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  • Venezuela,,,, mega-stupidity of the central bankers

    Gold has been called a pet rock and a barbarous relic. ALL central banks hold gold and many of them are currently buying gold. Bernanke said the FED held gold because of "tradition".
    Venezuela quietly sold 36 tons of gold recently to try to pay it's bills. Venezuela is crashed by corruption. Socialism there is a problem but, corruption is a bigger problem. The GOV there told people to start growing their own food. Reportedly, a pair of shoes costs a months wage. The violence has gotten so bad that Caracas is one of the most dangerous cities in the world. "More than 24,000 people died in violent homicides last year, according to the National Observatory of Violence. And Caracas, the capital, is one of the deadliest cities in the world."
    Venezuelan Exodus: Middle-Class Flees for United States | Fusion

    The CBs claim that they have a toolbox to control the economy. In reality, most of their tools don't work OR, they work in reverse. Their main tool was control of interest rates. This tool temporarily benefited the banks at the cost of destruction of the general economy.
    "None of the his is supposed to be happening" - inflation and economic growth are supposed to be rising in a world as manipulated by central bankers as this one. Instead, the opposite is taking place."

    Manufacturing crashed. Now, service is crashing. Stock prices were artificially held up by free money. This has come to an end because earnings just didn't happen. "Problem #3: The marginal effect of easing is no longer positive, and "everything QE was supposed to have done, it hasn't"
    "Problem #4: as a result of coordinated, global intervention, central banks are now forced to fight not just local but global demand shortfalls. " No kidding! Maybe wages are more important than free money to the banks.

    Next phase is a crash of central banks and GOV debt. "To this we would add one minor tangent: once we get to the "next phase", sell everything whose value only exists as a result of confidence in central banks. " Citi: "We Have A Problem" | Zero Hedge

    2/25 US crude supplies rise to highest level in 86 years – Bloomberg
    2/25 North Dakota's largest oil producer suspends all fracking – Zero Hedge
    2/24 Another oil crash is coming, and there may be no recovery – Bloomberg
    I'm building a woodgas truck,,, dunno what YOU are going to do.
    A crash of GOV debt and the central banks would be bad beyond imagining. Our cities would be worse than Caracas.
    Gerald Celente: Get Prepped For Global Systemic Collapse


    • to dream the impossible dream

      Capitalism is a productivity system. Communism/socialism is a distribution system. China wants to retain the control of communism and the productivity of capitalism. They have tried to retain complete control while letting the investment community have free rein.
      "The G-20 central bankers, finance ministers and IMF apparatchiks descending on Shanghai should take an unfiltered, eyes-wide-open view of the Red Ponzi fracturing all about them, and then make a petrified mad dash back to their own respective capitals. There is nothing more for G-20 to talk about with respect to China except how to get out of harms’ way, fast.

      China is a monumental doomsday machine that bears no more resemblance to anything that could be called stable,"
      "This cycle of undisciplined, debt-fueled digging, building, spending and speculating took its collective balance sheet from $500 billion of debt in the mid-1990s to the $30 trillion tower of the same that now gyrates heavily over the land.

      That’s a 60X gain in debt over just two decades in an “economy” that has no honest financial markets; no legal system and tradition of bankruptcy and financial discipline; and a banking system that functions as an arm of the state"
      In a true capitalist economy, the State must abide the discipline of the market. State debt can only be created at a measured pace that doesn't over-burden the productive economy. there is a possibility that China will come out of this OK. IF their giant horde of gold is revalued, this would make the Yuan viable. It might not save the mountain fo debt, though.
      Here Comes the Red Swan - The Daily Reckoning

      GOV always wants as much control as possible. Self-sufficient peasants are easy to kill but, hard to control. The United Nations program, Agenda 21 is an attempt to exercise increasing control over populations. China plans to go for this in a BIG way. China will move 250 million people from farms into cities - Tech Insider

      China has very little of a safety net. Should things go bust, there is no chance of supporting the enormous population in some kind of a transition. many years ago, Roberto Vaca wrote a book, The Coming Dark Ages. He wrote about the breakdown of "super systems" like communication and transportation. China will be a good candidate for this kind of problem.


      • Gold and Sr. Price

        Gold was the foundation of our monetary system.
        Absolute power corrupts absolutely.
        The people in charge are always corrupt.
        The corrupt people in charge create the currency.
        Corrupt people evade all discipline.
        Gold brings discipline.
        After the recurring crashes come the recurring wars.
        Gold is brought back to avoid the next crash,,, next war.

        2/26 The smart money panics. Junk bonds crash. Where to next? – Daily Wealth
        2/26 John Rubino: This is the worst collapse of our lifetimes coming – Crush The Street
        2/25 UK oil industry at the "edge of a chasm" – Oil Price
        2/26 Are we heading for a British sterling crisis? – AEI


        • Peak stupidity followed by epiphany

          This article lays it out as clearly as anyone could ask for.
          " The stock market is simply an asset with some intrinsic value based on an expectation of future free cash flows to equity holders. Those cash flows are generated from revenues less costs of the underlying companies that make up the market. "
          "What we find is that while the current valuation of expected future free cash flows to equity holders (i.e. market cap of Wilshire) has increased by some 55% since the end of 2011, the actual free cash flows of US corporations have only increased by 4%."
          You couldn't ask for a more clear picture of the divergence. Cash flows depend on sales and consumption. The CBs have been doing all kinds of financial engineering as a cure for our falling wages.

          "And so over the past 20 years we’ve seen this same type of dislocation three times. That is, we see expectations of growth far exceeding actual growth of free cash flows to equity holders. In the previous two dislocations we reached a peak dislocation (peak stupidity) followed by a reversion to reality (epiphany) where expected growth moves back in line with actual growth."
          "Today we appear to have just passed the peak stupidity inflection point as seen in the two charts above."

          "Well the fundamental charts above suggest we have significantly overvalued growth expectations and historically those over-inflated expectations can drop very sharply back in line with actual growth. So from a fundamentals perspective we should expect a significant drop in overall valuations (i.e. market cap). And from a technical perspective, if we are in fact following the previous bubble cycle pattern (which we seem to be), we should expect a nice bounce in price level from the recent lows (to perhaps somewhere between 2000 – 2030) accompanied by relative calm before an explosion of volatility and a market price plunge that sends us into the next crisis sometime around May (give or take). Happy trading!"

          A Blended Fundamental and Technical Perspective on Where We Go From Here | First Rebuttal

          Armstrong said that equities would be a "safe' place to be because public debt was going to crash. He said to get out of ALL public debt. SO, if equities are going to lose 50--90%, what are bonds going to do? Equities have a recurring crash when earning expectations don't meet reality. There are many $ trillions in bonds that now have negative interest rates. How long can bonds survive when they have no earnings?


          • Breakdown of social order

            "Notably, more than half of China’s government debt is that of local governments, whose borrowing grew at a an annual rate of 27% between 2007 and 2014" 27% debt growth. Why does that sound dangerous?
            Can Binge Drinking Really Cure Alcoholism? — Capitalist Exploits

            Lessons On the Dangers of Income Inequality... From TD Bank
            Bruce Judson on the Societal Dangers of Income Inequality
            Out-Of-Control Inequality Is Making The World’s Top Financial Officials Worried
            Americans consider inequality world's greatest danger | PBS ...
            Greenspan: Income Inequality 'Most Dangerous' Trend in US
            This Is How Income Inequality Destroys Societies - Business ..

            With regulatory capture, Western GOVs and bankers engineered a smashing success,,,, for them. Jim Rickards tell us that GOV is well aware of the coming collapse. The GOV solution; a police state to retain control. 9/11 was the cause celebre to institute the Patriot act. GOV plans to lock down very firmly. GOV is now talking about a test for depression in EVERY American. This would give them a further excuse to take guns.

            MANY economies and societies have gone through a terrible shock. some crash and fall apart. Some hold together. What determines the result?

            "Some nations survive invasions, environmental catastrophes, epidemics and inflation without disintegrating into disorder. Something about these nation’s social/ economic /political order makes them more resilient than other nations."

            "That the dramatic upheavals of war, pestilence and environmental collapse can trigger social disorder and revolution is well-established. Indeed, this dynamic can be viewed as the standard model of social disorder/revolution: a large-scale crisis—often a bolt-from-the-blue externality—upends the status quo.

            Another model identifies warring elites and imperial meddling as a source of revolution: a new elite forcibly replaces the current elite (known colloquially as meet the new boss, same as the old boss) or a dominant nation-state/empire arranges a political coup to replace the current leadership with a more compliant elite.

            A third model was described by David Hackett Fischer in The Great Wave: Price Revolutions and the Rhythm of History. By assembling price and wage data stretching back hundreds of years, Fischer found that cycles of economic growth spawn population growth, resulting in more workers entering the market economy.

            Fisher found that this wage/price cycle often ends in transformational social upheaval.

            While proponents of these models have a wealth of historical examples to draw upon, these models miss a key factor: the vulnerability or resilience of the nation-state facing crises.

            So rather than accept the proximate causes of disorder as the sole factors, we should look deeper into the social order for the factors behind a nation’s relative fragility or resilience.
            The Decline Of Shared Purpose

            Historian Peter Turchin defined a key factor in the resilience of the social order as "the degree of solidarity felt between the commons and aristocracy," that is, the sense of purpose and identity shared by the aristocracy and commoners alike."
            "Turchin also identified rising wealth inequality as a factor in weakening social solidarity. By the end-days of the Western Roman Empire, elites held not 10 times as much wealth commoners but 10,000 times as much as average citizens."
            How The Seeds Of Revolution Take Root | Peak Prosperity

            FED GOV has bought a couple billion bullets. Apparently, they don't expect much social cohesion.


            • No Shanghai accord... killing small banks... be the first to panic

              Everybody was quite assured that a Yuan devaluation would be worked out at the meeting of the G-20 in Shanghai. It made sense but, it didn't happen. I suspect that the Chinese hope to revalue their gold to re-invigorate their currency. They can't realistically do that until the Western gold supply runs out.
              Here is an excellent graph showing that the various monetary infusions are having less and less effect;
              The FX Mexican Standoff - The Automatic Earth

              • World Trade Falls 13.8% In Dollar Terms (FT)
              • G20 To Say World Needs To Look Beyond Ultra-Easy Policy For Growth (Reuters) How about wages?
              • As China’s Economic Picture Turns Uglier, Beijing Applies Airbrush (NY Times)
              • Bankers Have Not Learnt The Lessons Of The Great Crash (Tel.)
              • Bank Of America Preparing Big Layoffs In Investment Banking And Trading (BI)
              B of A has already laid off 20%+ of their workforce. The 2008 TARP rescue was done because the banks didn't want to shrink down to be commensurate with the actual productive economy. The big banks took the money in the hopes of outlasting the small banks that didn't have access to the FED money.
              List Of Failed Banks 2009-2015 |
              Regulatory capture allowed them to kill their competition.
              Killing Off Community Banks - Intended Consequence of Dodd-Frank?

              "The truth is that if society panics and there is a full blown rush out of existing electronic bank deposits and into physical currency to avoid negative rate taxation, only those who panic first will be safe."

              The Japanese have started buying safes and filling them with big bills to avoid NIRP at their banks.

              “According to the BOJ theory, they should have moved their funds into riskier but higher-earning assets. Instead, they moved into pure cash that earned nothing,” Richard Katz, author of The Oriental Economist newsletter wrote this month."
              The Global Run On Physical Cash Has Begun: Why It Pays To Panic First | Zero Hedge


              • Socialism creeping towards it's grave

                "But unlike in the dot-com crash of 2000… and Panic of 2008… there’s a new accelerant. If you’ve read us anytime in the past week, you know it’s the exchange-traded fund. The total net assets of all ETFs have exploded fourfold since 2008.

                Last night, during a live event David hosted from his place in Aspen, Colorado, he explained how ETFs will function as a “doomsday loop” during the next market meltdown."
                The Elites are Worried - The Daily Reckoning

                Armstrong, is there a way out of this mess?
                "ANSWER: I have provided the Solution Conference and the DVD is available for purchase. I have signed a contract and they will be making a Hollywood feature film out of the Forecaster Movie. The character will be based on me, but they will present the goal which was to to provide the solution. Hopefully, this will help provide the idea to a broader audience. But understand this; we cannot reverse the trend. The best we can do is mitigate the fall. We are destined to fail and the Financial Capital of the World will move to Asia following 2032. We cannot alter the cycle because those in power will never alter their thinking. They see only their self-interest and therein is why no empire, nation, or city state has ever lasted indefinitely. No doubt some will argue I am wrong. I think given the odds that not a single society has EVER beaten the business cycle, I think you can bet on our outcome without any risk."

                Armstrong; "More over, the idea that we have lived in some fantastic socialist era with GDP always expanding is an outright LIE, if not a delusional statement by someone who refuses to look at the trend. At the top is a chart of the government’s own source, the Bureau of Economic Analysis. GDP growth has been declining steadily as taxes rise. Like China, its first blast of GDP growth came at the beginning. It was true for the West as well following World War II. GDP growth has steadily declined to where a good number is less than population growth. Social Security collapses in 2017 as illustrated by this second chart, "

                "Secondly, if socialism is not a bull**** story, then why have we reached, at times, 70% of the entire national debt in accumulated interest? That money created neither schools nor roads and did not feed children or fund welfare. The bulk of the debt has been interest paid to the bondholders."
                "Why is the youth going for Sanders and Trump? Why do we have a generational gap in voting that first appeared in Scotland? Socialism is collapsing because the older generation has paid into a system that they do not want to believe is falling apart when it is time to get theirs. So they live in a delusional world that ignores everything factual around them and they cannot see they are robbing their own children of the very life they enjoyed."

                With creeping socialism, GOV spends more and more of the GDP. This burdens the productive economy. It also passes on a debt burden to future generations who have to pay off our bills.


                • Pedal to the metal in an economy without a steering wheel while overdosed on monetary

                  Here is a British MEP who has long claimed that the entire financial system is a scam.
                  The former governor of the Bank of England says that it is all coming down. World economy stands on the cusp of another crash, warns Lord Mervyn King
                  We seem to have reached "Peak Stupidity" and have started into recession. Recession is here and it's getting worse: Ron Paul
                  Before too long will come the epiphany. It is slowly emerging.

                  "cohorts of triple Cs typically experience 5yr cumulative default rates of 55 - 65% near the end of the cycle, implying half of the universe defaults before the end of year 5 and no longer pay coupons. Assuming recovery rates of 35% an investor should require roughly 12% yield to compensate for loss risks alone.
                  What about mark-to-market and liquidity risks? While triple C bonds are trading on average in the low $60s, investors will likely need to stomach a further decline later in the cycle. Historically, triple C prices bottomed in the $40 – 50 range,"
                  About That $1 Trillion In Distressed Credit: UBS Responds To Wall Street's Shock | Zero Hedge
                  So, junk bonds need at least 12% to break even. It WILL get worse. This is the epiphany. In the hunt for yield brought on by ZIRP, investors forgot to factor in default risk.

                  It's already too late to look for a greater fool to take this junk off your hands. Previously, the FED bought it all. Investors need QE to infinity because they continue to buy garbage. They can only get returns if the economy is growing.
                  EVERYWHERE that the core population is shrinking, the economy is shrinking. The CBs print like crazy to keep things going. That only lasts for a while.
                  Hambone's stuff: Central Banking for Dummies
                  "Of course, perpetually stomping on the gas pedal toward lower rates might create just a bit of debt...say about $250 trillion worth."
                  So, the central banks have the pedal to the metal at the same time that they are jacked up on monetary Viagra.


                  • Gold & war.......No stock earnings

                    Paying for the welfare-warfare State; "This broke the back of the London Gold Pool, members were tired of draining their countries gold reserves to pay for the U.S.’s Vietnam war and social reform policies.
                    At the request of London Gold Pool members the Queen of England declared Friday, March the 15th a bank holiday - the London gold market remained closed for two weeks and the London Gold Pool was disbanded.
                    Johnson was forced to reverse his decision to send hundreds of thousands more U.S. troops to crush the Vietnamese resistance - instead he opened up peace talks."
                    Ahead of The Herd - Demise of London Gold Pool Ends Vietnam War
                    Pox Americana is using the reserve currency status of the petro-dollar to wage war everywhere. The rest of the world (ex israel) is trying to toss out the dollar as a matter of survival. Goldman did all the sneaky deals in Europe to prevent the Euro from appearing as a replacement for the dollar. The Euro is crashing and capital is fleeing.

                    The "epiphany" occurs when investors figure out that they aren't making any money on their investments. Corporate execs do stock buy-backs to make the stock rise even though there are no earnings.

                    We are at that point again, "The previous all-time high in stock buybacks occurred in 2008 at the previous peak. That brilliant strategy led to 50% shareholder losses in a matter of months."
                    THE GREAT CORPORATE EARNINGS FRAUD « The Burning Platform
                    "It reeks of desperation as the Wall Street shysters attempt to extract the last dollar from their muppet clients before this house of cards collapses."


                    • no jobs,,, just free money

                      Google says that their robot means the end of manual labor, Google robot is 'the end of manual labor': VC
                      The banking industry says that 50% of their employees could be replaced with software;

                      OK, so nobody has a job. The Council on Foreign Relations (CFR) says that we need to drop money from helicopters. Even some bankers are saying that; HSBC Looks At "Life Below Zero," Says "Helicopter Money" May Be The Only Savior | Zero Hedge

                      Regulatory capture has reached new heights; "Those at the very top of the top have rigged the system even more thoroughly. Since 1995, the average income tax rate for the 400 top-earning Americans has plummeted from 30 percent to 18 percent.

                      Wealth, power, and crony capitalism fit together. So far in the 2016 election, the richest 400 Americans have accounted for over a third of all campaign contributions. " Robert Reich (The End of the Establishment?)

                      Do not worry. The richest .01% are getting a GREAT return on buying all those politicians.
                      "The combined cost of these 10 corporate welfare programs is $1.539 trillion per year. The three main programs needy families depend upon — Temporary Assistance for Needy Families ($17.3 billion), food stamps ($74 billion), and the Earned Income Tax Credit ($67.2 billion) — cost just $158.5 billion in total. This means we spend ten times as much on corporate welfare and handouts to the top 1 percent than we do on welfare for working families struggling to make ends meet."
                      10 corporate welfare programs that will make your blood boil

                      They took all of our money and jobs. We quite having kids and spending money. They sent $ trillions to the bankers to loan to us. We can't borrow. Consumption is crashing and, out of desperation, they want to send us free money. Our effective wages have crashed so, we stopped having kids. Free money won't induce the productive, responsible people to have bigger families. Free money HAS induced the non-productive people to have kids.

                      Part of the PTB want to see world socialism as the final outcome.
                      Part of the PTB want to see mass dieoffs.


                      • Moral degradation and Economic dissolution

                        We've been down this road before. The headlines are mile-markers on our road to insolvency.
                        3/03 Art Berman sees oil heading to $16, will lead to "banking bloodbath" – ETF Daily News
                        3/02 The party's over for corporate bonds – Wall Street Journal
                        3/02 China credit outlook cut to negative from stable by Moody's – Bloomberg
                        3/02 China to lay off five to six million workers – Reuters
                        3/03 Venezuela to print larger denomination bills as inflation soars – Fox News
                        3/02 Negative rates... negative outcomes – Zero Hedge
                        3/03 Only the IMF can now save Brazil – Telegraph
                        Zika is expected to infect 1 in 5 Puerto Ricans
                        How Hedge Funds Are Pillaging Puerto Rico

                        A nation isn't the land and water. A nation isn't just the people. A nation can't survive without a functioning economy. A clan might but, not a nation. Runaway greed combined with birth control and automation have distorted the economy to the point of no return. We aren't going to tweak things a bit and return to normal. The State can't force you to spend money and it can't force you to have children. Also, it can't pay it's promised obligations.
                        It has no solution for the demographic crash. The State is the central focus of moral degradation. Economic dissolution is certain to follow.


                        • The end of retirement

                          ZIRP and NIRP are destroying everyone who depends on interest income,,, including the banks, BUT,
                          The result;
                          The End of Retirement - Harper's Magazine
                          The End of Retirement is Near - Futurist ...
                          The end of retirement | The Economist
                          The End of Retirement As We Know It? -
                          The End of Retirement? - Slate
                          2030: The Year Retirement Ends | TIME
                          The End of Retirement: When You Can't Afford To Stop Working
                          End of Retirement | What Went Wrong: The Betrayal of The American Dream
                          EDIT; How severe is the retirement crisis? These six charts spell it out. - LA Times
                          Last edited by Danny B; 03-04-2016, 05:48 AM. Reason: add a link


                          • NIRP and financial death

                            "Our global, credit based economic system appears to be in the process of devolving from a production oriented model to one which recycles finance for the benefit of financiers. Making money on money seems to be the system’s flickering objective."
                            ",,,,,credit – its expansion in the U.S. alone since the early 1970’s has been 58 fold – that is, we now have $58 trillion of official credit outstanding whereas in 1970 we only had $1 trillion. Staggering, is it not?"
                            " Observe the collapse in bank stock prices – not just in the last few months but post Lehman. I’ll help you: Citibank priced at $500 in 2007, now $38 as shown in Chart I. BAC $50/now $12. Credit Suisse $70/now $13. Deutsche $130/now $16. Goldman Sachs $250/now $146"
                            "Same goes for pension funds. Puerto Rico follows Detroit not just because of overpromised benefits but because they cannot earn enough on their investment portfolios to cover the promises."

                            Bill Gross: Negative Rates Are Finance Economy's Last, Dying Gasp


                            • Zombie Banks


                              Your link above talks about zombie banks to float the bad assets. I'm fairly certain the US banks are already doing this. I have mentioned before that my grandmother was deemed incompetent. She had a reverse mortgage on the house already for more than the house is worth. Yet somehow her mortgage was sold by BOA to Seterus Inc. No way would a bank take over another bank's upside down loan site unseen. A google search of Seterus quickly points to bad service complaints. Obviously seterus is not out to make a profit, they are there to absorb bad loans and eventually go bankrupt.