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  • Danny B
    Bank risk in Mexico,,, shorting the yuan

    This is just a short note on banking risk. I worked for 10 years during the winters driving around Mexico. It was always a mystery how they paid so much interest on bank deposits. Many American expats had Mexican bank accounts. I was there during one of the periodic devaluations. The Expats lost most of their money,,,, all legal, of course.
    I have a Mexican friend who drove his new Suburban into Mexico on a trip. He checked into a hotel and parked his Suburban in a locked, walled compound. In the morning, it was gone. The tapes from the security cameras had several minutes erased.
    In that same era, the American FBI caught the Mexican FBI stealing new cars from American dealerships and, turning them over to Mexican government officials.

    This same thing is happening at Mexican banks.
    "formerly the U.S. Department of the Treasury’s primary representative in Mexico. “Mexican authorities try to prosecute these cases but often aren’t successful.” In 2018 there were 7.3 million complaints of fraud involving 18.9 billion pesos,"
    "Kathy and Jim Machir discovered that their nest egg was gone. When the Machirs and other San Miguel expatriates met with Monex officials in early January, the bankers told some of them that about $40 million was missing from as many as 158 accounts, many belonging to English-speaking Americans. A dozen people interviewed by Bloomberg News say that bank statements Zavala sent them purporting to show full accounts were apparently falsified. "
    The Mexican economy is shrinking and banking fraud has doubled since 2014. This is just a note for anybody who may have a deposit in a Mexican bank.

    The Yuan is getting weaker and the sharks are smelling blood. China has warned them NOT to short the Yuan. The typical way for a State to support their currency is; sell off dollars or gold and buy up home currency on the international markets. BUT, China and the emerging markets are desperate for dollars. Scrounging around to get dollars and, buy Yuan will just strengthen the dollar. They can punish the Yuan shorts but, it will cost them. The stronger dollar will make it that much harder to service dollar-denominated debt.

    5/26 Plunge of CNN, MSNBC ratings reveals fake news as bad business strategy – AT
    5/26 CNN lays off staffers after massive ratings drop – Zero Hedge

    How about that?
    This is a re-post of a vid from Bloomberg.
    DHL is doing drone delivery in China to cut way back on cost of delivery. The whole world is getting more competitive and trying to get more efficient.
    Just imagine what would happen if Amazon, for instance, took direct payments outside the banking system. Everybody else would have to follow.

    Here is a side note from China. The Chinese are big believers in LUCK. Somebody tossed coins into a jet engine,,, for luck before the flight.
    When China's air industry hits the news, stories are typically centered on passengers going rogue, punching each other, trying to wrestle open emergency doors mid-takeoff or dangerously tossing coins into airplane engines for luck.

    5/26 Glyphosate exposure linked to fatty liver disease in humans – Beyond Pesticides
    I'm sure that this report is just a mistake.

    Leave a comment:

  • Danny B
    Trump??? Europeans are turning the suicidal ship of state.

    In December, Powell made a bit of a move that markets did not like. They crashed and, he had to walk back his actions. Now, Trump has a trade war going and, markets want it to END. Also, they want a LOT more money pumped into markets.
    5/26 The bulls continue to bet on the Fed – Investing
    I guess that we have to wait and see.
    5/26 World faces ‘clear and present danger’ from trade war escalation – Reuters
    Certainly, the money renters face danger.
    Good graphs showing that stocks have turned.
    You Know Things are Falling When... - The Great Recession Blog
    So, just how fast will investor confidence turn?

    Here is a graph that is painfully clear.

    Intervention is the lifeblood of the markets. What will Trump and the FED do?
    The trade war will crash the markets. What will Trump do?
    Huawei was the flagship of the Chines tech pirates.
    What will Trump do?

    The State, by way of crony capitalism and legislative capture has now made housing unaffordable. Energy is fast becoming unaffordable for many people. Climate change is destroying crops worldwide. What happens when food is unaffordable?
    Three Charts Show Millennials Are Nowhere Close In Buying A Home

    There is very good news from Europe. Farage / Brexit is trouncing everybody. LePen has kicked Macron in the A$$. afD is doing well in Germany. The tribes of Europe are bing emphatic. They refuse to be subsumed by the garbage pouring in from garbage countries. Merkel won the Kalergi Prize for her work at destroying Germany with so called migrants. They wanted to migrate because they had screwed up their home countries.
    Even Greek Prime Minister Alexis Tsipras has called a snap election because of disappointing results for his party. He really screwed his fellow Greeks by going along with the troika of executioners. There will be SO many euroskeptics in the European parliament that it will truly melt down,,,, Just as Armstrong guaranteed them it would happen back in 1987.

    The Brexit party is going to have quite a party when they get to Brussels.

    Evidently, D.C. does NOT like transparency
    In Deep State Coup Attempt, All Roads Lead Back To Barack Obama & HRC
    Let's Call The Russian Collusion 'Hoax' What It Really Is - Treasonous Sedition
    America's Cities Are Unlivable - Blame WealthyLiberals And The One Percent
    NYT Admits Dem-Run Cities Unlivable - Dr. Drew Predicts Major Epidemic This Summer

    Pence Tells West Point Graduates They Should Expect to See Combat
    Yeah right, ground troops are going to invade somewhere.
    The army talks about virtue. The soldiers talk about horror.

    Leave a comment:

  • Danny B
    Ctrl P or,,, not,,,,,trouble in China,,,Topping,,,crop loss & plague.

    The Chinese didn't believe that he meant what he said.
    Now, it is Wall Street's turn.
    "After years of increasingly close cooperation and collaboration, the relationship has turned strained. Both sides are digging in their heels. Credibility is on the line. If one side doesn’t back down, things could really turn problematic. The Fed is asserting that it’s not about to lower the targeted Fed funds rate. Markets are strident: You will cut, and you will cut soon. Bonds are instructing the world to prepare for the Long March. "
    " The Shanghai Composite declined 1.0%, trading back to around February lows. China’s growth/tech ChiNext index sank 2.4% to the lowest level since February 22nd. Hong Kong’s Hang Seng China Financials index dropped 1.5% to the low going back to January 21st. "

    "During a three-day trip this week to the southern province of Jiangxi, a cradle of China’s Communist revolution, Xi urged people to learn the lessons of the hardships of the past. ‘Today, on the new Long March, we must overcome various major risks and challenges from home and abroad,’ state news agency Xinhua paraphrased Xi as saying, referring to the 1934-36 trek of Communist Party members fleeing a civil war to a remote rural base, "
    "May 19 – Bloomberg (Karen Leigh): “President Donald Trump said he was ‘very happy’ with the trade war and that China wouldn’t become the world’s top superpower under his watch."
    "The president also told Hilton he believed China wants to replace America as the world’s leading superpower, and it’s ‘not going to happen with me.’
    Credit Bubble Bulletin : Weekly Commentary: The Ignore Them, Then Panic Dynamic

    "s we’ve been warning in recent reports, the fundamentals show a global economy sliding into recession. And the technical charts show a dangerously bearish triple-top in the markets,"
    "The chart below from Sven Henrich presents a compelling argument that, using comparable measures from the 2001 and 2008 market routs, the S&P 500 has a very real risk of dropping in half within the coming year:"

    All the charts show that the markets have topped out. Wall Street demands more cash to keep the party going a bit longer. I suspect that Trump will let them choke.

    Mother Nature does NOT do extreme centralization. The risk of pandemics and plagues is too high. Air travel has made the risk of plagues much higher. Same for antibiotic resistance. Charles Hugh Smith writes about both the crash in farming and, the rise of plagues.
    oftwominds-Charles Hugh Smith: Superbugs and the Ultimate Economic Weapon: Food
    Rural America is doing very badly. The ongoing floods will greatly reduce food crops.

    ice age farmer :: grand solar minimum crop loss map

    The Chinese people are well on their way to avoiding banks completely just by using direct payment apps to the vendor.
    It looks like internet buyers of property are going to be a big problem in the future.
    Eisman says that the crash will probably take out all the banks except for the big 5.

    Leave a comment:

  • Danny B
    shorting treasuries,,,greenback is a stake in the heart of China

    ' Short selling is an investment or trading strategy that speculates on the decline in a stock or other securities price. ... Before the borrowed shares must be returned, the trader is betting that the price will continue to decline and they can purchase them at a lower cost.
    Short selling makes it possible to sell what one does not own"

    This sounds real lucrative and is used by the sharks any time that they smell blood.
    "For years now, US government bonds have looked like terrible investments, what with those trillion-dollar deficits and multiple wars and all. "
    'But two things are true of bubbles always and everywhere: They tend to go on longer than a reasonable analyst believes possible. And they burst when fundamentals finally win out. Treasuries will go the way of all bubbles someday and, just maybe, today is that day. "
    "The long bonds of any country with government debt and total debt exceeding, respectively, 100% and 350% of GDP are an automatic short, just on simple math. But the US, as the printer of the world’s reserve currency, is a special case in terms of timing. When trouble strikes elsewhere, people still come here to hide. So even in the face of ridiculous, Greek-like numbers, the dollar continues to function as money and Treasuries continue to find a bid.

    There will come a time when shorting Treasuries is the trade that makes fortunes and reputations "
    You can see why U.S. GOV is trying to push MMT to the fore AND, why bankers and money renters hate the idea. The only way that the money renters can stop MMT is to boycott sovereign bonds. If they do that, they make it easier for the State to rationalize the necessity of MMT.
    As debt-service costs go higher, we get that much closer to needing a printing press that is independent of the FED. GOV has the guns and the lawbooks. Shorting U.S. sovereign debt is not a good plan.

    5/24 Trump orders intel community to cooperate with Barr probe – Politico
    Why do I get the idea that he did not say it nicely?
    5/24 Does Ray Dalio really not know better than to invest in GLD? – GATA
    GLD is paper gold. At some point, the paper gold market will break down. With 6400 tons of paper gold traded every day, the crash will be a flash that nobody can escape.
    5/24 Oil plummets, on track for biggest weekly drop in 2019 – Reuters
    If the cost of energy goes up, everything else goes down. Trump has to work overtime to hold down the price of energy.
    5/24 Deutsche Bank CEO pledges tough investment bank cuts as shares hit low – Yahoo
    TOO late to save DB.

    "Initially, the stock market decided the trade war fears were overblown. Inside the Beltway, conventional wisdom said that Trump would reach a deal with China, that all of his tough talk was just a negotiating ploy.

    It wasn’t. Agree or disagree with Trump, he means what he says about tariffs and trade."
    These realities mean that China will not acquiesce but will retaliate for any actions taken by the U.S. It has already proven that. Next time, the Chinese may choose to retaliate not only with further tariffs of their own, but also with other forms of financial warfare.'
    Armstrong said that the financial capital of the world will move to China in 2032. Presumably, Trump wants to stop this.
    "This new trade war will get ugly fast and the world economy, which is already slowing, will be collateral damage. Given the trillions in dollar-denominated debt in emerging markets, a full-scale foreign sovereign debt crisis could be in the making if emerging-market countries cannot earn dollars from exports to pay their debts."

    So, as Trump cuts back on Trade with emerging markets, they have a very difficult time earning dollars to service dollar-denominated debt. He cuts in to their earnings at the same time that they need uninterrupted earnings.
    HOPEFULLY, we will see the inception of cyber-war and economic war displace kinetic war.

    Leave a comment:

  • Danny B
    The danger in corporate bonds

    5/23 Panic in the bond market: yields tumble, 10y inverts to Fed Funds – ZH
    5/23 Stocks topping, dollar up, gold getting closer – Technical Traders
    5/23 Credit-card charge-offs rise across banking system – Wolf Street

    "Over this period, (19 years)the corporate bond market has grown by 378%, greatly outstripping the 111% growth of GDP."
    ...If a recession causes BBB to BB downgrades, as is typical, ...
    "If only 25% of the BBB-rated bonds were downgraded to junk, the size of the junk sector would increase by $650 billion "
    "Will forced selling from ETF’s, funds, and other investment grade holders result in a market that essentially temporarily shuts down similar to the sub-prime market in 2008?"
    "he graph shows the implied ratings of all BBB companies based solely on the amount of leverage employed on their respective balance sheets. Bear in mind, the rating agencies use several metrics and not just leverage. The graph shows that 50% of BBB companies, based solely on leverage, are at levels typically associated with lower rated companies. BB

    If 50% of BBB-rated bonds were to get downgraded, it would entail a shift of $1.30 trillion bonds to junk status. To put that into perspective, the entire junk market today is less than $1.25 trillion,"
    Forced selling to WHO?

    The Rouble can and, will be attacked. It is at a disadvantage because it isn't much used in international business.
    BUT, "On a 10:1 trading to clearing multiple, that's the equivalent of 6,380 tonnes of gold traded per day, or 1.6 million tonnes of gold traded per year.Mar 29, 2017"
    " the notional value of daily paper gold trading is around $125.3 billion per day, given a dollar gold price of $1200 /oz. That calculation is based on the equivalent of 3248 tonnes of paper gold being traded daily."
    5/23 Russia adds 500,000 ounces of gold to reserves in March – Smaulgld
    Currently, everybody is trying to suppress the price of gold while they buy as much as possible. One of the biggest gold miners is collecting .24 ounces per ton of mined rock.

    Couple of vids
    5/23 China slams US ‘bullying’ as firms step away fro Huawei – Yahoo!

    I suspect that everything that Huawei builds has lots of back doors.

    Leave a comment:

  • Danny B
    Crony capitalism failing

    Crony capitalism looks and acts exactly like fascism. Mussolini said that fascism is the marriage of big gov and big business. Crony capitalism has brought us monopolies and cartels. As automation greatly lowers the cost of manufacturing, the monopolies raise prices and increase their profits. This all sounds good to the businessman until nobody can afford his products. Then, the State is tasked with keeping consumption going. This only works for a limited time. Crony capitalism squeezes a lot of people out of the economy. The dispossessed grow in numbers and demands.
    Anti fascism is a movement that equates all business with fascism.
    The Cloward–Piven strategy is a political strategy outlined in 1966 by American sociologists and political activists Richard Cloward and Frances Fox Piven that called for overloading the U.S. public welfare system in order to precipitate a crisis that would lead to a replacement of the welfare system with a socialist government":"
    Presumably, the antifas want to tear it all down to replace current GOV with something else.

    Regulatory capture has brought us to the point where socialism looks more attractive that the current version of capitalism. A nation is held together by people who have common desires and goals. The polarization is only getting worse. I suspect that antifa will make a BIG showing both before and after the election.

    Here is an article with excellent charts. It shows the last few "topping points'. Judge for your self when the next topping point will be.
    "Come on. We’re at the end of a bloated debt cycle propagated by easy money and it’s simply not producing growth anymore. Trade wars, blade wars, whatever, fact is growth peaked last year and it was all artificial because of the also artificial tax cuts.

    Let’s just keep things real here. The data shows ZERO uptick in organic growth anywhere.

    And the bond market has been screaming warnings since last year when it tagged its multi-year trend line."

    "While many voices seek to assure us these technologies won't displace human workers, the reality is cutting labor inputs is the core driver. What few pundits seem to understand (perhaps because they've never experienced a truly competitive market?) is that the rush to incorporate these technologies into existing enterprises is deflationary not just to prices but to profits."
    "Reducing labor inputs and improving productivity of capital and the remaining labor force is not going to generate profits if competitors can access the same tools and processes. The race isn't to maximize profits, it's to survive the inevitable deflationary spiral in prices as competitors are forced to pass along cost savings to customers to retain market share."
    So, form a cartel.

    "Pundits glorying in tech profits only consider monopolies or quasi-monopolies like Apple, Facebook and Google or monopolies / cartels enforced by government regulations and policies. Markets open to competition do not enable pricing power beyond a temporary advantage for one or two product cycles. (Please see Two Intertwined Dynamics Are Transforming the Economy: Technology and Financialization)"

    Here is a side note, "10 companies control the food industry - Business Insider

    Apr 4, 2017 - A small number of powerful companies, from Unilever to Coca-Cola, create ... Only 10 companies control almost every large food and beverage ..."

    "Everyone counting on trillions in tech profits is overlooking the inconvenient reality of the S-Curve for cheap credit, cheap energy and cheap labor--the three drivers of global expansion. Once credit dries up or becomes more expensive, once cheap energy is only a memory (or future fantasy) and once employment sags under the pressure to reduce labor inputs, the ranks of those with the earnings or credit to buy, buy, buy will be thinned."
    The State is doing all the buy, buy, buy. What happens when the sovereign bond market collapses/
    "Stagnant wages can only be supplemented with borrowed money until the costs of servicing the debt (interest) eats the borrower's budget. At that point, lenders will have to face the unpalatable truth that any additional loan will end in default, a process that will also collapse the entire unsustainable mountain of debt the household is struggling to service."
    Bring on MMT and UBI
    "As many others have pointed out, energy can be abundant but it only drives expansion if it's affordable to low-wage workers. If it's only affordable to the top 20%, every economy based on mass consumption implodes."
    We're all going to be ridding scooters and living in tiny houses.
    "Sure, there will be jobs for those installing and maintaining the software and robots, but remember: enterprises don't have profits, they only have costs, and the pressure to eliminate entire layers of managerial costs as well as production costs will only increase."

    "That leaves government-enforced monopolies as the only dependably profitable corporations, and the citizenry will soon tire of enriching tech oligarchs who bought political cover and regulatory moats. Deflation eats credit-dependent, mass-consumption economies alive from the inside."
    oftwominds-Charles Hugh Smith: Technology Is Not Just Disruptive, It's Disastrously Deflationary

    5/23 4 reasons why central banks are rapidly buying gold – Birch Gold
    They just don't trust each other.
    5/23 Brexit crisis: minister quits, piling pressure on Britain’s May – Reuters
    Hopefully, May will melt down just like the wicked witch of the West.
    5/23 Morgan Stanley warns Tesla is facing bankruptcy – ZH
    How many weeks / months did it take for Tesla to fall from the top?
    5/22 Glyphosate effects on earthworms – Environment Papers
    There are 20,000 sq. MILES of America farmland that have sterile soil.
    5/22 We’ve hit a new low in campaign hit pieces – Rolling Stone
    You ain't seen nothing yet.

    "My favourite today contains a quote from a US semiconductor maker who states “We’re too far into free trade that the world cannot have countries not trading.” Sorry mate, 1913 called and wants its ‘Great Illusion’ back; indeed, reports are that China’s surveillance camera-maker Hikvision is next in the US firing line. Standing with me not on the side of the (Norman) Angells is Eli Lake writing for Bloomberg, who argues “The tech cold war has begun. To which I can only say: It’s about time. If this ban is just a bit of brinkmanship designed to pry a better trade deal out of Beijing, however, then it’s a blunder. The national security implications raised by Huawei’s technology transcend any trade dispute.” And while US tech is in the headlines, so is US farming, where federal subsidies are set to rise sharply to offset trade-war pain."
    Um, what happens to farming if FED GOV goes broke?

    Leave a comment:

  • Danny B
    Election violence,,,, societal collapse,,,Crash of "no-profit-no dividend business mo

    I have to start with politics. Armstrong speculates about war in Europe starting in 2020.
    Now, keep in mind that the existing S tate powers plan to continue in power. Farage is giving them nightmares, along with S

    Salvini, et al. You saw that mainline Power in Spain violently attacked the secessionists. Armstrong writes, "Unfortunately, the tension should begin to become more pronounced starting in 2020 going into 2022. I am not sure it would be a war, but certainly a rising trend toward independence."

    The MSM is full of stories of antifa violently attacking anything conservative. Armstrong is predicting a LOT of violence around 2020.
    From Indonesia,
    6 hours ago - Violence erupted in Jakarta, Indonesia, after it was announced that President Joko Widodo won re-election.
    A “provocative and violent” crowd turned up from nowhere in central Jakarta at around 11pm on Tuesday (May 21)
    They have suggested that a group of provocateurs may have been responsible for the violence. "A majority of the protesters came from outside of Jakarta,"

    As Trump encourages the indictments of his enemies to grow and go forward, you can expect the extreme polarization to only get worse.

    From Australia, "Here I want to develop one thing that Bendell talks about: social collapse."
    "Bendell chooses to think that social collapse is inevitable, catastrophe probable and extinction possible. That’s my guess too."
    "The ecosystems of the world that have gently held civilizations over the past 10,000 years are collapsing."
    "What will it mean that phytoplankton numbers are dropping like a rock, or that insects are 80% depleted? Nobody knows. What happens next is completely unpredictable. Such is the nature of complex systems."
    "Almost none of those horrors were committed by small groups of savages wandering through the ruins. They were committed by States, and by mass political movements.

    Society did not disintegrate. It did not come apart. Society intensified. Power concentrated, and split, and those powers had us kill each other. It seems reasonable to assume that climate social collapse will be like that. Only with five times as many dead, if we are lucky, and twenty-five times as many, if we are not."
    " would hazard that about 99% of everything in the mainstream media is dedicated to sustaining the unsustainable, and 100% of everything in the financial “markets” is geared towards the same."

    The crash of Tesla motors;
    "Since anyone can read all the Tesla stories and draw their own conclusions as to what happens next, lets stick to the consequences. The obvious one is what does it do to confidence in the Modern Disruptive Tech (“MDT”) price model: “We don’t have to pay dividends or make profits because we are a disruptive company that's triggered a paradigm in demand and made ourselves a monopoly – therefore it’s all in our stock price” ? "
    "Tesla’s current stock crash shreds that MDT model. (Down 46% since Dec high, 30% from April.)

    Why? a) Because Tesla did not have anything like a monopoly. Its failing to deliver. I"
    "The MDT Model requires the stock to retain the confidence of the capital markets to keep it capitalised – Tesla has now lost that confidence. "
    "But the consequences of a collapse in the MDT model will be massive. Consider the pain. Consider firms like Softbank which have funded themselves from everywhere and anywhere on the basis they are oh-so-clever at Tech investing. And suddenly they find they own a whole bunch of stocks that have never paid, and never will pay a dividend or repay debt, and yet they have promised Mrs Watanabe (the archetypal Japanese retail investor) their bonds are great value (Junk as far as Moodys and S&P are concerned, investment grade according to local rating agencies)."

    "Asking around the reason for investment holders putting dosh into the fund is that anything is better than paying banks for the privilege of holding your cash."
    Do the smart thing, buy French bonds.
    "It struck me all as bit silly. France, that well know bastion of social equality, industrial peace, sensibility, stability, benevolent banks and companies accounts for over 25% of Euro corporate debt issuance."
    "we turn a blind eye to France breaching its sov debt limits, and corporates owing 125% of GDP because we trust them to spend it sagely?)"

    "The reason young people are turning to socialism is because they aren’t actually experiencing free market capitalism. We are trapped in a paradigm of crony capitalism or corporate fascist capitalism. "
    "But the show must go on. The freakshow of pedophiles, *****s, communists, fake Mexicans and baby killers running for president as Democrats should scare the living **** out of every critical thinking normal American. They make Trump look like a superstar in comparison. No matter who is selected by the oligarchs to represent the Democrat team, the outcome will hinge on three or four swing states, with no definitive victor likely until the day after the election – if then."
    That's when the Soros riots kick in.

    5/22 GOP Rep. Justin Amash holds ground on Trump impeachment – USA Today
    Just how desperate do you have to be to haul somebody up in front of a court of law when you don't actually have any crimes or charges?
    5/22 Has the day of the nationalists come? – Pat Buchanan
    Nope, not enough blood spilled yet.
    5/22 Housing collapse 2.0 continues as predicted here – Great Recession
    5/22 Central banks urged to join together to raise inflation targets – Bloomberg
    Here it is if you want an inside look at operations at a Central Bank.

    5/22 Turkey burns bridges with markets as costs of lira defense mount – Bitcoin
    Erdogan is going to do a spectacular flameout.
    5/22 Prepare for difficult times, China’s Xi urges as trade war simmers – Reuters
    Chinese markets are going down FAST
    5/22 British Steel collapses; thousands of jobs could go – Yahoo
    Well, 5$ trillion in debt isn't going to help.

    "Pushing interest rates below zero is both an act of desperation and something that in theory should have a huge, immediate impact of the behavior of borrowers and savers. The fact that negative rates have become the new normal in big parts of the world but haven’t caused the expected behavior change should scare the hell out of everyone. "
    "Businesses in particular should be borrowing and investing like crazy, igniting an epic capital spending boom.

    But that hasn’t happened. In Europe, for instance, negative rates have been in place for five years …"
    No kidding. Maybe it has something to do with crashing wages and spending power.
    "Business capital spending, the engine that in theory should be propelling Europe’s economy, looks like the opposite of a boom."
    Maybe because wanna-be buyers have no jobs or money.
    "even with negative interest rates the Continent continues to dig itself ever-deeper into a financial hole. The same death spiral dynamic is in place in US, Japan and China.

    To put the problem in more familiar terms, the world’s central banks have launched their version of tactical nukes at the problem of slow growth and soaring debt, and the dust has cleared to reveal the enemy unscathed and coming back for another go. "
    "The next recession will begin with interest rates already at emergency levels, leaving central banks with no choice but to launch even bigger nukes. If interest rates are currently at -0.5%, then push them down to -5%. If buying up every investment-grade bond didn’t work last time around, then buy up junk bonds and equities, and maybe pay off everyone’s mortgage and student loans. "

    Leave a comment:

  • Danny B
    Final harvest of the seeds of war

    Trump just signed for sanctions on Ruissia's Nordstream pipeline.
    At the same time, America has greatly increased the importation of Russian oil. How is that going to work out in the future? Fracking is a disaster that loses tone of money to produce oil that we must export because it is too low quality for American refiners.

    I encourage those of you who live in the British Isles to PLANT A GARDEN.
    While all the focus is on Brexit, the UK faces a debt and currency crisis
    UK has over $8T in external debt: 2nd largest debtor in the world after the U.S.

    True UK government debt exceeds £5 trillion as pension liabilities not in official numbers
    Total UK national nominal debt surged over £2 trillion; Increasing at over £5k per second
    Total debt (government, private, business & bank debt) as a percent of GDP is over 500%
    Total UK debt could total £6.7 trillion by 2023, rising to nearly 260% of GDP - PWC

    You'll soon be going down the Zimbabwe road.
    Yep, GOV really knows how to spend money wisely.
    Meanwhile, the U.S. Navy has a new research program.
    US Navy wants to create archive of 350 BILLION social media posts for 'research' purposes
    Of course, it is ALL very innocent.

    5/22 Nordstrom crashes to 8 year lows after slashing guidance – Zero Hedge
    5/22 Chicago Fed national activity index falls in April, tugged lower by factory slump – MW
    5/22 Checking the pulse of the U.S. economy: too much debt? – The Street

    Pulse,,, what pulse?
    5/22 Ron Paul savages ‘total failure’ Fed Reserve for ‘flat-out broke’ America – CCN
    5/22 Shortage of cheaper houses stifles U.S. homes sales – Reuters

    No mention of low wages.
    5/22 SAT adds parental misfortune score – Bad Daddy
    5/22 California border agents dropping illegal migrants at bus station – Zero Hedge
    I'm sure that this will deter other would-be migrants.

    Kunstler has something to say.****-nat...-tranquilizer/

    Originally, when money was connected to labor value, People worked and saved. They put their money in a bank. They merited interest because they had deferred their consumption. The bank lent out the money and merited interest because of the risk of non-payment. As wages froze at a low level, there just wasn't enough money in the banks to loan out to speculators. This necessitated the creation of money that was NOT connected to labor value. Through regulatory capture, the interest value of your deferred consumption (your savings) was stolen by banks that pay no interest on the value of your honest labor. At the same time, the banks still charge interest when they loan money.
    They have very little real risk if the State bails them out for every bad decision.

    The money renters still expect to receive interest even though they pay no interest. avoiding interest payments on bank accounts has gained them $400 billion a year. At the same time, they still charge huge amounts of interest payments on your debts.
    All of this is happening while the world is flooded with liquidity. The liquidity is all stuck in the upper loop which allows them to charge interest on something that is very scarce in the lower loop.
    Not all of this is the fault of the FED. Central banks were created to finance wars. So, while the FED is central to the ongoing robbery, it couldn't have dome it without regulatory capture by the State. War is just TOO profitable to ignore when there is ZERO morality at the top. The FED was created as Europe was slipping into WW I A few years later, America was financially geared up to have a BIG, expensive war.

    Jim Grant has an excellent article.
    Burke, "war is the health of the State"
    We need a new operating system.

    Leave a comment:

  • Danny B
    The operating system is frozen up

    "'the fall of the British pound back to 1985 levels"
    Nobody is buying bonds from the ECB. Why should anybody buy them from the BOE?
    5/21 British Steel risks collapse with 25,000 jobs under threat – Reuters
    Containerized shipping combined with automation has made a world with a few winners and, all the rest losers. All the CBs are doing QE by one name or another to keep employment going.
    Margaritaville lyrics.
    Don't know the reason
    Stayed here all season
    Nothing to show but this brand new tattoo

    But there's booze in the blender
    And soon it will render
    That frozen concoction that helps me hang on
    Wastin' away again in Margaritaville

    Eventually, there will be many millions of people stuck in Margaritaville with noting to do and, nothing to show.
    Traditionally, capitalism only rewards those who participate in remunerative enterprise. It offers nothing to those who opt out one way or another. Socialism tries to provide for everybody BUT, it kills the motivation of the entrepreneur. Socialism always fails because nobody has any motivation to make it work.
    Meanwhile the State tries to grow without limit. Traditionally, the State grows until it blows up the public bond market. There are over 22 million working for GOV in America.
    5/21 Four in ten Americans embrace some form of socialism – Gallup
    No surprise since 51% of Americans receive a check from GOV.

    5/21 Stocks come back but bonds flash a ‘dire’ warning about the economy – CNBC
    5/21 QE may be over, but the Fed’s U.S. debt hoard is about to soar – GATA
    Yeah, right.
    Trump is catching on.
    5/20 How Republicans gave us Millennial socialists – Aier
    It wasn't just republicans who fostered crony capitalism.
    5/20 Where is the Democratic alternative to forever war? – TruthDig
    Rich donors do not pay for peace.
    5/21 Deutsche Bank death spiral hits historic low. European banks get re-hammered – WS
    As Europe keeps falling, the implications for Europe and everyone else – Alhambra Partners

    Ah yes, centralization breeds contagion.

    Leave a comment:

  • Danny B
    Crops & food prices,,,speculator vs producer

    As more and more niches are automated, more jobs are lost. As Bricks & mortar gives way to E-commerce, fewer people have a salary. As aggregate purchasing power diminishes, the economy shrinks back to just essentials.
    "Over the past two decades, food prices have risen 2.6% a year on average"
    So, farmers are getting much less for their crops but, food prices are going up. It looks like they may go up much more.

    "– As of today, May 18th, 2019, no farmers (zero) have started planting.
    – In 3 years the percentage of April planting starts has decreased to 0% from 70% just 4 years ago. Typically planting was completed by mid to end of May.
    – Flooding this year from Ottawa to Detroit along with cooler temperatures can wreak havoc on winter wheat crops which are planted in the fall and has germinated. But if the heat doesn’t come to dry up the land then the wheat crop is susceptible to rot.
    – soil temperatures are below the 25-year average by 23 degrees.
    – more rain means less sunshine."

    Armstrong, "There is a lot going on in Britain. Many fear that Jeremy Corbyn will now win because Theresa May has made a real mess of BREXIT. Consequently, the Telegraph is reporting that Britain’s wealthiest individuals are preparing to leave the country. The fear that Corbyn will take over Britain as the prime minister is rising. He is so left-wing that the #1 question coming from the UK is whether a win for Jeremy Corbyn could be the reason the computer has been projecting the fall of the British pound back to 1985 levels"

    Armstrong, "QUESTION: Do you support Trump and his trade war with China?


    ANSWER: No. Trump is living in an old world view of trade. The numbers are not accurate to begin with. The United States for years actually relied on economic interdependence with China as a stabilizing force in relations with Beijing on geopolitical levels. In other words, China needed the US market to sell products to provide employment for its people. The business between the two nations formed a check on U.S.-China affairs. However, as Trump escalates his trade dispute, he is playing with fire.

    Asian culture is a matter of saving face. You cannot negotiate in this type of confrontational posture that leaves the opponent weak in appearance. Regardless if it works for China or not, it becomes a matter of principle. The result is a reduced incentive for stability and restraint in Washington. We already have the nonsense that the Democrats have done with Russia in re-establishing the Cold War. Here we have the Republicans wiping out relations with China. It was Nixon who opened up China and split the close ties between Russian and China. This policy in the USA has actually encouraged the relationship between Russia and China even if it was never intentional."

    Instant capital transfer has allowed the money-renters to invade & depart ANY market. Globalism is good for them to maximise profits. BUT, when they depart a sector / State / market, it generally crashes down for lack of capital. Armstrong, et al take a very dim view of anything that diminishes profits. The Central Banks are trying to prop up markets that have suffered from wild flights of capital. They do this with debt instruments. This has caused the CBs to create and hold unsustainable debts.

    MMT would give the Treasury the ability to sustain market sectors without incurring new debt. If a market can NOT be shorted and crashed for profit by the sharks, they will stop much of their speculation. For Armstrong and millions of other money-renters, this means a big cut in profits.
    Giving the power to create money SOLELY to the Treasury would short-circuit most of the speculators. Benjamin Franklin proved that paper money CAN work. There just needs to be limits to proliferation. Considering the amount of jobs lost to automation, it is highly doubtful that the welfare state is going to cut back on it's demands for funding.
    5/21 Harry Dent: MMT utter bullsh*t – free checks to everyone! (socialistic nightmare) – MS
    Has he thought about "free anarchy" for everybody.
    5/21 Tight U.S. job market not attracting new people to the labor force – Reuters
    The skills gap just gets worse and, welfare gets more comfortable.
    5/20 Here’s how many U.S. households will run out of money in retirement – Yahoo!
    Is that with or, without a crash?

    Leave a comment:

  • Danny B
    Oil, Iran, Putin,, Rare earths,, Farming crash,, slipping away

    Putin plays chess.
    The war hawks talk up a big attack on Iran. So what news do we get back?
    Visualizing The Countries In Range Of Iranian Missiles ZH
    Venezuela Oil Output in April Drops to 16-Year Low - US Energy Dept
    Russia's energy ministry does not rule out oil shortages on global market if demand grow
    Bank Of America - $90 Brent May Be Around Corner

    So, what happens to the West when oil spikes? Tar sands is failing. Fracking is a loser,,, Venezuela is screwed up. Maybe now would NOT be a good time to attack Iran.

    B]Trump Says War Will Mean The 'Official End Of Iran' (Total Annihilation) Warns 'Never Threaten US Again'
    US-Iran Showdown Is One False-Flag Attack Away From Global Calamity[/B]
    Sure, attack Iran and see what happens to the West. Even farming is crashing WITHOUT high fuel prices.
    Will Robot Tractors Save America's Farming Industry After It Crashes?
    "The S&P GSCI Grains Index Spot has collapsed more than 50% in 81 months from the August 2012 peak. Meanwhile, inflationary cost pressures have been seen in farming equipment, labor, seeds, fertilizers, fuel"
    5/20 Oil edges higher as OPEC+ says to stay the course – Reuters
    John Deere Slashes Production Amid A 1980sStyle Farm Crisis Collapse In Midwest

    Xi Sends Trump A Message - Rare-Earth ExportBan Is Coming
    Largest known rare earth deposit discovered in North Korea | MINING

    Buy your Neo magnets real soon.
    5/20 Insurer says Iran’s guards likely to have organised tanker attacks – Reuters
    5/20 ‘Sabotage’ of Saudi oil tankers is a dangerous moment in Trump’s feud with Iran – Ind

    There was NO sabotage. Bibi and the war hawks are just using S.O.P. to get a war going.
    5/20 What next? None of the UK cabinet is fit to remain in office – CW
    5/20 Austrian government collapses as far right leader caught in video sting – Reuters

    E-commerce is destroying bricks & mortar. So, all the work will go to warehouse workers,,, who are all robots.
    "Last year, e-commerce sales blew through the $500-billion level for the first time ($513.6 billion). For 2019, e-commerce is on track to hit $575 billion, an increase of $61 billion."

    There is a NEW free money train coming to town.
    5/20 Modern Monetary Theory finds embrace in unexpected place: Wall Street – NY Times
    Not all the big money people are onboard.

    5/20 Deutsche Bank shares hit all-time low after UBS cuts rating to sell – Zero Hedge
    So, who are they going to sell to?
    5/20 What will the next U.S. recession be like for investors? – Forbes
    What happens to all parasites when the host dies?
    5/20 Ford to cut 7,000 jobs by August, including 900 this week – CNBC

    "In an act of incredible courage the US, which was told (by the Israelis, of course!), that the Iranians were about to attack “somewhere”, Uncle Shmuel sent two aircraft carrier strike groups to the Middle-East. In a “daring” operation, the brilliant USAF pilots B-52 bombers over the Persian Gulf to “send a message” to the “Mollahs”: don’t f*ck with us or else…

    The “Mollahs” apparently were unimpressed as they simply declared that “the US carriers were not a threat, only a target“."
    The AngloZionist Empire: a hyperpower with microbrains and no cred left, by The Saker - The Unz Review

    Leave a comment:

  • Danny B
    4 week fuse,,,, deconstructing globalism

    Just a little bit more on China.
    " Wall Street demands a trade deal, and Wall Street has long believed – ever since the second TARP vote in September 2008 – that it always and everywhere gets what it needs to keep the bubbles aloft.

    Yet, here is what Mnuchin told another reporter who was actually listening. We’d call it an economic time bomb with a four-week fuse:
    According to Edwards Lawrence, Mnuchin also told Vice Premier Liu He “they have about four weeks until just about everything else China imports into the US gets a 25% tariff. The President says that is $325 Billion worth of items. In other words, the US is ever so gently reminding China it has a gun to its head and the clock is ticking.

    Actually, that’s no gun at all. It’s a $140 billion time-bomb that would splatter all over the US economy and the entire China-focussed global supply chain, which now ships $7.2 billion worth of goods into US ports each and every day"
    So, China is riding the credit tiger and, Trump is coming head on in the Trump train.
    This is a good article with a lot of info.
    "The first is $33.2 billion and that represents how much money Uber has spent on operations and overheads over the last three years (2016-2018). The second number is $23.1 billion, and that reflects the far lower amount of net revenue that was actually generated by all of this spending and disrupting."
    So, about that contagion. Where do you think it will hit?

    Powell kicked off the recession in December 2018 by trying to reduce the FED's exposure.
    5/18 Market loses its hopium-induced high, falls four weeks straight – GRB

    There is MUCH complaint about fake news. The algos that do all the trading have no ability to detect lies or BS. They believe that a trade deal is imminent.
    5/19 Goldman fund makes record retreat from muni junk bonds over risk – Newsmax
    5/19 America’s top cities swamped in debt, Chicago leads the way – Zero Hedge
    'Sanctuary City' Oakland, Near-Broke, Will Use Gas Tax Money to keep the lights on.

    Agenda 21 wants to move everybody into the cities. Calhoun created a mouse utopia back in the 60s. The mice eventually turned to violence.
    It doesn't look good for the cities.
    5/19 Ohio’s suicide rate jumps 24 percent from 2008 to 2017 – Akron Beacon Journal

    " The banking collapse was not a natural event, like a tsunami. It was a direct result of man-made systems and artifices which permitted wealth to be generated and hoarded primarily through multiple financial transactions rather than by the actual production and sale of concrete goods, and which then disproportionately funnelled wealth to those engaged in the mechanics of the transactions.

    It was a rotten system, bound to collapse. But unfortunately, it was a system in which the political elite were so financially bound that the consequences of collapse threatened their place in the social order. So collapse was prevented, by the use of the systems of government to effect the largest ever single event transfer of wealth from the poor to the rich in the course of human history. Politicians bailed out the bankers by using the bankers’ own systems, and even permitted the bankers to charge the public for administering their own bailout, and charge massive interest on the money they were giving to themselves."

    5/18 Axel Merk: ‘economy to die a traditional death…inflation will move higher’ – MS

    The Eurozone project benefited Germany at the expense of the rest of the bloc.
    Globalism benefited China and just 5 other States. It is obvious that globalism must be reversed and de-constructed but, nobody knows how to do it. Globalism combined with Automation has left much of the world without a job.
    Kunstler; The Golden Golem of Greatness will be blamed for most of that. The internal contradictions of Globalism were already blowing up trade and financial relations between the US and China. The Trump tariffs just amount to a clumsy recognition of the fatal imbalances long at work there. As a 25 percent tax on countless Chinese products, the tariffs will punish American shoppers as much as the Chinese manufacturers. Trade wars have a way of escalating into more kinetic conflicts.

    The sad truth is that both China and the US are beset by dangerous fragilities. Both countries have borrowed themselves into a Twilight Zone of unpayable debt. Both countries are sunk in untenable economic and banking rackets to cover up their insolvency.'
    "The temperament of the Chinese people is conditioned historically by subservience to authority, which tends to blow into anarchic rage quickly and catastrophically when things go wrong."
    Side note, China's Social Credit System Blacklists over 13 Million People - Same System Coming Here
    US Facing Widespread surveillance is ‘imminent reality' says tech privacy report

    Leave a comment:

  • Danny B
    Trolling Premier Xi

    Armstrong, "ASIA / AUSTRALIA: President Xi Jinping urged fairness and openness when he was presenting at a conference on Dialogue of Asian Civilizations in Beijing"
    I'll bet Xi didn't mention forced technology transfers, patent theft, market dumping and unfair State subsidies.

    " It’s worth noting that the renminbi is now only 1.2% from breaching the key psychological 7.00 level versus the dollar."
    " The Shanghai Composite dropped 1.9%, with the CSI Financials index down 2.7% and the ChiNext Index sinking 3.6%. Hong Kong’s Hang Seng Index declined 1.3%, led lower by a 2.1% drop in the Hang Seng China Financials index. "
    " The President began the morning with a tweet: “China should not retaliate - will only get worse! I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries.” Less than two hours later, Beijing announced retaliatory tariffs on $60 billion of U.S. goods. "
    Saving face is all so important in China.

    "rally public support around China’s position in its trade dispute with the U.S., as the ruling Communist Party takes a more aggressive approach — projecting stability and stirring up nationalistic sentiment in the process. ‘If you want to negotiate, the door is open,’ ‘If you want a trade war,’ however, he added, ‘we’ll fight you until the end.’
    Have they given any thought to what THE END means?
    "“Chinese President Xi Jinping denounced as ‘foolish’ foreign efforts to reshape other nations as he pushes back against U.S. trade demands. "
    Unlike Putin, Xi can be easily played.
    "The Chinese people’s beliefs are united and their determination as strong as a rock to safeguard national unity and territorial integrity, and defend national interests and dignity,’ "
    Starvation trumps dignity.
    “At no time will China forfeit the country’s respect, and no one should expect China to swallow bitter fruit that harms its core interests.”

    “Negotiations between the U.S. and China appear to have stalled as both sides dig in after disagreements earlier this month. Scheduling for the next round of negotiations is ‘in flux’ because it is unclear what the two sides would negotiate…”"
    There is no possibility of a trade agreement between 2 nations that routinely cheat.

    "The U.S./Chinese relationship was never going to end well. The lone superpower versus the rising superpower. Vastly different systems, cultures and values. And it would be such a different world these days if not for a decade (or three) of unprecedented global monetary stimulus – cheap (i.e. nearly free) finance that allowed the U.S. to run endless huge Current Account Deficits coupled with easy finance that bestowed upon the Chinese (the curse of) unlimited monetary resources for the most outrageous Credit and investment booms in history. "
    "Trump is the unreasonable and disrespectful bully. China will never again be disrespected and pushed around. President Xi - general secretary of the Communist Party, President of the People's Republic of China, chairman of the Central Military Commission, China's ‘Paramount Leader’ and revered ‘Core Leader’ – is precisely the great commander to confront the U.S. hegemon determined to repress China’s strength, advancement and rightful standing in the world."

    "May 16 – Bloomberg: “The Trump administration is pulling out the big guns in its push to slow China’s rise, with potentially devastating consequences for the rest of the world. The White House on Wednesday initiated a two-pronged assault on China: barring companies deemed a national security threat from selling to the U.S., and threatening to blacklist Huawei Technologies Co. from buying essential components. If it follows through, the move could cripple China’s largest technology company, "
    Credit Bubble Bulletin : Weekly Commentary: True Start to U.S. vs. China Trade War
    Historically, the banks have ALWAYS created credit booms where the punters borrow from the banks to expand the economy, primarily stocks and RE.
    Then, the banks withdraw liquidity and, crash the economy. The banks buy up everything that is distressed for pennies. This is how they covert credit that was freely created into tangibles.

    There is a new problem this time around. Many millions of people can no longer afford a house or even, food. This isn't entirely the fault of banks. Rome collapsed when Government over-reach impoverished the people. Rome's population fell from 1 million down to 20,000 as people left the cities to do subsistence farming. Something that is no longer possible.
    Once again, the State has over-reached and broken the bank. The Founding Fathers forbade direct taxes because they knew that the GOV would grow without limit if it could squeeze out money without limit. We have reached that point where State demands have severely diminished the productive economy.

    Leave a comment:

  • Danny B
    The fall of China,,, what else falls/

    At one time, the PBOC was creating more liquidity than the ECB, FED and BOJ all put together. Because of unrestricted international capital flows, the PBOC was floating the worldwide credit system. You might think that I am too focused on what happens in China but, you have to focus on the local effects of international capital. EVIDENTLY, global war against China is off the table because we don't want the cockroaches who are radiation resistant to inherit the planet. I'm not claiming the nuclear weapons are the ultimate weapon. Still, they would be used.

    I found an excellent article at Zero Hedge. You should read all of it. I'll cite part of it. The comments are even more informative than the article. Keep in mind that; if nuclear / kinetic war is off the table, the financial war will be extremely cut throat. Armstrong said that the world capital of finance would move to China in about 2032. I'm sure that America would like to prevent this.

    ZH Why An Economic War With The US Blows China Up
    “By putting more barriers in China’s path to US markets and, in the process, risking some short-term damage to the domestic and global economies, President Donald Trump could exact a heavy long-term cost on the world’s second-largest economy. Indeed, he may even threaten China’s chances of eventually entering the ranks of high-income countries."
    "change their development model if they are to make this difficult transition, powering through the dreaded “middle-income trap” that’s tripped up so many other developing countries…

    With external tailwinds turning into headwinds, China will need to rely far more on domestic demand to generate prosperity. To do so without building up risks in the financial system, Beijing would need to promote far greater household consumption "
    So, how does China increase domestic consumption when India, et al enforce a low global mean wage? How do they escape the demographic crash when their fertility rate is only 1.6. Their working population falls by 1 million a year. The price of changing over to automation falls every year.

    "after the US shut Huawei out of its markets, legislation to apply the same export restrictions to ALL firms listed under ‘Made in China 2025’ progresses through Congress, and suggestions fly the US might even go as far as placing Iran-style sanctions on any third party that IS prepared to sell crucial inputs to Huawei. Given Chinese households are swimming in debt and its housing bubble is the world’s largest,"
    "So says Bloomberg in ‘China’s Trade Worst Case: Growth Slows, Debt Rises, Companies Exit’.

    “Altogether, an economic war with the US blows China up. China would be cut off from Western markets, ideas, technology, and US dollar-flow long, long before it’s ready to replace the US for real.”
    Sighhh, this is short -sighted thinking. Here is a map of where all the people are.
    As far as being cut off from Western markets; there isn't going to be much in the way of Western markets after the bubble blows. Remember, we pay everybody with bogus treasury bills. China and Russia can develop all the tech they need. Cut off from dollars won't hurt them if they have enough gold.
    ", ‘China has three trump cards to win trade war with US’. Well, the second threat is nonsense, as we keep explaining, and doesn’t boost the credibility of the Global Times, to put it mildly; the last will accelerate the flood of firms out of China;"
    The Belt & Road program is geared to generating markets around the world.

    Now, for the comments.
    Batman 11America's secret weapon, neoclassical economics.

    China has made all the classic mistakes that everyone makes who uses neoclassical economics.

    They have inflated both real estate and stock markets with bank credit. They really got taken in by all that price discovery and stable equilibrium stuff.

    Their stimulus since 2008 has gone into all the wrong places that didn’t grow GDP; the private debt soared, but GDP didn’t. It’s a classic mistake.

    At 25.30 mins you can see the super imposed private debt-to-GDP ratios.

    Japan, the UK, the US, the Euro-zone and China.

    They have already learned the private debt-to-GDP ratio and inflated asset prices are indicators of financial crises.

    The West’s “black swan” is a Chinese Minsky Moment.

    As the Chinese understand the problem they are not going to try and cure a debt problem with more debt as we have been doing in the West since 2008. In the West, central banks dropped interest rates to the floor to squeeze more debt into our economies.

    Chinese bankers had inflated the Chinese stock market with margin lending in 2015.

    Set the scale to 5 years to see what happens to the Chinese stock market as their bankers inflate it with margin lending.

    The wealth is there one minute and gone the next, it wasn’t real wealth. GDP measures the real wealth in the economy.

    The Chinese wanted increased domestic consumption, but let housing costs soar.

    It was that neoclassical economics again, but they have now learnt that high housing costs eat into domestic consumption by reducing disposable income.

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

    Once they have sorted out the mess left behind by their technocrats trained in neoclassical economics they will be ready to start growing again, but it could take a while.
    At least they have worked out what the problems are, unlike their Western counterparts.

    Batman again
    Where does this ****ty economics come from?

    In 5,000 years of human history those at the top have designed systems to maintain themselves in luxury and leisure.

    They got started almost immediately.

    Mankind first started to produce a surplus with early agriculture.

    It wasn’t long before the elites learnt how to read the skies, the sun and the stars, to predict the coming seasons to the amazed masses and collect tribute.

    They soon made the most of the opportunity and removed themselves from any hard work to concentrate on “spiritual matters”, i.e. any hocus-pocus they could come up with to elevate them from the masses, e.g. rituals, fertility rights, offering to the gods …. etc and to turn the initially small tributes, into extracting all the surplus created by the hard work of the rest.

    The elites became the representatives of the gods and they were responsible for the bounty of the earth and the harvests. As long as all the surplus was handed over, all would be well.

    It’s been the same ever since, the extraction methods have just got more sophisticated over time.

    Things were all going so well until the Classical Economists turned up and couldn’t help but notice that the European aristocracy were maintained in luxury and leisure, but never did a stroke.

    Things were taking a very dangerous turn for the powerful vested interests of the late 19th century who rather enjoyed their life of luxury and leisure. They needed a new economics to hide what the Classical Economists had discovered.

    Neoclassical economics was the answer.

    Its original architects would have been only too well aware of what they had hidden and changed to produce an economics that suited the powerful vested interests of the late 19th century.

    Free market fundamentalists in the US picked this economics up decades later not knowing what had been changed and then developed a whole ideology from it, neoliberalism.

    They then rolled it out globally.

    Neoclassical economics had been designed to meet the requirements of 19th century elites and was bound to appeal to late 20th century elites, which it did.

    Unfortunately, the Europeans took this economics and designed the Euro with it leaving them to suffer the most from the now unknown flaws within the economics.

    Capitalism actually works best with low housing costs; this gives you some idea of how bad neoclassical economics is.

    \ust read the classical economists to confirm.

    Adam Smith observed the world around him.

    “The labour and time of the poor is in civilised countries sacrificed to the maintaining of the rich in ease and luxury. The Landlord is maintained in idleness and luxury by the labour of his tenants. The moneyed man is supported by his extractions from the industrious merchant and the needy who are obliged to support him in ease by a return for the use of his money. But every savage has the full fruits of his own labours; there are no landlords, no usurers and no tax gatherers.”

    The classical economists saw three groups in the capitalist system.

    1) Employers / Capitalists

    2) Employees / Workers

    3) Rentiers

    “The interest of the landlords is always opposed to the interest of every other class in the community” Ricardo 1815 / Classical Economist

    What does our man on free trade mean?

    He was an expert on the small state, unregulated capitalism he observed in the world around him. He was part of the new capitalist class and the old landowning class were a huge problem with their rents that had to be paid both directly and through wages.

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

    Employees get less disposable income after the landlords rent has gone.

    Employers have to cover the landlord’s rents in wages reducing profit.

    Ricardo is just talking about housing costs, employees all rented in those days.

    Low housing costs work best for employers and employees.

    Jeffrey Sachs created Putin's Russia - an official media source, the BBC, says so.

    A BBC documentary covers a young, naive Jeffrey Sachs and other US free market fundamentalists as they headed into Russia to make a right mess of things and pave the way for Putin.

    Part 3 – We will Force You to be Free (36 – 44 mins)

    The US dreamed of an open, globalised world.

    China became a superpower and the US went into decline.

    Last edited by Danny B; 05-19-2019, 06:35 PM. Reason: Ity jumped the gun

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  • Pot head
    Dirt minded

    Do your best scribbling.
    You will never achieve success.
    You are a blowhard.

    Leave a comment: