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  • C.H. Smith writes about some of the important factors that we haven't been paying attention to. They don't look good.
    Stocks, so far this year.

    After careful consideration, however, the best article I have found to explain what happened last year was this, from Unherd Magazine: 2020: the year the elites failed upwards. A few choice highlights include:
    Elite institutional authority is everywhere collapsing in a bonfire of self-immolation even as elite institutions become ever more powerful….The iron law of the American elite is that as long as everyone fails together, everyone fails upwards. Regime loyalty is the herd immunity of the ruling class, a protection against the consequences of their own failures. This is why the loss in authority that manifests in the “crisis of experts”, while real, doesn’t diminish their power. But it’s also why the regime has to become more ideological and nakedly coercive — for a kingdom of experts without reliable expertise falls back on propaganda and state power.

    There are so many examples of this to draw from that one does not know where to begin. Yet how could we not look at markets too? How *they* continue to fail upwards!


    • The corporations destroyed the linkage (wages) between themselves and the working class. This looked good on paper with them getting rich. Very little money filtered down to the working class. In turn, the working class ran out of money and, couldn't supply the necessary capital to keep earnings going in the stock market.
      "The total market capitalization of the U.S. stock market is $36,258,650.9 million"
      So, where does the capital come from to keep earnings alive for this $36 trillion market?
      It comes from wet-ink "money" created by the State.
      Yesterday, I posted an article from C.H. Smith. Today, I want to heavily quote from the comments. Several of them are brilliant.

      What you've described in this article, is the life-cycle of stars and indeed, of everything in the material universe..

      The only saving grace, is that some stars don't get to the stage whereby they implode once they run out of energy.. Some stars implode much earlier, while still possessing massive energy reserves and their implosion creates a new cycle of creation from the debris, for instance, Russia, China..

      Those two were fortunate, probably something to do with their existential philosophies..

      Implosions that are terminal, seem to occur mostly in western societies and the reason why is obvious..

      For instance, Rome, Spain, Portugal, Greece, Britain etc. never recovered, their implosions were terminal, meaning they used up all their energies before implosion, unlike folks in the East who imploded while still energetic metaphysically and were reborn like phoenixes arising from the ashes of implosion..

      Now Charles, as averred, energy necessary for rejuvenation, is not physical or material, it's metaphysical, meaning that if the metaphysical accounts of a nation or society goes negative or near depletion before implosion, that's it for the societies..

      It doesn't mean they cease to exist per se, some do, but it means they can't recover lustre, or put simply, they can't recover their glories, and thus, become like dwarf stars, emitting no light, and possessing no vigor..

      As above Charles, so too below..

      What's compounding the western societies problems, is the virus of exceptionalism which makes recalibration impossible. For instance, while Rome, the empire still had a chance at recovery, folks back then, just like now, were imbibing delusions of Roman glory even while it was declining precipitously, with other societies rising in power..

      The empire was stuck in a lethargic quicksand of inability to alter trajectory and again, the problem was exceptionalism..

      Look at Iran, it has periodically imploded while still energetic and thus, managed to survive as a civilization for thousands of years, same with China, same with Russia, and same with Damascus, India, and the South East Asian nations..

      And for the US, we expect same and why?

      Because of E Pluribus Unum, which is the antidote to Western terminal implosion, and that, Charles, is why probation will be in effect only till the summer to avoid terminal implosion..

      Put simply, someone has great interest in preventing a terminal implosion so then, there'll be an implosion before the zero barrier to inevitability is crossed, we already mentioned that earlier, that some generational cohorts will bear the cost of implosion so the healthy generational cohort can begin anew..

      It's either that, or long stagnation to sequester the available metaphysical energy, in which case, there'll be unremitting lethargy for ALL the generational cohorts till rationality is obtained..

      Concisely Charles, events actually occur in the metaphysical, the physical, is only effects, not causes and that, is what we've been trying energetically to make folks understand and that Charles, is why intellect can't devise solutions and why?

      Because intellect is good only for understanding the material, it can't understand the metaphysical, where causes originate..

      It's like trying to understand emotions by listening to heartbeats. Sure, you may understand that a heart beats faster when agitated, or slower when at rest, but it still won't tell you the cause of the beats cogently. You may deduce fear or excitement, but you still won't understand exactly how the fear or excitement causes the heart to beat faster..

      You might erroneously attribute it to chemical reactions, or emotion perturbances but you still won't understand the cause of the "perturbances"..

      To truly understand, you'd need something beyond intellect, empathy for example, and empathy Charles, is NOT a physical principle, it's a metaphysical one..


      Why did the roaring 20s lead to the Wall Street Crash and the Great Depression?

      US policymakers were using neoclassical economics and didn’t have a clue what was really going on.
      The economics of globalisation has always had an Achilles’ heel.

      In the US; the 1920s roared with debt based consumption and speculation until it all tipped over into the debt deflation of the Great Depression. No one realised the problems that were building up in the economy as they used an economics that doesn’t look at debt, neoclassical economics.

      Not considering private debt is the Achilles' heel of neoclassical economics.
      As they headed towards the financial crisis, the economy boomed due to the money creation of bank loans.

      The financial crisis appeared to come out of a clear blue sky as they used an economics that doesn’t consider debt, neoclassical economics.

      The Americans are gluttons for punishment, aren’t they?
      They have done it again!
      At 25.30 mins you can see the super imposed private debt-to-GDP ratios.
      No one realises the problems that are building up in the economy as they use an economics that doesn’t look at debt, neoclassical economics.

      1929 – US

      1991 – Japan

      2008 – US, UK and Euro-zone

      The PBoC saw the Chinese Minsky Moment coming and you can too by looking at the chart above.

      The Chinese were lucky; it was very late in the day.

      No one has got the faintest idea what they are doing with this dodgy economics.

      How did Japan avoid a Great Depression?

      They saved the banks
      How did Japan kill growth and inflation for the next thirty years?

      They left the debt in place and the repayments on that debt killed growth and inflation.
      It’s not as bad as Japan as we didn’t let asset prices crash in the West, but it is this problem has made our economies so sluggish since 2008.

      Western governments are always fighting the drag anchor of all that private debt in the economy, which tends to kill growth and inflation.

      Japan has been like this since 1991.

      It gets worse ......

      The Japanese are miles ahead in their understanding of events after the financial crisis.

      They have had thirty years to work on it.

      Japanification is a private debt problem.
      Japan understood the problem and used fiscal policy.

      The money supply ≈ public debt + private debt

      They paid down private debt and used Government borrowing and spending to maintain the money supply as they deleveraged to avoid debt deflation.

      The West didn’t know what was really going on and tried to use monetary policy to cure a private debt problem with more private debt.

      What else does Japan know that we didn’t?

      Austerity is the worst thing you can do in a balance sheet recession.

      When the private sector are deleveraging, you need to increase public borrowing to maintain the money supply and avoid debt deflation (a shrinking money supply)

      In the West, we didn’t try and get private debt down; we didn’t even know that was the problem.

      We tried to cure a private debt problem with more private debt.

      QE can’t get into the real economy due to a lack of borrowers.

      The banks are ready to lend, but there are too few borrowers as they are struggling with the debt they have already taken on. They had saved the banks, but left the debt in place.

      We did the same thing.

      QE can’t get into the real economy, but it can get into financial markets.

      The gap between economic fundamentals and the US stock market widened until it reached 1929 levels.

      This is why the Japanese didn’t do much QE until Kuroda, as they knew it couldn’t get into the real economy when people were more concerned with paying off existing debt than taking on new debt.

      Richard Koo has no idea what Kuroda is doing and has put this down to him having no central banking experience.
      Personally I think Kuroda does know what he’s doing.

      He knows QE can’t get into the real economy due to a lack of borrowers, but is using it to inflate asset prices as this is what QE does best.

      The Western central banks have been using monetary policy to try and cure a private debt problem with more private debt.

      They didn’t see the problems developing in private debt.

      They didn’t know the problems were caused by private debt.

      They tried to cure the problem with more private debt.

      “We cannot solve our problems with the same thinking we used when we created them.” Albert Einstein.

      He’s right, but we tried to do just that.
      Not considering private debt is the Achilles' heel of neoclassical economics.

      Just like it was in the 1920s.


      • Another comment;

        Chinese policymakers aren’t using that dodgy, old, 1920’s neoclassical economics are they?

        You can tell because they are making all the classic mistakes everyone makes with this dodgy economics.

        The Chinese are then doing something we don’t see elsewhere.

        They are learning from those mistakes.
        Davos 2018 – The Chinese know financial crises come from the private debt-to-GDP ratio and inflated asset prices
        The black swan flies in under our policymakers’ radar.

        They are looking at public debt and consumer price inflation, while the problems are developing in private debt and asset price inflation.

        The PBoC knew how to spot a Minsky Moment coming, unlike the FED, BoE, ECB and BoJ.
        A year later, and they had made further progress.

        Davos 2019 – The Chinese know bank lending needs to be directed into areas that grow the economy and that their earlier stimulus went into the wrong places.
        They had pumped bank credit into areas that don’t grow GDP, and the private debt-to-GDP had risen to a level they were on the verge of a financial crisis.

        Everyone does that with neoclassical economics, but they don’t usually see the financial crisis coming.
        The Chinese wanted to increase internal consumption, but they were using neoclassical economics and let real estate rip.

        The equation makes it so easy.

        Disposable income = wages – (taxes + the cost of living)

        The cost of living term goes up with increased housing costs

        The disposable income term goes down.

        They didn’t have the equation, they used neoclassical economics.

        The Chinese had to learn the hard way and it took years, but they got there in the end.

        The Chinese have now realised high housing costs eat into consumer spending and they wanted to increase internal consumption.


        • "However, the dominant approach to economics—known as “Neoclassical Economics” —ignores them completely, on the a priori grounds that the aggregate level of private debt doesn't matter: "
          The credit bubble MUST grow non-stop. As private debt rises, people become debt saturated and can't take on any new debt.
          The corporations destroyed the linkage (wages) between themselves and the working class.
          There are over 100 million NOT in the labor force.

          Americans Have Cut Their Debt by 30% Since 2018
          by Christy Bieber | Jan. 2, 2021
          In 2018, the average debt balance among those who owed money was just over $38,000.
          In 2020, the total average debt balance among those who owe fell to just $26,621
          The private debt bubble is shrinking. The credit bubble must grow so, the State is pumping liquidity into the upper loop so that credit can grow somewhere, somehow. With derivatives failing, it takes a LOT of fresh liquidity.

          In a democracy, the people count for something. They count not at all in a corporatocracy.
          The corporate control of ALL news reinforces their position of control. Their stranglehold on advertising keeps them well funded.

          "It wasn’t the year we did something substantial about Big Tech and the incredible influence and control it has established over our individual and collective lives.
          My friend, Senator Ted Cruz, said in an interview on Saturday while he was campaigning in the Senate races down in Georgia (races where Facebook recently disabled the Republican fundraising pages) that Google was “the most dangerous company on the face of the planet.”
          Dr. Robert Epstein before a Senate Judiciary Subcommittee on the Constitution. Dr. Epstein suggested that Google’s manipulated search results shifted 2.6 million votes to Democrats in 2016, a phenomenon known as the “Search Engine Manipulation Effect.”

          While many people still hold in doubt the true results of the 2020 Presidential Election, and regardless of the eventual outcome, the power of Big Tech is now consolidated and complete. 2020 was the year that Silicon Valley boldly and broadly made it clear they would not even attempt to hide their true intentions: to control America, both in terms of what issues need to be promoted or suppressed, and what discussion would be permissible regarding those issues.

          if the FBI barged into our auditorium at that very moment and stopped our event, seized all of our phones, and deleted all of our content, we would ultimately find ourselves in front of a judge who would deem those actions by a government agency to be unconstitutional.

          However, I would then point out, if Google, Facebook, and Twitter decided to censor and take down all our posted and shared content from that event, they would actually be acting within their First Amendment rights. Before a judge, they would win. They own the platforms. They get to set the rules of the game.
          The world we are now living in is a world that is being defined by Big Tech giants. They are deciding what the issues are, what the policy solutions are, and what conversations can be had around both. Without the ability to freely exchange information and ideas, there can be no freedom.

          Larry Ellison
          is going to make sure that the NWO runs smoothly

          Armstrong; PRIVATE BLOG – BigTech & Why They Are Censoring the World
          It makes perfect financial sense from the corporate P.O.V. Destroy every bit of competition from small vendors.


          • Armstrong;
            1. The Model still shows World War is coming 2025-2027 time period.
            2. PRIVATE BLOG – The Reserve Status of the Dollar will End by 2028
            Youtube, China Military Plans to Fight US with 1000 Nuclear Warheads:

            Lt. Gen Tom McInerney - World War III has started Listen To This Interview - Important Information
            BREAKING: Michael Flynn Addresses The Nation: 'Do NOT Give Up!' BIG CHANGES COMING!!
            •Jan 13, 2021
            So, the dollar will lose it's reserve status AFTER WW III

            1/10 2020 was the joint hottest year on record – IFL Science
            1/09 Coldest in recorded history in Spain, China, Canada – Dr. Sircus


            • The nation and the economy were taken over by the non-producers. They looted the producers. Makes sense. No point in stealing from people who produce nothing.
              Armstrong claims that a republic will always change into an oligarchy.


              Learn to pronounce
              noun: oligarchy; plural noun: oligarchies
              • a small group of people having control of a country, organization, or institution.
                • a country governed by an oligarchy.
              1/14 “655 people have $4 trillion. 200 million can’t cover a $1000 expense.” – ECB
              At the same time, A democracy has always devolved into socialism & communism.
              Armstrong now advocates Democracy. The problem isn't so much the system.
              The problem is human nature. Everybody wants to live an easy life supported by the work of others.
              A democratic republic was hoped to be the solution as offered by the founding fathers.

              Now, there is a big push to eliminate the electoral college. This would further enslave / impoverish the rural areas in debt-service to the much more populated cities.
              The beggars, bankers and bureaucrats see funding slipping away as the producers grow ever-poorer.
              The new domestic terrorism laws are expected to keep the producers hard at work and locked down.

              NOBODY will be allowed to write or speak of anything that has to do with freedom of any kind.
              All the scenarios of gold etc., as the hedge against inflation will fail. We are in a world where you cannot transfer all your assets into gold and hop on a plane — they will confiscate everything you have. We will be running Socrates on overtime. It appears we have higher volatility coming from a February turning point. But in all honesty, we will probably have to restrict those suggestions to the private blog because we have blocked Google from searching that forum — the Basic Level of service that includes private blog access is only $15 a month. We will have to let Socrates do the forecasting, for there can be no bias nor allegations of a computer being a domestic terrorist. Everything that 9/11 did to target foreign terrorists will now be turned inward against Americans if you are using the words “freedom,” “rights,” or “liberty.”

              ANSWER: We have entered a new Cold War which will eventually turn hot. The Politicians are using COVID to destroy the economy deliberately to usher in a new age of Authoritarianism.
              The world is falling apart and every possible thing the Democrats are doing is leading to the Great Divide which will fracture the United States and fulfil what our model has been forecasting to my regret.
              This is not a forecast that gives me any pleasure. I simply interpret what the computer has done. There will be no returning to normal. We have passed the point of no return. Now we have to look at where to park money to survive the chaos ahead.

              Armstrong predicted the crash in sovereign debt. The State is / was well aware of the approaching crash.
              The bond vigilantes would no longer buy State debt. The CB took that over.
              The stock market had no earnings. The CB / FED took over the job of pumping up markets. You got richer on paper because stocks rose regardless of earnings.
              Wet ink money supported all the markets.
              Excellent article from C. H. Smith.
              4. Financial assets as a percentage of Gross Domestic Product (GDP) hit an all-time extreme. Note that in the "Glorious Thirty" postwar years (1946-1975) of broad-based prosperity, financial assets were around three times GDP. Now financial assets are over six time the GDP.
              This ratio increased with every one of the three bubbles since the mid-1990s: the dot-com bubble in 1999-2000, the Global Financial Meltdown in 2008-09 and now the bubble of 2020-21
              Each bubble has been bigger because the POTUS didn't want a crash on his watch.

              The CB has bought up every market to try to keep sentiment from creating a final crash. At the same time, the Marxists are deliberately trying to crash the economy.
              1/14 Lockdowns: one of the greatest economic blunders in history – Daily Reckoning

              It doesn't look to get any better.
              965k Americans filed for first time jobless claims in the first week of 2021 - a massive jump from last week's 784k and well above expectations of a 789k rise...
              Stocks, Yields Rise On Expectations Of "Biden's Trillions"

              World Bank Head Sees "Quiet" Financial Crisis Brewing As Pandemic Lingers

              Yields Surge As Stunned Traders Learn Biden To Propose Massive $2 Trillion Stimulus

              A Nation Imploding: Digital Tyranny, Insurrection, And Martial Law

              How COVID Paved The Road To Serfdom

              California Is Worse Than You Think
              here is little or nothing that the current progressive state government has done that promotes the promotion of real wealth in California, yet even as state authorities actively destroy economic opportunities, the voters respond by demanding more of the same...


              • 2 good articles;
                "A window of euphoria as a $21 Trillion economy digests $10 Trillion of stimulus. What happens after that?"
                Designed to fail

                Short post but, it self-erased 3 times