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  • Danny B
    replied
    Military Narcissism,,, privately issued money

    Yesterday, I mentioned a stealth devaluation of the Yuan. Today is a different story.
    https://www.rt.com/business/430788-c...aluation-yuan/
    Trump is kicking more a$$ on trade. I think that he is using a weapon that is just too blunt.
    https://www.theepochtimes.com/trump-...m_2572647.html
    The FANG stocks had a great run but, are now correcting
    https://www.zerohedge.com/news/2018-...fall-continues

    Military budget, (repost), https://www.rollingstone.com/politic...t-2019-w521788
    Ron Paul, "Without being technically at war with anyone in particular, the U.S. is dropping a bomb somewhere in the world every 12 minutes, around the clock.
    The U.S. has 1,000 military bases scattered across the planet."
    "The Pentagon’s own numbers show that it can’t account for $21 trillion. "
    "1. The amount of money supposedly in the stock market is $30 trillion.
    2. The GDP of the United States is $18.6 trillion."
    "“[The July 2016 inspector general] report indicates that unsupported adjustments are the result of the Defense Department’s ‘failure to correct system deficiencies."
    " This would explain how Donald Trump’s military can drop well over 100 bombs a day that cost well north of $1 million each.

    So why can’t our government also “create” endless money for health care, education, the homeless, veterans benefits and the elderly, "
    "Earlier this month, Louisiana sent eviction notices to 30,000 elderly peopleon Medicaid to kick them out of their nursing homes. Yes, a country that can vomit trillions of dollars down a black hole marked “Military” can’t find the money to take care of our poor elderly."
    "mainstream corporate media are mouthpieces for the weapons industry. They are friends with benefits of the military-industrial complex. I have seen basically nothing from the mainstream corporate media concerning this mysterious $21 trillion. "
    https://mrtopstep.com/ron-paul-heres...nt-in-america/

    Comments,
    America Suffers From Military Narcissism

    the scale of America's military defies sane reason
    there are no military solutions to America's imperial dementia
    America has no ideological basis for its empire
    military culture selects an officer class of defectives
    illiterate peasants using IEDs and tunnels easily defeat hyper-expensive weaponry
    the Pentagon is corrupt, incompetent and impotent
    So, who is leading America around by the nose?
    https://www.zerohedge.com/comment/11891598

    Saving the dollar by kicking Europe off a cliff.
    https://www.zerohedge.com/news/2018-...ade-apocalypse
    "It should come as little surprise that the same week the Petroyuan was introduced, Trump released a flood of tariffs on Chinese exports – the first in a series of retaliatory efforts we could expect, setting the stage for an all-out tradewar between the world’s two largest economies."
    "This article ignores 4 massively important points! ...

    1) Since 1913 what we call "the U.S. Dollar" has really been a PRIVATE currency: the "Federal-Reserve Note"(FRN); issued by the PRIVATE Federal-Reserve Banks(owned by the Rothschild family and friends).
    2) Under the Breton Woods agreement after WWII, America agreed to exchange U.S. GOVERNMENT gold for PRIVATE currency (the FRN)[1].
    3) So the Rothschilds just kept printing up their FRNs and having front-men in the French government trade them in for gold at the US Treasury, then ship the gold to the Rothschild vaults in London and New York.
    4) This went on for 25 years until 1971 all the gold in Fort Knox was gone, and Nixon had no choice to put an end to the "gold-standard".

    "Yes, but he should have removed the currency-issuing MONOPOLY from ALL PRIVATE hands and restored it to GOVERNMENT hands. The problem is not that currency-issuing is a MONOPOLY, the problem is that currency-issuing is in PRIVATE hands. Currency-issuing needs to be a GOVERNMENT MONOPOLY as mandated in the U.S. Constitution Article I Sec 8: "The CONGRESS shall have power..To coin money" and as proposed in the Occupy Need Act [2])..

    The idea that the problem is that currency-issuing is a MONOPOLY, and that the monopoly should be broken up and put into many OTHER PRIVATE hands, is a Libertarian Austrian-School idea, following the teachings of Ludwig Von Mises, the famous Jewish economist funded by the Rothschilds.

    This Libertarian doctrine is the Rothschild's last line of defense. If all else fails, and their currency-issuing monopoly be broken up and put into many other PRIVATE hands, they are confident that soon they could own all those other PRIVATE hands, and be back in business as usual, within a few years. On the other hand, should their PRIVATE monopoly become a GOVERNMENT monopoly, all would be lost for them."
    http://www.monetary.org/occupying-the-need-act/2014/04

    The job market,
    http://charleshughsmith.blogspot.com...tatus-quo.html
    6/25 China’s central bank frees up US$100 billion in funding as trade war looms – SCMP
    They lowered the amount of reserves the banks must hold. Not the smartest manouver when you are trying to devalue your currency at the same time.

    Leave a comment:


  • Danny B
    replied
    How long has this cycle been extended?

    How long is the average economic cycle? Well, it averages 10--12 years. The banking system became far too crowded. Everyone was clamoring to rent out their wet-ink money. The tech bubble crashed because everybody was throwing money at enterprises that had no earnings. The housing bubble crashed because everybody was throwing money at borrowers who could not pay it back.
    John Hussman writes about how this cycle has become hyper-extended by the free-money FED. He has been very wrong about timing on investments because he was timing the cycle as if it were a normal cycle of 10--12 years. He readily admits as much. NOBODY thought that the FED would inject so much nor, extend the cycle so much. Excellent article if you want a good understanding of where we are in this new, "extended" financial world.
    https://www.hussmanfunds.com/comment/mc180604/

    "With just 42 days trading days left until the S&P500 bull market becomes the longer of all time, Morgan Stanley's chief cross-asset strategist, Andrew Sheets, writes that investors are now more sanguine about how much time they have until the next recession than at any point since 2010. "We’re 8 ½ years into an expansion, and many investors finally are finally confident that there is plenty of time left on the clock."
    "All this is taking place against a backdrop in which key market elements are vastly different from a year ago"

    "Presenting, Bank of America's Charts of Darkness"
    https://www.zerohedge.com/sites/defa.../darkness1.jpg
    This is a good article enumerating the various peaks.
    https://www.zerohedge.com/news/2018-...apocalypse-dow

    Technical traders has a good article.
    https://www.thetechnicaltraders.com/...be-setting-up/
    Bill Bonner has a questionable article where he speculates that GOV will get rid of both paper currency and the private banking system. I'm doubtful.
    https://bonnerandpartners.com/the-fi...e-war-on-cash/
    ZH claims that China is doing a stealth devaluation of the Yuan as part of the trade war. Keep in mind that; as the dollar goes up, it is much more difficult to service dollar-denominated debt.
    https://www.zerohedge.com/news/2018-...C0%2C0%2C0%2C1

    Various writers speculate that China could dump it's U.S. treasury debt and crash American markets. This would cause the Yuan to rise when China wants it to fall.
    https://www.rt.com/business/430645-t...s-debt-keiser/

    American infrastructure is falling apart. The money goes to the military.
    https://www.rollingstone.com/politic...t-2019-w521788
    Much of it goes to the safety net also and, that is being steadily cut back. Military spending rises and Social Security spending falls.
    https://www.cnbc.com/2018/06/21/soci...udy-shows.html
    Trump is further stirring things up with China.
    https://www.cnbc.com/2018/06/25/trum...wsj-repor.html
    So, it IS different this time. The economic cycle and the 1/2 cycle have been extended.

    Leave a comment:


  • Danny B
    replied
    Trade wars, playing chicken,,,chicken in Hormuz,,, multilateral world

    Blankfein: Trump's Trade Threats Are A Savvy "Negotiating Strategy"
    Nope, this is like beating the snot out of your wife. You can't undo it.
    This unfolding trade war shows just how ignorant American negotiators are. Many things are produced in one place and, assembled in another. Raw materials could be sourced anywhere. Capital some place else. The Chinese put a tariff on pork. The largest American pork producer is owned by the Chinese.

    U.S. corporations moved manufacturing to China to take advantage of low-cost labor. These US Corporations then retain the enhanced profit margins from the low cost manufacturing in offshore tax havens to evade US Corporate taxes.
    Many also don't understand that the bulk of the "Trade deficit" with China comprises the import into the US of US brands such as Apple and many others. There is a lack of understanding that even such imports of US brands are still IMPORTS!!
    China is not the problem but US Corporations. And they will NOT onshore manufacturing if a full trade war breaks out with China but simply shift manufacturing to Thailand, Vietnam, Indonesia etc.

    "the US currently imposes a 2.5% tariff on imported passenger cars"
    "EU imposes a 10% tariff on all imported U.S. cars"
    "Not long after Trump's tweet, the European Union vowed it was prepared to retaliate immediately should the tariffs be imposed, saying it would continue tit-for-tat escalation in its trade dispute with the U.S. "
    "Earlier in the week, the EU imposed retaliatory tariffs on €2.8 billion ($3.3 billion) of American products "
    "Europe is convinced that Trump would have no choice but to reverse direction once there is sufficient outcry from either politicians, business or if the market itself were to crash:"
    There is little appreciation for the fact that; when the markets crash, they won't get up again.
    "That suggests that some of the tariffs may indeed have to take effect (they can always be rescinded afterwords). All that means is that there's a greater risk for escalation in the trade dispute and a more severe market selloff."
    The markets can not survive a big selloff.
    The article goes to great length to show that the effects of a full-blown trade war would be minimal.
    https://www.zerohedge.com/news/2018-...war-could-look

    Game of Chicken: US vs China on Tariffs
    https://www.youtube.com/watch?v=c2sMNjpVzvg&t=12s
    So, just how much is this trade war worth at the moment?
    Jerome Powell is Playing “Chicken” With $10 Trillion in $USD Shorts
    https://www.zerohedge.com/news/2018-...ion-usd-shorts
    "Jerome Powell has emphasized that he is more concerned with the real economy than the financial markets.
    Put another way, the Powell Fed, unlike the Bernanke or Yellen Feds before it, is willing to sacrifice stocks in the name of normalizing monetary policy provided the economy can withstand it.
    As a result of this, the Powell Fed intends to continue with its rate hikes as well as the increase in QT (we go to $50 billion per month in July),"
    Here is a graph of what QT has done to Brazil.
    https://www.zerohedge.com/sites/defa...GPC6-23-18.jpg

    "there is a significant risk that the markets might actually enter a free fall. Powell is playing a dangerous game. "
    https://www.zerohedge.com/news/2018-...ion-usd-shorts
    It seems to me that Powell is depending on capital inflows to prop up American markets.
    Evidently, he has turned a blind eye to corporate debt.
    Evidently, he has turned a blind eye to the EMs defaulting to American banks.
    Evidently, he has turned a blind eye to the looming collapse of the EU banking system.
    Evidently, he has turned a blind eye to the fact that China will soon have to devalue. A minimum negative 10% to u.S. markets.

    "Iran could effectively shut down the Strait of Hormuz, the narrow channel connecting the Persian Gulf to global markets. It is the only sea route from the Persian Gulf to the open ocean.

    Tankers moving oil from Iraq, Iran, Saudi Arabia, Qatar, Kuwait, and the United Arab Emirates all have to pass through the strait. That translates into roughly 35% of the world’s oil traded by sea.

    Nearly $2 billion worth of oil passes through the Strait of Hormuz every day. It’s the most critical oil choke point in the world.

    In the event of an all-out war, Iran would quickly shut down the Strait of Hormuz. It’s been blatantly clear about this.

    Credible studies have shown that—in a best-case scenario for the US Navy—Iran could seal off the Strait with sea mines and asymmetrical warfare techniques for at least a month before the US could reopen it. The Pentagon itself has admitted as much."
    https://www.caseyresearch.com/the-th...ock-is-coming/
    Not in a month,,, not in a year. The Suez was closed for 7? years.

    "In one week President Trump confirmed that his first concern is the United States, that he has what may be a workable vision for its place in the world, and he loathes globalism and the globalists."
    "It’s hard to say if Trump’s dislike of Angela Merkel is business—she’s one of the world’s most visible and vociferous proponent of globalism, or personal—it’s always her way or the highway."
    "That Trump is willing to blow off Europe suggests that he may be blowing off empire. "
    "As global competition moves from military to economic, Trump is also going to make sure he tilts, as much as possible, the rules of that competition back towards the US. There are the existing trade arrangements with Europe, Canada, and Mexico that he’s willing to blow up, presumably to obtain better arrangements."

    "he may get some breathing room to address the intractable second and third realities: the trajectory of US spending and debt, and the fundamentally corrupt government. On the debt, all the breathing room in the world isn’t going to save him. "
    most of America’s rulers and its captive media are speaking out against a peace initiative, not on the merits of the initiative itself, but because Donald Trump was one of its initiators.
    https://www.zerohedge.com/news/2018-...ragon-and-bear

    Leave a comment:


  • Danny B
    replied
    Yield curve,,,, slowly melting

    Well, there is a lot going on. Emerging market debt is on a slow boil as interest rates rise. Their debt just becomes too expensive to service. At the same time, domestic U.S. debt is on a fast boil. 2/10 of a percent rise in interest rates claws out an additional $1 trillion in interest charges from the economy.
    " the ECB has been printing money and buying Eurozone debt roughly 33% faster than the economy of the Eurozone has been growing."
    Eurozone debt is the deep-fat fryer, not the hot-pot.
    "Ten-year Treasury yields fell three bps to 2.90% (up 49bps). Long bond yields slipped a basis point to 3.04% (up 30bps)"
    This is the feared inverted yield curve. You can see that it isn't yet inverted,,, just close. When Russia recently dumped a whole slew of bonds, it drove up the 10 year. That pushed things closer to inverted. You can also see why GOV has to lie about price inflation. At the true 10% price inflation, the long-bond is a big loser.

    "With such complexity in the world, central bankers should be disinclined from grand experiments. A decade of central bank rate manipulation, "money" printing and market intervention has ensured deep structural changes in the marketplace."
    They didn't fix anything because they don't have a clue of how the system works. All they cared about was saving the banks,,,, at any cost. Well, the cost is here and, they are not going to like it.

    "Thursday from Zero Hedge: "This Is The Greatest Short-Squeeze In History." The Goldman Sachs Most Short (50 highest short interest names above $1bn) is up 18.8% y-t-d. From May 3rd intraday lows, the GS Most Short has surged 20%"
    These are people betting on a crash.
    https://creditbubblebulletin.blogspo...nce-chase.html

    You Brits are going to get blown out of the water,,,, at the same time that you blow up the EU. Good thing that you have your own currency. The Irish are getting revenge for the potato famine.
    https://www.theguardian.com/politics...claude-juncker
    Here is a graph of the DOW. https://deviantinvestor.com/wp-conte...d-image-9.jpeg
    Here is a good graph on the breakout of interest rates.
    https://deviantinvestor.com/wp-conte...-image-10.jpeg
    "The US government has borrowed and increased official debt an average of 8.8% per year since 1913. "
    https://deviantinvestor.com/10116/sa...y-know-better/

    6/23 Europe hits back at Trumps tariffs as trade tensions mount – Bloomberg
    6/23 China moves to quell systemic bond risks after wave of defaults – Bloomberg

    The tariffs are going to do a lot of damage.
    6/23 Water wars: India facing “worst crisis in its history” – Zero Hedge
    Pakistan: Pakistan may soon have world's third largest nuke stockpile ...
    https://economictimes.indiatimes.com › News › Defence

    And
    In Kashmir, Pakistan and India race to tap the Himalayas | GulfNews.com
    https://gulfnews.com/.../pakistan/in...tap-the-himala...

    Leave a comment:


  • Danny B
    replied
    Overview from Rickards,,, oil-yes,,, SDRs-no

    Jim Rickards has a LOT of experience in world capital markets. Here, he writes a very good article focused on defaults in emerging markets. It is well worth a read.
    "Once that happens, even the stronger countries such as China lose reserves rapidly and end up in default. In a worst case, a full-scale global liquidity crisis commences, this time worse than 2008."
    "The IMF will soon run out of lending resources and will have to pass the hat among the richer members. But the Europeans will have their own problems, and the U.S. under President Trump is likely to reply, “America First,” and decline to participate in bailing out the EMs with U.S. taxpayer funds.

    At that point, the IMF may have to resort to printing trillions of dollars in special drawing rights (SDRs) to reliquify a panicked world. SDRs are essentially world money. Elites are working behind the scenes to ultimately replace the dollar with SDRs as the leading reserve currency."

    https://dailyreckoning.com/a-new-glo...sis-has-begun/
    These "elites" who are hard at work are all in the West.
    The crash is definitely coming. The IMF hopes to create megatons of SDRs. This will be our new "one world" currency.
    There is a slight possibility that this scheme would work if America and the West did not have to import anything. There is a slight possibility that this would work if America did not need markets for exports.
    More to the point, the IMF plans to have everybody accept SDRs for payment of oil. NOT GOING TO FLY.

    Combined Compliance For OPEC, Non-OPEC Hits 86% | OilPrice.com
    https://oilprice.com › Energy › Oil Prices

    "Congress Is Considering A Bill Enabling Anti-Trust Litigation Against OPEC"
    https://www.zerohedge.com/news/2018-...n-against-opec
    Do you see the coming tug-o-war? Russia, China and Iran are buying up all the oil,,, blending it and, brokering it to consumers.

    Russia Looks to Strengthen Ties with Mexico as NAFTA ... - PanAm Post
    https://panampost.com › North America › Mexico
    Targeted by Trump, Mexico Courts Putin's Russia, Xi's China | Civic ...
    https://www.usnews.com/.../targeted-...ssia-xis-china

    Canada is pissed off. Mexico is pissed off and looking to Russia. Venezuela oil production is falling fast. Our close-in oil suppliers are not looking so good.
    The East would rather chew barbed wire than accept SDRs from the great satan. Pox Americana is going around the world trying to whip everybody into line using sanctions, fines and lawsuits. The deep State would prefer to also use the military but, it has been gutted by corruption from the MIC.
    Immediate implementation of the FUSOR + our existing oil supplies would allow us to survive. But, our export markets would still be moribund.

    The FUSOR won't get immediate implementation.
    The coming battle is between gold and the SDR. The US/IMF would like to strongarm Russia and Iran into accepting SDRs for oil.

    Leave a comment:


  • Danny B
    replied
    Eurozone debt

    The consumer spends less and less. She is tapped out. The actual economy shrinks. Mergers and acquisitions increase. Historically, M&A action increases as the economy falters.
    https://www.dollarcollapse.com/disne...ox-end-bubble/
    M&A is increasing. The yield curve has inverted. Both of these are indicators of an impending crash. It is hard to say just how much the capital inflows will change the dynamic.

    German bankers loaned to Greece knowing that Greeks were perennial deadbeats. When Greece couldn't pay, Merkel and Schäuble bailed out the banks embraced the Greek debt as being debt owed to the German State. Germany put Greece over a barrel and rogered them well. This has been profitable.
    https://www.rt.com/business/430541-g...arns-billions/

    "They suffer from low profitability and carry an estimated total bad loan exposure of around 759 billion euro, which accounts for roughly 30 per cent of their equity capital."
    "While US bank stocks are up 24 per cent since the beginning of 2006, the index for euro-area bank stocks is still down by around 70 per cent. Perhaps most notably, ’Germany’s two largest banks, Deutsche Bank and Commerzbank, have lost 85 and 94 per cent, respectively, of their market capitalization."
    Of course they lost capitalization. What would you do if your bank faced a "bail-in"? America has plenty of bad loans but, they are "hidden" in the GSEs like Freddy and Fanny. The bad loans will blow the private banks in Europe and, the public debt in America.
    The Central Banks removed ALL moral hazard and financial risk. Did it ever occur to them that this might cause bankers to run wild?
    https://www.zerohedge.com/comment/11868040

    "Then there's a horrendously unexpected crash. The status quo panics, and the Federal Reserve and the Savior State rush to provide massive stimulus--tax cuts, tax rebates, more federal spending, lower interest rates, bond buying, easier lending standards, increased liquidity, and so on.

    Asset prices respond to these constant injections of uppers very predictably: they leap higher as participants realize the "Fed put" is in place: the central bank will not let markets decline, so the profitable strategy is "buy the dip."

    "Note that the quantity of stimulus required to "fix" the markets increases exponentially every bubble-pop. Where a sharp decline in interest rates and conventional monetary stimulus stopped the 2002 crash in its tracks and reinflated asset bubbles, the next bubble-pop crash in 2008-09 required an unprecedented range of unconventional stimulus to stop the crash and reinflate the era's third asset bubble: zero interest rates (never done before), $4 trillion in bond and mortgage purchases (never done before), ending mark-to-market pricing of financial instruments (never done before) and unlimited liquidity to the banking sector and financial markets (never done before). "
    https://www.oftwominds.com/blog.html

    "Even if we look at the hatred poured on Trump, this is indicative of how civilization collapses. It does not matter if you agree or disagree with Trump. This sort of hatred and the personal attacks, especially led by CNN, is so destructive I fear what comes AFTER Trump. There is absolutely NO POSSIBLE WAY that anyone who would really try to help the situation will come to power. CNN has guaranteed that nobody in the right mind would dare to be president."
    https://www.armstrongeconomics.com/f...rd-do-we-fall/

    To the readers on the continent, you're going to get hit the worst. Brussels keeps printing to keep the European version of the blob-State well paid. Millions of paper pushers depend on the printing press.
    "Keep in mind that the Federal Reserve’s balance sheet never exceeded 25% of US GDP. "
    No mention of the back-door money from the PPT and ESF.
    "To put €4.5 trillion in perspective, it is over 40% of the annual GDP of the 19 countries comprising the Eurozone (€11.35 trillion)."
    "The ECB’s balance sheet has grown by 8.9% since this time last year, far faster than the overall Eurozone economy (2.4%),
    "and by an amount far greater than the combined GDP growth of the entire Eurozone (€372 vs €278 billion). In other words, the ECB has been printing money and buying Eurozone debt roughly 33% faster than the economy of the Eurozone has been growing. As if that weren’t enough, the ECB bought significantly more bonds in the last year than the entire increase in the national debts of all the Eurozone countries combined in 2017."
    "and by an amount far greater than the combined GDP growth of the entire Eurozone (€372 vs €278 billion). .

    "Both public and private emerging market debt raised money in dollars. A 2% increase in interest rates could spark a sharp rise in the proportion of emerging market corporate debt issues at risk of default. This is true especially in Brazil, Turkey, and India.' 1/2 of the BRICs
    https://www.armstrongeconomics.com/i...coming-crisis/
    The trade war has the potential to completely screw up world trade. As if that isn't enough, Trump wants to revamp GOV.
    https://www.upi.com/Top_News/US/2018...8;utm_medium=2
    He wants more efficiency. The State specializes in inefficiency so that it can give jobs to buy votes,,, and hold down crime.

    6/22 New Jersey heads for budget clash, possible shutdown – US News

    Leave a comment:


  • Danny B
    replied
    Hot money in RE

    The various CBs created an extra $ 200 trillion. They took impaired loans and put them in a "bad bank". This strategy was supposed to take bad loans off the books of the banks so that they could continue to issue new loans. There was little demand for new credit from people who were credit-worthy. So, they made loans to people who were not credit-worthy.
    $200 trillion was just too much to be absorbed into the productive system so, it was circulated in the upper loop of the economy. Unfortunately, much of the money flowed into anything that could be considered a store-of-value. It blew out the price on everything that ran in a short-term cycle. Commodities peaked and crashed. There is one area that has a long-term cycle. Real Estate. The hot money that was conjured up in the upper loop was searching for a home that appeared safe. RE is a long term cycle so, it appeared safe.

    Here is a comprehensive article on the price of housing. I’ll do a few excerpts but, you should read the whole thing.
    "Since 1960, renters’ median earnings have gone up 5 percent while rents have spiked 61 percent; homeowners earn 50 percent more while home prices have gone up 112 percent.
    The Harvard study noted that the cities with the greatest increases in housing costs also have the greatest increases in homelessness. Expensive housing encourages private equity firms and other investors to buy up apartment buildings and evict the current residents.
    But wait, it gets worse: The Harvard study found that the fastest rise in home prices is at the low end of the market. “Cheap” homes, or those selling for less than 75 percent of the median price, are appreciating at twice the rate of high-end homes.

    The reason for this appears to be that low-cost housing is simply disappearing from the market. Since 1990, more than 2.5 million apartments renting for less than $800 per month have been demolished, upgraded into luxury condos or converted into hotels or offices. Between 2010 and 2017, prices in poor urban neighborhoods rose 50 percent faster than in rich neighborhoods,

    "Before the recession, America built around 1.1 million new homes per year. In its best year since, the country built just 849,000. "
    VERY strange,, maybe it is because houses are unaffordable.
    "America also has a nationwide shortage of construction workers. According to the Harvard report, building firms have 200,000 job openings, the highest number in a decade. And yet, despite persistent labor shortages, construction worker wages are rising slower than the rest of the private sector."
    "“In a lot of cities,” he said, “the market can’t supply housing for people making less than six figures.”
    "But here, too, the news is grim. In 1988, just one city in America had homes that cost, on average, more than six times the annual median income. Today, 22 of them do. "
    https://www.huffingtonpost.com/entry...b056b2263c621e
    Keep in mind that the number of owner occupied houses hasn't gone up in decades. Everything is bought up by speculators who are close the the free-money spigot.

    6/21 American cities are so expensive that they risk ‘demographic bomb’ – BI
    6/21 LA home prices surge past new record – Patch
    6/21 A $24 million tear down on Nantucket? Island prices breaking records – CNBC
    6/21 15 US cities where home prices are skyrocketing – CNBC
    6/20 Home price insanity: $2.6 million for 900 square feet – CBS


    "The headline figure is striking: global debt has hit a new high of 225% of world GDP, exceeding the previous record of 213% in 2009. So, as the IMF points out, there has been no deleveraging at the global level since the 2007-08 financial crisis."
    "The IMF’s recommendation to governments is that they should fix the roof while the sun is shining: accumulate a fiscal surplus, or at least reduce deficits,"
    Yep, raise the snot out of taxes.
    "Since the crisis, far tougher capital requirements have been introduced for banks"
    And immediately gutted.
    "At a time when economic growth is robust almost everywhere, financial markets are relaxed about debt sustainability."
    Growth in the sector of the economy that produces NOTHING is robust.
    https://www.theguardian.com/business...nancial-crisis

    In the Baaken field they are flaring off natural gas to the tune of 1,800, 000 Bbl. equivalent of oil every day. They don't have the infrastructure to do anything else.
    https://www.bloomberg.com/view/artic...-shale-dilemma
    6/21 Fed Chair Powell calls case ‘strong’ for more interest rate hikes – CNBC
    6/21 Americans still aren’t saving, despite the booming economy – Bloomberg
    I'm glad to hear that everything is booming. Before long, we are going to hear one BIG BOOM.
    The feces-for-brains at the FED look at the extremely low unemployment rate and conclude that the economy is close to overheating. The 95 million Americans of working age who are not in the labor force evidently isn't an important consideration. They just want to raise rates to attract capital inflows AND save the pension funds. So, what can we expect for results?
    "With over $50 trillion in non financial domestic debt, every 100 basis point ( 1/10 of a percent ) increase in rates produces a $500 billion economic drag."
    So, 2/10s of a percent rise will extract and extra $1trillion in debt service. The FED is raising rates to try to accumulate "ammunition" to fight the next recession. This isn't ammunition that they are accumulating. It is "fissionable" debt that they are stacking up in one place. It is increasing at the rate of $1.5 trillion a year. At some point, it will reach critical mass.

    The FED funds rate has been dropping in tandem with the birth rate. This is all tied to the consumptive rate of the 16---62 year olds.

    Keep in mind that all GOV is socialist. They attract the corrupt and, the non-producers. They never reduce their predations. Good article.
    https://lara-murphy.com/wp-content/u...May-Horton.pdf
    Global debt in real time.
    http://www.imf.org/external/datamapper/datasets/GDD

    Leave a comment:


  • Danny B
    replied
    Trade war NOT predictable

    The entertainment du jour is the trade war. Bretton Woods made the dollar the reserve, anchored to gold. The anchor chain was broken. If a State wanted to sock away reserves, it had to have dollars. It could only get dollars by manufacturing stuff and, undercutting American prices. Under this kind of competition, manufacturing couldn't compete and, left the country.
    If America lays on enough tariffs, American manufacturers could be competitive again. 50% of the cost of everything that you buy is for finance so, price competitiveness will be very elusive. Besides that, the bankers use your savings to buy up EVERYTHING. Then, you buy it from the bankers.
    The Smoot-Hayley Act raised tariffs and, reduced world trade by 50%. Nobody won.

    Blankfein: Trump's Trade Threats Are A Savvy "Negotiating Strategy"
    China cuts US investments by 92% amid escalating trade war

    https://www.youtube.com/watch?v=A4h-IakgKik&t=1431s

    "Approximately 88 years ago (in June 1930), American lawmakers did exactly what the U.S. is doing today – they enacted the now infamous Smoot-Hawley Tariff Act 1930 – and raised tariffs on hundreds of goods imported into the U.S. According to one quantitative assessment, these measures reduced U.S imports by over 40%, sending the world’s trading order into a tail spin. "
    "Based on 2017 steel import figures compiled by the U.S International Trade Administration, the top eight economies (in order of magnitude) most likely to be disrupted by the 2018 steel tariffs include:

    Canada
    Brazil
    South Korea
    Mexico
    Russia
    Turkey
    Japan
    Taiwan
    Canada: Prepare for a bloody trade war!

    EU To Launch Counter-Tariffs Against US On Friday
    India Prepares Duty Hikes On More Goods In Retaliation Over Trump US Tariffs
    German Automakers Call For End To EU-US Car Import Tax - Reports

    Escalating Trade War Between Trump US & China Sends Shock Waves Through Markets
    'Belligerent' US Trade Policy Toward China Will Damage Iconic American Brands


    "With over $50 trillion in non financial domestic debt, every 100 basis point ( 1/10 of a percent ) increase in rates produces a $500 billion economic drag."
    The yield curve continues to flatten – underscoring the fragility of domestic economic growth.
    http://realinvestmentadvice.com/kass-risk-happens-fast/
    "The new US tariff will be imposed if China goes ahead and implements its new tariff on American goods, announced last week, the White House said, adding that trade between the two countries “must be much more equitable.” China is currently running a $376 billion surplus in trade with the US, according to the White House.

    If Beijing choses to continue its tit-for-tat tariff policy with the US, Washington will impose further tariffs on imports from China in addition to the $200 billion announced, the statement warned."
    "French President Emmanuel Macron called the tariffs “not only criminal, but a mistake,” adding, “Economic nationalism leads to war.”
    So, the frogs are going to invade.
    "Canadian Prime Minister Justin Trudeau called the tariffs “totally unacceptable” and an “affront” to Canada, describing the announcement from Washington as “a turning point in the Canada-US relationship.”
    Said the wanker with no leverage.

    Italy is in very bad shape, https://www.zerohedge.com/news/2018-...ueled-populist
    Depending on how you view the numbers, America has a $1.4 trillion trade surplus.
    https://www.armstrongeconomics.com/w...trade-tariffs/
    Mixing tariffs with duties, https://www.armstrongeconomics.com/w...y-get-revenue/

    "ANSWER: The Government always thinks that throwing more money at something make it better. I have NEVER seen where that has EVER corrected any such trend. The problem lies in the total mismanagement. Governments are simply incapable of operating even a bubblegum machine. They completely fail to understand the economy, human nature, or society as a whole. The only way to actually correct such a problem is to privatize. That installs actual management and employees must actually perform. Government unions demand benefits and they negotiate with themselves. This is why the entire socialist agenda is collapsing"
    https://www.armstrongeconomics.com/a...he-sixth-wave/

    Russia dumped a bunch of U.S. sovereign debt. This raised bond yields. Remember that everything crashes if bond yields go north of about 3.5 %
    This seems to have been a test-run to see how weak the bond market is. China has lots of bonds that they could dump if they thought it necessary.
    https://sputniknews.com/us/201806191...s-debt-dollar/
    Currency wars and inflation-targeting always take money from the worker.
    https://antoniusaquinas.com/2018/06/...rican-workers/
    Last edited by Danny B; 06-21-2018, 04:31 AM. Reason: Mo info

    Leave a comment:


  • Danny B
    replied
    VZ oil,,, China and American oil,,, CORRUPTION

    Norges, biggest sovereign wealth fund, takes tough line on corruption ...
    https://www.thetimes.co.uk/.../bigge...-line-on-corru...
    Some leaders are corrupt, some aren't. Unfortunately for Malaysia, there is at least $100 billion missing.
    https://www.armstrongeconomics.com/i...goldman-sachs/

    VZ can't pay the oil engineers but, it spends $ 3.6 million a day for spoiled daughters.
    Report: Hugo Chavez's Daughter Is Richest Person in Venezuela
    VZ doesn't have enough money to buy the light crude needed to blend with it's "axle grease". In addition, the State spent LOTS of money on welfare and, almost nothing on it's oil workers.
    https://www.zerohedge.com/news/2018-...ons-fall-apart

    China is the largest customer for U.S. crude......................................
    "On Friday, Beijing threatened to impose tariffs on US energy products in response to $50 billion in tariffs imposed by US President Donald Trump. Such tariffs would inhibit Chinese refiners from buying US crude imports, potentially crashing US energy markets "
    https://sputniknews.com/world/201806...ff-US-suprise/
    Trump is a RE mogul. He has to depend on his advisors to let him know about possible fallout to his planed decisions. Sabers were rattled at North Korea and,,,, China sent bombers to patrol Taiwan. Is everybody in the State debt so stupid that they didn't foresee that?
    Trump sanctions China to cause a reduction in the trade deficit. Did State totally ignore the possible repercussions?

    Something you knew all along, https://www.zerohedge.com/news/2017-...new-poll-finds
    Derivatives were created to generate fees when banking became TOO crowded. It is still too crowded. Not only that, it is just an information business.
    https://mrtopstep.com/bank-ceos-says...k-employees-2/
    Super Mario said that he is going to turn left AND right at the same time.
    "We are simply at the end of the road of this complete insanity. So buckle up. Get ready for the ride of a lifetime and make sure you keep your hands and feet safely inside the vehicle. Is the ECB risking a total collapse in public confidence when they discover you cannot keep rates artificially low and end QE simultaneously?"
    https://www.armstrongeconomics.com/w...lly-ending-qe/
    While I might advise that you buy more popcorn, that does not mean that I am insensitive to the plight of Europeans who will see millions of deaths and a drastic reduction of your living standards. All I can do,,, I do here on this blog.

    Some of the big money is moving into gold.
    https://www.caseyresearch.com/these-...l-chaos-hedge/
    6/18 Mattis: Puttin is trying to “undermine America’s moral authority” – Caitlin Johnstone
    The awful slice of America that is blowing up the world has ZERO moral authority.
    Hopeless European millennials.
    https://www.dollarcollapse.com/faile...rope-populist/
    Hopeful American millennials, https://www.zerohedge.com/news/2018-...-student-loans

    6/18 Consumers stubbornly cling to cash after multiple hacks and system outages – WS
    Change "stubborn" to intelligent.
    6/18 Emerging Asia hit by foreign investor exodus – Bloomberg Plan "A"
    6/18 Financial hole for SS and Medicare even deeper than experts say – MW
    Yep SS is bust. Actually, NOT true. SS has a whole pile of Non-negotiable Treasury bonds that it received for it's cash. The cash was desperately needed to make wars in the ME that were necessary for our protection.
    6/18 Fed’s Dudley complains unemployment is too low, rate hikes needed – Mish
    95 million of working age who are not in the labor force. A crippling skills-gap that can't realistically be overcome. Just wait til a couple hundred thousand bankers hit the pavement.
    Plant a garden AND buy more popcorn.

    Leave a comment:


  • Danny B
    replied
    Trade war, pensions, fertility,,,, wobbly China

    The upper loop of the economy is at all time highs. Here is a graph of trade flows in real stuff.
    https://www.zerohedge.com/sites/defa...?itok=JRhwydO0
    It has turned down quite a bit. This is BEFORE tariffs, sanctions and trade wars have show their effect.
    https://www.peakprosperity.com/blog/...ins-gonna-fall

    " in just 16 years (1960–1976), fertility in the US dropped from 3.65 births per woman to only 1.76. "
    "How can a shrinking group of working-age people support a growing number of retirement-age people? The easy and quick illustration to this question is to talk about the number of workers supporting each Social Security recipient. In 1940, it was 160. By 1950 it was 16.5. By 1960 it was 5.1. I think you can see a trend here. As the chart below shows, it will be 2.3 by 2030."
    https://upload.wikimedia.org/wikiped...ency_ratio.png

    "How can one worker support two or three retirees while still working and trying to raise a family with mortgage payments, food, healthcare, etc.? Obviously, they can’t, at least not forever. But no one wants to admit that, so we just ignore reality. "

    "States' pension funds have nearly $4 trillion of stock investments, but somehow haven't benefited from soaring stock prices.

    A new report by the American Legislative Exchange Council (ALEC) shows why this is true. It notes that the unfunded liabilities of state and local pension plans jumped $433 billion in the last year to more than $6 trillion."
    "This means in six years, without the $6 trillion being somehow restored (magic beans?), pension underfunding will be at $8.4 trillion or thereabouts, even if nothing else goes wrong."
    "I noted last week in Debt Clock Ticking that the total US debt-to-GDP ratio is now well over 300%. That’s government, corporate, financial, and household debt combined."

    "you find that the US governments from the top to bottom owe over $30 trillion, which is well over 150% of GDP. Technically, we have blown right past the Italian debt bubble. And that’s not even including unfunded Social Security and healthcare benefits, which some estimates have well over $100 trillion"
    The Pension Train Has No Seat Belts | Mauldin Economics

    "It is my strong view that nations that aspire to solve their shrinking population problem must first abolish their interest-based monetary and financial system and replace it with systems that are based on risk-sharing principles."
    "I hope Europe, the US, Japan, Singapore and others that are faced with shrinking population problem would replace their interest-based monetary system with interest-free systems to ‘save’ their populations and unique cultures. In this regard, Islamic finance comes to mind and indeed is something all nations can consider."
    https://www.ahamedkameel.com/interes...ertility-rate/
    The Islamic banking system COULD be a positive solution to the current system. It has been forcefully stamped out whenever possible.

    "I would argue that China's runaway mortgage finance and apartment Bubbles at this late stage of the cycle significantly increase the risk of systemic crisis."
    "China's private-sector companies of all sizes, even large ones, had long faced challenges in obtaining loans. But the credit squeeze on them this spring has been particularly painful. 'It's very bad, and we see not just small and medium-sized enterprises defaulting but even big companies defaulting,"
    "With the Trump administration Friday announcing $50 billion of tariffs on Chinese goods - supposedly with a list of an additional $100 billion ready to go - and China retaliating with its own tariffs on $34 billion, there are concerns for an escalating trade war. Returning to the potential for an upside dollar dislocation, China is today unusually financially and economically vulnerable."
    https://creditbubblebulletin.blogspo...t-fallacy.html
    The trade war is getting off to a running start.

    "something remarkable happened last week: the entire global bond curve just inverted for the first time since just before the financial crisis erupted."
    "As for the timing, well it's troubling to say the least: it did so just before the last two bubbles burst."
    https://www.zerohedge.com/news/2018-...ay-be-imminent

    6/17 Trump’s tariffs add $9,000 to the price of a new home – Idaho Statesman
    6/17 A 1-bedroom in Oregon is now unaffordable for the average worker – OPB
    6/17 Higher home, mortgage prices mean first-time buyers pay 19% more – Dallas

    The hot money continues to chip away at affordability.
    https://twocents.lifehacker.com/youl...ent-1826831468
    "Today, the migration patterns are purely economic, but they are inspired by socialism whereby they need only show up and receive automatic income and benefits."
    https://www.armstrongeconomics.com/a...are-migration/

    "A national debt is the single greatest way we transfer wealth among citizens as well as nations. I kept yelling on Capitol Hill that Quantitative Easing would fail, it would not “stimulate” the economy for a very simple reason. The assumption that the Fed would buy 30-year bonds and then the banks would lend into real estate with lower interest rates was crazy."
    Of course it was crazy. The BRICs put a roof on wages and therefore, a roof on discretionary spending.
    https://www.armstrongeconomics.com/a...eans-anything/

    Leave a comment:


  • Danny B
    replied
    Automation,,people shortage,,, capital flows

    Zero Hedge has an excellent article on automation taking all the jobs. I'm going to start with a couple of the comments.

    "We do jobs so we can buy specialized human labor in the form of goods and services. Money is a claim on human labor. The more automation goes into a product, the less labor it takes to buy it. For example, in the Victorian Era, a man might work a half a day in the field in order to afford a single loaf of bread. Today, a minimum wage moron can buy that same loaf with just a few minutes of labor.

    Goods that go beyond a certain threshold of automation become free. For example, content is served almost entirely automatically on the internet, hence, almost all content is free. Those things that are paid for generally go by the freemium model, where a few people buying special services pay for the entire service."

    "Anyone who knows anything about economics knows that if machines replace humans in ten key industries that the value of those products in the economy falls and therefore more lucrative opportunities open up elsewhere. In the early 1900s the tractor and fractional horsepower electric motor replaced 80% of all jobs. Was it a catastrophe or did the economy adapt."
    Quote, "In fact, automation could destroy as many as 73 million U.S. low skilled, low wage laborers by 2030, a recent report by McKinsey Global Institute stated.

    The dire prediction that robots could take a bulk of the middle-class jobs — has led many of macro strategists to believe that significant economic disruptions are coming to America."
    You should read the entire article, https://www.zerohedge.com/comment/11827708

    I do not see a single mention that, AS AUTOMATION RISES, THE BIRTH RATE FALLS. People see no particular need to have children to support society. People see no future job niches for their possible offspring. Since a living wage is available to so few, the majority can't afford to have children.

    Here is a good article on credit and the cost of renting money. The article goes on and on about the falling FED funds rate. Reportedly, we are 1% away from setting off a credit crisis. Japan PROVES that there is no escape from a credit crash if the population is falling. Does this article make mention of this? Not on you life.
    https://www.goldmoney.com/research/g...efcode=dollarc

    The foundation of the entire economic system is based on growth. More and more wealth must be stolen from the producers to keep the parasites growing numbers well supported. This is completely contrary to the needs of the family and society. Several States are importing millions of immigrants in the hopes of increasing population growth. The fallacy is; most of these people left their home countries because they had no skills or job opportunities there. This has been well proven in that most of the immigrants remain on the dole for the rest of their lives.
    Instead of being an economic stimulus, the majority of these immigrants are an economic drain.

    Some States turn a blind eye to this. Others do not.
    6/15 Diplomatic meltdown: Italy-France relations collapse over immigration – ZH
    6/14 Merkel struggles to avert German coalition crisis on migrants – Reuters

    Consumption by the State can never be repaid. Only so much can be siphoned off before it affects the overall fiscal health.
    6/14 Euro tumbles as ECB vows to keep rate down – Reuters
    The EU can NOT service it's debt at any rate higher than ZIRP. Draghi knows that he is causing ENORMOUS capital flight. The fallout...
    6/15 Emerging markets massacred as dovish Draghi sends dollar soaring – ZH

    These feces-for-brains never seem to consider globall capital flows. Did it never occur to Draghi that continued ZIRP would wipe out the banks AND the entire EU bond market?
    6/15 The ECB, not the Fed, is the match that will spark bond market volatility – MW
    Not entirely true. Due to the saturation of the U.S. dollar AND the lower cost of the U.S. safety net, the FED was able to raise rates and attract capital. I suspect that these capital inflows have been diverted to support the State rather than actually flowing into stock portfolios. Stock indices have gone way up from investors trying to preserve their capital. They don't care about P/E.
    All this capital that was attracted had to come from somewhere. The FED took in all the bad loans and made the U.S. banks appear stronger. The ECB did NOT take in the bad loans. Forget that Freddie, Fannie and Sally are bankrupt and bleeding $billions. As long as these black marks do not show up on the balance sheets of the private banks.

    China created more new credit than the FED, ECB and BOJ combined. That has led to about $1 trillion a year of capital flight from China. Capital inflows beget confidence and, more capital inflows. Draghi holds rates down and, causes more capital outflows.

    6/15 China holds fire on rates, posts ‘shockingly weak’ activity growth – Reuters
    Shockingly weak, huh? Their workforce is shrinking by ONE MILLION a year.
    6/15 Junk bonds blow off the Fed, face sudden reckoning – Wolf Street
    6/15 Cryptocurrencies lose more than $42B following hack, regulatory crackdown – Fox No big surprise.
    6/15 Italy never should have joined the euro, and the ECB can’t rescue it – MW Time will tell the details.

    Leave a comment:


  • Danny B
    replied
    Taper, SS,,, notes on Trump

    Headlines;
    6/14 Emerging markets “under pressure” after Fed rate hike – Bloomberg No accident there.
    6/14 ECB gets ready to pull the plug on stimulus scheme – Reuters Armstrong claims that Yellen told Draghi NOT to continue with ZIRP. He also claims that Draghi has destroyed the European bond market. Draghi can pull the plug on stimulus but, the Italian banks will look like Vesuvius,,,, on a bad day.
    6/14 Capital flight to Germany in full swing – Mish The Germans hold lots of exposure to Italian banks. When Deutsche bank blows, this will crater the Bundesbank.
    6/14 Bank of Japan cuts bond-buying by 30bn yen – biggest taper yet – Zero Hedge
    So, the CBs are going to cut back printing. There is way too much hot money in the system for it to stabilize. Everybody is hunting for yield.
    6/13 Junky loans surpass junk bond market as investors chase yield – The Street

    Shadowstats is correct but, nobody wants to listen to them.
    The Real Economic Numbers: 21.5 Percent Unemployment, 10 Percent Inflation And Negative Economic Growth
    6/14 Fed will give $37 billion of free money to the banks – Mish Why stop now?
    6/13 Fed hikes rates, points to two more increases by year’s end – CNBC https://www.youtube.com/watch?v=j2pGBv9Ly6A

    6/14 The Social Security deficit will be monetized – GATA Armstrong tried to convince FED GOV to privatize SS and put the money into stocks instead of GOV bonds. The democrats blocked this. ALL the money needed to be available for wars. If it were in stocks, it couldn't be raided to the last penny.
    6/14 Bitcoin notches two-month low in the wake of cryptocurrency exchange hack – CNBC
    6/14 The real opportunities in cryptocurrencies — aren’t in cryptocurrencies – Daily Bell

    I don't see a future for crypto-currencies. They are used for tax avoidance and money laundering. That pits them against the State. They are constantly hacked and stolen.
    6/13 Rents are still growing much faster than wages, even as growth cools slightly – MW The hot money flows into residential RE. The speculators demand higher rent. It is all part of the hunt for yield. ALL of this contributes to a falling birth rate.

    6/14 Chris Packham warns of ‘ecological apocalypse’ in Britain – Guardian It is looking kind of grim. I haven't been there lately.
    Last Exit to the Road Less Traveled - New Economic PerspectivesNew Economic Perspectives
    Here is an article on the shadow rate at the FED. The article is interesting but, investors must turn a blind eye to the true rate on price inflation. The price inflation rate must be subtracted from the bond yield to get a true picture.
    https://dailyreckoning.com/the-shado...-flashing-red/

    Notes on Trump;
    Military-Industrial Stocks Crash After Summit
    6/13 Trump’s tariffs on China coming soon – Politico The globalists gave China most favored nation trading status. Looks like Trump is going to un-friend them.
    6/14 Donald Trump was right. The rest of the G7 were wrong – Guardian
    6/14 Eurozone immigration crisis 2.0 may wreck Merkel’s coalition – Mish Lets hope so.
    5/06 Nobel Peace Prize committee says “no f**king way” to Trump – Extra News
    6/12 Trump Is Nominated For The Nobel Peace Prize
    Fulfilling The Visions That Dance In His Head

    Trump has MUCH bigger plans than any SERIOUSLY devalued Nobel prize.
    6/14 US-backed Kurds agree to “unconditional talks” with Syria after US-Turkey deal – ZH How to piss off Netanyahooo
    6/14 Centrists concerned that DONALD TRUMP isn’t hawkish enough – Medium He is cutting into their profits. Centrists, my A$$.
    Mueller indicted a bunch of Russians in his witchhunt to bring down Trump. He knew that they would NEVER show up to testify.
    6/14 Russians Mueller indicted actually show up in court – ZH

    The Shanghi cooperative Organization includes a LOT of States. They have pledged to avoid war at all costs to settle their differences.
    North and South Korea pledge to end war, seek denuclearization ...
    https://www.reuters

    Trump showed up in N.K. with visions of wealth for Kim's PEOPLE. America says that it is going to get quite rich developing the country. Russia and China have said that they will develop N.K.
    NOPE, we can't have peace in Korea until the contracts are signed AND a Rothschild bank installed.
    Hot war has just gotten too dangerous. The war-mongers seem happy enough to settle for a cold war. Trump and Putin are conspiring to bring an end to even that. The war hawks are doing (almost) everything that they can to continue a lucrative business.
    Much of this centers in Tel Aviv.
    The hawks continually provoke Russia by chipping away at it's interests. If Russia finally responds, they can say, SEE, we told you that Russia was a dangerous aggressor. Putin has to absorb damage in the cause of bringing world peace. Obviously, there are several factions that do NOT want world peace.
    https://www.zerohedge.com/news/2018-...ide-deep-state

    Leave a comment:


  • Danny B
    replied
    Fiscal policy & FED policy,,,borrowing $trillions to support non-producers

    The Central Bank was created to finance wars when the State didn't have enough gold to finance a protracted war. (G-30 bulletin) Before WW II, the FED was forced to buy GOV bonds to make sure that the war could be long and lucrative. Both Japan and Germany tried in vain to surrender early. Both were rebuffed. After WW II, U.S. GOV demanded that the FED continue to buy GOV bonds. This set the CB on the road to finance State debt.
    The State is the firewall between Darwinian pressures and, non-producers. As time goes by, more and more non-producers are drawn to a State paycheck. The bankers are more than willing to make GOV "service" very lucrative to public officials with power. The second tier hangers-on don't get remuneration from the bribe train. They have to settle for a GOV job that pays them far more that the private sector,,,, that is, if they even have any abilities needed in the private sector.

    Central Bank monetary policy is slowly subjugated to service an ever-increasing State debt. This isn't just about the welfare State. The warfare State is a huge drain also. The welfare state buys us a bit of domestic tranquillity. The warfare state does just the opposite.
    https://www.zerohedge.com/news/2017-...hem-killing-us
    17. Read, On Killing: The Psychological Cost of Learning to Kill in War and Society, by Lt. Col. Dave Grossman.

    We would need a completely different fiscal policy if we wanted FED policy to be more responsible. The public debt has doubled under every administration. The politicians grow ever-more rapacious. The blob State grows ever-larger. The war industries consume ever-more wealth.
    Armstrong,"That said, the conspiracy theorists blame the central banks for absolutely everything and assign no blame to the politicians for the fiscal side."
    "The difference is, I really had some $3 trillion under contract which was about 50% of the US National Debt at the time. "
    "When our model called the 1987 Crash to the day that was one thing. But the very day of the low it confirmed that was it and the low would hold and off we would go to new highs by 1989.95. I was called in by the White House that day and asked to confirm this low would be it"
    "Then the Tokyo Crash took place perfectly with the top of the ECM 1989.95 and again I had two central banks on the phone at the same time. The question was did the computer say they needed to intervene? I said no. It was confined to Japan."
    "The stock market again peaked on the very day of the ECM July 20th, 1998. That was followed by the collapse of Russia and the Long-Term Capital Management Crisis. That is when the CIA called and wanted the model "

    "Yellen pleaded with Drahi to stop his insane negative interest rate policy. He would NOT listen. She hesitated in raising US interest rates back in 2014 hoping that Draghi would see the huge mistake he was making in creating the next crisis – the destruction of the European bond market and the pending Pension Crisis."
    "We try to contribute to society in hopes of one day perhaps AFTER the Crash & Burn, just maybe we can avoid a fall into totalitarianism. "
    https://www.armstrongeconomics.com/a...central-bamks/

    "You have to understand that the entire budget and social programs were indexed to the CPI. So, the NUMBER ONE way to reduce deficits was to reduce the CPI index so politicians did not have to vote to cut programs and suffer the arrows launched by the public."
    "The biggest cost of labor is NOT the actual wage paid to an employee. It is the benefits, taxes, and regulatory costs." Feeding the blob State
    "They wanted to lay-off 25% of the workforce and the Germany government finally agreed. At the last minute, they instructed the company that they COULD NOT pick and choose who to lay-off. They had to offer 100,000 to give up their job “willing” no less. Everyone who knew they could get another job took the 100k and left. The very people they wanted to get rid of stayed. That was how regulators screwed up companies. "

    "The higher the tax burden, the lower the standard of living" "The tithe was an obligatory offering from the law of Moses requiring 10 percent of an Israelite’s firstfruits. We are so far beyond that it is destroying our civilization. As you can see we take the total consumption of government as a percent of GDP. There is just no end in sight. The USA economy is doing far better than Europe as a whole simply because we are at 37.6% of GDP compared to the insanity of France where Communism began – 56.7%. "
    "The development of robots is to simply eliminate the benefits and regulatory costs. The worker sees this as just his hourly wage. But the real costs in far too often 50% of the wage or higher from the company’s perspective. "
    https://www.armstrongeconomics.com/w...ove-to-robots/

    "This is the battle between Demand v Supply-side Economics. This age of “New Economics” that was ushered in by Marx and Keynes, justified that government had the power to manipulate society to achieve their goals. The idea of raising and lowering interest rates to influence demand has utterly failed. The 800-pound gorilla in the room is the $200 trillion+ of sovereign debt around the world. Demand-Side Economics cannot possibly work when the biggest debtor is government and the raising of interest rates only increases their deficits that come back as tax increases reducing the net wealth of the people and lowering economic growth."

    "This is why we are headed into a Crash & Burn. There is no other outcome possible. Government is crowding out the private sector so the annual rate of economic growth has steadily declined. The transfer of wealth is not between the RICH v the POOR. It is between Government v the People."
    "But states like Illinois and California have net migrations outward because of the tax burden – not because some CEOs make too much."
    https://www.armstrongeconomics.com/a...ver-discussed/
    Gavin Newsom will double the state income tax: John Cox - MSN.com
    https://www.msn.com/.../gavin-newsom...ax.../vp-AAypl...


    Armstrong will invariably take the side of the private bankers. It is NOT that simple.
    "The Communist Manifesto foresaw the predatory and polarised global capitalism of the 21st century. But Marx and Engels also showed us that we have the power to create a better world. "
    https://www.theguardian.com/news/201...nist-manifesto
    At the same time,we must consider, "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship"

    This is where we now find ourselves. Too many non-producers trying to live off of renting their money. Too many non-producers in GOV trying ti live off of the taxes of the producers. 50% of the cost of everything that you buy, goes to finance. The banks front-run everything that you buy,,, using your savings that pay no interest to you.
    Americans Must Work Jan. 1 Through April 24 Just to Pay Taxes
    The debt has doubled under every administration.
    6/13 Congratulations workers — you make a penny more per hour than last month – Mish
    Armstrong is correct about the burden of debt caused by the State. He ignores the burden caused by the bankers. That is, price inflation caused by currency inflation.
    https://internationalman.com/article...as-a-milk-cow/
    The reproductive rate and the demographic crash is where the rubber meets the road.

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  • Danny B
    replied
    C.H. Smith,,, Buffet,,,bank closure,,,Trump & peace

    Some writers are just WAY above all the others. Charles Hugh Smith is one of them. And, what does it cost you to hear his wisdom?
    If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
    Moving on, Smith has written an EXCELLENT summary of where we are. It is a great over-view.
    https://www.oftwominds.com/blogjun18...wrong6-18.html

    A couple of years ago, Venezuela pulled home all it's gold to support it's currency. The currency is failing anyway.
    Most recently, Turkey is pulling home it's gold.
    Countries Around the World Have Begun Pulling Their Gold from U.S Vaults
    The problem isn't necessarily the currency. The problem is the sovereign bond market. Theoretically, the currency is commensurate with economic activity. The health of the bond market is commensurate with confidence.

    "Buffett’s $116 billion mountain of cash was enough to literally buy any of the 450 largest companies in the United States.

    But he didn’t buy a single one. Why? Because they’re all too expensive. Asset prices are far too high.

    So… here is the most successful investor in modern history who:

    1) Didn’t buy anything in 2017;

    2) Is stockpiling a mountain of cash;

    3) Is now selling an asset that he would typically hold forever because another company made an absurdly high offer for the business"
    (He holds) "a massive stockpile of $116 BILLION in cash at the end of 2017… most of it in short-term Treasury Bills."
    https://www.thedailybell.com/all-art...means-for-you/
    P/E ratios are astronomical because of all the hot money floating around looking for a safe-haven in something tangible.
    Armstrong has said to have a weeks worth of food. Armstrong normally does not talk about specifics like that. Armstrong has been VERY vocal warning about the difference between assets and currency. Buffet has his money in Treasuries.
    Put this all together; you can see that Armstrong is avoiding forecasting a bank closure. Why else would he endorse having a simple one-week food supply?
    Deutsche bank laid off 10,000 more employees. How long can a bank operate after losing so many people? When the Italian banks and Deutsche bank collapse, all banks will be closed for reorganization. Buy LOTS of popcorn.

    The cost of an education has gone up at 3 times the rate of general inflation.
    "The number of students enrolled in higher education had dropped by a little over 450,000 after years of booming growth"
    Those who actually teach are not getting the money. It ALL goes to the blob state. The millions of paper-shufflers who add nothing to the industry.
    https://www.theatlantic.com/educatio...n-dies/561995/

    Apparently, the global financial safety net is breaking down, https://www.philstockworld.com/2018/...ly-inadequate/

    Larry Kudlow, National Economic Council director, hospitalized after suffering heart attack, Trump says
    Poor guy took a look at the budget deficit.
    Armstrong is not openly predicting a bank collapse. Economic Prism is predicting a collapse of the dollar. I suspect that this will happen after the EMs and Euro collapse.
    https://goldsilver.com/blog/the-us-g...y-option-left/

    It is obvious that the West is in a downward spiral. Israel is hoping to avoid becoming collateral damage. Their plan is ;take the oil in the Golan Heights of Syria AND, the gas off of Lebanon and Gaza. Russia and Putin stand in their way. As we get closer to our date with bankruptcy, Netanayahooo gets ever-more strident condemning Russia. Israel is a pariah in the world community. THAT is why NATO made a point in telling israel that it would not defend them in the case of an attack on Iran.
    Trump and NATO are OK with rattling sabres all around Russia. The NATO command has NO intention of becoming a flambé at a Russian BBQ.
    Trump refused to sign a G-7 paper condemning Russia. That right there is an indication that any kind of kinetic attack on Russia just isn't going to happen.
    The Deep State is gnashing their teeth about peace on the Korean peninsula. North Korea was supposed to get a quick fry job. This would create a bridgehead to go into Russia. Trump is ruining that plan also.
    Predictably, the NYTimes is going ballistic at the thought of peace.
    Kunstler, http://kunstler.com/cluster****-nati...ing-diplomacy/

    Leave a comment:


  • Danny B
    replied
    Peak cheap oil, Trump and the FUSOR

    America reached peak cheap oil Several years ago. The shale-oil-miracle was all pumped out at a loss. The junk-bond market is melting and, shale needs 1.5 million new wells at a cost of $5.4 trillion. The Wolfowitz doctrine called for Pox Americana to control Central Asia and, all the resources there. The Sino-Soviet bloc is just NOT going to let that happen. Trump and Co. are trying to buy a little more time and, a little more confidence. There is a general agreement that America will collapse going into 2020. This would be at election time for the President.
    50% of our oil is used on the road. We're importing about 4 million BPD.
    Trump is trying to create raproachment with Russia. Several factions are trying to block that.

    Iffy, "According to secret space program whistleblower, Corey Goode, President Donald Trump issued a highly classified Memorandum soon after his January 20th inauguration ordering the release of group of classified patents concerning anti-aging and health, along with free energy technologies."
    https://www.exopolitics.org/secret-p...g-free-energy/

    ". Dr Thomas Valone estimated that patent applications for FREE ENERGY related technology have been "secretized" over 3,000 times over the years."
    Patent Office
    OK, it is obvious that a crash in oil supplies would bring a crash in EVERYTHING. Will Trump try to pull a rabbit out of a hat? There is a positive indication.
    Lockheed Martin Now Has a Patent For Its Potentially World Changing Fusion Reactor - The Drive
    Hot fusion was discovered decades ago. It was buried to protect the petroleum industry. Standard Oil had to borrow money from the credit markets to pay dividends. I suspect that the FUSOR will be brought to market to take pressure of oil production.

    The West is going in to a complete crash. Cheap fusion would make a huge difference in the outcome. As the price of energy goes up, consumption goes down.
    Housing; https://www.theautomaticearth.com/20...re-overvalued/

    Kunstler, The Summer of Discontent - Kunstler

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