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  • Danny B
    replied
    The credit monster will eventually break out of control

    Danielle DiMartino Booth spent 10 years advising the FED. She has done some very good writing. I'll excerpt but, you should read the whole article.
    "At the outset of the last crisis, following Bear Stearns’ rapid decline, systemic risk mutated in the least expected places. It always does. "
    "The banking system was infinitely stronger(now) than it was back in 2007. That’s true but such simplicity is dangerously misleading"
    This is completely false. The banks are desperate for deposits.

    "A credit crisis that began with untenable global debt of $140 trillion was “resolved” by accumulating another $70 trillion in credit. Got it."
    "most of the debt build has occurred in the capital markets, the shadow banking system and critically, on central bank balance sheets. It follows that the next source of systemic risk will originate and spread from one of these conduits. "
    The jury is still out as to whether it will be in corporate bonds, OR, credit markets.'
    "It is not stock market volatility that will be the primary disruptor, but rather volatility in the credit markets."
    "Edwards may be on to something. The divide between the S&P 500 and the combined Smart Money Flows Index and Ed Yardeni’s Fundamental Stock Market Indicator is now at a cycle wide. Google both and thank me later."
    But we’ve clearly forgotten that it is economic conflict that precedes geopolitical upsets, not the other way around, hence the red herring of most perma-bulls’ contentions that geopolitics is the only thing that can derail markets.
    https://www.linkedin.com/pulse/great...martino-booth/

    Everybody has a favorite candidate for which sector of the market is going to blow first. Here is an excellent article about politicians buying votes from public service unions.
    How a pension deal went wrong and cost California taxpayers billions - Los Angeles Times
    The globalization of poverty, https://www.globalresearch.ca/the-gl...-order/5313987

    Kunstler,. "The true message of income inequality is that the nation as a whole is becoming incrementally impoverished and eventually even the massive “wealth” of the one-percenters will prove to be fictitious, as the things it is represented in — stocks, bonds, currencies, Manhattan apartments — hemorrhage their supposed value. The very wealthy will be a lot less wealthy while everybody else is in a life-and-death struggle to remain fed, housed, and warm. "
    Stop and Assess - Kunstler

    Venezuela and Argentina, https://www.dollarcollapse.com/argen...rrency-crisis/
    5/06 When money dies: In Venezuela, a haircut costs 5 bananas and 2 eggs – ZH
    Plant a garden !!

    Leave a comment:


  • Danny B
    replied
    Unprecedented employment picture

    I'm constantly trying to get my head "around" various trends to figure out how they affect the whole picture.
    "Roughly 10,000 Baby Boomers will turn 65 today, and about 10,000 more will cross that threshold every day for the next 19 years.Dec 29, 2010
    Automation could eliminate 73 million jobs, a new McKinsey report says
    https://www.usatoday.com/story/money....../899878001/
    Robot automation will 'take 800 million jobs by 2030' - report - BBC ...
    Robot automation will 'take 800 million jobs by 2030' - report - BBC News
    \
    China's working age population will fall 23% by 2050 | World ...
    https://www.weforum.org/agenda/2016/...ng-population/


    "China’s labor force is expected to lose 1 million workers each year for the foreseeable future" "Before long, though, we’re more likely to treasure robots than to revile them. They may be the one thing that can protect the global economy from the dangers that lie ahead."
    https://www.washingtonpost.com/poste...=.68b457b0913e
    The article blindly goes on about how robots are going to do all the production. There isn't a single word mentioned about jobs, income and consumption. Not ONE SINGLE WORD about the mental health of people who have no job, nor, center in their lives. No mention of the young who have no job prospect. No mention of the young failing to form a household. No mention of the increasing drug use and suicide rate.
    Look at the populations that receive the most welfare money. They have the most social problems.
    https://www.washingtontimes.com/news...ug-fueled-dea/

    From one point of view, America has 40% unemployment.
    Take the working age population. Multiply that number by the possible hours that can be worked per year. The end result is 40% higher than the number of hours actually worked.
    David Stockman has a very good article laying it all out
    http://davidstockmanscontracorner.co...-aint-awesome/

    Keep in mind that our current level of employment is maintained to a great degree by CB printing. Minus QE, the economy would have shrunk by more than 7%.
    The work force is shrinking. The experienced people are retiring. There are few niches for new entrants. Jobs are getting more technically demanding. The State was instrumental in failing to educate the next generation.
    https://www.cnsnews.com/news/article...not-proficient
    The solution, https://www.zerohedge.com/news/2018-...ent-snowflakes

    Our current system uses debt-money to support an even-increasing number of retirees and non-producers. The State borrows with no intention of repayment. After the default cascade, there will be no resuscitation of our current system.
    https://www.dollarcollapse.com/plung...es-great-news/
    Last edited by Danny B; 05-06-2018, 06:52 PM. Reason: One more link

    Leave a comment:


  • Danny B
    replied
    Paying for the blob State by squeezing productivity

    The blob State is always on the hunt for taxes, fines and fees. There are millions of bureaucrats that have gold-plated pensions and salaries. Keep in mind that money spent for consumption can not be paid back. The money that goes to bureaucrats just goes down a rat hole and, robs capital from the productive economy. The money circulates, after a fashion BUT, it doesn't do anything productive.
    "Eurozone commercial banks will have to pay the European Central Bank 12% higher fees this year. The Eurozone banks must pay €474.8 million in fees for the supervisory services of the ECB. The cost of supervising the banks has risen to over €500 million"
    "The ECB, on the one hand, claims that Quantitative Easing will stimulate the economy, but it raises its fees and taxes keep going up. "
    https://www.armstrongeconomics.com/w...ervising-them/
    The blob State prints money to pay itself.

    " A closer look at Italy reveals that more than 10% of the balance sheets of Italian banks constitute bad loans. The cost to bailout Italy is put at €189 billion while Spain comes in around €100 billion "
    So, the banks are going bust but, they must pay increased fees to the blob State.
    "The Eurozone still has inherent significant risks in the balance sheets of European financial institutions. This is primarily because where the USA took the bad loans from the banks and stuffed them into Freddie and Fanny, in Europe, the bad loans are still on the books of the banks."
    OK, so the banks will collapse in Europe and, the State will collapse in America.
    Armstrong writes deposit insurance will fail in Europe because the banks have so many non-performing loans. Is that any worse than the situation in America where the GOV will fail because it took on the NPLs?
    https://www.armstrongeconomics.com/i...ive-in-europe/

    "ANSWER: It is amazing that the politicians are so clueless and the heads of the banks are far too often just talking politics. London is bigger than all the financial centers in Europe COMBINED! Because of regulation being consolidated in Britain, it even beats New York City – a fact that is often overlooked. The United States has SEVEN regulatory agencies that compete with each other for power compared to one for Britain. London still wins hands down.Neither Frankfurt nor Paris even has the infrastructure to function as London does."
    https://www.armstrongeconomics.com/i...ket-execution/
    So, the blob State in America has seven times as many bureaucrats sucking up to the banks as London has. The ECB is charging $1/2 billion to supervise the European banks. As long as it generates salaries, the American and European regulatory agencies don't give a hoot what the banks do. The European banks wouldn't have so many NPLs if the regulatory agencies were actually doing their job.

    The creation of the Eurozone was a bureaucratic overlay on States already burdened by high taxes. It reduced their GDP by 20%. Socialism always seems to get carried away with itself. If a little bit of tax & benefits
    is good, more of the same is better.
    Chart of the Day: Europe Runs on Taxes - The Sounding Line
    Once again, you can't print debt-money for consumption.


    5/05 The coming massive commodity rally – Daily Reckoning
    So, just how long can you drive down the value of a currency before tangibles go way up.
    5/04 Input costs are soaring in ISM surveys – Zero Hedge
    Consumption has crashed. Manufacturing that depended on high volume must now depend on high margin to maintain profitability. With no alternative, they cut their own throats.
    5/04 Dow pops 400 points as Apple leads tech higher – CNBC Buffet is seen as a bellweather investor. The feds slip him a check and, he buys whatever looks weak. Buffet bought Apple and, presto, Apple rises. This is in spite of the fact that Apple reported very weak I-phone sales.
    General Electric is VERY weak so, Buffet talks about buying lots of GE. He even said that he could write a check and buy the whole company. How many people jumped into GE stock after that? The feds always bail out Buffet.

    Politicians make an art out of lying through their teeth. Reportedly, public pensions are in worse shape than private pensions.
    5/05 Blame our politicians for the retirement savings problem – The Hill
    http://thehill.com/opinion/finance/3...avings-problem

    "The American president, Thomas Jefferson, is accredited with the following comment: “It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.”
    What if you WANT wars?
    "The expansion of debt in the advanced economies went from $55.1 trillion in 2001 to $119.2 trillion in 2016. And the increase in debt is not limited to advanced economies—over the same period of time, emerging markets economies went from $6.4 trillion in 2001 to $43.9 trillion in 2016."
    http://nationalinterest.org/feature/...l-crisis-25683
    "While it can be argued that massive stimulus was necessary to avoid another Great Depression,"
    THAT point can certainly be argued but, it is false, non the less. The stimulus was created to save the banks, crony capitalism and Marxist socialism.

    Leave a comment:


  • Danny B
    replied
    Crony capitalism,,,desperate banks,,,$400 trillion pension gap

    The State, by it's very nature is a parasite that must do constant re-distribution to survive. Out of necessity, society allows the State to have guns and lawbooks. The producers in society wish to have a very limited State to minimise the predations. The non-producers naturally wish for an expansive State. Since the State naturally attracts more and more non-producers, it creates more and more laws to rob the producers. It all eventually blows up. The non-producers lament the inequalities of capitalism and, preach socialism. Our current system is top-down socialism for the rich. Crony-capitalism can break the system just as fast as Marxist socialism.
    https://www.themaven.net/mishtalk/ec...EyxzNnoBhZr4Q/

    I've written plenty about the rise of automation. Robots don't pay employee taxes that are used to fund public pensions. The bankers stole all the private pension money. The funding gap is growing.
    https://www.themaven.net/mishtalk/ec...EePt5W_mIZC5Q/

    The banks are desperate for deposits and, desperate to generate fees.
    "Ten years ago, Goldman made a killing by betting - alongside some of its best clients such as John Paulson - against subprime Residential Mortgage Backed Securities (and their various synthetic and "squared" derivatives) "
    "Now, a decade later, Goldman is once again hoping to profit off America's sub-660 FICO population, only instead of betting against subprime borrowers, it is lending to them.

    That's right: Goldman is now a subprime lender itself, because through its retail-facing bank, which both collects deposits and issues loans, subprime borrowers have emerged as one of the most important client bases of the FDIC-backed hedge fund which until just 2 years ago had no conventional, retail-facing banking operations whatsoever."

    https://www.zerohedge.com/news/2018-...g-goldman-2018
    In the next crash, there will be NO possibility of a bailout. This isn't even a "hail Mary" play by GS. GS is going to walk the metaphorical plank. They have just made the plank a bit longer.

    We WILL have price inflation in a few selected areas. But, when astronomical valuations come back to earth, most of what we will see is , deflation.
    https://www.themaven.net/mishtalk/ec...Uy-sAkSAlJDNQ/

    Leave a comment:


  • Danny B
    replied
    401k gone,,, dump the military,,,crashing consumtion

    The bankers used regulatory capture to force in their Central bank. They offered LOTS of loans to GOV to create a bond market. GOV just passes on all the cost to the taxpayer. Banker control of the State allowed the banks to take all our retirement money and invest in building up China. There is more profit investing in a low-cost labor market than investing in a high cost labor market. The retirement money is gone. The banks are chipping away on YOUR claims to YOUR money.
    "There are tens of thousands of workers who are due lost 401(k) money, but there is no one central depository where you can look for what's rightfully yours. " Forbes

    "Even if you still have a good job and a paid up mortgage, chances are your monthly 401(k) statement will remind you that you've lost a good chunk of your savings. Trillions of dollars have evaporated from those accounts " CBS News

    The entire pension system is flat busted. Both public and private. Your 401k is gone. The banks are desperate for deposits. Why is that?
    "Banks brace for multi-year deposit war | afr.com
    404 | afr.com
    Aug 5, 2016 - Australia's big banks face a costly battle for household savings to close a $400 billion "funding gap".
    So, how big is the "funding gap" in the West?

    Armstrong and the mega-corruption in New York.
    https://www.armstrongeconomics.com/a...with-russians/
    Excellent article on the collapse of Marxist/socialism in America.
    https://www.armstrongeconomics.com/i...by-generation/

    "Try talking about the Pension Fund Crisis that will hit all the people directly. The Trump deficit will put money back into the economy directly whereas the Obama deficits were never something that actually stimulated the people directly. It was like Quantitative Easing – welfare for the bankers, not the people."
    https://www.armstrongeconomics.com/a...llar-deficits/

    The total U.S. military budget, including black projects is reckoned at $1 trillion. GOV also reports that $2.3 billion is missing. Later, this is changed to $13 trillion. Dunno what the current figure is. America is in no danger of being invaded by Canada, nor Mexico. The military is mostly an instrument to rampage around the world stealing resources. It is also a very blunt tool used to create a "greater israel" and, protect opium crops in Afghanistan. Did I mention drug distribution all through Europe by way of NATO bases? It is also the enforcement arm of the FED making sure that everybody uses U.S. dollars. What honest and practical uses are there for the U.S. military?
    https://russia-insider.com/en/americ...litary/ri23359

    This is not to disparage the soldiers, just their mission. And the politicians who create this mission. FED GOV has tons of money for the military but, hates to spend anything on infrastructure or education. The time WILL come when retired people will demand the benefits that they paid into. Congress will patiently explain that the military is FAR more important and, must be fully funded. This will happen at the same time that most pension funds collapse. Many millions of old people will be demanding to get into the FEMA camps to survive.

    So, the banks took all of our money using regulatory capture. The economy crashed because the lower loop could no longer support the predation of the upper loop. Fresh money was injected into the upper loop hoping to create a revival in the lower loop. All this money NEVER went into wages so, the lower loop defaulted. More money was pumped into the upper loop again and again. Money couldn't be pumped into the lower loop or, we would all quit our jobs.
    The wage-price spiral never happened and, hoped-for price inflation was almost absent. The only thing that brought any price inflation was; feeding the consumer more and more debt.

    This has come to an end and the would-be consumer is locked out of the market.
    5/03 Ford cutting massive $25.5 billion, confirming end of major automotive cycle – ZH
    5/03 Nissan shocks with 28% sales plunge – Bloomberg

    Ever-increasing tax demands will keep him out of the consumer-goods market.
    5/04 The $21 billion debt most Illinoisans know nothing about – WirePoints

    So, we did a wage and wealth transfer from the West to the East. The Chinese are eating better and, can now afford a scooter. The West is saddled with an enormous debt load and, we can barely afford a scooter.

    OK, so, the world is sliding down to a global mean wage. The work force is shrinking. Productivity is rising greatly due to automation. What about jobs? What about consumption?
    https://www.youtube.com/watch?v=GrGe...ature=youtu.be

    Crony capitalism brought us this crash. Armstrong calls it a crash of Marxism/socialism. Naturally, he considers enormous bailout for bankers to just be part of good business. The crash will go on for a long time. The State and corporatocracy are both family unfriendly. The credit system only works with a growing debt load. You can't grow the debt load with a shrinking population,,, shrinking workforce and, rising automation. Japan shows us the way.
    Consumption will continue to crash and take the credit bubble with it.

    Leave a comment:


  • Danny B
    replied
    China; needing a family friendly GOV system

    Since all capital can move electronically, things that happen in China can have an immediate effect around the world. China is experimenting with some kind of State-run capitalism. It's hard to predict the outcome. They have 64 million empty buildings and dozens of empty cities. They have the fastest shrinking workforce in the world. They have HUGE growth plans but, an extremely low birth rate.
    Here are a few additional notes.
    "Five days of meetings in Beijing with Chinese, U.S. and European government officials and business leaders made it crystal clear to me that what’s going on right now is nothing less than a struggle to redefine the rules governing the economic and power relations of the world’s oldest and newest superpowers — America and China. This is not a trade tiff.
    “This is a defining moment for U.S.-China relations,”

    “No one can contain China anymore.” You hear that confidence in Beijing a lot today from Chinese: Our one-party system and unified society can take the pain of a trade war far longer than you Americans can. "
    China is in the process of getting a lock on mineral and energy deposits worldwide.

    "In Act I, U.S.-China relations were all geopolitics, with the U.S. and China against the Soviet Union. That lasted until the late 1970s, when Act II began: China shifted toward capitalism, becoming a huge factory and new market — and 30 years later turned into the world’s second-largest economy.

    In large part this was due to the work ethic of the Chinese people, the long-term thinking of China’s leaders and the government’s massive investments in infrastructure and education."
    "ACT III opened in October 2015, when China announced its new long-term vision: “Made in China 2025,” a plan to dominate 10 next-generation industries, including robotics, self-driving cars, electric vehicles, artificial intelligence, biotech and aerospace."
    "That is why many E.U. countries are now scrambling to pass new laws to prevent China from buying up their most advanced industries. And that is why China is telling E.U. countries, as one E.U. official put it, “Whatever you do, don’t join the U.S. camp” on trade. The last thing Beijing wants is a U.S.-E.U. united front demanding it play fair."

    "Trump also has nothing to say about investing in the real source of long-term U.S. strength — infrastructure and education."
    "China is a much more open country today than it was 25 years ago — but it’s also much less open than it was five years ago. Xi’s allies argue that his crackdown on corruption; his repeal of term limits, which position him to rule for what could be decades; and his tightening of the control that the Communist Party wields over every institution was urgent because collective rule did not work. China’s society, government and military were being eaten away by corruption from within, those allies say."
    https://www.nytimes.com/2018/05/01/o...ump-trade.html

    China is an absolutely controlled society. If you jaywalk, an AI program / camera will use facial recognition to automatically fine you. The "brain helmets" that millions must wear can't make life any better. It is highly doubtful that China can reverse it's population slide. China will never escape the trap that Japan is already in.

    Leave a comment:


  • Danny B
    replied
    No babies,,, sliding down

    A baby bonus is paid in
    1 Australia
    2 Canada
    3 Czech Republic
    4 Italy
    5 Lithuania
    6 Russia
    7 Singapore
    Great Britain, "Meanwhile, 100,000 more children live in poverty today than did this time last year. "
    “There are 4.1 million children – nearly a third of the entire child population – living in households on less than 60% of the average income.” “..it is not so much that poverty is more severe, but that it has spread. “It’s everybody. Your average family is like that now.” "
    “..a million and a half more children will sink below the poverty line by 2021 thanks to benefit changes.”
    "In the UK, a 2012 study found that the number of career politicians (that is, politicians with minimal experience outside of politics) had more than quadrupled between 1983 and 2010."
    https://www.theautomaticearth.com/20...arles-dickens/
    The State has definitely turned anti-human. Socialism destroys the family.
    The corporatocracy is focused only on profits which is damaging to all living things. England and France are going to fall very hard. Windrush isn't the only problem.
    5/02 UK mistakenly deported thousands of foreign students – Independent Undoubtedly, the darker ones.

    Bond shorts have hit record highs. Commercial traders have taken the opposite view betting on inflation. The upper loop has been HUGELY inflated. The stock markets have rolled over. There isn't going to be any high inflation in the future. It will be turtles (deflation) all the way down. FED GOV is sucking money out of markets with insane borrowing. The FED is (reportedly) pulling out many $ billions. Another 1/2% rise in the 10 year rate will bankrupt 20% of U.S. companies. All of this brings deflation.
    https://www.themaven.net/mishtalk/ec...EuszWT7n0S6wg/

    "long-term thinking of China’s leaders and the government’s massive investments in infrastructure and education. "
    "And there is a trade imbalance today because we’ve been investing in our future and you Americans have been eating yours."
    All of this is true. The corporatocracy shuns infrastructure and (free) education. Weapons of war come first.

    “The private sector yield curve reading stands at zero, or right on the threshold where trouble can be expected to begin,” Gave wrote in a note published on Tuesday. “Should this spread move into negative territory, I would expect a financial accident to occur outside of the U.S., a U.S. recession, or possibly both.”
    "Prime rates below the natural rate of corporate credit have allowed banks to generate “artificial” money, kept “zombie” companies alive,"
    "If the private sector curve inverts “zombie companies will fail and capital spending will be cut, as firms move to service debt and repay principal. Workers will get laid off and the economy will move into recession.”
    https://www.bloomberg.com/news/artic...d-gavekal-says

    5/02 Japan kicks the can on fiscal discipline, again – Nikkei
    There is just no escape from a falling population. The Japanese GOV has started a nationwide dating site hoping to get more Japanese births. Japanese women are looking for a FARM boy to marry. Evidently, the city culture is just too negative for a family.

    5/02 Moving averages getting weaker and weaker; major carnage coming – Mish
    Everything got a bit weaker after the 1987 crash. The 2000 crash demanded a lot of stimulus. The '08 crash demanded MUCH more. The stimulus just isn't working like it used to.

    5/02 Companies hire 204,000 more workers in April – CNBC
    Viewing employment without rose colored glasses – Real Investment Advice

    "Consensus expectations from economists are for an unemployment rate (U3) of 4.1% which is nearly unprecedented in the last fifty years." "many economists to warn of tight labor markets" "As shown above, there is only one person filing an initial jobless claim for every thousand people in the workforce."
    "Closer inspection of the BLS data reveals that, since 2008, 16 million people were reclassified as “leaving the workforce”
    Viewing Employment Without Rose-Colored Glasses | RIA

    Leave a comment:


  • Danny B
    replied
    Inescapaple demographics crash with growing debt

    As the developed world becomes more effed up,,, as birth control becomes more widely available, people have decided not to bring children into this mess. Things are so polluted in China spends 15% of it's gdp fighting pollution. China created it's great leap forward to prevent the West from carving it up. The cost of rapid industrialization has been horrible for the flora and fauna. Man is a part of nature and can not simply divorce himself.

    "While China has embarked on ambitious plans for economic and military domination over the next several decades, they may end up defeating themselves without a single shot fired - thanks to their longstanding birth restrictions, shrinking fertility rate and exploding elderly population.
    "In a worse-case scenario, slowing growth and a labor shortage could leave China unable to care for hundreds of millions of retirees," notes the Wall Street Journal.

    China’s clinging to birth restrictions defies a clear demographic trend: Its workforce is shrinking and the population is rapidly ageing. By 2050, there will be 1.3 workers for each retiree, according to official estimates, compared with 2.8 now.
    About the same for America,,, in spite of leaving the southern border open. https://www.ssa.gov/history/ratios.html

    "While some experts have argued that slower population growth could mitigate pressure on China to create new jobs as technology increases productivity,"
    China is a leader in robotics. Technology will increase productivity but, it won't increase jobs.
    "will see an average annual decline of nearly 6 million Chinese"
    The Japanese show all of us the way forward.
    “China will learn what many other countries have learned—that it is much more difficult to get people to have more babies” than to force them to stop having them."
    " Moody's cited China's rapidly ageing population as a major factor in their decision to downgrade their sovereign rating,"

    Then, there is the whole corporate mentality.
    "When Ms. Li, the Qingdao professor, refused to abort her third child, she said, her university employer accused her of selfishly putting at risk her supervisors’ careers, the school’s future and co-workers’ bonuses."

    "Singapore, for example, has very liberal immigration policies and offers a "baby bonus" as high as 10,000 Singapore dollars ($7,500) along with grants available for parents which can be used for healthcare and education. "
    "President Xi Jinping has acknowledged the need to breed - stating in 2015 that China needs more births"
    https://www.zerohedge.com/news/2018-...ions-set-stage
    Excellent infographic on population growth, Visualizing Global Population Growth by Continent - The Sounding Line

    Nobody wants to live in an Orwellian world NOR bring children into it.
    Giant Chinese companies are outfitting millions of employees -- everyone from factory workers to military personnel to pilots and train drivers -- with special uniform hats containing an unspecified neurological sensor package claimed to be capable of detecting "depression, anxiety or rage"
    Chinese Factories Employ "Brain Scanners" To Stop Workers' Mistakes Before They Happen
    China's "SkyNet" facial recognition tools can compare up to 3 billion faces per second to help the government enforce its new "social credit score" - the Communist Party's latest and most widespread tool of political repression.


    " the Chinese government is pushing to double the size of the economy by 2020 (setting this goal in 2010). "
    Have the government idiots taken a look at Japan and their falling population?
    "Increasing debt without a concurrent economic gain has inevitably led to the economic downfall. Out of 43 countries that experienced an increase of credit-to-GDP of more than 30 percent in five years, 38 of those countries faced a financial disaster. "
    Yep, printing money without a corresponding increase in wealth never seems to work out.
    " In 2016, 41 banks wrote off 576 billion yuan in bad loans, up considerably from the 117-billion-yuan bad loan write-offs in 2013."
    The Global Debt Addiction: China's Out of Control Debt - Gold Telegraph

    Bonds pay very little but, as long as they pay a higher percentage than the percentage lost to price inflation, people buy them. Even using artificially depressed GOV figures for inflation, bonds have been losing for years.
    https://www.bloomberg.com/news/artic...nded-years-ago
    Keep in mind that people who bought bonds with free money aren't particularly concerned about a drop in value.
    If you buy high-yield bonds, you get a higher return but, more risk.
    https://www.bloomberg.com/news/artic...nk-bond-market

    Leave a comment:


  • Danny B
    replied
    Cyber crime,,, paper money

    Cyber Crime Costs Projected To Reach $2 Trillion by 2019 - Forbes
    https://www.forbes.com/.../cyber-cri...llion-by-2019/
    5/01 Bitcoin: One cryptocurrency to rule them all – Aier
    4/30 Cryptos are the most heavily manipulated market in history – Bob Moriarty

    China's Shutdown Of Bitcoin Miners Isn't Just About Electricity - Forbes
    Gold has attributes that BTC does not have.

    4/30 US stocks jump on dealmaking, earnings – CNBC
    5/01 Stocks fall as market awaits Apple earnings – CNBC

    Kunstler, "Our financialized economy — like everything else we do — operates at levels of complexity so baffling that even its supposed managers at the central banks are flying blind through fogs of debt, deception, and moral hazard. When that vessel of pretense slams into a mountain top, the effects are likely to be quick and lethal to the economies on the ground below."

    "Personally, I expect our collapse to be as sudden and unexpected as the USSR’s, but probably bloodier because there’s simply more stuff just lying around to fight over. Of course, I expect the collapse to express itself first in banking, finance, and markets — being so deeply faith-based and so subject to simple failures of faith. But it will become political and social soon enough, maybe all-at once. And when it happens in the USA, it will spread through the financial systems the whole world round."
    That Collapse You Ordered...? - Kunstler
    He never was a ray of sunshine. He does bring up the question of just how fast the unwind will be. Since our money has no tangible value, it is just information. How fast can information and contagion travel?
    The repeal of the Glass-Steagal act gave our savings to the bankers to gamble with. The bankers are now looking everywhere for money.

    US banks in 'arms race' for deposits as rates rise - Financial Times
    https://www.ft.com/content/1bd2ca6c-...b-bc4b9f08f381

    So, the banks took our money and, now, they need more.
    YOUR money was just an unsecured investment in the bank.

    A lot of people are getting nervous about their money in the banks. SO,
    "Sky News has also found that the proportion of UK banknotes circulating outside the banking system - in people's pockets, stored at home and outside the country - has now hit the highest level since 1979, as a percentage of GDP."
    The cure;
    UK Demonetisation: Paper 10-Pound Notes Go Out Of Circulation In UK
    It's time to offload these £50 notes | Money | The Guardian
    Europe to Remove 500-Euro Bill, the 'Bin Laden' Bank Note Criminals ...

    Obviously, if the State does not want you to hold paper money,,,, that is just what you should do.

    Leave a comment:


  • Danny B
    replied
    PPT, ESF,,, RISING debt,,, RISING energy

    The Fed caused 93% of the entire stock market's move since 2008: Analysis yahoo Finance 2016
    The stock market is an indicator of economic activity, not the economic activity in itself. The economy wouldn't budge on it's downward march so, they messed with the indicators.
    The same is true for bonds. The FED was buying up all the slack. They claim that they have stopped. What about other groups? There is the ESF.

    "Is it possible that the ESF, located conveniently at the nexus between US monetary policy, foreign policy and last but not least, a promoter of the interests of the US military-industrial complex,"
    "officially in charge of defending the dollar, the ESF is the government agency which controls the New York Fed, runs the CIA's black budget, and is the architect of the world's monetary system (IMF, World Bank, etc). ESF financing (through the OSS and then the CIA) built up the worldwide propaganda network which has so badly distorted history today (including erasing awareness of its existence from popular consciousness). It has been directly involved in virtually every major US fraud/scandal since its creation in 1934: the London gold pool, the Kennedy assassinations, Iran-Contra, CIA drug trafficking, "
    https://www.zerohedge.com/news/prese...rotection-team

    Then, there is the PPT.
    The Working Group consists of:

    The Secretary of the Treasury, or his or her designee (as Chairperson of the Working Group);
    The Chairperson of the Board of Governors of the Federal Reserve System, or his or her designee;
    The Chairperson of the Securities and Exchange Commission, or his or her designee; and
    The Chairperson of the Commodity Futures Trading Commission, or his or her designee.
    https://en.wikipedia.org/wiki/Workin...ancial_Markets

    All of this matters when the State wants money. How much money does the State want?
    NOTES;
    The U.S. Just Borrowed $488 Billion, a Record High for the First Quarter
    U.S. Treasury Secretary Steven Mnuchin said he’s unconcerned about the bond market’s ability to absorb rising government debt
    Ability, yes,,,, desire,,, well, maybe.
    Treasury said net borrowing totalled $488 billion from January through March, a record for that period and about $47 billion more than it had previously estimated
    Who did the estimation?
    https://ei.marketwatch.com/Multimedi...7-ac162d7bc1f7

    The U.S.’s need to issue more Treasuries is expected to grow as the fiscal picture deteriorates.
    The Treasury said Monday that tax changes are “poised to underpin near-term consumption and investment” and “the stage is set for a pick-up in growth over the near term.”
    There is no growth in the lower loop so, they print more and more.
    https://www.bloomberg.com/news/artic...quarter-record
    Investors are getting more comfortable with the idea of four interest rate hikes this year, "
    Comfortable, huh? Interest rate hikes will blow out all the debt markets.
    "Think in terms of higher consumer and producer price readings coupled with surging oil prices and a falling dollar,"
    https://www.cnbc.com/2018/04/30/the-...may-ensue.html

    The upper loop is over-stuffed with money. The vast majority of people are under-stuffed with money. Look at the price of gold. Gold has no price. It's value and demand varies very little over time. It's "price" is pretty constant. So, if you look at the price of gold, you are looking at the value of the currency. The CBs have all printed in unison cheapening all currencies at once so that no currency is seen as a haven from over-printing. The price of gold must be suppressed so that currency doesn't look quite as bad.
    So, they drive down the value of the currency. What about oil? When will a "falling " currency be reflected in the price of oil? Paul Volker (FED head) raised interest rates to about 22% and the economy survived. Today, that would be instant suicide.
    The same is true for the price of oil. The dollar goes down but, the price of oil remains subdued. How much longer can that go on? Oil and gold tend to move together.
    Charles Maxwell, a veteran energy analyst (since 1957), is now predicting oil prices will climb to $300 a barrel in 2020,

    "From a price in the $40 range a mere six months ago, we’re now into the $70s per barrel and higher prices are forecast."
    "Rising energy costs are a type of inflation that we saw in the mid-2000s, during the previous runup to oil at over $130 per barrel in 2008"
    That didn't work out so well, did it?
    https://dailyreckoning.com/seven-pillars-gold/

    Armstrong, " We simply have to let it burn down to the ground and start from scratch."
    https://www.armstrongeconomics.com/i...ee-healthcare/
    Last edited by Danny B; 05-02-2018, 12:31 AM. Reason: DUH

    Leave a comment:


  • Danny B
    replied
    Printing money to make people happy,, Jim Willie,,,

    Central bank governor Gideon Gono was reported to have moved into his new 112-room mansion on the outskirts of Harare. The new residence was reported to feature an art gallery, a billiard room, a swimming pool with three islands, and four helipads.
    He runs the Central bank of Zimbabwe. He is the one who printed the famous $5 trillion notes.
    Nhalan Nene of South Africa said that he will force the reserve bank to print more money and, give it to the poor.
    ‘We will print more money and give it to the unemployed to end poverty in South Africa’, Says new minister of Finance – News Updates South Africa

    It just never works out to print money that is not connected to labor or wealth creation. This is South Africa's gold production. The employment graph looks about the same.
    https://upload.wikimedia.org/wikiped...Production.png

    4/30 Fight for deposits erupts among banks, with winners and losers – Wolf Street
    I'm going to copy the entire text of the 2 latest summations from Jim Willie.

    April 21st: topics covered the most significant financial event in a generation, the launch of the Gold-Oil-RMB futures contract in Shanghai China, the gradual move toward Saudis selling oil in RMB terms,
    Saudi is going broke. They were forced to sell off stakes in ARAMCO, the State oil company. It was way over-priced because they lie about their reserves. The Chinese came along an offered a good price that nobody else was willing to pay. Remember that China has to get rid of treasury notes by buying stuff. China now has leverage to force Saudi to sell in Yuan

    the Chinese investment of RMB inside the Saudi Economy in its development, the path of the Chinese Yuan and valuation issues with expectations of eventual gold linkage with the Yuan currency, the Chinese march away from the USD Sphere with Belt & Road Initiative projects worth $8 trillion outside the USD framework coupled with non-USD platforms like the AIIBank, the Russian vulnerable situation with their Ruble currency easily fortified by gold huge reserves,

    21 years ago, South Korea was close to bankruptcy. The State asked people to donate their gold to save the country. 8 tons were collected in just the first week. This shows just how important gold is for the stability of a currency.
    the potential launch of a Russian gold-backed crypto money, the potential of a Gold Trade Note with a 1000 ton placement of gold, along with more discussion of personal investments in silver bars,
    Both China and Germany have been on a silver standard in recent history.

    and the Eurasian Trade Zone establishment and development which goes contrary to the George Orwell futuristic view (not in the US press), with conclusion that the Shanghai GOR futures being the death knell for the Petro-Dollar and the Saudi oil sales in RMB terms being the dagger in the Petro-Dollar’s heart

    https://youtu.be/N3S1PBKOdvs
    “Longstanding Chinese War: Intrigue & Betrayal”

    The trade war with China has roots going back at least to the 1990 decade. It has been financial in nature in the past, only recently in trade & commerce. Note the tungsten laced gold bars sent to Hong Kong banks. Note the Hong Kong independence with FDI investment promised to China. Note the US gold lease with China, reneged upon in 2005. Note the hidden unravelling of the Vatican lord.
    No idea of the true story of Vatican gold. Everybody agreed to send all the gold to Switzerland first before it went to China or Hong Kong. The Swiss were entrusted with getting the tungsten out of the system.

    Note the Chinese property confiscations, seen in JPMorgan HQ. Note the Chinese dumping of Fannie Mae bonds, beginning in 2005. Note the quick consequence of the Lehman failure and subprime bond crisis. Note the Chinese dumping long-term USTreasurys. Note the construction of the vast array of non-USD platforms and channels. Note the death knell for the Petro-Dollar. Witness the gradual emergence of the Gold Standard, arising from the East.

    Longstanding Chinese War: Intrigue And Betrayal
    China buys up everything in sight, using U.S. treasuries. The West rolls all of their money into bonds and derivatives and, other non-tangible vehicles. China buys tangibles. Russia already has enormous tangible wealth and doesn't need to buy anything.

    Armstrong, " Debt relief of 50% is needed on the entire (EU)national debt – not just the loans since 2010."
    There will be no saving the EU. There is almost no possibility of the investors accepting a 50% haircut. Even if they did, the credit default swaps would kick in. Even a "clean" 50% haircut won't save them because the interest burden would just keep growing. The hunt for taxes to pay the State and banks just causes more economic deflation. As long as the money is stuck in the upper loop, it has NO value to the economy.
    https://www.armstrongeconomics.com/w...e-debt-crisis/
    Socialism gives resources to the poor based on NEED. Capitalism gives money to the poor based on work. Crony capitalism gives money to the rich based on influence. It is only pure capitalism that avoids high inflation of the money supply. Only capitalism provides the motivation for work to be performed. With the parasites in control, actual productivity always seems to diminish. They starve up out to keep us working so, we have fewer offspring.

    Leave a comment:


  • Danny B
    replied
    Ignoring history,,, GSEs,,, late stages of a credit super-cycle.

    " Fundamentally, bull market psychology rests on the basic premise that underlying fundamentals are sound - economic growth, earnings, inflation dynamics, new technologies, global trade, etc."
    " wise person said that it's not true that we don't learn from history. It's that our learning is dominated by recent history. It becomes too easy to ignore everything beyond the past few years. Over a relatively short time horizon, the previous bust cycle becomes ancient history. What matters for the markets - especially as the cycle evolves to the speculative phase - is the here and now."
    " Not only do we not learn from our mistakes, we instead seem to go out of our way to create bigger ones. This time much Bigger."

    " Our government is amassing debt and obligations it will not repay. There's the $21 TN of rapidly expanding debt, along with tens of Trillions of future entitlements. And let's not forget the government-sponsored enterprises. The GSEs ended 2017 with a record $8.857 TN of securities outstanding (record assets of $6.826 TN, along with a record $2.125 TN of guaranteed MBS)."
    Yep, the bad loans were stuffed in the GSEs.
    https://creditbubblebulletin.blogspo...al-wisdom.html

    4/28 Retiring broke? More than half of Americans are at risk of it happening – USA Today
    4/28 A pension ‘Hurricane Harvey’ could spread across the US – Birch Gold

    The cash in the SS fund was stolen for wars and replaced with non-negotiable Treasury notes. The war-mongers are increasingly shrill in their demands that the entitlements be cut back and, the military budget raised.

    4/29 A tsunami of US debt is about to hit the markets – Gefira
    4/29 Speculators have never been more short bonds — ever – Zero Hedge

    You're watching the slow march of history being made.

    Interesting,,, stages of a financial bubble.
    STAGES OF A FINANCIAL BUBBLE - Where Are We Now? - munKNEE dot.com
    4/29 Freddie Mac launches “3% down” mortgage with no income restrictions – Zero Hedge
    This is pure socialism overlaid on pure financial stupidity.
    4/29 Brexit failure looks more likely every day – Bloomberg
    The Eurocrats (socialists) are absolutely frantic to kill Brexit. They know that Europe is fast collapsing and they want to lasso in the London banking centers.

    B of A; US 10 Year Treasury Notes Are Junk Bonds | Politics
    beforeitsnews.com/.../b-of-a-us-10-year-treasury-notes-are-junk-bonds-2998610.html

    Translation, Take your money out of GOV bonds and, stuff it in our banks.

    Leave a comment:


  • Danny B
    replied
    Notes and vids from Armstrong

    When it comes to referencing history, NOBODY does it better than Armstrong and Socrates. Armstrong claims that we are in the final stages of a collapse of socialism. The Eurocrats make no bones about it. They Worship the idea of socialism. Maybe that is because the vast majority of politicians have NO job niche in the productive sector of the world. Here is an amazing article about Junker.
    "We live in a very dangerous era for this is the collapse of Marxism and they will fight back with every ruthless means possible to save their theory of living off of other people’s money."
    https://www.armstrongeconomics.com/a...-of-karl-marx/

    America injected money into the upper loop. China injected money into the lower loop.
    "Right now, China’s Debt to GDP stands at 250% mainly because to stimulate their economy, they actually lent money to people. The Western government bought their own bonds back to the “indirectly stimulate” the economy which never made it to the people."
    https://www.armstrongeconomics.com/i...n-the-horizon/

    "The Bank of England actually prints itself internally £1 million and £100 million pound notes. They are used only internally to back the paper currency issued by other banks such as the Bank of Scotland. "
    https://www.armstrongeconomics.com/i...million-notes/
    So, they print paper money to back other paper money. There is no actual wealth backing anything.

    Armstrong vids;
    https://www.youtube.com/watch?v=67z6EE-As-I&t=148s

    https://www.youtube.com/watch?v=OW-hLpbc_Mg

    https://www.youtube.com/watch?v=xnvHZGTGu2g

    https://www.youtube.com/watch?v=B1yf6iluOmM&t=88s

    Leave a comment:


  • Danny B
    replied
    Stockman, Amazon,,rising debt

    Stockman,
    1. police the planet via a massive Warfare State funded with borrowed money;
    2. leave the $2.5 trillion Welfare State and its 110 million beneficiaries politically undisturbed on the theory that deficits don't matter;
    3. Cut Taxes for the donors, the business lobbies and the affluent classes whenever they get the chance on the theory that tax cuts pay for themselves; and
    4. Throw Spending Bones to farmers, small business, exporters, veterans, border control nativists and law and order conservatives to keep the rest of the GOP voters happy.
    "Yes, American taxpayers surely deserve a Federal government that taxes less than 18.0% of GDP, which was the "current law" level for FY 2019 before the Christmas Eve bill reduced the take to 16.5%.

    But even more so, they deserve one that spends well less than 21% of GDP today and upwards of 24% of GDP a few years down the road."
    "However, the math got thrown into a cocked hat when the tax cut ballooned to double the intended size during a legislative bidding war in the summer of 1981---even as the initial spending cuts got stealthily restored by Congressional saboteurs in future years."
    The article has a lot of good info.
    Contra Corner » Yield Shock On Wall Street, Conservative Default In Washington

    Stockman on amazon,
    Last night Amazon reported a whopping 41% plunge in free cash flow for the March 2018 LTM period compared to prior year. Yet it was promptly rewarded by a $50 billion surge in market cap"
    "A year ago Amazon's market cap towered at $425 billion---meaning that it was being valued at a downright frisky 47X free cash flow. But fast forward a year and we get $780 billion in the market cap column this morning and 146X for the free cash flow multiple."
    "Already at the crack of dawn SunTrust was out with a $1900 price target---meaning an implied market cap of $970 billion and 180X on the free cash flow multiple."
    "Fully 96% of Amazon's $5.0 billion of LTM operating income was accounted for by its cloud services business (AWS).

    The e-Commerce juggernaut, by contrast, posted just $188 million of LTM operating income, which am0unts to, well, 0.1% of sales on a computational basis."
    "meaning that there is $300 billion or even more of bottled air lodged in the implied $580 billion value of e-Commerce. "
    GOOD article.
    Contra Corner » Jumping The Great White Shark Of Bubble Finance
    Keep in mind that the $300 billion in bottled air will eventually escape. Just the same, the pundits are forecasting hyperinflation. The upper loop has already been hyperinflated. THAT is where the air will leak out.

    "But what happens when the economic pie is no longer expanding, yet the keepers of the system seem unable to turn off their own desires to grab more, more and yet more from that same pie?

    That is where we find ourselves today. The economic oxygen is being sucked from the middle and lower classes and the social and political pressures are building"
    "As we progress from here, the disparity between the haves and have-nots is only going to intensify, with debt (and our debt-based money system) being used as the primary weapon for controlling an increasingly dispossessed public."
    https://www.peakprosperity.com/blog/...ire-approaches

    "The ultimate goal of the new world order as an ideology is total centralization of economic and governmental power into the hands of a select and unaccountable bureaucracy made up of international financiers. This is governance according the the dictates of Plato’s Republic; a delusional fantasy world in which benevolent philosopher kings, supposedly smarter and more objective than the rest of us, rule from on high with scientific precision and wisdom. It is a world where administrators become gods."
    How The Globalism Con Game Leads To A 'New World Order'

    A pretty good article on currency wars, http://aheadoftheherd.com/Newsletter...-has-begun.pdf
    Here is an EXCELLENT collection of the best charts in recent history. The sixth chart down shows a pretty good rise in wages.
    https://www.marketwatch.com/story/th...ors-2018-04-26
    BUT, wages have been static to falling. How do we account for that?
    "From 1978 to 2013, CEO compensation, inflation-adjusted, increased 937 percent, a rise more than double stock market growth and substantially greater than the painfully slow 10.2 percent growth in a typical worker’s compensation over the same period."
    So, you can discount the wages for the average productive worker.

    Peter Schiff, the perma-bear, https://www.rt.com/business/425291-p...-fed-mr-magoo/
    'If trade stops, war starts,' warns Alibaba founder Jack Ma
    Russia built a pipeline around the Ukraine because they were stealing gas. They are pissed off. https://www.rt.com/business/425191-r...nsit-conflict/
    "I think the chances the U.S. experiences an imperial collapse similar to that of the USSR (or like any historically unmanageable and corrupt empire) has become increasingly likely. My view at this point is the U.S. and its global power position will be so dramatically altered in the years ahead, it’ll be almost unrecognizable by 2025, as a result of both economic decline and major geopolitical mistakes. "
    https://russia-insider.com/en/russia...part-2/ri23252

    Leave a comment:


  • Danny B
    replied
    Pox Americana,,, a lawless mad dog

    France’s President Macron Says He Wants to Build “The New Syria” Together with the US
    More Trump BS Exposed - US To Expand Military Presence In Syria – Mattis

    Pox Americana and the deep State have made it very clear that they have zero respect for ANY law anywhere in the world.
    Israeli Defence Minister Moshe Dayan: “Israel must be like a mad dog, too dangerous to bother.”
    THIS is the mentality that the rest of the world must face. America is not far from a credit collapse. I expect that the rest of the world will help us along. Strauss & Howe wrote Generational Turnings. America is in the fourth turning. Russia and China are NOT. They are expanding and growing. America has 15 times the debt per capita as Russia. America has 10 times the GOV debt that Russia has.
    Russia is by far the richest country in the world in natural resources, priced $75 trillion, much higher than the second place US with $45 trillion.

    China is doing some things right. Neither of these 2 States is cursed under the control of bankers and zionists. Even little North Korea has something going for it.
    Privately-held SRE Minerals on Wednesday announced the discovery in North Korea of what is believed to be the largest deposit of rare earth elements anywhere in the world. About $ 10 trillion.
    The West will fall very hard. The East Will muddle through because they do NOT focus on supporting the upper loop at the expense of the lower loop.
    Our refusal to leave Syria, no matter what the circumstances, will make it very clear to the R.O.W. that Pox Americana must be starved out if the world is to see peace.
    The Top-Secret Cold War Plan to Keep Soviet Hands Off Middle Eastern Oil
    Well, now they have all the oil and, we don't.

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