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Old 09-08-2017, 02:56 PM
Danny B Danny B is online now
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Phillips Curve,,, oil slowdown

Most of the various economic theories espoused by Academia are headed for the rubbish bin. There is one theory that is headed for the rubbish bin that might actually be correct.
Investopedia, "The Phillips curve is an economic concept developed by A. W. Phillips showing that inflation and unemployment have a stable and inverse relationship. The theory states that with economic growth comes inflation, which in turn should lead to more jobs and less unemployment"
The boneheads don't define if "inflation" is currency inflation OR price inflation. They also show a painful lack of vision. Suppose that employment grows in China and falls in America?
Next on the list of stupidities is; they totally lie about unemployment in America,,, and then wonder why the Phillips Curve no longer "works"

Equally stupid, they equate a growth in employment with an automatic growth in wages. Capital flows freely across borders. It has generously flown to low-wage producers and distorted wage levels. Academia is too stupid and lazy to try to incorporate the Philips Curve on a global basis.

In a general sense, all interest rates are tied to the rate of the 10 year treasury bond. The State drives down this rate so that it can service IT'S debt with less pain. No matter that it wipes out everybody who depends on interest income. All the funds will perish along with the investors and retirees who depend on them. We are in a deflationary spiral because of the lack of population growth and falling wages.

“10-Year Treasury Yields Headed to Zero Percent” Saxo Bank CIO" BUT, now, "they" are claiming that ZIRP isn't enough and negative rates are necessary.
"With nearly everyone, even Janet Yellen at the Fed, predicting wage-induced inflation, Jakobsen makes a bold call in the opposite direction."
"wage-induced inflation"
"Everything is deflationary: demographics, technology, energy, and the debt mountain." wages
"Meanwhile, most central banks – most prominently the Fed – continue to believe in the old-school Phillips curve model, and through this mistake, they misguide markets on both inflation and growth – a classically dogmatic, bureaucratic way of thinking whose limits in a world of ever-changing technology are obvious."
The FED has always worn blinders.
"• New call: energy prices to fall by 50% over the next 10 years."
9/07 Duke energy nixes nuclear, will amp up solar power plants in Florida – Clean Technica

Self-driving electric Ubers will definitely reduce the demand for gasoline. Who is going to rebuild the grid for all this new load? The State will eventually tax the snot out of electric cars to maintain the highway structure.
"Canada’s central bankers are clearly acting on bubbles and excess while the Fed and the European Central Bank continue to monitor the non-existent link between tight labour markets and inflation."
"What our credit impulse model says is that from the peak in Q4’16 there is a high probability of a big slowdown in the global economy 9-12 months later – so from October 2017 to March 2018."
"A push is on for electric cars in China and Europe. Even if the US lags, demand for oil will decline. Add in a global slowdown, and the price of crude could easily collapse."

OK, so, the price of oil is going down, Ouch. U.S. oil companies lost $67 billion last year - Apr. 26, 2016
Big Money has lost faith in Big Oil, https://srsroccoreport.com/u-s-frack...-losing-faith/

So, the price of crude could easily collapse. There is ALREADY no profit. will the drills and pumps stop?
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Old 09-09-2017, 03:14 AM
Danny B Danny B is online now
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ZIRP to save the State

There are projections of a storm-surge + tide that will reach 32 ft. in Miami.
There are also 2 storms behind Irma. Lots of investors have dumped their investment in insurance companies. There will be a lot of loss. You can bet that the insurance companies will be bailed out. The individual home owner will naturally be screwed.

Strong Euro,,, weak dollar, https://www.armstrongeconomics.com/m...ro-the-dollar/

"This idea of lowering interest rates envisioned by Larry Summers, demonstrates that he knows absolutely nothing about economics. He has only read books and never rolled up his sleeves and had to work in the real world to be able to see what I am writing about. Why economic professors are ever allowed to play with the economy is beyond me. " Armstron was previously a professor at Princeton.
"Draghi tried to be as vague as possible, because he is trapped. He knows this cannot go on forever. He realizes that once he stops, the bond market crash and there is a risk that the Eurozone government are forced to pay real interest rates and that will blow out the entire EU budget system."

"This idea of lowering interest rates envisioned by Larry Summers, demonstrates that he knows absolutely nothing about economics."
"the bond market crash and there is a risk that the Eurozone government are forced to pay real interest rates and that will blow out the entire EU budget system."
Put these 2 together and something becomes obvious. ZIRP was all about rescuing GOV debt. Summers knew what he was doing. ZIRP kills everything that doesn't have a feeding tube to the FED. The feeding tube saves the banks. Every president has doubled the debt. Trump would need to pump it up to $40 trillion to be in line with his predecessors.
The prime objective is; save public debt. It doesn't matter if everything else dies on the vine. Public debt in Hartford, Conn. isn't looking too good.
Draghi can never cut back. The Italian banks will blow. The French GOV spends 57% of the GDP. Can Draghi stop buying French debt?
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Old 09-10-2017, 12:10 AM
Danny B Danny B is online now
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Gibson't Paradox and all the other rules that dont hold

Now, you know all about the Phillip's curve. Next comes Gibson's Paradox.
Historically, money was saved up and channelled through the stock market to finance profitable ventures. Historically, taxes were saved up (as bonds) to finance public works. Historically money was saved up by deferring current consumption to finance some profitable enterprise. The Phillip's paradox was a "rule" during the times when money creation was limited.

"between 1750-1930, interest rates in Britain correlated with the general price level, and had no correlation with the rate of price inflation. "
"The relationship between interest rates and the general level of prices held until the 1970s. This article summarises why Gibson’s paradox functioned, why interest rates do not correlate with price inflation, and the reasons it failed to be evident after the 1970s."
The gold window was closed in 1971.
"Resolving the paradox boiled down to answering a very simple question: is the interest rate set by demand from the borrower based on what he is prepared to pay, or is it set by the interest rate demands of the saver, seeking a decent return on his money? The neo-classical assumption has it that in a free market it is what the saver demands to part with the temporary use of his money that controls the loan rate, and the borrower is at his mercy."
"Indeed, all the literature going back to pre-Keynesian days assumes that consumers decide interest rates by dividing consumption between what is needed today, and what should be saved for the future."

The advent of easy credit,,, the advent of social security made saving unnecessary. We spend 105% of out earnings.
"The vision of the idle rich living off the income of their capital also fuelled post-Marxian sentiment. The bias of opinion has always been against the seemingly idle saver and in favour of the industrious debtor. The saver is cast as a villain, and even central bank policy today is biased against him."
Warren Buffet has $80 billion cash sitting on the sidelines. Has he deferred consumption? What could he possibly buy?

"The assumption, that it is the saver who demands the interest rate, carried throughout the known history of economics, and finds its more recent expression with Keynes, who wanted to do away with saving altogether.ii He gave savers the epithet of rentier, an ugly word suggesting a rich man who rents out his capital, gathering in profit from the efforts of others."

These bone-headed ivory tower economists have always been simpletons. They group together low-wage and high-wage people. The people who live check-to-check have no possibility of saving. I know people who take their kids to McDonalds one a month as a special treat.
"The businessman sets the price of borrowing by having the option not to borrow. In his calculations, he will attempt to quantify his fixed and marginal costs of production, and the added productive capacity additional capital will provide. He must estimate the wholesale value of his extra production, to assess his profits, gross of interest. He is then able to judge what interest he is prepared to pay to secure the capital required for a viable proposition."

Not a single mention of consumptive power. 1/3 of companies in the Russell 2000 index are losing money. It is NOT a problem of productivity.
"Therefore, there is a link between interest rates and how money is used. The reason this did not translate into a correlation between interest rates and the rate of inflation is changes in interest rates only reflect changes in the allocation of money between immediate consumption and savings. "
ALL of the free money went to the top 5%. The CBs printed up an extra $200 trillion. They expected a trickle-down effect to the larger masses of the middle class. AT THE SAME TIME that wages were falling. This $ 200 trillion can't actually be spent into the economy. It would make price inflation that much worse,,, while wages were still falling. You could buy quite a few wars with $ 200 trillion.

"Imagine for a moment an economy without the central bank imposing interest rates on the free market, restricting itself to note issuance and being lender of last resort. If interest rates rise, it is because there are fewer savings relative to demand for investment" Yeah,, how MUCH note issuance?
"Equally, if interest rates fall, they reflect a greater relative supply of savings,(the printing press stuck in hyperdrive) and a lower proportion of income being allocated to immediate consumption." No, they reflect a runaway printing press.
"The overall quantity of money is immaterial in this relationship. If you doubled the quantity of money, so long as you double money spent both on consumption and money saved, interest rates would be unchanged"
Only if you double the money to every person,, not just the rich.

"So why, after over two hundred years of correlation between wholesale prices and bond yields, did it end in the early 1970s? It is obvious that the continuing rise in prices denominated in state-issued currencies, lacking the anchor of gold, could not lead to a continuing rise in interest rates. It is the reasons the relationship ended which concerns us. There were two distinct periods to consider."
"The breaking of demand for savings was the first time that Gibson’s paradox was nullified in the history of the cost of borrowing, stretching back to 1750. We then entered an era of financial revolution, where the application of capital changed from financing production to financing government deficits and personal consumption." Public consumption and private consumption.

"The use of credit was being hijacked. From London’s big bang onwards, regulation of markets evolved from private-sector associations, collectively known as self-regulatory organisations, to full government regulation. At the same time, restrictions on consumer credit were lifted, and demand for credit shifted from industrial lending and some restricted residential mortgage finance, progressively in favour of the consumer. Today, as well as mortgages, US credit card student loans and vehicle finance now total nearly $13trvi, exceeding total corporate bonds of $5.2trvii, to which must be added bank lending to non-financial corporates currently at $2.1tr.viii"
"We now have an explanation as to why Gibson’s paradox no longer holds today. It has been superseded by the predominance of financing for consumption by both consumers and government"

"Consumers who borrow are usually seeking greater satisfactions than are afforded from their income, which if they are to pay down the debt incurred requires a matching sacrifice in their satisfactions subsequently."
So, empty your pockets and hand over $ 60 trillion.
Further thoughts on Gibson’s paradox
The demand for finance for public and private consumption has eclipsed corporate demand for credit. The credit bubble MUST grow or the interest to pay off previous loans won't be created.
"Allow me to print a nation's money and I care not who makes the laws."
Force me to print a nation's money and I am eventually screwed.

Trump needs to eventually double the current debt of $ 20 trillion up to,, $ 40 trillion. The "Taper Tantrum" proved that any slow down in the printing presses will allow the bubble to deflate. Draghi has very painful visions of what happens to Europe if he lets off the gas. China keeps trying to back off the printing presses,,, and then suffers heart failure. ALL of this capital creation is fungible. It moves all over the globe regardless of which CB originated it.
Capital flows,,, labor does not. 5% have benefited from QE. 6 States have benefited from globalism. The old economic theories are for simpletons and economists.
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Old 09-10-2017, 06:01 PM
Danny B Danny B is online now
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Guns OR disaster relief

Well, Irma is headed up Florida to Georgia. It is the second-longest lived hurricane in history. It is moving at 9 mph to give everybody a real thrill.
"Dave told her that there was no power and no water and that Irma made Hugo and Marilyn look like a rainstorm" Caribbean Hurricane Network - stormCARIB.com - Local Reports on Tropical Systems threatening the Caribbean Islands

Hurricane Jose may very well take out the Atlantic side of Florida while Irma takes out the gulf side. Jose could conceivably move up the eastern seaboard.
So, who is going to pay for all this?
"It took an actual fight just to push the first few billion dollars in emergency aid for Houston through Congress, with four Texan representatives voting against "
"Sure, the US has a National Flood Insurance Program, but who’s covered by it? Besides, the Program was already $24 billion in debt by 2014 largely due to hurricanes Katrina and Sandy. With total costs of Harvey estimated at $200 billion or more, and Irma threating to cause far more damage than that, where’s the money going to come from?"

"Towns, cities, states, they’re all maxed out as things are, with hugely underfunded pension obligations and crumbling infrastructure of their own. They’re going to come calling on the feds, but Washington is hitting its debt ceiling. All the numbers are stacked against any serious efforts at rebuilding whatever Harvey and Irma have blown to pieces or drowned."
"Therefore, as the gap between the “desired” living standard and disposable income expanded it led to a decrease in the personal savings rates and increase in leverage. It is a simple function of math. But the following chart shows why this has likely come to the inevitable conclusion"
"We can go on listing all the reasons why, but fact is America is in no position to rebuild. Which is a direct consequence of the fact that the entire nation has been built on credit for decades now. Which in turn makes it extremely vulnerable and fragile. Please do understand that mechanism. Every single inch of the country is in debt. America has been able to build on debt, but it can’t rebuild on it too, precisely because of that."

"the Bank of England learnt that it was cheaper and less disruptive to find some way of rescuing banks that were in danger of collapsing, rather than letting them go down." IN THE SHORT TERM ONLY. Remove moral hazard and see what you get in the long term.
"You could construct a totally safe banking system but it would be unable to make much credit available to potential borrowers." ONLY TO THOSE IN THE UPPER LOOP.
"US investor optimism is at a 17-year high, the highest it has been since 2000, just as the dot-com bubble was about to burst."
Ten years since the start of the last banking crisis, we have to ask ourselves ? when will the next one happen? | The Independent

“The machines” are computers running complex trading algorithms — pre-programmed software that lets computers “think” and trade for themselves.
And they now control a third of all trading on U.S. stock exchanges."
"The Dow plunged 22% on Oct. 19, 1987 — the largest one-day market crash in history.
Brilliant, stupid computers didn’t start it.
But brilliant, stupid computers turned a down day on Wall Street into Black Monday."
"Apparently, it was a rogue algorithm that triggered the sell-off…"
"This kind of sudden, unexpected crash that seems to emerge from nowhere is entirely consistent with the predictions of complexity theory. Increasing market scale correlates with exponentially larger market collapses…"

" Harvard is trying to sell $2.5 billion in real estate and private equity investments. The move was announced in May and there have not been any material updates since then other than a quick press release in early July that an investment fund was looking at the assets offered."
This will become widespread at some point.
" I would suggest that one of the primary motivations behind the Fed/PPT’s no-longer-invisible hand propping up the stock and fixed income markets is the knowledge of the pandemonium that will ensue if the stock market were allowed to embark on a true price discovery mission. "

"ECB is seeking from the European Commission the authority to implement a moratorium on cash withdrawals from banks at its discretion."

OK, so, America is flat broke. How did we get there? Remember that wealth attracts corruption. It is highly concentrated in the district of corruption,,, Tel Aviv on the Potomac. Our Bretton Woods unlimited credit card allowed Pox Americana the ability to wage war on credit. This was paid for by everyone who used oil.
Jack Ma of Alibaba said that America didn't have bullet trains because we wasted $14 trillion on wars. The war profiteers were locked in to the treasury.

Here is an article explaining that the taxpayers are going to pay $ 19 million to refurbish 50 trucks over a 3 year period.
So we are going to $ 380,000 EACH to paint them and put on new tires.
The military budget combined with the black-ops budget is over $1 trillion a year.
There will be a HUGE fight over disaster relief. There NEVER seems to be any fight over $trillion combat airplane boondoggles.
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Old 09-12-2017, 05:12 AM
Danny B Danny B is online now
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The general situation

Veterans Today has a pretty good summation of all the big problems, The Hurricane of our Lives – America goes broke and nobody seems to care | Veterans Today
Excellent article from John Mauldin explaining the mechanism of how GOV always goes broke. The first part is a slow read. The Future of the Global Economy

9/12 WTF chart of the day: BOJ now owns 75% of Japanese Etfs – Zero Hedge
The FED owns about 50% of domestic ETFs. We'll see just how that works out.
9/11 Australian banks sitting on A$500 billion of ‘liar loans’ – Bloomberg
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Old 09-12-2017, 02:15 PM
Danny B Danny B is online now
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Armstrong: fiat, confidence and legal tender

America is fast going broke. There will come a time when the ptb will have to choose between; a strong military OR domestic support / harmony.
"Nevertheless, historically, ONLY those currencies of the dominant military power have EVER been the reserve currency. So you may not want to hear about the 800 bases etc, but you cannot escape the fact that part of the reserve status of any currency is the military power."

"The strength of the dollar is based on capital flows, not trade. There has been the safe haven issue that dominated World War I and World War II because the USA really cannot be invaded. "
"But trade is a tiny fraction of international capital flows. This is why the Euro has utterly failed to become a major reserve currency "
"China must establish a solid rule of law in order to provide CONFIDENCE for foreign capital to park money in their currency. "
Excellent article, https://www.armstrongeconomics.com/m...of-the-dollar/

"China will replace the dollar but only AFTER 2032. Until then, they must still work on establishing the Rule of Law so that capital will park in yuan with confidence. Denominating oil in yuan or euro means nothing. Where will you park your cash? That remains dollars for major institutions. There is no alternative."
"Unfortunately, governments are broke. They are hunting people with any money at all and that creates a disincentive to invest, rising unemployment, and civil unrest turning the poor against the rich instead of the poor against the politicians who have created this mess."

"ANSWER: Most money is actually created by the private sector through leverage and bank loans today. This is why when there is a crash, the contraction takes down banks for it is the leverage that collapses. When you have a debt based system, then the monetary system becomes leveraged."
"As far as legal tender is concerned, that means it is acceptable by government to pay taxes and fines. What good is it that all your money is in BitCoin and you have to pay taxes when the government does not accept it?"
"The entire system rests solely upon CONFIDENCE. You would only accept a gold coin in payment solely because you know someone else will accept it from you. With that degree of CONFIDENCE, nothing would be acceptable."
"This is why I say that the Monetary Crisis Cycle comes into play when we have a collapse in public CONFIDENCE. It really has nothing to do with the quantity of money. "
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Old 09-12-2017, 02:31 PM
Danny B Danny B is online now
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China; wages, employment, rule-of-law

China must establish a very firm rule of law to attract capital. Meanwhile, rule of law is diminishing in Amerika. GOV is seizing $billions every year on nothing but flimsy excuses. Can a Chinese communist government actually respect private property? China will crash. Will they be able to maintain order during and after the crash?
China has recently pumped in about $ 30 trillion to keep things floating. You walk into Harbor Freight Tools and marvel at the low prices. How can Chinese companies possibly make a profit with these prices. Here is a graph of free cash flow in Chinese companies.
China moved >300 million peasants to the cities. They are paid very low wages so, they can eat better but, they really are not "consumers". China can not very well send them back to the countryside. The Chinese "miracle" has created an "anti-miracle" in the high-wage consumer societies. China has impoverished their best customers. Can China bleed money indefinitely? Emerging automation will tend to suppress wages around the world. Will China ever find the well-off consumes that it needs?
Chart of the Day: Putting the Chinese Corporate Debt Bubble in Perspective - The Sounding Line

Last edited by Danny B; 09-13-2017 at 12:54 AM. Reason: sppelling
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Old 09-13-2017, 01:06 AM
Danny B Danny B is online now
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Trump rocking the Chinese boat

I do not believe that Trump and Mnuchin have the experience to run the economy. They are really rocking the Chinese boat.
"The US could impose economic sanctions on China if it does not implement the new sanctions regime against North Korea, the US Treasury Secretary has warned. Steven Mnuchin said the restrictions could involve cutting off Beijing’s access to the US financial system. "
"calling the fresh round of sanctions against Pyongyang “historic.” Mnuchin added “if China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the US and international dollar system.”

"Washington has, so far, been reluctant to impose economic sanctions on China over concerns of possible retaliatory measures from Beijing "
"Washington runs a $350 billion annual trade deficit with Beijing. China also holds $1 trillion in US debt, which amounts to 28 percent of US Treasury bills, notes and bonds held by a foreign government."
"The committee chair went on to say the US could give Chinese banks and companies “a choice between doing business with North Korea or the United States.”

"To gauge the likelihood and timing, it is necessary to consider the typical attributes of a reserve currency and evaluate China’s progress in each of these dimensions. The factors that generally affect a currency’s reserve status includes:

• Economic size

• Macroeconomic policies

• Flexible exchange rate

• Open capital account

• Financial market development
No mention of respect for private property.
"The U.S. Dollar maintains illusionary worth, only because the central bankers are all in with their dollar dominated derivatives. Moreover, the Chinese are very much dependent upon their exports to keep their economy going. Settlement in Federal Reserve notes is crucial for the American system to keep buying from overseas.

Just the mere threat of payment in the renminbi for all the Chinese goods that Walmart imports could be devastating."
China wants to have a reserve currency
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Old 09-13-2017, 01:45 AM
Danny B Danny B is online now
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95 million workers on permanent vacation

Steve Keen,
"The correlation between credit and employment is staggering—not just because it is so big (the correlation coefficient, for those who follow these things, is 0.8), but because according to mainstream economists like Ben Bernanke, the correlation should be close to zero."
"but economists turn a blind eye (and not a Nelsonian one) to this data because it doesn’t suit their preferred model of how banks operate. They model them “as if” they are intermediaries who introduce savers to borrowers, not as originators of both money and debt. "

"I don’t expect a crisis in the USA and UK in the near future, but rather stagnation like that which Japan has experienced since its “Bubble Economy” burst back in 1990. There will be revivals and reversals, but not an outright crisis because a pre-requisite for that is very high levels of credit. " Private debt in America is $60 trillion. How big an overhang is needed?

John Hussman does excellent research and projections. He shows very clearly that the stock market will have zero returns for about the next 12 years. Hussman and several other writers who I read all commit the same sin. They all agree with the unemployment numbers from the BLS. Unemployment stands at 4.6%...or something like that. Many of these writers / investors mention that the labor participation rate is just around 64%.

"Market returns don’t just emerge from nowhere. They are driven by the sum of three factors: growth in fundamentals, income from cash distributions, and changes in valuations (the ratio of prices to fundamentals)." I don't see the word "consumption" squeezed in there.
"while the U.S. Bureau of Labor Statistics estimates labor force growth of just 0.3% annually in the coming years (which would be matched by similar growth in employment only if the unemployment rate does not rise from the current level of 4.3%)."
About 155,000 people try to enter the labor force every month. <25%> of college grads are living in their parent's basement.
" August 2017 Unemployment Rates Notched Higher: U.3 Rose to 4.44% versus 4.35%, U.6 Rose to 8.59% versus 8.57%, and the ShadowStats-Alternate Rose to 22.2% versus 22.1%"
Commentaries by Date

95 million American workers not in US labor force - CNBC.com
So, 95,000,000 Americans not working or producing. The feces-for-brains economists wonder why actual productive gdp isn't growing.
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Old 09-13-2017, 02:14 AM
Danny B Danny B is online now
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Killing our concience,,,, one body at a time

One last post on the social side of Pox Americana.
"It’s a vicious act of intellectual corruption to maintain that the war on terror does not create terrorists, that those killed, wounded, or displaced have no friends or family who will exact what they consider justified vengeance. The terrorism we see now is lava trickling from a volcano of hatred that has boiled, bubbled, and occasionally erupted for centuries, and will continue to do so. There will be no live and let live. Blood will have blood"
"With the US government, the figurative and literal have merged. Someone pushes a button on a drone, missile, or bomb control and murder is done in furtherance of never-ending American war. It’s as disassociated, remote, and cold-blooded as murder gets. Nevertheless, neither the murderers nor the public from which they try to hide reality will have any more success eluding the psychological turmoil and toll than the Thane of Cawdor and his lady."

"How does evil become banal? Practice, practice, practice. Killing becomes the routine, what the government does. Like many bloodthirsty, tyrannical regimes the US government has warmed up on foreigners. However, the functionaries and politicians who now push the Kill the Enemy button also push the Domestic Surveillance button. They will not hesitate to push the Enemies of the State, Mass Detention, Concentration Camp, and Execution buttons when the time is right."
"And although most people don’t make the connection, institutionalized murder is responsible for an appreciable part of the government’s $20 trillion debt and $200 trillion in unfunded promises, as well as its cronyism and corruption, loads under which the economy now strains and will finally collapse."

"Executioners have a short ‘life’. They get tired of the work. The soul sickens of it. After ten, twenty, a hundred death-rattles, the human being, however sub-human he may be, acquires, perhaps by a process of osmosis with death itself, a germ of death which enters his body and eats into him like a canker. "
Killing Them Is Killing Us | Zero Hedge
Side note; "Here and elsewhere, we are castaways amidst the hobgoblins of our own horror show. It is not only the demonic cries of over 100,000 suicides amongst Vietnam Vets and a further 25,000 ex-service men and women dead by their own hand since 2012 – from our more recent wars of empire – that we hear: the psychic airwaves tremor not only with their suffering, their sacrifices and their condemnations "

"The value of money and the cost of borrowing it is about as fundamental as it gets in a so-called advanced economy. You can screw around with a lot of things running a society, but when that goes, you’re flirting seriously with anarchy. In the meantime, we’ll see how the social glue holds things together in those parts of Florida that are entering a preview of medieval attractions in the electrical blackout days ahead."
In the Dark - Kunstler
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Old 09-13-2017, 08:05 PM
Danny B Danny B is online now
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Bouncing with bitcoin

9/13 Bitcoin should be valued at half of what it’s worth today – CNBC
9/13 Bitcoin tumbles after Jamie Dimon calls it a fraud – Zero Hedge
9/13 Cryptocurrencies are here to stay – Daily Reckoning
9/13 Why bitcoin is not a bubble – Bitcoin
9/13 Balance of power: want to give sanctions the slip? Buy bitcoin – Bloomberg
9/13 Collateral damage from the inevitable bitcoin crash – Forbes
9/13 Bitcoin is the ‘most crowded’ investment in the world right now – CNBC9/13 N Korea getting around sanctions by using hackers to steal bitcoin? – CNBC
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Old 09-14-2017, 04:04 AM
Danny B Danny B is online now
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Mutually assured (cyber) destruction

The shock of the destruction of Hiroshima and Nagasaki led all States to avoid nuclear war. Mutually assured destruction was an all too real possibility.
John McAfee now says that there is no such thing as cyber security. He claims that any state can take down the grid of any other State. He also claims that there is no possible way to stop hackers.
The tools released from Vault 7 are out in the wild and taking down everything.
We are now back to confronting mutually assured destruction from the cyber world.

Last edited by Danny B; 09-14-2017 at 04:41 AM. Reason: moar info
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Old 09-14-2017, 04:40 AM
Danny B Danny B is online now
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White, Armstrong, Stockman

William White, " presented one of the earliest and most thoughtful warnings of the financial crisis back in 2003. Anyone with a brain ought to take him seriously"
"White, as hinted in the Economist profile, has consistently warned that the global economy stands at a precipice – that essentially the 2007 crisis was not an end but a beginning. If that stance sounds familiar, it should. It falls in line with the fourth turning analysis covered here in previous posts. Neil Howe, the author of The Fourth Turning, calls the 2007 crisis the catalyst for the protracted fourth turning now in progress and scheduled to end, by his estimate, sometime in the 2030s."

"• The global financial system has become dangerously unstable and faces an avalanche of bankruptcies that will test social and political stability. ."
The default cascade.
“In retrospect, central banks should have let the benign deflation of this (temporary) phase of globalisation run its course. By stoking debt bubbles, they have instead incubated what may prove to be a more malign variant, a classic 1930s-style ‘Fisherite’ debt-deflation.”
Wages fell and the worker could not support R.E. prices. He defaulted. The banks were rescued from the pain of default but, the worker never had his wages rescued.
Prominent establishment economist William White warns ?More dangers now than 2007? |

Armstrong, "Initial Considerations” IMF Discussion Note, and intends to replace the US Dollar as the global reserve currency as early as January 2018 (probably later) with its decades-old Special Drawing Rights by converting the “foreign-exchange reserve assets” into a global currency using Distributed Ledger (Blockchain) technology."
"ANSWER: No. This is really rubbish. I can’t believe how many people are writing in asking about this subject matter. Nevertheless, a new one-world currency is coming. It will be different from what anyone imagines."
"What makes the dollar the reserve currency is the national debt. It is the only game in town to park big money."
So, the CBs print up mega tons of pixels. The pixels flow into GOV debt. That’s fine if you are in the upper loop.

"The SDR cannot replace the dollar by January 2018. What a joke. Yes the IMF is making a pitch to be placed in charge of a new one-world currency. I had argued originally for the SDR back in 1980s when the IMF was a legitimate agency. Time and money has corrupted the IMF and it is now just a political ploy."
"I am preparing a special report on this which will include the whole future of block-chain. It will be ready before the WEC in November. A new one-world currency is coming. There is no doubt about that. The market forces will make that reality. That is the dollar rally – not decline."

I have a lot of doubt about the prediction of a one-world currency. Who issues it? Who sets and maintains it's value? The eurozone has proved that a single currency is a straitjacket. The transactional currency can NEVER be the store of value. FOFOA proposes that all currencies will float and gold will be the store of value. Is it possible to have one store of value at the State level and, another store of value at the personal level?
If we are to have international commerce, the store of value must be agreed on by both importers and exporters. In the East gold is rising. In the West, U.S. treasuries are falling.

Stockman says that removing the debt ceiling is a doomsday move. The debt ceiling has already been raised over 100 times. Why does he think removing the ceiling is catastrophic?

"The state comptroller of Illinois—the most financially troubled state thanks to its pension crisis—summed it up well. He said: “We can’t go bankrupt and we can’t print money. Taxpayers are going to have to pay this bill.”
"Last year, Americans paid over $300 billion in property taxes. In Illinois and other states, property tax bills exceeding $10,000 per year are not uncommon."
" Greeks traditionally have always regarded property as a secure investment. But now it has become a huge millstone, given that the tax burden has increased sevenfold in the past two years alone."
" Higher taxes would make more people leave the state and actually decrease the amount collected.

This trend is already underway. More than half a million people have left Illinois over the past decade. That includes over 3,000 millionaires who’ve fled Chicago in recent months."
My Two Big Bets on the Pension Crisis | International Man
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Old 09-14-2017, 03:19 PM
Danny B Danny B is online now
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The recently perceived demographic crash

Continuing with cyber war. Every small player is trying to accomplish asymmetrical warfare. Instead of bombs and missiles, the competition is between brains and systems. We are losing in that department.
The American Power Grid Has Been Hacked - The Organic Prepper
We can easily be held to ransom.

Some VERY informed and important people have recently become aware of the unfolding demographic crash.
"By 2050, the U.S. will have twice as many seniors as it does today.

And many of these people will retire. They’ll stop producing for the economy.

They’ll also buy fewer goods and services. That’s what happens when people retire. Seniors spend about 38% less on consumer goods and services than people in the workforce.

That’s a serious problem.

After all, consumption makes up 70% of the U.S. economy. So, the economy could take a major hit if millions of people start buying fewer goods and services. If that happens, U.S. stocks could come crashing down, too."
A sudden epiphany, Huh ?
The article is about stocks. The usual short-sighted BS. Japan has clearly proved that a State can't have an expending credit bubble with a shrinking population. It is possible but, NOT with debt money. Our debt bubble is continually pumped up to compensate for the fall in earnings and production & consumption. The State has no effective mechanism to compensate with mass default of the consumer. So, the just keep rescuing the banks.
"They’ll stop producing for the economy." No mention of the 95 million people who are not in the labor force and have " stopped producing for the economy."
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Old 09-15-2017, 05:21 PM
Danny B Danny B is online now
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The new normal,, squatting over a volcano

"Yesterday the government reported a “modest” August budget deficit of $108 billion. That’s one month folks. This is another example of how the government and their mainstream media mouthpieces portray horrifically bad, extremely abnormal financial data as normal and expected. They pretend everything that has happened since 2008 is just standard operating procedure."
So, think about the alternative??
"Those in power pretend near zero interest rates eight years after the recession was supposedly over is normal. They pretend $500 billion to $1.4 trillion annual deficits are normal. They pretend 20% unemployment is really 4.4%. They pretend the stock market is at all-time highs due to an improving economy rather than central bank easy money and corporate stock buybacks. They pretend $20 trillion of debt and $200 trillion of unfunded welfare promises is no problem. "

"The $108 billion August deficit brought the year to date deficit to $674 billion. With one month left in the fiscal year, the deficit will end at approximately $750 billion. Does that strike you as normal? The propaganda media will spin this dreadful result as positive by saying it is down from $1.4 trillion in 2009."
"No one ever mentions the annual deficit in 2007 was “only” $161 billion. As a cherry on top of this mass deception, the total budget deficits reported since 2002 totalled $9.4 trillion, while the national debt rose by $13.8 trillion. Just a slight $4.4 trillion accounting discrepancy among friends."
The printing press is starting to fuse it's gears.

"With interest rates near record low levels, interest on the debt of $275 billion exceeds the total receipts from corporate income taxes. "
(Multinational corporations with profits held overseas would face a mandatory one-time tax as part of the planned Republican tax legislation, Treasury Secretary Steven Mnuchin said Wednesday. Multinationals would face mandatory tax on offshore profits, Steven Mnuchin says )

"Social Security, Medicare, Interest, and Obamacare are on automatic pilot accelerating rapidly. Congress just increased the war budget by $100 billion, because war is our main racket. Tax cuts for corporations and an infrastructure boondoggle are on the way. "
\"We know the $20 trillion debt will reach $24 trillion by the end of Trump’s first term. We know the $200 trillion of promises will not be honored. We know entitlement spending will skyrocket as Boomers retire en mass. We know the tremendously overvalued stock market, bond market and housing market will crash, ushering in part 2 of this financial crisis and triggering the worst phase of this Fourth Turning. "

"The chart below is a truth bomb obliterating the narrative. More than one in three households has $0 of savings, with 57% having less than $1,000."
David Stockman SCREAMS about fiscal insanity from the people in D.C. who want to do away with the debt ceiling. WHAT IS THE ALTERNATIVE?
The final solution for people without money is the usual solution, DEATH.

Here is a good article on complexity. Do you blame the snowflake OR, do you blame the avalanche? Complexity vs risk.
Could Market Complexity Trigger The Next Crash? | Zero Hedge

The State with the biggest military is generally the State with the reserve currency. That State generally goes bankrupt from trying to maintain both the military and the empire. It takes a LOT of a$$-kicking to maintain an empire.
U.S. Wars and Hostile Actions: A List – Let's Try Democracy

Just a slight $4.4 trillion accounting discrepancy As more and more States ditch the dollar, they have less and less incentive to buy American products. Venezuela is the latest. As more States shun the dollar, the FED / treasury must make up the difference. Eventually, there is less and less in the dollar-debt markets.
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Old 09-16-2017, 02:49 AM
Danny B Danny B is online now
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BTC, wages, gold-oil, currency war

9/15 USD collapse: longest losing streak in 14-years spooks bulls – USD
This is the NORMAL outcome of a currency war. This gains export advantage and forces others to devalue their currency. BUT, a currency war, seen from street level, is a cut in wages.
9/15 Hooray! Your real earnings declined in August – MishAnd the result,
9/15 U.S. retail sales post biggest drop in six months – Reuters
"Comparing a range of household expenses from a decade ago to today, uSwitch.com found that despite household income increasing by over 2% in the 10-year period – it is down by a shocking 33% since 2007.

The dramatic fall is due to the 20% rise in all household costs, with gas bills shooting up by 58% and electricity bills and water bills increasing by 42% and 27%."
Financial crash: US heading for dollar collapse 10 years after 2007 crisis | Daily Star

BTC notes;
9/15 Bitcoin price will ‘explode’ but adoption ‘won’t happen’ – Coin Telegraph
9/15 Comparing bitcoin, ether, & other cryptos – Zero Hedge
9/15 Bitcoin and gold – Schiff Gold
9/15 The bitcoin: a chapter in the history of mass speculation – Plata

GDP is barely growing at about 1%. Keep in mind that GOV counts money as part of gdp when it is printed AND counts it again when it is spent.
Also, 9/14 Did you know housing gets counted twice in GDP? – Renegade Inc.
9/15 David Morgan: China’s gold-oil link, debt ceiling repeal will boost metals – GATA
9/15 How China just “reset” the global monetary system with gold – Birch Gold

Finally, here is a suspicious article, https://www.rt.com/news/400265-barce...ove-to-israel/
I'm taking my BOV to my BOL for some R & R for a few days so, I'll be AFK.
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Old 09-26-2017, 12:44 AM
Danny B Danny B is online now
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Catching up on Armstrong

A lot going on and, it will take quite a bit of reading to catch up. I'll start with Armstrong.
"The Draghi era of negative interest rates has proven to be a complete disaster. People have withdrawn money and preferred to buy safes. "
"firing expensive staff with experience, and replacing them with inexperienced kids. Additionally, the low-interest environment and the decline in deposits has resulted in a major contraction in bank branches. As banks also move to online banking, they have been able to reduce staff. In 2016, the banks let go some 50,000 jobs. They were also able to close some 9100 branches throughout the EU"

The German pension system is BROKE. The answer is,,,, TAXES, of course.
"The German government is desperate for money and what they are doing now is just unbelievable. Germany is looking to order companies to prepay VAT tax before they even collect it. Companies in Germany will now have to pay the VAT immediately to the government on any amount they have billed to a customer. "

"“Not much more than a decade ago, in what now seems a more innocent age, the ‘New Economics’ had become orthodoxy. Its basic tenet, repeated in similar words in speech after speech, in article after article, was described by one of its leaders as ‘the conviction that business cycles were not inevitable, that government policy could and should keep the economy close to a path of steady real growth"
"This era of “New Economics” was set in motion by Karl Marx who advocated that government could control the economy and thus create Utopia. "
"We rejected everything that Adam Smith discovered and the Invisible Hand, rushing into Socialism for it empowered government rather than the private sector"
"This is a battle to the death of Marxism, which in all its various flavors, empowers government that always seeks to turn people against one another in order to retain power " Race wars are on the menu.
"Unfortunately, we are in a battle for our freedom and that of our posterity. Governments are broke. Everything is moving against them from every possible angle. They borrow with no intention of paying anything off and are blind to the trend they have been caught up in."
"government is incapable of managing anything for its own self-interest always stands in the way. "

"Then we adopted the idea put forth in this New Economics was that government could “stimulate” by borrowing and that would be less inflationary than printing. This became the Quantity of Money Theory, which has been proven to be complete wrong."
We can't just print money. The bankers would all shrivel up and die.
"While Draghi has expanded the money supply for almost 10 years, deflation has prevailed proving once and for all that the Quantity of Money theory is simply not correct"
"we have reached at times 70% of the entire national debt was composed of accumulative interest expenditures. So the money never went to build roads, schools, or help the poor as politicians pretend. "
YES, but, the bankers are very happy.

"Until we are ready to review this theory of “New Economics” and the Quantity of Money Theory and deal with it, our future is doomed. If we cannot start a dialog, there is no hope. " DIALOGUE,,,, with all the miscreants in congress,,,,,may be with the swamp?

"When the climate turns cold, that is when food shortages takes place. When the climate turns warm, that is when economic activity starts and empires expand. The cold period we are entering will be on time for the shift in empires going forward."

" Behind the Curtain many are simply asking of Europe: What the hell is going on? This has been a “euro crisis” that simply never seems to end. What has happened to Greece, Portugal, Italy, Spain, Holland and now even France. Many outside of Europe are simply asking has Europe just lost its mind?"
The evolutionary cycle of civilization, https://www.armstrongeconomics.com/a...v-renaissance/
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Old 09-26-2017, 12:57 AM
Danny B Danny B is online now
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Financialization in a bubble world

Here is a short vid on financialization. https://www.youtube.com/watch?v=YN9xvzPEBIU
Every physical object is "converted / labelled as a financial instrument. I do not know if that includes your birth certificate.
The post-war United States went on a mission to control the whole world. The greatest sin of Donald Trump is to attempt to reverse the accumulation of empire.

The FED created a giant bubble in everything. It did this in the name of rescuing the banks and financial system. With 95 million Americans no longer in the labor force, the productive economy was just too weak and small to keep the banks in business. Things have only gotten worse and the FED can't withdraw stimulus without causing a huge crash. They talk a good story of reducing stimulus but, they can't escape.
“From 2008 through May 2017, QE and other Fed liquidity programs raised the Fed’s balance sheet from $800 or so billion to $4.5 trillion. The QE programs ended in October 2014."
SO, where did the $4.4 trillion accounting discrepancy come from?
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Old 09-27-2017, 12:45 AM
Danny B Danny B is online now
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Yuan-Gold-Oil,,, IMPOSSIBLE to predict

As the empire unravels, pieces shoot off in all trajectories. There is NO coherent picture that includes all the pieces. It is more difficult, day by day to project which piece is going where. Bitcoin is the perfect example. One day, it's good. The next day, it is bad,,, feared by CBs and States.
After cryptocurrencies, comes GOLD. The Chinese plan for gold and oil to move together. Actually, they move in complementary opposite directions. The petro-Yuan is slated to replace the petro-dollar. The petro-dollar was created when the gold-backed dollar died in 1971. The Saudis were given a deal that they couldn't safely refuse.

China will pay for oil in Yuan. This Yuan can be directly converted into gold. The Bretton Woods deal was D.O.A. because it set a fixed price on gold. The gold-Yuan-oil deal will float.

"exporters of oil to China will accept the Chinese currency, the Yuan, in payment for oil; for this deal, the Chinese have added an incentive: the Yuan received by the oil exporters will be exchangeable for gold"
Sounds OK but, there is a wild card. "This gold will be "sourced", i.e. "purchased" outside of China, for the oil exporters."
Apparently, this means that China MUST buy gold on the open market to pay for oil.
"This scheme - should China effectively carry through on its intentions - is quite revolutionary and likely to have vast consequences which will affect the whole world.

For the first time, since August of 1971- 46 years ago - gold will once again form part of commercial international transactions.

Not only is it a first in 46 years, but the Chinese are linking together both the world's real money, gold, and the world's most important commodity, oil, which is the fundamental motor of all the world's productive activity."
"In the final analysis, we can eliminate calculations of the Dollar price of the barrel of oil, and the Dollar price of gold. The final calculation will have to be the relationship that the world markets establish between oil and gold.

Enormous amounts of oil going to China will have to be paid in gold. An economic balance will be established between those enormous quantities of oil and a relatively tiny amount of gold with which to pay for them. Only the world markets will determine that relationship, but we can see that the intermediate figures in the relationship - the price of oil, the value of gold, the value of the Yuan and the value of the Dollar will all be affected as the economic relationship between vast amounts of oil and scarce amounts of gold is determined."
"The establishment of a nexus between, oil, the world's most important commodity and foundation of the world's industrial activity, and gold, which is the world's true money, will overthrow everything which we have taken for granted during the last 46 years."
"Needless to say, the very big devaluation of the Dollar will place the US in an extremely difficult situation."

GEAB weighs in on this same subject, Western Systemic Crisis 2017-2019 – The Almighty dollar against the Great Petro-Yuan Temptation | GEAB
"The countries which will immediately benefit from this revolution are, of course, the countries under Western sanctions, such as Russia, Iran, Venezuela… Those mentioned countries are, by the way, sitting on the world’s largest reserves of gas and oil, that is the reason why we are talking of petro-gas-Yuan, knowing that gas represents the energy of the future much more than oil does."
"Since there is no longer an obligation to go through the US dollar in international transactions, the perception of the value of the US currency will radically change, to focus more on the reality of the solidity of the US economy , its production, its exportations… so many indicators currently in the red."

China is holding a LOT of dollar-denominated debt and securities. When China wants to buy exterior gold, they can just spend their dollars and run down their dollar surplus. This would force America to accept these securities from third parties. After the Chinese dollar hoard is run down, they don't need to continue with vendor-financing for exports to America. The Wal Marts will run empty.
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Old 09-27-2017, 01:04 AM
Danny B Danny B is online now
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The No-Baby economy

At one time, the finance industry accounted for about 5% of American GDP. When "money" had a positive value, the parasites got very little of it. When "money" was created as debt, the parasites created it with wild abandon. When bankers create faux money, they are first in line at the money spigot. They survive on constant inflation. The finance industry now accounts for a far bigger part of the GDP,,,, the GDP being nothing more than a count of how much money is in the system.

The bankers rapidly inflate the money supply (inflation) causing steady price inflation. You pay three time the fraction of your income to buy a house as your grandfather did. This is because the average worker must sell his labor and has no leverage (collective bargaining). Wages lag ever-more behind price inflation. Both parents had to go to work to survive this creeping wage-deflation + price inflation. Would-be parents didn't have the time or money to have children.

Several States have come to realize that the economy can't grow if the population is shrinking. Everyone is working too hard to have time & money for kids. The Korean GOV has come up with the brilliant idea that; they can put all the women to work and those same women will have more babies.

China "From 2007 to 2014, the country's debt quadrupled, to $28 trillion from $7 trillion. Over the same period, China's economy grew to $10.5 trillion from $3.5 trillion.

These numbers are staggering and point to one indisputable fact: All Chinese growth since 2007 has come from borrowing. There was no miracle in it. But it gets worse...much worse. The numbers also show that every $1 of new debt brought only pennies of GDP growth. "
The States with the worst demographics also have the worst debt problems. There are just not enough babies being born to keep the debt-currency bubble inflated.
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Old 09-27-2017, 01:26 AM
Danny B Danny B is online now
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More and more people left behind

9/18 One-tenth of global GDP is now held in offshore tax havens – Zero Hedge
The rich write the rules and they have taken good care of themselves. Sooner or later, they will discover that the default cascade will turn their riches into worthless paper.
Financialization has moved a lot of debt from Wall Street to silicon valley. It is thought to be even more risky.
Silicon valley has almost NO appreciation of what risk really means. They loan anything to anybody.
Levered Loan Volumes Soar Past 2007 Levels As "Cov-Lite" Deals Surge | Zero Hedge
American companies are sitting on mountains of both debt and cash.
9/26 Lenders loosen mortgage standards, as demand falls – Wolf Street We don't need no stinkin safety net.

View from the street,,, reality.
"You can try and tell people that they’re doing just great, using the media you control, and it’ll work for a stretch, if only because they want to believe it, badly, but when these same people can’t even feed their children while you make such claims, you will eventually lose their attention and support. The difference between beliefs and experiences."
"Inequality breeds more inequality until it no longer can, until people say ‘I want that cake you are having because my kids are hungry. And I brought a pitchfork’."

"Economic prosperity is concentrated in America’s elite zip codes, but in an interesting report on Distressed Communities, from The Economic Innovation Group, it is increasingly clear that economic stability outside of those communities is rapidly deteriorating."
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Old 09-28-2017, 01:25 AM
Danny B Danny B is online now
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Legal tender vs debt

For much of man's history, money had a positive value. Starting a couple of centuries ago, debt began to be traded like money. If somebody owed you money, that was just the same as having that money in your pocket. The bankers were gradually allowed to create more and more of the money supply. It is ALL debt but, it is treated as wealth. Here are some thoughts on money but, you should read the whole article.

"Within the U.S. there is a debt-free money already available that circumvents bank lending, it's called "legal tender". Legal tender is not borrowed, loaned or spent into circulation and the only legal way it gets into circulation, is by your demonstrated productivity and by your demand for the medium.
Another interesting thing, neither the Fed or the banks possess the legal authority to create money, and they don't. What they do create is asset-backed, debt-based private credit, which is not designated or acknowledged in law as being a money, or a currency, or a medium of exchange, with the only legal aspect associated with it, residing in the debts incurred with its use.
nowhere in law does it designate or even acknowledge Fed and bank generated asset-backed, debt-based private credit as being a legal tender, or money, or currency, or a medium of exchange, it is 100% Bank Debt, even when it comes from the Fed.

People are confusing a means of payment, the transfer of a debt obligation (credit), for the medium of exchange, what is owed as payment (an asset). By legal definition, United States coins and currency, including Federal reserve notes, are legal tender money, a medium of exchange (the asset) by law.

Checks as well as debit cards, credit cards, money orders, etc., are a means of payment, referred to as a generally accepted (institutional) arrangement or method that facilitates delivery of money from one to another. Payment has not been made unless or until actual money proper has changed hands. All credit is debt outstanding.

All you’re doing when you use a debit card (credit) to make a purchase is, transferring your obligation to pay the vendor, to the bank, payment has yet to be made. The bank deducts the amount from its debt to you, as represented by your account with them, and adds that amount to the debt it owes to the vendor, as represented by his account with the bank. There was no money or currency of any type, digital, electronic or otherwise, used or exchanged in that transaction, just a transfer of an obligation to pay, which has yet to be met.
Banks are not intermediaries between borrowers and savers, they originate pseudo-loans as pseudo-deposits, irrespective of credited savings accounts or current reserves held." Keep this in mind. The article has many interesting links.
Random Thoughts

"By 1990, the median U.S. citizen had less disposable income than the median cost of living; i.e., the blue line turned negative. This trend lower has continued ever since. The 2008 financial crisis proved to be a tipping point where the burden of debt was too much for many consumers to handle. Since 2008 the negative trend in the blue line has further steepened."
"Note that the green line, unlike the blue line, remains positive and relatively stable from 1959 to 2008, 20 years longer than the blue line. The take away is that consumer and government debt filled the diverging gap between incomes and the cost of living."
"The divergence between the lines halted in 2008. The financial crisis was in part the result of a consumer that had exhausted their ability to use more debt to maintain their lifestyle. Despite the lowest interest rates on record and increases in government transfer payments, the green line has not been able to recover."
"To impress upon you the importance of understanding the role debt has played in supporting our lifestyles, the graph below highlights the magnitude and composition of consumer credit and government transfer payments as a percentage of consumer spending. Combined they now account for 43% of all consumer spending, which in turn accounts for nearly 70% of economic growth. In other words, almost a third of economic growth is reliant on increasing debt."
2 excellent graphs.
The Illusion Of Prosperity | Zero Hedge
(U. S. Money) If you just want to count actual notes and coins, there are about U.S. $1.2 trillion floating around the globe.
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Old 09-28-2017, 01:50 AM
Danny B Danny B is online now
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Public debt created by public serpants

ALL governments eventually default. The State rarely recognises any limitations. America did a partial default in 1931 and 1971, by breaking the value or convertibility of the dollar/gold. Greece has spent much of it's modern history in default. All European States have defaulted. ALL States eventually live, breathe and tax strictly for their own survival. It is no surprise that they always go overboard on spending and taxing. Armstrong is predicting another bout of public debt default in a long history of State default.
The CB prints money for the private banks who, in turn, buy State debt. This debt ALWAYS, eventually becomes unserviceable. At the same time, the State tries to give the appearance of helping the average person. Right now, the FED is talking about reducing their balance sheet after a LOT of printing.
"Long predicts, “I think there is a scare coming this fall. That scare will allow central banks to start more quantitative easing and other programs. They will be guaranteeing the markets and guaranteeing assets because they can’t have this pension system collapse, and it’s all in the stock market. I think we are talking about the spring of next year.” (When it all totally implodes.)"
Gordon Long: They MUST CONTROL GOLD To Control Interest Rates | Silver Doctors

How can they rescue the entire pension system while at the same time,,,,, reducing their balance sheet?
How can they keep raising taxes when everybody’s income is falling?
"The estimated cost to the private sector for global warming has reached about $1 trillion globally. "

Norway did NOT drink the Koolaide. They did not buy public debt.
Mario Draghi (Goldman Sachs) is the manufacturer of much of the Koolaide.
"My question is this. Have the measures taken by the ECB resulted not in averting a crisis, but transforming it into a far greater risk and simply extended the entire deflationary process?"
"Absolutely. This entire policy has failed to create inflation and has proven that inflation is not driven purely by the quantity of money. Confidence is the critical factor. The rich can move their capital to foreign lands. However, the average person cannot move their labor or money offshore. They have withdrawn their cash from the banks to place in their safes at home reducing bank deposits. The negative interest rates have hurt the pension funds and the elderly who once upon a time were able to support their retirement upon interest income "
"The ECB has seriously hurt the European economy and is now trapped. It owns 40% of Eurozone debt and an uptick in rates will devastate its portfolio holdings and probably create the biggest loss in the history of any central bank. Meanwhile, governments have been on life support and never reformed. When the ECB cannot buy more government debt, watch how fast rates rise. We are looking at a crisis that has no historical precedent."

In a crash, you sell what YOU MUST and, NOT what YOU WANT.
“We’ve got lots of teachers, some doctors, many professional women and one petroleum engineer,” brothel owner Gabriel Sánchez said of the women who sell their bodies for $25 an hour. “All of them showed up with their degrees in hand.”
Venezuelan Women Forced To Turn To Prostitution To Afford Food | Zero Hedge

"I had the 1961 edition. In it, Samuelson, a prominent Keynesian economist who won the Nobel prize in economics, predicted that the economy of the Soviet Union would overtake the U. S. economy in 23 years (by 1984). Even as late as the 11th edition (1980), Samuelson stood by his prediction."
"So how is it possible that Samuelson and his fellow Keynesians could even consider that a planned economy could work better than a free economy? For 11 editions he persisted in believing that failed theory. And a generation of students left school with the idea that a centrally planned economy could work."
"Therein lies the problem: contemporary economics is not able to explain what happens in the real world. The lack of valid theory, the improper use of mathematics (econometrics) and raw empirical research as a substitute for good theory has led contemporary economics to a dead-end. Even worse, they recommend economic policies that often achieve the opposite of what they intended and make problems worse. And, we end up paying for their mistakes."
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Old 09-28-2017, 04:30 PM
Danny B Danny B is online now
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Nobody is prefect

Red Alert
September 28, 2017 at 1:37 pm · Reply

In 2013, Armstrong predicted the DOW would double by 2015. At the time of the prediction the DOW was approximately 14,000 – today (April 2016), it is at/near its high of 17,737.00. In 2014 he stated that $100+ crude oil was here to stay. Crude is now trading below $40. So both of these are way off base. Let’s take a look at some of his other miscue predictions:

Forecaster Martin Armstrong calling for start to a Sovereign debt crisis 2015.75 – he means the 3rd quarter of 2015 but it did not and has not transpired… yet.

August 25, 2011 – Martin Armstrong: Gold to Correct for 1-3 Quarters Before Resuming Uptrend – Gold was $1740 on that date, did correct lower – but never resumed, eclipsed or equaled that high 1-3 quarters after – nor has it 4.5 years later.

June 1, 2012 – Martin Armstrong: Are Commodities Preparing for a MAJOR RALLY? Armstrong is still looking for gold to explode to the upside into 2015 due to the Sovereign Debt Crisis – in this case the exact opposite happened – Commodities essentially collapsed for the, almost, 4 years following his statement.

November 2009 – “Martin Armstrong: Gold Headed To $5,000 And Beyond!” – 6 years later and no where near. That is not saying it can’t or won’t – just that without a date – it is a rather meaningless statement.

April 19th, 2013 – “We elected Weekly Bearish Reversals in both metals with gold closing at 1397.2 and 2304.1. Gold closed also just below the Weekly Break line 1398.6. This is warning that the FAILURE to exceed Friday’s 4/19 high intraday, and a penetration of 1310, we are looking at a drop to $1158. Breach that, and we very well may see $907 in 2 weeks.” No chance. Before he said this Gold had dropped $200 in the month of April, 2013 but it ended about $90 higher after he made the statement and it did not reach or breach $1158 although the following month it came close. Sub $1000 has not occurred even 3 years later.

Dec 2012 – “The metals will be taking off during 2013, Martin believes after the summer, going all the way to 2016. Major support is at 1570.” – Gold started December 2012 at $1720 and closed 2013 at $1205 – $1570 was not support and June (Summer), it went below $1200.

Oct 2013 – Gold’s going to drop below $1000 – and here is an example of his flip-flopping from the previous prediction. Sub $1000 has not occurred even 2.5 years later.

Aug 9, 2013 – “Martin Armstrong has come out with this shocker – Dow 32,000 by 2015! – needless to say this wasn’t even close to transpiring.

In 2013 – regarding the above DOW call: “Gold will be a beneficiary too, but in 2015.” but later stated ”$650-910 price of Gold coming soon.” – so this is an extreme flip-flop and neither came close to fruition.

September 14, 2014 – “Is Martin Armstrong Right on Sub-$1000 Gold?” – This seems to be a call that he is sticking with (see below), and I don’t disagree, but the timing has not proven him correct to date.

More recently:
“The metals will bottom on the Bechmark targets. Today, gold has collapsed again back down to the 1208 level. All the screaming, hollering, kicking, biting, and name-calling will not prevent gold from meeting its fate. You have to realize there should be a retest of the 1980 high just under the $1,000 mark. There is a risk of testing the Yearly Bearish Reversal at $680. That would probably finish-off the gold promoters for quite a while. I think even a break of $1,000 will make them look rather stupid. But that is what you need at the finale.
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Old 09-28-2017, 08:56 PM
Danny B Danny B is online now
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Gov vs. GOV

In 1932, 17,000 veterans who were POOR demanded that GOV pay them for their bonus certificates.
"Army Chief of Staff General Douglas MacArthur commanded the infantry and cavalry supported by six tanks. The Bonus Army marchers with their wives and children were driven out, and their shelters and belongings burned."
The standing army used tanks and troops and horses to drive off army veterans.

"The BBC has come out and reported that three million savers in Britain in what is known as final-salary pension schemes only have a 50/50 chance of receiving the payouts they were promised"
"The odds of those in government receiving what they were promised is probably less than 50/50 worldwide with few exceptions."
"Political Hell is coming to an eventful end as Spain sends in 16,500 troops to invade Barcelona and subjugate Catalonia "
"This is the crisis we face in Democracy. Government will become more Draconian as we see in Spain to retain power. To hell with human rights or even what is moral. Government will only act in its own self-interest."

"Starting in 2018, the Governmental Accounting Standards Board—the source of generally accepted accounting principles (GAAP) for state and local governments—will force officials to record healthcare liabilities on their balance sheets. Pew Charitable Trusts estimates the national shortfall will add up to $645 billion.

That’s on top of the estimated $1.1 trillion in unfunded pension liabilities they already had. In other words, this giant problem that no one knows how to solve is about to get 59% worse!"
What Could Go Wrong? For Public Pensions, More Than You Know | Connecting the Dots Investment Newsletter | Mauldin Economics

"(Ken Rogoff and Carmen Reinhart wrote an important book called This Time Is Different on the 260-odd times that governments have defaulted on their debts; and on each occasion, up until the moment of collapse, investors kept telling themselves “This time is different.” It never was.)"
“the bubble in government promises,” which I think is arguably the biggest bubble in human history. "
Pension Storm Warning | Thoughts from the Frontline Investment Newsletter | Mauldin Economics
9/28 California schools facing $24B in retiree health costs – SF Chronicle
9/27 “Hypermiliterization” of Urban Shield alleged – Daily Cal

Social Security Administration: So Here’s Why We Need 174,000 Hollow Point Bullets…

Obama DHS Purchases 2,700 Light-Armored Tanks to Go With Their 1.6 Billion Bullet Stockpile
1.6 Billion Rounds of Ammunition: Homeland Security under Investigation for Massive Ammo Purchase

"On top of a wide range of gas and chemical grenades, rubber bullets and other riot rounds, the purchase calls for “controlled noise and light distraction devices,” including flash bangs which set off a 175 dB sound with 6 – 8 million candelas light bursts in 10 milliseconds.

So why are the Feds prepping to take on crowds?"
Eventually, the State workers will get the shaft on their pensions.

" Reading Gesell's deconstruction of 'economics' is like watching a firebomber blowing the roof off of an entire block of houses..."
""Money-interest is exacted from the wares, that is, directly from the circulation of wares and money. (We have already noted that Marx denied this possibility). Interest upon money is quite independent of the existence of a proletariat deprived of the means of production; it would be no whit less if all the workers were provided with their own instruments of production. Interest on money would in that case be levied by the merchant (possessor of money) from the workers when they were handing him over their produce. It would be levied because the merchant, by withholding his money, could prohibit the exchange of the wares produced by the workers - without direct loss to himself, and with direct, inevitable loss to them, since all wares, with a few unimportant exceptions, lose daily in quantity and quality and, in addition, cause considerable expense for storage and caretaking.." Silvio Gisell - The Natural Economic Order "
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Old 09-29-2017, 02:58 PM
Danny B Danny B is online now
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public debt,,, stock market reality

Going forward, we are going to see an increasing battle between GOV employees and the taxpayer. California just raised the snot out of various taxes. It won't cover the pension shortfalls for State employees but, they had to do something.
Kentucky is farther advanced on the road to insolvency that California.
Teachers Demand $3,200 From Each Kentucky Household To Fund Pension Ponzi For 2 Years | Zero Hedge
Cute pic, http://www.zerohedge.com/sites/defau...0Grenade_0.png

No matter how much they raise taxes and employee contributions, the demands ALWAYS outgrow the inflows.

The States do not have a printing press but, the FEDs DO, "President Trump’s just concluded deal with Democrats to suspend the Constitutional debt limit, removes the last road blocks that would prevent even greater dollar depreciation. That deal allowed the U.S. Treasury to borrow a staggering $317 billion, the most ever in a single day,"
A New Challenge to the Dollar | Euro Pacific Capital

2 articles on the stock market and margin debt.

9/28 Oil analysts baffled as Venezuela ditches petrodollar – Oil Price Venezuela is being persecuted by everybody who wants their considerable oil. Maduro is no angel but, the America is making things much worse.
9/29 Fewer auto sales dent consumer spending in August, inflation still weak – MW
9/28 Pending home sales dive: economists miss the boat by over 2% – Mish

DO NOT WORRY!, 9/29 US second-quarter growth revised upward to 3.1% annual pace – Bloomberg
A revision fixes everything.
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Old 09-30-2017, 02:31 PM
Danny B Danny B is online now
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Dancing backwards off a cliff,,, Spain

"The ever richer rich cannot spend enough to keep things moving. They can buy stocks and bonds and houses, but they can’t buy all the groceries and clothing that the poor and middle class no longer can. But it’s those things that keep the economy humming along."
"An economy as unbalanced as the one we presently have is bound to perish. The rich are killing their own economies by trying to get richer all the time. And they have no idea that’s what happens."
"our media, owned by the rich, support anything that will make them richer. Even though that is suicidal for everyone involved. We are a tragic species in many more ways than one."
"We live in a system that is warranting economic suicide for everyone including its own proponents"

" The protagonists wouldn’t know how to achieve that. They don’t understand what makes an economy run, and keeps it running.

And they don’t want to understand, because they think it’ll make them less rich. Nobody gives balance a second’s thought. Presumably because they think the system, like nature, will eventually balance itself. And they’re right in that. They just haven’t considered what that balancing act might mean for them personally."

Spain is nearing civil war, https://www.armstrongeconomics.com/i...g-separatists/
Armstrong, "We are looking at an economic crash – not a market crash. As government implodes with the Pension Crisis, capital shifts from public assets to private. This is a process that is not instantaneous, it is an ongoing event that will worsen now into 2020"
Armstrong is just too focused on markets. The markets are being buoyed by continuous liquidity infusions from the FED. He never mentions wages.
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Old 10-01-2017, 02:42 PM
Danny B Danny B is online now
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Dick Eastman on the money supply

On Sunday, September 24, 2017 10:42 AM, Dick Eastman <oldickeastman@q.com> wrote:

Lording over all organized crime is the Bank-of-England/East-India-Company/Rothschild system of interest slavery under which each nation borrows its entire money supply at compound interest. A super mafia of Jewish merchant bankers dictates national money supply quantities and lending volume. No business, entrepreneur or home buyer can do anything until a money lender gains an "interest" in the undertaking, that is unless someone signs a contract obligating the payment of interest and return of principal for each amount of loan deposit created. No nation can simply create its own permanent money and distribute it among its citizens for their use. The lending of an entire nation's money supply at interest is the exaction of tribute. It is national slavery.

And money is only provided for the economy as long as someone is credited as having assets or money-earning opportunities from which interest tribute may be drawn. There is no escape from this interest servitude because there can never be enough money for all existing debt to be paid off so that each month there are additional defaults, foreclosures, bankruptcies and seizure of assets pledged as collateral. National economies always tend to deflationary depression and debt tends to increase. It does not happen all at once because the interest payments are made over periods of a year or several years, but it is always happening.

Every yen, pound, rupee, dollar, dinar, peso etc. is co-created with an obligation for the borrower to pay that much plus interest and the lender has claim regardless of whether the borrower defaults on the loan or not. The laws are entirely loaded in favor of the lender and against the borrower, even though both signed the loan contract and the borrower provided the opportunity of the return.

There is no need for any nation to borrow its money supply. A people can declare their independence from organized crime in money and lending and in government. They can form new governments which will provide the money supply without charge, from "thin air," simply by naming a new monetary unit and declaring it legal tender for all debts and contracts and for the paying of taxes and then distributing this money to the people by way of a "new money dividend" so that the people themselves can spend it into circulation. The power of money creation can be taken out of the hands of bank. The nation's banks can be reorganized into mere lending clubs, where people who have saved money from consumption can pool it with the money of other savers and lend it out at interest without regulation. The borrower and the lender will share the risks 50-50. In the event of default, the lender will assume half of the responsibility for the default. If a bank lends on risky ventures that fail, the "lending club" will lose with the borrower.

In such an populist economy there will be a lot more economic expansion from business people from their own earned profits. The prices of goods will be perhaps 40 percent lower because of less interest-burden component going into the price. And government will be able to finance all of its activities with tax financing. The national debt of government can be repudiated on the principle that fraud vitiates all contracts and the international lending system is a fraudulent criminal racket.

The only problem with this is not in the details of the solution, but in the fact that no one hearing about it thinks its worth the fight that is required to loose the hands of organized crime from our throats. Nevertheless, I ask you to support this idea by teaching others about our situation and this remedy. Out of 7 billion people in the world there must be someone who would like to see humanity set free.

Dick Eastman
Yakima, Washington
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Old 10-02-2017, 12:54 AM
Danny B Danny B is online now
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Graphs,,, wage deflation brings monetary deflation

I have a bunch of charts that are very informative. The world has low-wage States and the world has high-wage States. As shipping gets more efficient, the cost of trade and transportation falls.

As shipping costs fell, shipping volume rose, https://cdn.static-economist.com/sit...518_FNC639.png
So, trade is growing. BUT, much of this trade is with low-wage States. http://thecorner.eu/wp-content/uploa...-2-777x400.jpg

Capital can instantly flee to the best market. Labor can not. Labor is "stuck" where it is at, https://www.advisorperspectives.com/...ed6040119e.gif
Here are historical wages adjusted for (bogus) inflation numbers. http://2.bp.blogspot.com/_1pb7adF2Rp...+Long+Term.jpg
Just the same, labor is losing ground.
Minimum wage compared to gold. The angle of the fall is quite steep. http://www.silverdoctors.com/wp-cont...ge-in-gold.png

Wages haven't gone anywhere, https://www.advisorperspectives.com/...s-YoY-Real.gif

It is easy to see why our wages have crashed. Taking all this together shows that the American worker has had continuous wage deflation. We had no money to spend on discretionary stuff and the economy was rapidly deflating. The banks jumped in with more and more debt money because they are scared stiff of general deflation. Our wages couldn't keep the economy going so, the State jumped in with TARP money.

As wages continue to deflate, the financial parasites whipped up financialization to make up the difference,,, so that they never lose. The "Affordable Care Act" is only affordable if you make $110,000 a year.
As time goes by, more and more things are unaffordable.

The Automatic Earth reports that finance just doesn't understand the damage and the danger.
Paul Craig Roberts writes about this also.
"What we are witnessing in the United States is the first country to reverse the development process and to go backward by giving up industry, manufacturing, and tradable professional skill jobs. The labor force is becoming Third World with lowly paid domestic service jobs taking the place of high-productivity, high-value added jobs.

The initial response was to put wives and mothers into the work force, but now even many two-earner families experience stagnant or falling material living standards. New university graduates are faced with substantial debts without jobs capable of producing sufficient income to pay off the debts.

Now the US is on a course of travelling backward at a faster rate. Robots are to take over more and more jobs, displacing more people. Robots don’t buy houses, furniture, appliances, cars, clothes, food, entertainment, medical services, etc. Unless Robots pay payroll taxes, the financing for Social Security and Medicare will collapse. And it goes on down from there. Consumer spending simply dries up, so who purchases the goods and services supplied by robots?"
"jobs offshoring reduces corporate costs and financialization transfers remaining discretionary income in interest and fees to the financial sector. But as consumer discretionary incomes disappear and debt burdens rise, aggregate demand falters, and there is nothing left to drive the economy. "

"The Wall Street Journal editorial asserts that the young are not in the work force because they are on drugs, or on disability, or because of their poor education. However, all over the country there are college graduates with good educations who cannot find jobs because the jobs have been offshored. To worsen the crisis, a Republican Senator from Wisconsin wants to bring in more foreigners on work permits to drive US wages down lower so that no American can survive on the wage, and the Wall Street Journal editorial page editors endorse this travesty! "

"The foreigners on work visas are paid one-third less than the going US wage. They live together in groups in cramped quarters. They have no employee rights. They are exploited in order to raise executive bonuses and shareholder capital gains. "
"As an economist I cannot identify in history any economy whose affairs have been so badly managed and prospects so severely damaged as the economy of the United States of America."

Low-wage competitors brought wage deflation. The financial sector is hard at work to hold back economic deflation. They are "forced" to take a larger and larger chunk out of the productive economy. Meanwhile, the FED prints mega-tons of "money". This money must flow somewhere and, it does. There is little deflation in the upper loop. BUT, 1/3 of the companies in the Russell 2,000 index have negative cash flow. The stock market is where the rubber meets the road. The lower loop is responsible for most of the consumption. The stock market values are pumped up like a blood-engorged tick. BUT, it is the lower loop that creates earnings for the stock market.
The earnings just aren't there. All those $trillions have to be parked somewhere so, much of it remains in the stock market. This article shows the margin debt, https://www.financialsense.com/jill-...t-and-market-0
The sad fact is; all this free money will never flow into wages. The lower loop will continue to deflate. U.S. GOV will continue to try to cover the shortfall. GOV borrowed $ 317 billion in just one day.
"By 1990, the median U.S. citizen had less disposable income than the median cost of living; i.e., the blue line turned negative. This trend lower has continued ever since. "
"total budget deficits reported since 2002 totalled $9.4 trillion, while the national debt rose by $13.8 trillion. Just a slight $4.4 trillion accounting discrepancy"

Apparently, the FED is locked-in to printing whatever it takes to keep the party going. The alternative is a deflationary cascade of default that would leave NOTHING standing.
Nobody knows who is credit-worthy and who is not credit worthy. Buffet (not Jimmy) said that; you never know who is swimming naked until the tide goes out. A credit lockup would mean the end of the West.
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Old 10-02-2017, 05:48 PM
Danny B Danny B is online now
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Current reading

Have no doubt, the State is there only to preserve the power and wealth of the State.
"Inflation peaked at 500 billion percent before the national currency was abandoned in a favour of the US dollar".
"Unemployment in Zimbabwe is estimated at over 90 percent, and at least 80 percent of government revenue is used to pay state workers' wages."
The Federal Reserve has NO army. I believe it is being forced to print whatever the banks and GOV claim is necessary. This may account for the $ 4.4 trillion discrepancy between the deficit and the debt.

The public pension funds are broke but, here is a claim that they are flooding the market with cash.
This $700 Billion Public Employee Ticking Time Bomb Is Only 6.7% Funded; Most States Are Under 1% | Zero Hedge

China's plan to link gold-oil-Yuan by the end of the year will be highly inflationary to the gold price AND highly deflationary to the value of the Yuan.
"China’s total debt could rise 77 percent to $46 trillion by 2021" https://www.bloomberg.com//news/arti...-action-needed
If they play their cards right, they can devalue away the pain of repaying Yuan-denominated debt.

"Though many call an expansive state The Nanny State, I prefer the term The Savior State, as the state claims its expanding powers under the guise of saving us from a variety of threats—including those that arise from the socio-economic system the state oversees. In other words, The Savior State’s guiding ideology is to save us from ourselves."
"In a centralized power structure, this crisis management manifests as change the rules without warning to increase the reach and power of the state. The justification is something along the lines of these emergency powers are needed to protect the nation"

Fitts writes about a missing $ 21 trillion, https://usawatchdog.com/21-trillion-...-austin-fitts/
Israel is fighting tooth and nail (but not with israeli blood or treasure) to destroy Syria and annex the Golan Heights. Seems that there is a LOT of oil there. https://www.armstrongeconomics.com/i...-saudi-arabia/

"The press champions self-interest. They created the Spanish American war with fake news about the sinking of the Maine in the Spanish harbor."
"When the news turns to propaganda, it is one of the last things to take place in the historical sequence of how civilization falls. The mainstream media is the third horseman of economic Apocalypse – Taxes – Corruption (Politics/Rule of Law) – Propaganda – War.

*(First you have the taxes, then comes the corruption to bribe politicians to get out of the taxes and they use the courts to extract taxes, then comes the propaganda of the media to manipulate society to hold on to power, and then finally comes the war (civil unrest/international)"
Keep in mind that, although Armstrong has had some "misses" while predicting economic numbers, he has been very accurate at predicting social movements. He was VERY accurate at predicting the breakaway in Catalonia.

Last edited by Danny B; 10-03-2017 at 01:35 PM. Reason: Mo info,,, spelling
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