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  #1081  
Old 11-03-2015, 04:13 PM
Danny B Danny B is offline
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Cash pulled out,,, debt created to cover the hole

Canada is a resource economy and resources are crashing. Consequently, the money is leaving Canada. Forget China: This Extremely "Developed" Country Just Suffered Its Biggest Money Outflow Ever | Zero Hedge
Stockman says to end the FED's money creation ability. Seems strange because private banks create most of the money. End The Fed’s Money Monopoly–The Only Escape From Monetary Central Planning & The Wall Street Casino | David Stockman's Contra Corner
China seems to be losing control. "Did Something Just Snap In China: Total SOE Debt Rises By $1 Trillion In One Month"
Did Something Just Snap In China: Total SOE Debt Rises By $1 Trillion In One Month | Zero Hedge
"Every year, China is now adding $2.5 trillion of private sector debt to a $9.7 trillion GDP." Why does that sound like a BAD idea? China's "Minsky Moment" Is Here, Morgan Stanley Finds | Zero Hedge
The banking industry just gets more and more concentrated in fewer hands. Considering just how big it has gotten, the meltdown / explosion will probably be heard on Pluto. https://hendersonlefthook.wordpress....en-of-banking/
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  #1082  
Old 11-03-2015, 05:41 PM
wayne.ct wayne.ct is offline
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Centralized Banking, etc.

If you care to examine what is going on along with the hows and whys, perhaps you will see what I see. There seems to be a pendulum or wave phenomenon in which power becomes centralized on the one hand and then swings back toward a decentralized paradigm over time and in various contexts.

In the recent past the US Dollar formed a 'centralized' common reference point in the global economy, not just in the US. Even though individual countries had their "own" currencies and individual banks had their own depositors, creditors and stockholders, etc, there was this "central" factor. This was, of course, the reserve currency, the USD.

The pendulum is swinging the other way. The central planners are resisting this with counter force. I think this is more than a mere change from one reserve currency to another. I think we are headed for economic hard times.

Now, regarding Iceland, the article about Iceland says they are putting the money printing authority in the hands of a central bank. Really? I guess they have not really learned anything. Or, perhaps, the central banker types have been hard at work behind the scenes to get what they really want and have deceived the people of Iceland, again.

There really is, in my view, a psychology to this and until more people understand this stuff, they will continue to get manipulated and controlled by powerful people with their own selfish interests.
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  #1083  
Old 11-06-2015, 04:50 AM
Danny B Danny B is offline
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Falling wages,,, falling economy

After WW II, America built a high-wage, high-price economy by having a lock on manufacturing. By about 1970, we lost that lock and it has been a downhill slide ever since then. It stands to reason. We are in a transition period where we still have high prices even though aggregate labor income has crashed through the basement.
#17 There are 7.9 million working age Americans that are “officially unemployed” right now and another 94.7 million working age Americans that are considered to be “not in the labor force”. When you add those two numbers together, you get a grand total of 102.6 million working age Americans that do not have a job right now.
21 Facts About The Explosive Growth Of Poverty In America That Will Blow Your Mind
#16 There are simply not enough good jobs to go around anymore. It may be hard to believe, but 51 percent of all American workers make less than $30,000 a year.
So, 102.6 million not working. 10,000 people sign up for social security every day. So, not working,, not earning.
American industry was thrown into global competition.
Aluminum; When a 127-Year-Old U.S. Industry Collapses Under China's Weight - Bloomberg Business
Steel; https://www.washingtonpost.com/news/...ree-heres-why/
Oil; It's a gusher! Oil industry layoffs hit 6-month high: report - NY Daily News

America has crashed badly with globalism. The financial sector has tried to soldier on by printing lots of money. It would like to remain independent and detached from the pain of the working man. BUT, a 4 decade slide in wages is dragging down Wall St. Globalism chipped away at wages / purchasing power. Manufacturers had to get more efficient to deal with our falling wages. They did more outsourcing to lower the cost of their goods. This, of course, is a downward spiral. They resorted to ever-more mergers and trade agreements for more efficiency to try to meet our shrinking wages.
As industry, especially banking finds it ever-more difficult to make a profit, they exert ever-more control over GOV to get more favorable deals. The latest trade deals would gut all GOV regulation. We're sliding towards a global-mean wage and industry just can't make a profit no matter how many robots they buy. They take ever-more control of GOV as we slide into fascism. Big Pharma, especially, has BIG profits mandated by law. WE can't pay for their high-priced medicines so, GOV mandates that we must join up. We still can't pay so, GOV pays in our names and expects to charge it off to our children. Our children are not working.
Lacking their former levels of profit ( because we are lacking our former wages), industry (especially banking) pushed even harder for more State control of our wallets.
Jim Willie: Fascism & Gold | SilverDoctors.com
51% of Americans receive a check from GOV so, it's going to be difficult for us to Support both GOV and industry with our new-found poverty.
Oil used to be a guaranteed source of money for GOV, but, it has reversed and Big Oil is losing $ billions.
War industries used to be big money-makers but, things haven't gone so well lately. "In May 2003 Congressman Henry Waxman (D-CA) discovered that Halliburton subsidiary KBR had received a $425 million contract to rebuild Iraq in December 2001, a full year and a half before the war had even started. "
"All told Halliburton had received over $7 billion worth of contracts and the job of putting Iraq back together had barely even begun."
https://hendersonlefthook.wordpress....anking-on-war/ Raping a country for it's resources makes good business sense so, we do it a lot. That's over with now.

Russia has been super-effective in Syria. This has re-energised the Syrian army. China wants a piece of the action because they see it as a turkey shoot. They have plans in the MENA. With that much muscle in Syria, Iranian planes are bring in a volunteer battalion from Iraq. Hezbollah is happy to do the ground work and spare Russia the casualties. ISIS is getting their butts kicked so bad, they can't even use the weapons we send; https://www.youtube.com/watch?v=YwCKsPzanbg
Russia is going to blockade the coast, China will help. http://www.veteranstoday.com/2015/10...-syrian-coast/
Russia has brought in lots of missiles for hostile aircraft. There is WAY too much firepower in Syria for the Pentagram to even consider setting foot inside. The war-mongers are rabid. https://www.youtube.com/watch?v=mC7Fz0d9H8M
This decline contributes to a decline in other areas. Lots of States are dumping U.S. bonds. Many are in the process of rejecting the U.S. dollar.
All of this will help to bring back the gold standard. Because of Triffin's dilemma, any State that has the reserve currency will always over-print and crash. There is much talk about the SDR but, I don't think that it will fly.

Manufacturing has left. Steel has left, Aluminum, going. Lead gone. Oil leaving. http://www.reuters.com/article/2015/...Vu739ppkkMs.97
We're all going to have a lot of free time.
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  #1084  
Old 11-06-2015, 02:46 PM
Danny B Danny B is offline
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Banking,,, central banking losing credibility

" The share of households in the middle tier of income earners has fallen to 43% from 55% since the 1970s, according to The New York Times.
And those households in the middle tier haven't gotten a raise since 1999. "
As America's middle class collapses, no one is buying stuff anymore / Boing Boing
Earnings are sliding but, the banks don't want to slide with us. Through manipulation of everything under the sun (except wages), they have managed to keep going. The Central Banks are now running out of both "tools" and believers. The banks are slowly being pulled towards the black hole of insolvency. S&P Puts Too-Big-To-Fail US Banks On Ratings Downgrade Watch, Blames Fed | Zero Hedge

"Singer criticized the “obvious failure of monetary extremism” to grow the economy." You only grow the economy with more production AND more consumption. "Singer thinks these problems could reach the U.S. soon. If that happens, he’s worried about the government’s response.

They will not remain passive in the face of a renewed global recession and/or financial crisis... What policymakers will do, in all likelihood, is hope and pray, and when that fails, they will likely double down on monetary extremism."
Extremism seems to equate to money printing. The Council on Foreign Relations has called for sending everybody $ 80,000.
When the Cult of Central Banking Collapses… | Casey Research

The propaganda file;
"Due to the nature of modern money, it would technically be possible to adjust the way the monetary system works such that governments directly print all the money they need. If this change were made then there would be no requirement for the government to ever again borrow money or collect taxes. This would have an obvious benefit, because it would result in the dismantling of the massive government apparatus that has evolved to not only collect taxes but to monitor almost all financial transactions in an effort to ensure that tax collection is maximised. In other words, it would potentially result in greater freedom without the need to cut back on the ‘nanny-state services’ that so many people have come to rely on. So, why isn’t such a change under serious consideration?

The answer is that it would expose the true nature of modern money for all to see, leading to a collapse in demand for the official money."
GOV will never do anything like dismantling itself. The Hegelian dialectic calls for never ending growth of GOV until it controls everything. Communitarianism - Final Synthesis In Hegelian Dialectic
" leading to a collapse in demand for the official money" Blatant lie. The non-producers would demand even more of this free money. the producers would be a different story.
"One of the best historical examples of how taxation creates demand for money is the use of “tally sticks” in England from the 1100s through to the 1600s. In this case, essentially worthless pieces of wood were converted into valuable money by the fact that these pieces of wood could be used to pay taxes. Moreover, once taxation had created demand for the sticks, the government was able to fund itself by issuing additional sticks."
Gee whiz, this system only lasted for 500 years. What a failure. "essentially worthless pieces of wood " The sticks were notched to indicate their value as a receipt. Then the sticks were split in half lengthwise. Each person received his half of a receipt that could not be counterfeited or modified. Steven Saville Blog | Why governments can't just print the money they need | Talkmarkets
The article could have examined the pros and cons of GOV created money but, it is much easier to just spout propaganda.
We slide towards a global mean wage at the same time that we have a demographic crash. The upper loop of the economy where all the free money is circulating is in complete denial.
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  #1085  
Old 11-07-2015, 04:26 AM
Danny B Danny B is offline
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Employment way up,,, FED hike needed

In the simplest terms, ZIRP originally helped the banks. Later, it hurt them. ZIRP hurts hedge funds and insurance funds and retirement funds. ZIRP hurts savers and anyone who depends on interest-income. ZIRP helps corporate America to a certain extent. They are taking on a LOT of debt because money is so cheap. ZIRP is now hurting the big banks and they have been down-graded. They must be REALLY bad for S&P to publicly downgrade them. To a great extent, ZIRP is locked into the system because there are hundreds of $ trillions in interest rate swaps. Corporate America is in bad shape and only 3 companies have AAA rated credit. The lack of earnings is hurting corporate America. The crash of interest-earnings-income has driven many consumers to cut way back.

The FED is NOT independent. It has no army and is under the thumb of the district of corruption. Their balance sheet is up above $ 4 trillion. They take all their orders from the kleptocrats. They print to fund runaway socialism in D.C.
Forbes Welcome
Originally, the FED collected interest on the money it created. They now reimburse this money back to Washington.
The FED is printing with a knife at their throat. ZIRP was supposed to last no longer than 6 months. The big banks have been downgraded and the FED is desperate to save them with a rate hike.
Currently, they are talking up a storm about how good employment is and the need for a December rate hike.
Employment; Goldman Sachs, "just yesterday hiked its forecast from 175K to 190K" A LOT of people see that thy are not prepared for retirement and are trying to build up savings,,, or just stay out of the poorhouse "As the chart below shows, in October the age group that accounted for virtually all total job gains was workers aged 55 and over. They added some 378K jobs in the past month, representing virtually the entire increase in payrolls. And more troubling: workers aged 25-54 actually declined by 35,000, with males in this age group tumbling by 119,000!"
" workers aged 55 and older have gained over 7.5 million jobs in the past 8 years, workers aged 55 and under, have lost a cumulative total of 4.6 million jobs."
The Most Surprising Thing About Today's Jobs Report | Zero Hedge
The FED is desperate to "spin" a good jobs report so that they have an excuse to raise rates.
11/06 'Off the charts' jobs report pushes rate hike odds 'way up' – MarketWatch RIGHT, off the charts and out of the truth zone" ADP Report Latest Sign of Cooling Job Market
"The jobs report released Wednesday doesn't bode well for Friday's official government data release." NOT to worry, GOV jimmied the numbers.
"102.6 million working age Americans that do not have a job right now." They jimmy the numbers and fools believe it. ANY excuse for a rate hike to save the banks.
11/06 Stocks and gold turn lower after big jobs beat; dollar flies – Seeking Alpha
Vid, https://www.youtube.com/watch?v=NyxyRK39N4o
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  #1086  
Old 11-08-2015, 03:15 AM
Danny B Danny B is offline
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I've written something over 1,000 posts. My profile page; "This page has had 3,030 visits ". How many of you are spooks,, raise your hands.
This post is on the collapse of federal GOV,,, followed by the rest of GOV. I hope that the spooks take due notice that their gravy train is coming to an end.
Martin Armstrong was a professor at Princeton. He and his program, Socrates seem to have all of history at his (their) fingertips. I try to extract a few important points from my source documents and let you do the amount of reading that is necessary for complete understanding. The more that you read, (hopefully), the more corroboration, logic and understanding will come out of the exercise.
Armstrong; "The question how do empires die is absolutely critical to surviving the Sovereign Debt Crisis."
"Empires do not die by HYPERINFLATION – that is reserved for the fringe. When an empire dies, it historically has ALWAYS been by DEFLATION/STAGFLATION. How? Real wealth is driven from the ABOVEGROUND economy into the UNDERGROUND economy where it is hoarded and tucked away. This is why we find hoards of Roman coins. This reduces the VELOCITY of money and commerce collapses. This is ALWAYS AND WITHOUT EXCEPTION how empires die. "
HOW DO Empires Die? | Armstrong Economics
It's a long article but, you can skip much of it. It is worth reading. The important point to take away is that commerce collapses.

Armstrong; "What Destroyed Rome was its Unfunded Government Employee Pensions" http://s3.amazonaws.com/armstrongeco...ons-051811.pdf
The article has EVERY detail that you could ask for.

Kotlikoff; "$205 Trillion in Unfunded Liabilities" $205 Trillion in Unfunded Liabilities - The Daily Reckoning

Grover Cleaveland; “At times like the present, when the evils of unsound finance threaten us, the speculator may anticipate a harvest gathered from the misfortune of others, the capitalist may protect himself by hoarding or may even find profit in the fluctuations of values; but the wage earner – the first to be injured by a depreciated currency – is practically defenseless. He relies for work upon the ventures of confident and contented capital. This failing him, his condition is without alleviation, for he can neither prey on the misfortunes of others nor hoard his labour.”

Armstrong; "the two words POLITICAL ECONOMY should have been divorced the moment they met. Just as we have SEPARATION OF CHURCH AND STATE to ensure freedom of religion, we now need SEPARATION OF ECONOMICS FROM POLITICS just to survive. This is just NOT working!
"This cycle marks the peak in government as an employer and we call them PUBLIC SERVANTS because they produce nothing to expand the wealth of the nation, but live off of those who do produce like a parasite;the larger the government role in employment, the lower the economic growth. That is precisely the problem in Greece"
http://s3.amazonaws.com/armstrongeco...ots-091311.pdf
This is what happens when you put the parasite in charge.

Charles Hugh Smith, " Life Cycle of a Bureaucracy" This is an EXCELLENT read. Of Two Minds - When Collapse Is Cheaper and More Effective Than Reform
Jim Willie, "“I’m concerned about the period of time between the dollar collapse and the new system. I’m told its going to be a 4-10 month period of CHAOS…” http://www.silverdoctors.com/jim-wil...se/#more-58656

This is an excellent article on the balance between capitalism, socialism and free markets; http://economyandmarkets.com/economy...s-of-our-time/

All Governments eventually default. All GOV makes promises for the future to get votes. It always becomes too expensive. 51% of Americans receive a check from GOV. California by it's own CAFR report has extracted an extra $ 8 trillion in taxes. Georg Wilhelm Friedrich Hegel wrote that GOV should collect enough taxes so that it would gradually be able to afford to have everybody working for GOV. That way, nobody would disapprove of the high taxes. GOV would eventually absorb and control everything.
But, GOV is a parasite. The Cold War was just a jobs program. it didn't create any wealth,, just shuffled it around. GOV is just a consumer, NOT a producer.
A viable loan must be to an entity that will produce enough wealth to repay the loan. A loan taken out just for consumption can't be paid back. That is why GOV always defaults.
So, WHO IS HOLDING THE BAG?
"Martin: Absolutely nothing. And if you really look carefully, the issues that created the problem which was the derivative CDSs, they still didn’t regulate. So they regulate everything else around it, but they just don’t do whatever is right at that point in time."
"The only thing we do know is that 40% of the interest that is on our national debt goes out to foreigners. So, the old economic theories where fixed exchange rates system and all these things after World War II, it just does not exist anymore. And we really have to sit down and revise the entire world monetary system because nobody knows what they are doing."
"If you add up the interest expenditure between 1986 and 2006, you’ll see that 80% of the increase in the national debt was all interest. So, we are not getting anything for this. Forty percent of that money is going out of the country. So, it’s just astonishing to me that you can cut every program you want, but the national debt is off the table. You cannot negotiate it. You cannot – I mean, we have to create a new monetary system. We just have to do so. The debt is going to take over absolutely everything "
If you look at the amount of interest that we are paying that is leaving this country, it is far more than what we are losing in trade.

"All of the yelling and screaming that they did over the derivatives but they still did not – they still did not regulate them. They still did not stop the CDSs from being issued. They did nothing. They regulated other things, and added more agencies and more government jobs, but they actually did not do anything to prevent what was happening. And to tell you the truth the reason they will not do so is because the banks that they were looking at are primary dealers. A Primary dealer is the one that settles the government debt for them. So, they are never going to charge criminally any of those banks because they have become kind of like the financial crack dealer. They are not going to give them up."

Ah, but the primary dealers just got downgraded. All Governments eventually default. The FED is holding a HUGE part of GOV debt. The FED gave the banks something like $ 2.7 trillion in excess reserves and pays some interest on them. How bad is the situation if they have been downgraded when GOV is trying to pump up confidence? in addition to the $4 trillion that the FED claims that it is holding, it is printing of tons of pixels to rescue crashing energy hedges and derivatives. The poor get screwed but, it is the rich who are holding the bag.
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  #1087  
Old 11-08-2015, 04:13 AM
Danny B Danny B is offline
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Tyler Durden and helicopter money

Tyler Durden at Zero Hedge is always years ahead of whatever is coming along in the financial world.
Back in early 2009, just around the time the Fed announced it would unleash QE1, we warned that any attempt to reflate the debt (a pathway which ultimately leads to hyperinflation as monetary paradrops are the only logical outcome as a result of the deflationary failure of the intermediate steps) would fail, and instead would saddle the world with even more debt, making monetary financing, i.e., paradropping money, the inevitable outcome.

We said that instead, the right move would be to liquidate the excess debt, and start anew - a step which, however, would wipe out trillions in (underwater) equity, something which the status quo would never agree to, as that is where the bulk of its wealth is contained.

7 years later, debt is well over $200 trillion, having risen by more than $60 trillion in the interim, and we are rapidly approaching the peak of the world's debt capacity as we noted a month ago in "The World Hits Its Credit Limit, And The Debt Market Is Starting To Realize That."

Today, we find that none other than Adair Turner, a member of the Bank of England's Financial Policy Committee and a Chairman of the Financial Services Authority, wrote a long essay in Bloomberg which admits everything we have warned about.
Equity value had to be preserved no matter how much employment crashed.
"More important, national incomes and living standards in many countries are 10 percent or more below where they could have been, and are likely to remain there in perpetuity. " Yep, that is what happens when you slide to a global wage at the same time that everything is automated.
"Almost any economics or finance textbook will describe how banks take money from savers and lend it to borrowers" Pure BS but, go on.
"Advanced economies' public debt on average increased by 34 percent of GDP between 2007 and 2014. More important, national incomes and living standards in many countries are 10 percent or more below where they could have been, and are likely to remain there in perpetuity.

The fundamental problem is that modern financial systems inevitably create debt in excessive quantities. The debt they create doesn't finance new capital investment but the purchase of existing assets, It doesn't finance new capital investment because nobody has wages to buy the products of capitalism. The investors know that we are broke.

At the core of financial instability in modern economies lies this interaction between the infinite capacity of banks to create new credit, money and purchasing power, and the scarce supply of urban land. Self-reinforcing cycles of boom and bust are the inevitable result" No mention whatsoever of crashing wages.
"We seem to need credit to grow faster than GDP to keep economies growing at a reasonable rate," So, credit will keep the economy growing even as wages crash,,,, on what planet?
" the deflation risk is fuelling fears the global economy could be fast stuck into a deep low-growth mire." Maybe the crash of the core population has something to do with low growth.
A Stunning Admission From A BOE Central Banker: This Is What The Coming "Helicopter Money" Will Look Like | Zero Hedge
“Consider for example a tax cut for households and businesses that is explicitly coupled with incremental Bank of Japan purchases of government debt – so that the tax cut is in effect financed by money creation”
Bloody marvellous idea. 102 million Americans of working age not in the labor force and you're going to give them a tax cut. What about the 51% of Americans who already receive a check from GOV.
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Last edited by Danny B; 11-08-2015 at 05:34 PM. Reason: forgot the link
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  #1088  
Old 11-08-2015, 06:48 PM
Danny B Danny B is offline
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Borrowing to survive

Wages and earning power are crashing but, "Consumer Borrowing in U.S. Rose at Faster Pace in September" "The $28.9 billion jump in total credit followed a $16 billion gain in the previous month, Federal Reserve figures showed Friday"
"lending for auto purchases and bigger credit-card balances." GREAT, bump up my limit on my card and I will be your friend forever.
Consumer Borrowing in U.S. Rose at Faster Pace in September - Bloomberg Business
Anthony Wile writes about the coming collapse. The Daily Bell - The Inevitable Collapse of the World's Economic System – It's Coming
He makes a common mistake / omission. If you are going to plan for a collapse of credit and GOV, there is one, basic first step. Do a mental exercise. If the banks closed tomorrow, what would you do? THAT is what most people will do. Make your plans accordingly.
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  #1089  
Old 11-10-2015, 05:11 AM
Danny B Danny B is offline
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Creeping socialism,,, creeping automation

Socialism requires a command economy but, a command economy has never worked. The more that the PTB push for a centralized economy, the more things go wrong.
Jim Grant;"We are in a regime of price administration. Price control is a policy that has failed for millennia. " " We are under the governance of former tenured economics professors who think they know more than they could possibly know."
"The 2008 Crisis Didn't Come From Nowhere," Jim Grant Slams The Fed's Utopian World Of "Economic Sleepwalking" | Zero Hedge
As if it wasn't bad enough with economics professors running the show, We have idiot lawyers too.
"Then the central banks have the bonds, which they could never sell again, and as debt rises, the central banks go belly up. Honestly, this is what we deserve for electing lawyers who think they can just write a law and make the impossible happen."
Armstrong also has a very good explanation for the 3 types of inflation;
"If we follow the logic here, QE is supposed to “stimulate” the economy by reinventing inflation. But does this only create cost-push inflation or asset/currency-inflation rather than demand-inflation that marks economic growth? The first two forms of inflation reduce the living standard as net disposable income shrinks. Demand inflation requires confidence as people invest expecting to make more in a boom, not punishment. This type of stimulus will widen the gap the socialists talk about between rich and poor for it will only create asset inflation. So it is hard to follow the logic that QE alone, while hunting money for taxation, will have any stimulus impact other than eroding the economic base."
Quantitative Easing & the Illogical Conclusion | Armstrong Economics
OK, so QE erodes the economic base. Ending QE wipes out almost everything. 1/2 the pundits are convinced that the FED will raise rates. 1/2 the pundits are sure that they won't. The economists have been seriously wrong every time for the last 5 years so, it is anybody's guess. Either path is destructive.
The FED is stuck with $ trillions in bonds that it can never sell. I suppose that U.S. GOV will default to the FED when times get tight.
When speaking about price inflation, you must recognize the difference between the 3 types. Demand inflation is when prices go up because the economy is honestly growing. There is no possibility of demand inflation when wages are falling. So, all price inflation that we see is spill-over from money supply inflation.
One write claims that GOV will try very hard to juice the economy for the upcoming election year. They are out of bullets AND juice. «Welcome to the first global recession created by central banks» | International Selection | Finanz und Wirtschaft

OK, that is a summation of the good news. The bad news is; after we crash, we will never escape.
Robots Will Change World Beyond Recognition Says BoA
The Telegraph comments on the viewpoint of Bank of America in Robots May Shatter the Global Economic Order Within a Decade.
"Robots will take over 45pc of all jobs in manufacturing and shave $9 trillion off labour costs within a decade, leaving great swathes of the global society on the historical scrap heap." Shaving $ 9 trillion off labor costs is also shaving $ 9 trillion off of wages.
"In a sweeping 300-page report, Bank of America predicts that robots and other forms of artificial intelligence will transform the world beyond recognition as soon as 2025, shattering old business models in a whirlwind of “creative disruption”, with transformation effects ultimately amounting to $30 trillion or more each year."
"We are coming close to the crucial “inflexion point” when it is 15pc cheaper to use a robot than to employ a human worker."
"The social effect is to squeeze out those at the bottom of the employment ladder, rendering them almost unemployable without re-education. Bank of America describes this as the “displacement of human labour”, estimating that almost half of US jobs could be at risk."
What if they are too stupid to educate? Re-educate for what. We just don't need them in the labor force.
"Productivity will soar but wages will not rise at the same pace, if at all. The owners of capital will take an even bigger slice of global income, pushing inequality to yet greater extremes. Labour’s share of the pie peaked at 65pc in 1975 in the rich countries and has already dropped to 58pc."
Right, capital will take a bigger share. No it won't. Lacking wages, there won't be any buyers.
"not to mention the 800m illiterates in the world. It is easy to imagine the explosive political consequences if governments fail to take action to mitigate the effects," How do you mitigate stupidity?
"We may achieve the dream of prosperity without toil as robots take over, but find ourselves living in a jobless dystopia."
"The higher the wage inflation, the greater the incentive to replace workers with robots."
Read more at Mish's Global Economic Trend Analysis: Robots Will Change World Beyond Recognition Says BoA; Automation Will Change Jobs More Than Kill Them Says McKinsey
MANY politicians see socialism as the only cure for runaway automation. The mass murderer (vaccinator ) Bill Gates says that only socialism can stop global warming. http://i100.independent.co.uk/articl...e--b1xNpbL8O_x

Mother Nature always allows "superior" species to overtake "inferior" species. What if the superior species is a robot?
Labor's share of income continues to drop. if capital owns all the robots, the income from the labor of the robots will accrue to them. Capital just grows and grows. Aggregate human wages just continue to shrink. IT'S ALREADY HAPPENING. Manufacturing and capital are pushing things like the TPP and the TTIP. This would give all control of commerce to supra-national companies and take it away from GOV. They can't make a profit because our wages are shrinking. They count on more control to make up for lost earnings.
Do you think that they will drive UP wages? ALL the Western trade agreements are attempts to lower costs to meet lower consumptive power. Capital is hard at work trying to create price deflation. If they accomplish this by creating wage deflation (aggregate), it will be a zero-sum game.
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Old 11-11-2015, 03:49 AM
Danny B Danny B is offline
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Running out of momentum,,, slamming it into reverse

102.6 million of working age not employed. This reduces GDP. Armstrong; "If you look at the amount of interest that we are paying that is leaving this country, it is far more than what we are losing in trade. " " 80% of the increase in the national debt was all interest."
This debt repayment has to be squeezed out of the GDP. Eric Sprott says that there just isn't enough GDP to service the debt; https://www.youtube.com/watch?v=C58jGfVcplg
Then, there is the problem of various States redeeming their U.S. Treasury paper. The FED is fully controlled by the district of corruption. The FED is printing to rescue $ trillions in collapsing derivatives. The FED is as busy as a one-legged man at and A$$-kicking contest.
The primary dealers are the banks that sell and redeem GOV debt. They were recently downgraded AND they are selling off corporate bonds to raise cash. Maybe business isn't so good. Maybe, nobody is buying U.S debt.

The financial system operates at maximum leverage to get maximum return. Everything is fine as long as the shifter doesn't get thrown into reverse while humming down the road. When the private sector crashed into a low-wage competitor, things were crammed into reverse. The upper loop of the economy where the free money lives tried to party on. They grew the money supply for themselves but, NOT for the lower loop. This eventually cut back consumption in the lower loop. Lack of consumption bumped into productivity. This, in turn, bumped into earnings.
This caused the money-magic to go into reverse. Imagine driving your car at 60 MPH in reverse. You are going to bump into a LOT of obstacles.
The tally of damaged obstacles is rising.
18 Numbers That Scream That A Crippling Global Recession Has Arrived
Every contraction is an "opportunity" for a default. Every default is an opportunity of a cascade.
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Old 11-12-2015, 04:05 AM
Danny B Danny B is offline
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Defaults, small, large and gargantuan

Well, the important events are just coming faster and faster. China is the nexus at the moment.
The Chinese banks are crashing but, they just got a $ 400 billion margin call.
https://finance.yahoo.com/news/too-b...124857291.html
U.S. banks have loads of exposure to risky trades; U.S. banks said to hold $10 trillion of 'risky' trades | Gold Anti-Trust Action Committee
Corporate debt has gone up quite a bit, "As Net Leverage Soars 15% Above Its 2008 Peak" It's Not The Record High Debt That Is The Biggest Risk, It's This | Zero Hedge
So, global trade has collapsed. This might start a few defaults. We Have Never Seen Global Trade Collapse This Dramatically Outside Of A Major Recession. So Buckle Your Seat Belts Boys And Girls, Because We Are Definitely In For A Bumpy Ride.
Student loan debt is higher that what RE subprime was in the 2008 crash; http://www.gordontlong.com/Articles/...Auto_Abyss.pdf It has a very high default rate. Students even have their very own debt clock, http://schiffgold.com/commentaries/w...ime-bomb-tick/
Car loans and over productivity are on the rise, http://www.gordontlong.com/Articles/...Auto_Abyss.pdf
This is all building up to a default crescendo. http://wolfstreet.com/2015/11/10/wer...in-us-history/

Greece isn’t receiving the funds that it needs. Part of Spain voted to split. Portugal has pissed off the ECB by actually trying to have a democracy. The dictators in Belgium want 100% control. http://www.zerohedge.com/news/2015-1...row-government
It has been long known that the U.S. dollar carry-trade would eventually go into reverse. As the dollar grows stronger, it is ever more difficult to service dollar-debt when your earnings are in your local currency that is getting weaker.
11/10 EM exodus: emerging economies see half trillion in capital flight – Zero Hedge
It has long been planned for a restructuring of emerging market debt when things go bad. The common term is "restructuring".
Greece proved pretty well that restructuring just doesn’t work. DEFAULT will be the operative word. Default will take down all the banks.
https://www.bullionstar.com/blogs/ko...restructuring/
The rating agency S&P took a momentous step when it downgraded the big banks. Now, Moodys rating service has something to say; 11/10 Moody’s warns of global shockwaves – City AM
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Old 11-13-2015, 04:23 AM
Danny B Danny B is offline
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The catwalk for detfault.

That 1/2 $ trillion threatens to become $9 trillion. The US Dollar Bull Market Could Trigger a $9 Trillion Debt Implosion | Zero Hedge
Peak oil (demand) 11/12 Stocks hammered again by oil selloff, rate worries – The Street
Peak oil (storage), Something Very Strange Is Taking Place Off The Coast Of Galveston, TX | Zero Hedge

Well, Greece is stuffed; Greece Comes to a Standstill as Unions Turn Against Tsipras - Bloomberg Business
Portugal is going crazy and Spain wants to split BUT, somehow, Finland is the sick man of Europe; 'Sick man of Europe' Finland agonises over austerity | Reuters

Venezuela is currently the sick man of S. America.
Venezuela Default Countdown Begins: After Selling Billions In Gold, Caracas Raids $467 Million In IMF Reserves | Zero Hedge
Puerto Rico is close to the edge; http://www.bloomberg.com/news/articl...out-of-options
So the defaults are on the way. When and who?
Four US Firms With $4.8 Billion In Debt Warned This Week They May Default Any Minute
http://www.zerohedge.com/news/2015-1...w-capital-here
The defaults are starting to pick up in China. http://www.zerohedge.com/news/2015-1...-more-defaults Who knows when the contagion will explode?
The banks are in deep do-do but, the bet is that they are in better shape than GOV; http://www.bloombergview.com/article...vatives-market
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Old 11-13-2015, 03:12 PM
Danny B Danny B is offline
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Default and repudiate, the careless lender gets what he deserves

Andy Hoffman has been writing about the unwind for years. " “Economic Mother Nature” is on the verge of taking her revenge on the manipulators that sought to usurp her immutable laws with money printing, market manipulation, and propaganda"
Energy is the largest cash generator and it is crashing worldwide. This, in turn, brings down everything else. "Horrible Headlines" Go Parabolic, "Economic Mother Nature" Nears All-Out Victory | SilverSeek.com

Here is a good article that covers a lot of ground; "The world’s most prestigious financial institution, known as the “Central Banks’ Central Bank” – the Bank for International Settlements – warned in 2008 that bailing out the big banks would create sovereign debt crises, transferring the banks’ problems to their host nations. That’s exactly what’s happened.

Last year, the head of the Bank for International Settlements said that things have gotten worse:

The world economy is just as vulnerable to a financial crisis as it was in 2007, with the added danger that debt ratios are now far higher and emerging markets have been drawn into the fire as well, the Bank for International Settlements has warned.

A study of 124 banking crises by the International Monetary Fund found that propping up banks which are only pretending to be solvent – instead of forcing them to write off their bad debt – typically shreds the nation’s economy:"
"And contrary to another mainstream myth, military spending is HORRIBLE for the economy … especially in the long-term."
"On a global level, growth is being steadily drowned under a rising tide of debt, threatening renewed financial crisis, a continued squeeze to living standards, and eventual mass default."
Yep, mass default is on the way.
"In other words, the bigger the bubble, the bigger the bust. And given that the enormous super-bubble of debt may be about to burst, the world’s skyrocketing might not look very smart in the coming years."
"Indeed, an economics professor who bases his analysis on computer models says we’ll have “a never-ending depression unless we repudiate the debt, which never should have been extended in the first place”."
Yep, call it repudiate or call it default.

"Top economists say that Iceland did it right … and everyone else is doing it wrong. Here’s why:

Arni Pall Arnason, 44, Iceland’s minister of economic affairs, says the decision to make debt holders [i.e. the people to whom the debts are owed … mainly bondholders] share the pain saved the country’s future.

Even the IMF points to Iceland as a model for debt write-offs as a way out of its economic slump.

Postscript: Debt-forgiveness was historically considered the cornerstone of both religion and liberty."
Shocking, Little-Known Facts About Debt. Private Debt Exploding | Global Research - Centre for Research on Globalization
When GOV passed out free money, it was bound to go into bad investments. The natural credit system would have financed good investments. When banks were allowed to sell their loans on the secondary market, they were bound to relax lending standards. The legal system mandates that the borrower must pay for ill-advised borrowing. But, human nature is always present in a transaction. Mother Nature is going to have a say in all of this.
Previously, the irresponsible borrower was flogged and suffered losses. What about irresponsible lenders? The upcoming worldwide crash of defaults is going to be a stern reminder that the lender must be mindful of risk too.
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Old 11-15-2015, 03:55 AM
Danny B Danny B is offline
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God is mad at the FED

"in the words of the Old Testament “ the use of false weights and measures is the greatest abomination in the eyes of the Lord ”.(King James Version ,Wycliffe translation,Proverbs,XX10.)
Professor Fekete argues that Real Gold Bills are the only way to rescue / revive international trade. The guy is really smart.
http://www.professorfekete.com/artic...EFOctandor.pdf
Professor Antal E. Fekete - Articles
Honduras is now making the news; Get Ready For Crazy | Zero Hedge
The B.I.S. says that the FED is a bunch of bozos;
Indeed, one the Fed’s core tools – quantitative easing – which is aimed at boosting inflation, may actually CAUSE deflation.

Another core tool – creating a “wealth effect” – actually HARMS the broader economy in the long run.
Federal Reserve Admits It Has NO IDEA What It's Doing Washington's Blog

"Let’s say an individual has saved $100,000 in cash. He keeps the money in the bank, which pays him less than 1% interest. Rather than earn this low rate, he decides to loan the cash to an individual who wants to buy a rental home at 4% interest."
"The bank, on the other hand, can perform magic with the $100,000 they obtain from the central bank. The bank can issue 19 times this amount in new loans—in effect, creating $1,900,000 in new money out of thin air."
"If the reserve requirement is 5%, the bank can issue $1,900,000 in new loans based on the $100,000 in cash"
"Imagine if we each had a relatively modest $1 million line of credit at 0.25% interest from a central bank that we could use to issue loans of $19 million. Let’s say we issued $19 million in home loans at an annual interest rate of 4%. The gross revenue (before expenses) of our leveraged $1 million would be $760,000 annually –let’s assume we net $600,000 per year after annual expenses of $160,000. (Recall that the interest due on the $1 million line of credit is a paltry $2,500 annually).

Median income for workers in the U.S. is around $30,000 annually. Thus a modest $1 million line of credit at 0.25% interest from the central bank would enable us to net 20 years of a typical worker’s earnings every single year."
If We Don't Change the Way Money Is Created and Distributed, Rising Inequality Will Trigger Social Disorder Washington's Blog
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Old 11-15-2015, 04:14 AM
Danny B Danny B is offline
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Working harder and earning less

"U.S. -- a vast majority of working Americans -- saw no gains in their wages between 2000 and 2012. At the same time their productivity increased nearly 25 percent."
"While wage stagnation is not new -- a median U.S. wage earner has seen a 5 percent growth in wages between 1979 and 2012 while boosting productivity nearly 75 percent"
America Workers Are More Productive, But Their Wages Are Flat, And In Some Cases, Lower

Increase in real value of the minimum wage since 1990: 21%
Increase in cost of living since 1990: 67%
One year's earnings at the minimum wage: $15,080
Income required for a single worker to have real economic security: $30,000
Productivity has surged, but income and wages have stagnated for most Americans. If the median household income had kept pace with the economy since 1970, it would now be nearly $92,000, not $50,000.
Overworked America: 12 Charts That Will Make Your Blood Boil | Mother Jones
"From 1973 to 2014, American worker productivity increased 72.2 percent while median worker compensation rose just 8.7 percent. From 1948 to 1973, by contrast, typical worker compensation and productivity grew at roughly the same rate."
This chart shows a clear divergence right about 1973, just after we went off the gold standard completely. http://www.epi.org/files/91664-figA-body.png
Post WW II, America had a lock on manufacturing. By about 1970, the rest of the world had rebuilt their factories and we had a lot of new competition.
It's true that we are slipping towards a global-mean-wage BUT, 50% of the cost, on average, is for finance.
Socialism for the rich is really grinding us down.
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Old 11-15-2015, 06:59 PM
Danny B Danny B is offline
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Deflationary Ice age and papadrops of cash

Japan can print their own currency and they just keep creating more and more of it. Greece can not print and they just keep going farther and farther in the hole. All of you know who The Council on Foreign Relations is (CFR). The CFR just reported that austerity and debt restructuring just aren't working in Greece. They won't come out and say that massive default is in the winds. Macro and Markets » Greece’s Bailout Dead End

"Nomi Prins – Keynote Speaker Who Recently Addressed The Fed, IMF And World Bank, Warns “It’s All Coming To An End”
November 13, 2015

Today Nomi Prins, the keynote speaker who recently addressed the Federal Reserve, IMF and the World Bank, warned King World News “It’s all coming to an end.” Nomi Prins – Keynote Speaker Who Recently Addressed The Fed, IMF And World Bank, Warns “It’s All Coming To An End” | King World News Nuff said
"deflationary Ice Age" is upon the world" "There is, of course, one way to short circuit said Ice Age, and it involves paradropping money in an act of terminal fiat desperation (the outcome is always hyperinflation) " The CFR also endorses helicopter money.
YES, the dreaded hyperinflation BUT, the alternative is revolution.

A large State is un-natural and artificial. It must be held together by external forces when internal forces are inadequate. The internal forces are centered on mutual prosperity. That has left the room. The external force is ;fear of a common enemy. Why do you think that the CIA goes around murdering people at wedding parties along with general murder? They are trying to create as many enemies as possible. America needs the threat of external enemies to keep the masses from going their own way. The terror attacks will continue until morale improves.

Albert Edwards Explains Why The "Global Economy Will Be Thrown Into Chaos" | Zero Hedge

The cheerleaders for the Eurozone are getting more desperate to hold it together. EU Commissioner's Dire Warning: "The Only Alternative To Europe Is War" Short-sighted idiots.
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Old 11-15-2015, 07:26 PM
Danny B Danny B is offline
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Europe and war

It's often claimed that "all wars are banker wars". London was certainly the epicenter of banking decades ago. Many of the London bankers were jewish. Is there any connection? What does history say in retrospective? I'm posting quotes from the people in the "know", people who were there.

"Judea declares War on Germany." - Daily Express (March 24, 1934)

"Germany is the enemy of Judaism and must be pursued with deadly hatred. The goal of Judaism of today is: a merciless campaign against all German peoples and the complete destruction of the nation. We demand a complete blockade of trade, the importation of raw materials stopped, and retaliation towards every German, woman and child." - Jewish professor A. Kulischer (October, 1937).

"The fight against Germany has now been waged for months by every Jewish community, on every conference, in all labor unions and by every single Jew in the world. There are reasons for the assumption that our share in this fight is of general importance. We shall start a spiritual and material war of the whole world against Germany. Germany is striving to become once again a great nation, and to recover her lost territories as well as her colonies. But our Jewish interests call for the complete destruction of Germany..." - Valadimir Jabotinsky, in Mascha Rjetsch (January, 1934)

Winston Churchill: "We will force this war upon Hitler, if he wants it or not." - Winston Churchill (1936 broadcast)

"Germany becomes to powerful. We have to crush it." - Winston Churchill (November 1936 to US-General Robert E. Wood)
Now, we get close, it was economic competition.

"The war wasnt only about abolishing fascism, but to conquer sales markets. We could have, if we had intended so, prevented this war from breaking out without doing one shot, but we didn't want to." - Winston Churchill to Truman (Fultun, USA March 1946)

"Should Germany merchandise again in the next 50 years we have led this war (WW1) in vain." - Winston Churchill in Times (1919)

"Hitler and the German people didn't want this war. We didn't answer Hitlers various petitions for peace. Now we have to admit that he was right. Instead of a cooperation with Germany, which he had offered us, now stands the gigantic, imperialistic might of the Sovjets. I feel ashamed to see how the same intentions which we accused Hitler of now are pursued under a different name." - Sir Hartley Shawcross, British chief-accuser in Nuerenberg
Hitler made NUMEROUS attempts to try to avoid war. ALL of them were rebuffed by Anglo-Americans and French.

"We made a monster, a devil out of Hitler. Therefore we couldnt disavow it after the war. After all, we mobilized the masses against the devil himself. So we were forced to play our part in this diabolic scenario after the war. In no way we could have pointed out to our people that the war only was an economic preventive measure." - US foreign minister Baker (1992)

What about later on when understanding set in?
"Germanys unforgivable crime before WW2 was its attempt to loosen its economy out of the world trade system and to build up an own exchange system from which the world-finance couldnt profit anymore. ...We butchered the wrong pig." - Winston Churchill, The second World War (Bern, 1960)
Important Quotations For A Better Understanding Of WWII

"Lies come along first, and drag along the gullible. Truth limps in long afterwards, hanging on the arms of time.” - Balthazar Gracian


There is NO reason at all to have a war with Russia. The neocons are arming Germany to the teeth hoping that some provocation will appear. Other States in Europe are being loaded up with offensive arms. The basis of this is pipelines; Competing Gas Pipelines Are Fueling The Syrian War & Migrant Crisis | Zero Hedge
The new Russian cruise missiles show Europe that they do not have a missile shield. Hopefully, the epiphany that came to Churchill AFTER the war will come to European leaders BEFORE a planned war.
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Old 11-16-2015, 05:53 AM
Danny B Danny B is offline
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A change of guard

The FED jawbones the market and the market goes up. "Absent the performance on FOMC days, the stock market has gone nowhere in 17 years. "
What Hath The Fed Wrought? | Zero Hedge
Investors flee precious metals. They are fleeing ELECTRONIC precious metals. Investors Flee Precious Metals as ETF Outflows Top $1 Billion - Bloomberg Business
Meanwhile in China, "Roughly 21 tonnes, or 685,652 troy ounces of gold in .999 fine kilo bars, was withdrawn, net of a small deposit of 27,328 ounces, from the Brinks warehouse in Hong Kong yesterday."
Jesse's Café Américain: About 38% of All the Comex Gold in Hong Kong Left the Warehouses Yesterday
That would most likely be gold pulled from Hong Kong and taken to China.
This is an excellent article on the future of America; "The point of no return will pass once and for all sometime in 2016, and America’s elite will no longer be able to choose between the provisions of compromise and collapse. " Time Is Running Out For Pax Americana?s Apologists*|*Oriental Review
" However, the globalization of not only the world’s industry and trade (that was achieved by the end of the 19th century), but also global finance, caused the collapse of the American empire through a policy that was extremely dangerous and costly for the whole world. To put it bluntly, the United States could bury civilization under its own wreckage."
"America’s elite have been offered a “soft landing” that would preserve much of their influence and assets, while gradually adapting the system to better correspond to the present facts of life (bringing it into line with the available reserve of resources), "
"Up until 2015, America’s elite (or at least the ones who determine US policy) had been assured that they possessed sufficient financial, economic, military, and political strength to cripple the rest of the world, while still preserving Washington’s hegemony by depriving everyone, including (at the final stage) even the American people of any real political sovereignty or economic rights. "
You can see that the new Russian military systems counter the military strength of America,,, especially if we have to rely on turkeys like the F-35.
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Old 11-16-2015, 01:33 PM
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MonsieurM MonsieurM is offline
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Quote:
Originally Posted by Danny B View Post

A large State is un-natural and artificial. It must be held together by external forces when internal forces are inadequate. The internal forces are centered on mutual prosperity. That has left the room. The external force is ;fear of a common enemy. Why do you think that the CIA goes around murdering people at wedding parties along with general murder? They are trying to create as many enemies as possible. America needs the threat of external enemies to keep the masses from going their own way. The terror attacks will continue until morale improves. [/B]


The cheerleaders for the Eurozone are getting more desperate to hold it together. EU Commissioner's Dire Warning: "The Only Alternative To Europe Is War" Short-sighted idiots.
..... Dead on

Quote:
It is only necessary to make war with Five things; with the maladies of the body, the ignorances of the mind, with the passions of the body, with the seditions of the city and the discords of families.
--- Pythagoras
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Last edited by MonsieurM; 11-16-2015 at 01:39 PM.
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Old 11-16-2015, 09:32 PM
Danny B Danny B is offline
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Refi NOW,,, sucha deal

The biggest economic crime of all? The biggest economic crime is when international bankers lend the entire money supply of a nation at compound interest, placing the burden of providing national purchasing power upon home buyers and and home equity refinancers where the standard contracts stipulate front-loading of interest payments, so that when deflation from interest drain makes it impossible for households to pay their bills without refinancing to consolidate credit card debt etc. they refinance and in so doing forfeit 100 percent of the interest they have worked so hard for so long to to pay so they must start over paying full interest on principal that, that in many cases has not been paid down even one cent. Over 90 percent of people who refinance do not realize that in doing so they make a gift to the owners of the bank of all the interest they have been paying for, often several years as they are forced to start all over paying full interest on the original full principle -- except that over this time deflation continued and earning each dollar of principal and interest will be even harder than before. The biggest economic crime of all is having this kind of monetary system, this kind of theft of people kept in ignorance of the crime, when money can and should be provided free of charge by government as a public utility, as necessary infrastructure required for a market economy that serves the common good.
~ Dick Eastman Yakima, Washington
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Old 11-17-2015, 02:44 PM
wayne.ct wayne.ct is offline
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Refi

Yup, I have noticed how the banks want me to refi when the net benefit to me is zero. They really are greedy.
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Old 11-17-2015, 04:32 PM
Danny B Danny B is offline
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Money from thin air

It has always been considered the right of bankers to create money. Very little of our money supply is created by the FED. Money creation is at a standstill because we are debt saturated. There are increasing calls for the central bank to BYPASS the private banks and create public money that would be injected into the economy by direct deposit.
Monetary authorities around the world are scratching their collective heads wondering why growth has stopped. They still refuse to connect financial growth to population growth. Their actions impoverished us and we cut back on family size. Pre-birth control, this wasn't a widespread option. "They" are operating on assumptions that are no longer valid.
We slide towards a shrinking population that has lower and lower wages. "They" have come up with the grand idea of paying is directly so that we don't have to rely on our shrinking paycheck. This idea is loudly denounced by private banking.
BUT, as we slid further into deflation, the State sees revolution on the horizon. Here are a couple of articles on public money creation.
Why Not Just Print More Money? - The New Yorker
http://www.24hgold.com/english/news-...ael+Pento&mk=1

Our claimed debt is $ 18 trillion. The GAO says that it is closer to $ 65 trillion. https://www.rt.com/usa/322377-debt-c...reform-walker/
FED GOV can't realistically print new money to pay off the debt. The further we slide into deflation, the more calls there will be to create free public money.
The bankers are very happy to create money out of thin air to LEND to us. They MOST certainly don't want to be paid back with money created out of thin air by GOV.
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Old 11-19-2015, 04:27 PM
Danny B Danny B is offline
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Avoiding reality as long as possible

State sponsored terror.
It Is Time to Knock off the Bull**** About Surveillance for Terrorism | Armstrong Economics
When The State Is Not Your Friend—–Police Asset Seizures In 2014 Exceeded All Burglaries | David Stockman's Contra Corner
FED rate hike;
11/18 Fed minutes show majority willing to raise interest rates in December – MarketWatch
11/18 Five reasons the Fed can’t raise rates - Peter Diekmeyer – Sprott
India and Brazil;
11/17 Indian exports contract 17.5% to $21.3 billion in October – Live Mint
11/19 Brazil GDP in "free fall mode", get ready for "terrible" Q3 print – Zero Hedge
The Indian GOV came up with the idea that Indians should turn in their gold to the banks and earn interest. It didn't fly; 11/19 Indians refuse to give their gold to the government – Zero Hedge
Evidently the Indians have learned a thing or 2 over the last 32,000 years. https://www.youtube.com/watch?v=evOelfBZbnA
Money velocity is still falling but, there is a more colorful way to state this; 11/19 Money: the blood of capitalism is clotting – Talk Markets
MSM is waking up to the prospects of automation; 11/15 Robots could steal 80 million US jobs – CNBC
David Stockman speaks his mind; Stockman CNBC Interview: Last Spasm Of The Bull, Meltdown Ahead | David Stockman's Contra Corner
Here is an excellent article with several links that lays out the strategy of China.
http://www.24hgold.com/english/news-...n+Popescu&mk=1
Sooner or later, the financial sector will learn that very few people are needed in the productive economy BUT, every person wants to be part of the consumptive sector.
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Old 11-20-2015, 05:08 AM
Danny B Danny B is offline
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Fiat currencies and gold backed bonds

"This process was facilitated by a system of lend-lease, in which supplies of arms, equipment and strategic materials to recipient countries were paid for in gold. As a result, the US built up its gold reserves from 13,000 tons in 1938 to 21,800 tons in 1949, concentrating 70% of the world's reserves of the yellow metal in one place.
Read more: http://sputniknews.com/business/2015...#ixzz3s0FU44Az
Pretty good for a barbaric relic.
De Gaulle, "In 1965, he demanded that the United States exchange $1.5 billion dollars for gold. America had no choice but to agree. In two years, de Gaulle made US gold stores 3,000 tons lighter.

Following this, Germany and other countries made the same exchange. And by 1970, the gold reserves of the United States had decreased by more than half, to 9,838.2 tons."
"The largest gold reserve stored by the Fed belongs to Germany, at 674 tons. On the whole, the country holds nearly 3,500 tons of gold.

However, both sides were content with the situation: the US received money for storage, and Germany knew its reserves were finely protected.

The first major attempts by foreign countries to return their gold reserves first began in 2012. At the time, Germany made attempts to withdraw its gold, but it was denied by Washington.

The US said it could not provide the required security for audit. Then, Washington said it was impossible to differentiate the US gold bars from German ones."
Read more: http://sputniknews.com/business/2015...#ixzz3s0GRAyQw
That is very strange. All bars have a number and are not supposed to be re-melted.

China is onboard to join in on the SDR BUT, they say that it is just temporary. http://www.24hgold.com/english/news-...n+Popescu&mk=1
"First in private conversation and more recently on the record. Ben Bernanke, past chairman of the U.S. Fed, said to Jim Rickards, author of Currency Wars, in Seoul, South Korea in 2015: “The international monetary system (dollar based) is not coherent.” And he added, “We need new ‘rules of the game’.”
Triffin's dilemma makes it clear that using a sovereign currency for the reserve currency will always lead to a crash. It has been proven time and time again that a "working Currency" can NOT serve as a store of value. Gresham's Law makes this clear also.
Gresham's Law also makes it clear that no sovereign currency can be gold backed. Any gold-convertible currency would soon go into hiding and be unavailable for use as a currency. Gold-convertible bonds make perfect sense because they are regarded as a store of value and not a working currency.
There is nothing wrong with using a fiat currency for daily use. If the State over-issues it, price inflation and currency conversion will soon tell the tale. Investors will flee to something more stable. The reserve-currency store-of-value attribute is what allows America to go around thrashing the world.
The Chinese initiated currency swaps will gradually sideline the dollar. When China has enough gold, they will offer gold convertible bonds as a store of value. All bonds will be denominated in gold-ounces or kilos or some other weight. The Yuan will float like every other currency.
The Gold supply increases by about 1 1/2% per year. The economy grows by about the same amount. NO currency will be the reserve currency. They will all float depending on the economic strength of the issuer. Gold-denominated bonds will become the strongest collateral. That will satisfy both Gresham and Triffin.
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Old 11-21-2015, 04:22 AM
Danny B Danny B is offline
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Another day,,, another financial mess

Here is some BS straight from the self-proclaimed most important BS book.
"Chapters 2 and 3 employ a neoclassical growth framework to study monetary phenomena. The neoclassical model is one in which growth is exogenous and money has no e¤ect on the real economy’s long-run"
Page xix http://www2.um.edu.uy/dtrupkin/Walsh.pdf

The oil glut is going to take down a LOT of hedges and derivatives; Goldman eyes $20 oil as glut overwhelms storage sites - Telegraph
" the cartel, which has lost half a trillion dollars of revenue since the oil crash kicked off in mid-2014. Several OPEC states are in dire straits. Even the Saudis have been downgraded by Standard & Poor’s and are facing a budget crunch."
It doesn't help that ISIS is dumping cheap oil on the market; The Most Important Question About ISIS That Nobody Is Asking | Zero Hedge
A few headlines;
11/20 Hedge funds, large retailers, and energy companies imploding – Market Daily News
11/20 China has a $1.2 trillion Ponzi finance problem – Bloomberg
11/19 What the heck? US public debt up $518 bn in November alone – My Budget 360
11/20 Baltic Dry Shipping Index just collapsed to all-time low – ETF Daily News Maybe because we are too broke to buy anything.
11/20 As investors shun debt, banks are left holding the bag – New York Times YES, banks are left holding the bag. What about the Chinese?
11/19 Chinese savers turn to gold as rest of world exits holdings – Bloomberg
11/19 China's steel industry peers into abyss as output to plunge – Bloomberg No surprise. It's the same for British and American steel producers.

"What exactly do we mean by deflation? Back in 2008 the central banks of the developed world, as well as China, had a choice:

1. admit that prior policies geared towards encouraging borrowing at a faster rate than income growth were a horrible idea, or
2. double down and push those failed policies even harder

As we all know, they chose option #2. And so here we are, just 8 years later, with nearly $60 trillion in new debt piled on top of the prior mountain -- while GDP grew by only $12 trillion over the same time period:
Deflation Warning: The Next Wave | Peak Prosperity
"In other words, instead of saying to ourselves: Hmmm.... it was probably a terrible idea to pile up debt at 2x the rate of income growth, what the world did instead was to double down on that terrible idea and pile on more debt at 5x the rate(!) of nominal GDP growth."

11/20 ECB's top economist signals need to act to maintain confidence – Reuters Well, if it wasn't for 50% youth unemployment, there might be more confidence.
11/20 Draghi says ECB will do what it must to spur price gains – Bloomberg No kidding,,, raise prices. What about raising employment?
11/20 Auto originations hit 10-year high, subprime loans fuel growth – Mish Liar-loans to sell more cars. What a novel idea.
Charles Hugh Smith on currency revaluation;
" But raising interest rates has a brutally negative effect on the domestic economy, as higher rates choke off domestic lending, which then pushes the economy into recession.

It's a no-win double bind, though, for doing nothing and letting one's currency implode drains the nation of capital and makes imports unaffordable. "
" The bone-dry half-dead forest awaiting an igniting lightning strike is the global mountain of debt--debt which is no longer supported by current valuations of commodities and risk.

In effect, a currency crisis is simply the abrupt revaluation of the currency to reflect new realities. That revaluation then raises the risk premium on debt denominated in that currency or owed in other currencies.

As emerging market currencies decline, the income streams needed to service all the debt denominated in U.S. dollars declines, a self-reinforcing dynamic: as income and valuations fall, capital flees, pushing the relative value of the currency down even more, which further raises the risk premium that then triggers even more capital flight.

The sums in play are so staggering (an estimated $11 trillion in emerging market debts denominated in other currencies) that even the Fed won't be able to stop the meltdown. "
Of Two Minds - Is This How the Next Global Financial Meltdown Will Unfold?
So, things are going to get even worse for States with weak currencies, especially for commodity exporters.
Yep, there is a big chain of defaults in the future.
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Old 11-22-2015, 01:54 AM
Danny B Danny B is offline
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No way out

The dead-cat bounce, When Wall Street Gets DeFANGed———Look Out Below! | David Stockman's Contra Corner
Hedge fund implosion,,, close cousin to the dead-cat bounce, What Hedge Fund Panic Looks Like | Zero Hedge
NOBODY is spending money on capacity expansion. Why bother if nobody has any money? It Is Different This Time——–Now Comes The Global CapEx Depression | David Stockman's Contra Corner

"Saudi Arabia cannot balance its budget unless the price of oil is at least $106 a barrel"
First appeared: Saudi Arabia’s Economy is Coming Apart at the Seams | New Eastern Outlook
Goldman eyes $20 oil as glut overwhelms storage sites - Telegraph
BMW REALLY wants you to buy a car, http://www.silverdoctors.com/us-econ...-out-of-money/
If the FED raises rates, they will wipe out the emerging markets. (they can't be saved anyway). If they don't raise rates, they will wipe out the hedge funds. Plus, " We must normalize rates ASAP to prevent a major crisis in Pension Funds of which the average hold 40% in government debt and cannot meet future obligations."
http://www.armstrongeconomics.com/archives/39604
It really doesn't matter if they raise or not. It's just a choice of who gets crashed first. When the emerging markets default on $ 13 trillion of debt, it will take down everything else. The pension, hedge and insurance funds may want a rate hike so that they can earn interest income. What will it matter if the whole rest of the economy crashes 2 weeks later?
Brazil will go down no matter what, • Petrobras’s Dangerous Debt Math: $24 Billion Owed in 24 Months (Bloomberg)
Both oil and steel are crashing, • US Oil Producer Bankruptcies Are Piling Up (WSJ)
• Total US Household Debt Hits $12.1 Trillion As Subprime Auto Lending Jumps (WSJ) Liar-loans to the rescue.
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Old 11-22-2015, 10:39 PM
Danny B Danny B is offline
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more and more contraction

Th FED, reportedly has a toolbox full of tools. I posted from their "Bible" and it shows that their tools are defunct.
"Seven years after the Fed unleashed ZIRP and QE to "fix the economy", it has finally admitted that ZIRP and QE failed to do that" " in other words, the Fed's experiment has weakened the economy so much, its potential growth rate has been cut in half in the past decade. " Whadda you mean"experiment"?
"For example, if nominal growth is 3 percent and the debt GDP ratio is 300 percent, the implied equilibrium nominal rates is around 1 percent. This is because at 1% rates, 100% of GDP growth is necessary to service interest costs.' Bunch of effing "tools" they are.

" This scenario is also bullish for rates because the Fed would, at the very least, stop rolling down its SOMA portfolio. More likely it would restart asset purchases in an attempt to stimulate the economy once more, pushing yields further down. We have argued in the past that unconventional forms of monetary accommodation are here to stay. The minutes of the October meeting confirm this view, noting that some policy makers felt it would be “prudent to have additional policy tools” because a lower long-run equilibrium real rate makes it more likely that reductions in the Funds rate alone would not be sufficient to stimulate the economy in the event of a downturn in the future.

Whether this error will crush what little credibility the Fed has and be its final error, either policy or communication, will be revealed in the very near future.
Good luck Janet. "
Here Is The Complete Scenario In Which The Fed Hikes Rates, Starts A Recession, And Launches QE4 | Zero Hedge
All this unconventional BS will do nothing for employment.

"During a liquidity crunch, there will be very little money in circulation, leading to very little economic activity, and under such circumstances, cash will be exceptionally important. Managing risks to liquidity (cash) makes the difference between being at the mercy of changing circumstances and having the freedom of action to respond to both opportunities and threats as they develop"
"As we have pointed out at the Automatic Earth many times before, trade is very vulnerable when the credit it relies on dries up, meaning that economically contractionary times typically lead to trade collapses. "

Nicole Foss presents: Challenge and Choices - The Automatic Earth
In 2007, I started a thread "The Long Cold Winter". https://eplaya.burningman.com/viewtopic.php?t=19613
I see a recent article with the same name. The Long, Cold Winter Ahead |
"Winter Is Coming" - Wall Street Economists At Work | Zero Hedge
Morality goes away = trust goes away = credit goes away = trade goes away. Stock up on imported beer, NOW.
Saudi produces oil for about $ 15 a bbl. EVERYBODY and their brother is trying to sell oil to meet deteriorating economics. How long can the higher-cost producers keep pumping? Many copper mines are selling copper for less than it costs to mine. What about U.S. oil producers? Rig count is down 60%. EVERYBODY lies about profitability. A large part of the energy sector is crashing; Short These Oil & Gas Companies - They Are Going To Zero | Seeking Alpha
NOBODY will finance U.S. oil producers because nobody will trust them. Nobody will take U.S. Treasury bonds in payment for imported oil,,, only cash or gold.
Better finish building your wood-gas truck.
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Last edited by Danny B; 11-23-2015 at 05:35 AM. Reason: 1 more link
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  #1108  
Old 11-23-2015, 05:31 AM
Danny B Danny B is offline
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Countdown to the FED meeting

Same old news as the crash progresses.
"The $500 Trillion Ticking Time Bomb
But Yellen knows that things are far from well. She knows that unemployment is not 5 percent, since 94 million people capable of work are not working. She also knows that the risks in the U.S. and in the world economy are greater than ever.

The U.S. federal debt is $18.5 trillion and total debt is close to $70 trillion. On top of that there are unfunded liabilities in excess of $200 trillion, plus there is around $500 trillion of interest-rate-sensitive derivatives in U.S. banks.

With a debt and risk position of around 3/4 of a quadrillion dollars, it’s not the most comfortable position for the Fed to increase interest rates.
http://kingworldnews.com/the-500-tri...ancial-system/
The masters of finance are VERY worried. It just occurred to them that China planned to default all along, Masters of the Finance Universe Are Worried About China - Bloomberg Business

"How long can this charade continue?”

David Stockman: “No one really knows. That’s the problem. We are in such uncharted waters. None of this has ever been tried before. None of this is sustainable. It defies every law of common sense and sound economics and finance. Therefore, you are building up a larger and larger combustible element in the system that sooner or later will blow."
David Stockman – This Will Scare The World To Death | King World News
Hmmm, I guess that it WAS and experiment
The FED meeting is in a few weeks. Just imagine the FED as a stationary train in the middle of the RR tracks. There are 2 trains loaded with high explosives converging from either direction.
Pray to all the gods that you believe in that the massive credit lockup doesn't take out the agriculture sector.
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Old 11-23-2015, 03:59 PM
Danny B Danny B is offline
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15 people smarter than Wall Street

“If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.”
― Warren Buffett
“When you combine ignorance and leverage, you get some pretty interesting results.”
― Warren Buffett
"What caught my attention in late 2007 were the weird, amorphous, and ever growing trading losses in the subprime-mortgage bond market suffered by the big Wall Street banks. Citigroup’s losses went from $6 billion to $40 billion to more than $65 billion. Merrill Lynch announced a $4.5 billion hit, then revised it to $19 billion and then finally to more than $50 billion. Morgan Stanley announced that it had lost more than $9 billion on what appeared to be a bet by a single trader. ( It turned out to be closer to $ 100 billion ) The big Wall Street banks had become the dumb money. Their employees, the putative best and brightest, and surely the most self-interested people on the planet, were committing mass suicide. How had that happened?

Someone had to be on the other side of the big Wall Street firms’ stupid bets. I set out to find as many of these people as I could. There turned out to be about 15 of them, who had gone all in on the bet against subprime-mortgage bonds. The group included some seriously interesting and peculiar people—the sort of oddballs and misfits who would have a hard time getting a job at a big Wall Street bank. "
Even Michael Lewis Was Surprised Hollywood Bet on The Big Short | Vanity Fair
"Yet they’d found a way to see what the expert insiders had missed: that the big Wall Street banks had become so bizarrely organized that it was hard to say where their stupidity ended and their corruption began."
The big Wall Street banks had become the dumb money.
YES, Wall street had become the dumb money BUT, it was your money that they were losing.

15 people.
On Wall Street, the losers in the collapse of the housing market are legion. The biggest winner looks to be John Paulson, a little-known hedge fund manager who smelled trouble two years ago.

Funds he runs were up $15 billion in 2007 on a spectacularly successful bet against the housing market. Mr. Paulson has reaped an estimated $3 billion to $4 billion for himself -- believed to be the largest one-year payday in Wall Street history.
"Michael Burry was one of the first investors in the world to recognize and invest in the impending subprime mortgage crisis. "
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Old 11-25-2015, 03:52 AM
Danny B Danny B is offline
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Worgl and related solutions

I’ve mentioned Worgl before but, not in detail. Worgl had extremely high unemployment. The Mayor only had 40,000 schillings.
"Instead of spending the 40,000 schillings on starting the first of his long list of projects, he decided to put the money on deposit with a local savings bank as a guarantee for issuing Wörgl’s own 40,000 schilling’s worth of stamp scrip. He then used the stamp scrip to pay for his first project. Because a stamp needed to be applied each month (at 1% of face value), everybody who was paid with the stamp scrip made sure he or she was spending it quickly, automatically providing work for others. When people had run out of ideas of what to spend their stamp scrip on, they even decided to pay their taxes, early.

Wörgl was the first town in Austria which effectively managed to redress the extreme levels of unemployment. They not only re-paved the streets and rebuilt the water system and all of the other projects on Mayor Unterguggenberger’s long list, they even built new houses, a ski jump and a bridge"
"In fact, every one of the schillings in stamp scrip created between 12 and 14 times more employment than the normal schillings circulating in parallel. The anti-hoarding device proved extremely effective as a spontaneous work-generating device.

Wörgl’s demonstration was so successful that it was replicated, first in the neighboring city of Kirchbichl in January of 1933. In June of that year, Unterguggenberger addressed a meeting with representatives of 170 other towns and villages. Soon afterwards 200 townships in Austria wanted to copy it. It was at that point that the central bank panicked and decided to assert its monopoly rights. The people sued the central bank, but lost the case in November 1933. The case went to the Austrian Supreme Court, but was lost again. After that it became a criminal offence in Austria to issue “emergency currency.”
----------------------------------------------------------------------------------
This story is well known. The center piece is Demmurage currency. The current darling idea of the GOV / Central bankers is negative interest rates to get investors to invest. One more stupid idea that we will have to suffer through until it too is proven a failure.

"The stated justification for this move is to stimulate "demand" by forcing consumers to withdraw their money and go shopping with it. When an economy is struggling, it is standard practice for a central bank to cut interest rates, making saving less attractive. This is supposed to boost spending and kick-start an economic recovery.

That is the theory, but central banks have already pushed the prime rate to zero, and still their economies are languishing. To the uninitiated observer, that means the theory is wrong and needs to be scrapped. But not to our intrepid central bankers, who are now experimenting with pushing rates below zero."
The Austrian CB was aghast at how effective the Worgl experiment was. The CBs are owned by the bankers and they distribute free money to the bankers ( upper loop ).
The Worgl experiment distributed free money in exchange for LABOR to the lower loop.
Ghandi, the seven deadly sins.
"Wealth Without Work
Pleasure Without Conscience
Knowledge Without Character
Commerce (Business) Without Morality (Ethics)
Science Without Humanity
Religion Without Sacrifice
Politics Without Principle"
The upper loop would love for us to continue to run up our debt load. They are VERY unhappy that we can no longer qualify for more debt. The CFR, et al have proposed dropping money out of helicopters to alleviate the shortage. The FED has "printed up" about $ 26 trillion all told. Almost all of it is sequestered in the upper loop. A small % of it has bled over into the lower loop and raised prices of certain areas. At the same time, demand has crashed and lowered prices in other areas.

Ellen Brown explains the critical difference between Worgl and current efforts to get the economy going.
"Whether negative interests will actually stimulate an economic recovery, however, remains in doubt. Proponents of the theory cite Silvio Gesell and the Wörgl experiment of the 1930s. As explained by Charles Eisenstein in Sacred Economics:"
"There is a critical difference, however, between the Wörgl currency and the modern-day central bankers' negative interest scheme. The Wörgl government first issued its new "free money," getting it into the local economy and increasing purchasing power, before taxing a portion of it back. And the proceeds of the stamp tax went to the city, to be used for the benefit of the taxpayers. As Eisenstein observes:
It is impossible to prove . . . that the rejuvenating effects of these currencies came from demurrage and not from the increase in the money supply . . . .

Today's central bankers are proposing to tax existing money, diminishing spending power without first building it up. And the interest will go to private bankers, not to the local government."
Hang Onto Your Wallets: Negative Interest, the War on Cash and the $10 Trillion Bail-In
"If central bankers are seriously trying to stimulate the economy with negative interest rates, they need to repeat the Wörgl experiment in full. They need to first get some new money into the economy, money that goes directly to the consumers and local businessmen who will spend it. This could be achieved in a number of ways: with a national dividend; or by using quantitative easing for infrastructure ( didn't work for Japan with their shrinking population) or low-interest loans to states Will it somehow go to the working man or just be handed out for the dole?; or by funding free tuition for higher education Yeah right. Just what we need, more unemployed students). Consumers will hit the malls when they have some new discretionary income to spend. Just what we need, buy tons more junk from China.
There are no simple answers. The simpletons in GOV haven't a prayer of coming up with a solution. The financial industry ignores social issues like; demographic crash, unemployment, falling core population, falling wages, pollution, birth-control, etc. The final arbiter will be the Grim Reaper.
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