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  • Danny B
    replied
    Puputovs, MMT,, poor Italy

    Well, the proverbial $hit is flying in Venezuela, Venezuelan Protesters Unleash 'Poop Bombs' As Currency Collapses 99.5% | Zero Hedge I feel real bad for the Venezuelans. Many of them are going to die. If they took all the effort they spend protesting and used it to do gardening, they would be much better off.

    Italy is following Greece because the eurocrats refuse to deal with reality. A lot of Italians are going to die. In Bleak Prognosis, Italy’s Financial Regulator Threatens EU with Return to a “National Currency” | Wolf Street
    An article on modern monetary theory https://dollarcollapse.com/monetary-...netary-theory/

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  • Danny B
    replied
    Money, wealth and gold, FOFOA

    This post not only calls for quite a bit of reading, it calls for quite a bit of thought and understanding. There were 3 writers over a period of a few decades who had an inside window to gold AND a serious understanding of economics.
    Another, Friend of another and Friend of friend of another. The following article if from FOFOA. He continues a tradition of fantastic insights into economics. You should read the whole article. It's long. The only thing better than a good book is a long, good book. The article centers on Money, gold and wealth. You have to read it slowly to let some of the foreign concepts sink in.

    "The debt built up from all of the past, unfree, protectionist old world trade is killing the transition. (to digital currency)
    The policy is to sell free trade and the narrow margins it produces as they shut down entire economies because the low profits cannot service the old debt.
    This brilliant, modern free trade system and all of its benefits cannot be implemented using the US dollar as a reserve currency.
    Government guarantees would require the treasury (and Fed) to print unbelievable amounts of new currency to cover the unserviceable debt that Free Trade would create!
    Back in 2014, I wrote a series of three very long posts, Fiat 33, Dirty Float and Global Stagnation, which explained, at length, my view of the future monetary system I call Freegold, which, ironically I think, has almost nothing to do with gold. Excellent articles to read.

    Please see Moneyness and Moneyness 2: Money is Credit for more on this subject More EXCELLENT information.
    Building upon FOA, I tend to think of three spheres of trade in which the ancients would have engaged each other. The three could be described as distant, local, and "among trusted acquaintances" or what we could call "super-local". As FOA explained, gold was best suited for distant trade, and, therefore, gold was always "On the Road,"
    1. Gold was not money, in fact it was practically the antithesis of money in ancient times. If you understand that money was credit, and that credit was used proportionately at the local and super-local levels, gold was the tradable wealth item used where money (credit) couldn't be used, over long distances between strangers.

    "To understand gold we must understand money in its purest form; apart from its manmade convoluted function of being something you save. Money in its purest form is a mental association of values in trade; a concept in memory not a real item.
    Let me repeat, to be perfectly clear. I think that gold gets its value today, its real value, which will be apparent come Freegold, from the way the Giants (LARGE holders of gold) use it.
    That 52,000 tonnes of new gold (has gone underground,,, disappeared)
    Here's what the above means to me. There is a hidden level of demand for physical gold which is virtually infinite.
    In total, adding up all twenty years in the table above, that's $1.38 trillion that bought up the new supply coming out of the mines, and I'm suggesting that money (actually around 95% of it) did not come from one of the known sources

    Money is essentially the antithesis of wealth. A balance in the monetary plane represents an unsettled imbalance in the physical plane.
    We can theoretically have balanced trade without being an island of self-sufficiency. It feels odd including the word "theoretically", but we haven't had balance in so long, it almost seems necessary. Again, this is the basic idea, to head toward balanced trade. The problem is that the 40 straight years of trade deficit need to be settled before we can have balanced trade.

    We have run a trade deficit every year since 1975, and just like coins have two sides, there's a flipside to a trade deficit too. That flipside is that we've been exporting dollars every year since 1975, net-exporting that is. And as I mentioned above, money is essentially the antithesis of wealth, a balance in the monetary plane represents an unsettled imbalance in the physical plane, and for 40+ years, the rest of the world has accumulated a huge balance of dollars which represents an unsettled imbalance between us and them.

    "The only thing that kept this process from showing up in the prices of everyday goods was the support other Central Banks showed for our currency through exchange intervention. As I pointed out in my other writings, this support was convoluted at best and done over 15 to 20 years. Still, it's been done with a purpose all this time. That purpose was to maintain the dollar for world economic trade, without which we would all sink into depression…

    We got here, of course, because the dollar was used globally for many decades, so it wasn't exactly like using our own currency. It was the world's currency, so it was okay in a way that we became "Financial Island" for the dollar. The problem is the vicious circle that created, leaving us with no escape other than currency collapse.
    You need to get competitive again (both Obama and Trump get this), but you can't until all this debt is either settled or wiped out through currency collapse (this is the part they don't get), and there's no chance it will ever be settled in real terms at today's prices. So you're stuck, or as FOA put it, "it's the dollar that's caught in a vice."

    In our time and for the first time in the modern US dollar history, the US will embark into a classic hyperinflation for the sake of retaining its own lessened dollar for trade use. As destructive as that might be to players in this financial house, it is better than immediate total economic failure.
    The debts and the dollars would remain; only 90% of their current illusion of value would vanish."
    Oh we'll get there alright, the only part that might surprise a lot of people, President Trump included, is that 40+ years of debt will be wiped out through currency collapse along the way. But get there we will! ;D
    Modern money is fine. Repair the concept of wealth at the personal level, and everything will be fine.

    FOFOA: Money or Wealth?

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  • Danny B
    replied
    China right on track for default...Systemic meltdown in Europe

    The wealth in China is underpinned by commodities. 5/11 China iron ore prices crash through key support to 6-month lows – Zero Hedge
    So, what to do when commodities crash?
    Simple !!! Borrow more money, https://capitalistexploits.at/2017/0...d-bull-market/
    If you are looking for some humor, GOV is ready to provide it. Keep in mind that the day before 9/11, GOV reported that $ 2.7 trillion was missing. Since then, several more $ trillions have simply gone missing. GOV has now created a website so that Joe average can track every dollar of GOV spending.
    For The First Time, You Can Track Every Dollar The Government Spends | Zero Hedge

    In France, the newly elected Macaroon is the anointed darling of the Rothschilds. Emmanuel Clinton and the revolt of the elites | Asia Times
    This is an act of desperation. Nothing can save the Euro.
    "Contrary to global perceptions, the biggest issue in this election was not immigration, it was actually deep resentment toward the French deep state (police, justice, administration) – perceived as oppressive, corrupt and even violent."

    I can't forget Kunstler;
    "Europe’s economic fate may be determined by forces far away and beyond its power to control, namely in China, where the phony-baloney banking system is likely to be the first to implode in a global daisy-chain of financial uncontrolled demolition. Much of that depends on the continuing stability of currencies."
    "The trouble is they are all pegged to fatally unrealistic expectations of economic expansion. Without it, the repayment of interest on monumental outstanding debt becomes an impossibility. "
    "Consider, though, that what you take for the drumbeat of nationalism is actually just a stair-step down on a much-longer journey out of the globally financialized economy. Because the ultimate destination down this stairway is a form of local autarky that the current mandarins of the status quo can’t even imagine."

    "That journey has already begun, though neither the public nor its elected leaders, have begun to apprehend it. The first spark of recognition will come in the months ahead when the current cover story on markets, “money,” and growth falls away and political leaders can only stand by in wonder and nausea that the world has the impertinence to change without their permission."
    Paris Afterparty - KUNSTLER

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  • Danny B
    replied
    Setting up for the bloodbath

    Much of American wealth was tied up in real estate. When RE crashed in 2008, that brought down most of the rest of the system.
    Much of Chinese wealth is invested in commodities. Commodities are headed down, https://www.bloomberg.com/view/artic...-taken-lightly
    Investors believe that stocks are going to go screaming up. Stocks are going up because CBs are buying them. P/E is close to 30--1. The CBs see stocks with no earnings as being superior to bonds that are expected to blow all to hades. Investors also see emerging market debt to be a good investment. IF the EMs are sucking up every dollar they can get PRIOR to blowing up and defaulting, those investors will get hosed very well.
    https://www.armstrongeconomics.com/i...-rate-of-2016/

    "The bond debt from developing countries is growing exponentially with total commitments reaching around $425 billion+. This crop of bonds have an average maturity of 6.3 years as compared to 10 year maturities for investment grade rated as risk-free.

    This is adding to the crisis we see on the horizon and a dollar rally will set off a debt crisis like nobody has ever seen in more than 100 years. Private debt among emerging markets is almost about $1.6 trillion with maturity due to foreign creditors over the next five years. It looks like about 90% of this debt is in US dollars."

    Yep, they are setting up the West for a BIG blowup, https://www.armstrongeconomics.com/i...-rate-of-2016/
    Armstrong, "Additionally, we have produced a very important report on the Fate of the Euro & the ECB. This report dives into the crisis faced by central banks and illustrates how it is now possible for central banks to actually fail."
    Armstrong stated VERY clearly that the State is NEVER proactive.
    "More importantly, we have offered a SOLUTION on how to save the ECB.
    https://www.armstrongeconomics.com/a...kong-wec-2017/

    Stockman, " I would target sometime between August and November because that’s when the rubber is going to meet the road on a debt ceiling increase when they are out of cash. Washington is going to end up in vicious political conflict over what to do about the debt ceiling. . . . It is going to be one giant fiscal bloodbath the likes of which we have never seen.”
    Fiscal Bloodbath Coming this Fall-David Stockman | Greg Hunter’s USAWatchdog

    Keep in mind that Trump must increase the debt to $40 trillion over a period of a few years.

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  • Danny B
    replied
    Oil companies rapidly dying

    You can well imagine that I find it difficult to separate the BS from the truth. I also find it difficult to pull together ideas from many different sources. You have to sort out all this stuff in your own mind.
    America had a boom post WW II. Things started to go down when the R.O.W. rebuilt their manufacturing capacity. In the mid-60s, the politicians inflated the system to create the welfare-warfare State. By 1971, gold was leaving the treasury at the rate of 100 tons a week. Not knowing any better, Nixon broke the gold standard rather than revaluing the gold/dollar. This incident prompted Ron Paul to go into politics. The chief strategist in China said that this was the single most important action taken by America, NOT the world wars.

    Wages in America have been going down for decades.
    Purchasing power has been going down for decades.
    Oil supplies in the lower 48 have been going down for decades.
    Fracking brought expensive oil online.
    Our wages go down, the price of oil goes up.
    Up until a few years ago, the oil majors sent about $1/2 trillion to the banking industry for investment. This has rolled over and the number is NEGATIVE. The oil majors are spending huge amounts of money for debt service. This high price for gasoline and diesel is made worse by GOV taxes. GOV adds about 70 cents per gallon. The oil companies profit about 5 cents per gallon.
    California just added $ 50 billion in taxes to fuels.

    Our wages are going down. The price of oil is going up. Profits are going down. Demand is going down. Oil companies have stopped paying for exploration and are cutting back on maintenance. They have cut back their stock dividends. The oil companies are sinking beneath the waves.
    We can't afford their oil any more. The taxes just make it worse.
    Our wages go down and the net change in money pushed into the system from the oil majors has been about a negative $750 billion. The credit bubble MUST grow but, input from the oil industry is crashing.

    "This next chart says it all. The top three U.S. oil companies, ExxonMobil, Chevron and ConocoPhillips cleared a hefty $16.3 billion after CAPEX and dividends were paid during the first half of 2011:"
    I arrived at that figure by taking these three companies Cash from Operations and then deducted Capital Expenditures (CAPEX) and Dividends. Now, if we look at the same figure five years later, these three U.S. oil companies are in the HOLE for $18.1 billion. "
    Their interest payment on debt is 86% of profit, https://i1.wp.com/srsroccoreport.com...00%2C358&ssl=1
    It is a good idea to read the whole article, THE COMING BREAKDOWN OF U.S. & GLOBAL MARKETS EXPLAINED… What Most Analysts Miss – Truth is Justice

    Infrastructure maintenance is also killing the oil majors, A Sobering Look At The Future Of Oil | Zero Hedge

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