited non-linear dynamics that scared the bejabbers out of the central bank/state authorities accustomed to linear systems."

                              "Adam Tooze is an attempt to autopsy the meltdown and investigate the mindset and assumptions that led to the panicky bailouts and frantic goosing of a third credit/asset bubble — the bubble which is about to pop with even greater non-linear effects.

                              This is the nature of non-linear dynamics: everything is tightly tied to everything else. Tightly bound/connected systems are hyper-coherent, i.e. every component is tightly bound/correlated to other components."
                              "The vast imbalances created by 10 years of unceasing goosing will unleash a non-linear avalanche of reversions to the mean and rapid unwinding of extremes."

                              Who knows what will set it off? You can be assured that the contagion will travel around the globe in less than a day. In the original bailout, the U.S. Treasury mandated that all the banks take the money. Nobody knew if a bank was solvent or not,,, lying or not. All trust between banks was gone. By pumping up all of them, Treasury brought back trust. The CBs have pumped in something like $237 trillion and, things haven't improved. The next unwind will involve the loss of trust once again. The banks will close this time.

                              Turkey shot down a Russian plane and created quite a problem for themselves. Trump refuses to attack Idlib. The British are pushing very heavily for an attack. Syria has intercepted most missiles from israel, so, a plane might not be a good idea.
                              Macron is a globalist Rothschild. He has gone way out on a limb by directly attacking Russia and shooting down an unarmed plane.

                              "Air traffic controllers at Khmeimim Airbase “lost contact” with the aircraft on Monday evening, during an attack by Israeli F-16 fighters on Latakia, said the MoD. The plane was 35km off the coast of Syria when it vanished.
                              Russian radars also registered the launch of missiles from a French frigate in the Mediterranean on the evening of September 17."
                              I expect Putin will make them pay very dearly.
                              France is going down fast. The State spends 57% of the GDP and their debt is FAR above what is allowed by the EU. I don't wish this on the French people BUT, they did NOT vote for Le Pen. This is what they get.

                              It's not just America that has an epidemic of despair. Notice that these deaths are very high among First nation people. Canada has the same problem.

                              All the $trillions that flowed into passive investment is at high risk of berserk algos all trying to sell at the same time. Junk bonds will evaporate in a microsecond. Now, Michael Milken says that investment grade paper is at high risk.
                              Don't forget that U.S. government debt was downgraded 2 notches a few years ago. It almost makes you want to buy gold.

                              " Bolton made it very clear that the United States would NEVER cooperate with the Hague Tribunal and it regards the international court as an “illegitimate court” for the ICC is only good when it prosecutes non-Americans for war crimes.

                              Indeed, Bolton virtually declared war on the Hague and said that the United States and Israel, with other allied states, would put immigration bans on judges and prosecutors of the ICC, and it would also freeze any potential assets of Hague lawyers in the United States."
                              The Court at the Hague would have to move to MUCH larger quarters if they were to prosecutes all the war criminals in just the American lagoon of the swamp.


                              • A crash here, a crash there. Pretty soon, you have a real problem

                                Most of the news is too lacking in veracity to post here. Most of the rest is pretty technical. It is centered on China and, their big, big bubble. The Chinese bet almost everything on continued consumption from the West. Did they not consider that we would become poor when we lost our jobs to them?
                                Zhou Xiaochuan was the head of the PBOC. They brought in a new wonder boy, Yi Gang. He has a PHD in economics from the university of Illinois. So, Yi is a product of Western economics.
                                "This is a hard conclusion for many in the West (and in China, I suppose) to reach. They’ve been taught the technocracy from the very beginning. Give technocrats full autonomy, as they have in China, and watch all the good things they will accomplish."
                                "The powerful central bank doesn’t appear all that powerful, rather judging by what’s really going on in all facets of China money central bankers in 2018 once again appear to be desperate. Like 2015 desperate. Because of their models"

                                "Per Crescat’s model, the neutral Fed funds rate that would be necessary to control rising inflationary pressures today is 5.5%. The current Fed funds rate, however, is only 2%. Our research is based on the history of a breadth of inflation and labor market indicators and the Fed Funds rate going back to 1971."
                                "If the Fed were to raise interest rates by 3.5% to get to the neutral rate to prevent rising inflation, it would be catastrophic for today’s financial asset bubbles. Doing so would massively invert the yield curve, crash the stock and credit markets, and create a recession. Such is the tradeoff between inflation and financial asset bubble deflation that we face today."
                                1971 was when we parted final company with the gold standard. These feces-for-brains are trying to calculate inflation and deflation when the money supply has been growing 6-8% a year. They ignore the cumulative effects of debasing the dollar.

                                "China has been the fastest growing major GDP economy in the world, contributing over 50% of global GDP growth since the Global Financial Crisis. But the China miracle has all been accomplished by unsustainable debt growth, non-productive capital investment, and a massive hidden non-performing loan problem. China’s NPLs are estimated at close to USD 10 trillion" $ 10 trillion in non performing loans,,, what could go wrong?
                                Great chart,
                                Here is a chart of CB gold reserves. If it is good enough for them, it is good enough for me.

                                It doesn't matter so much if the West does or doesn't believe in gold. What matters is; what do the energy exporters want.
                                Here is a long, technical examination of the effects of automation by Authored by Per Bylund via The Mises Institute,
                                It is 100% garbage. I can't believe that these people consider themselves academicians.
                                "Similarly, the market’s production process with decentralized decision-making can be improved through the adoption of rational central planning where all available information is used properly. The task is thus to get the right people into power, and then have them calculate the best possible outcome given the means and ends already known.

                                In other words, we need not know anything about economy per se, but the task is one of engineering: to reduce waste and improve the existing processes."
                                While you're professing ignorance about the economy, you should also profess ignorance of human nature, natural resources, energy consumption and extraction. Throw in geo-politics and climate change.
                                "But the threat is not real for the simple reason that the efficiency of production is not the problem that economy tries to solve. The actual problem is the use of scarce means to produce want satisfaction." Yeah, I want a meaningful career to provide a center for my life.
                                "The economy is about economizing, and economizing is not about physical resources or means of production." Oh, do tell?
                                "So far the debate on automation has completely skipped the value dimension. While this makes the problem much easier to solve, whether through the creation of machines or algorithms to solve calculations, it provides a solution that misses the core of the question."
                                He missed the bus when they were handing out intelligence and rationality.
                                "If robots save us from the toil and trouble of working, that’s one thing. It means replacing leisure for labor, which cannot be a bad thing."

                                "Peak annual potential labor force growth took place in 1998, adding 1.9 million persons...almost entirely among the prime working age population. By 2008, total potential labor force growth was down about 15% (from peak) but the shift was well underway with the prime working age population growth down 25% to 1.4 million annually. By 2018, the potential labor force growth is just 35% of peak. By 2028, annual labor force growth will be just 15% of that seen at peak growth."
                                In the last 10 years, wages have doubled in China. Demand for robots increased 400% last year. Their labor force shrinks by 1 million a year. Will the fall in the human labor force be an even match with the rise in robots?
                                Everybody concentrates on productivity and ignores consumptive ability.

                                "Wages on Wall Street are now the highest they’ve been since 2008, with the average salary in the financial industry clocking in at $422,500. "
                                "Last year, a study found that 553,742 Americans were living on the streets on one given night. The biggest cause is a lack of affordable housing, something that’s exacerbated by flat wages"
                                Not one word of mention that inflation from the FED has priced millions out of the housing market. No wonder the suicide rate is so high.

                                As productivity and GDP dropped, the FED ramped up printing. Here is a chart of GDP minus FED printing.
                                "And when the music finally stops - as they say - it will be the central banks that bear the brunt of the blame.

                                "And it's that $20 trillion, built up over the last two decades, that has basically distorted everything - falsified prices, repressed interest rates, caused an explosion of debt. Twenty years ago there was $40 trillion of debt in the world today there is $250 trillion worth of debt in the world. The leverage of the world has gone from 1.3 times which is 3.3 times,"
                                Hmmm, Armstrong did mention something about Sovereign debt having some future problem.
                                Tesla, "The market cap is $60 billion going to zero - you can feel that happening. was only a couple hundred million."
                                "Amazon is one example, Stockman said, claiming that its current valuation, at 160x free cash flow, is simply impossible to justify.
                                "The crash of Amazon it will thunder across the planet," Stockman said."