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Old 10-03-2017, 01:55 PM
Danny B Danny B is offline
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Fall of the globalist economy and rise of populism

Here is a cross-post on rising fascism as represented by globalist forces trying to lock down control and erase popular representation.
Globalization is a story in economic failure.
The German election is history and the French election is soon.
Armstrong, "I really hope Le Pen wins because that will force Brussels to look in a mirror just once. If Macron wins, we are looking at a very hard landing for the EU next year. This will probably rise up even violently and places Europe at risk of civil war from the standpoint that Brussels has federalized Europe behind everyone’s back."

I can't possibly write about the economy and ignore something like a looming civil war. The globalists federalized Europe and figured the people would just go along with it. They figured that enough immigration would break up any popular resistance. The populace would be so busy trying to protect themselves from immigrant violence that they would scream for more protection from Brussels.

The Europeans have figured out that they are being raped figuratively by Brussels at the same time that they are being raped physically by the rapefugees and economically raped by the bankers. The mask has come off. Brussels has condemned the vote in Spain.
Everybody important reads Armstrong. He predicts that capital will flee public debt. Draghi talks about reducing stimulus. The ECB already owns 40% of European bonds. Imagine what private capital flight will do to the bond market.
The globalists want a EU army to put down rising populism. Europe could burn to the ground.
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Old 10-03-2017, 02:16 PM
Danny B Danny B is offline
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money, crypto, asset-class, legal-device, the law

The globalists have a plan to retain control BUT, Christine LaGarde of the IMF speculates that both the central banks and the private banks could be displaced

"Let us start with virtual currencies. To be clear, this is not about digital payments in existing currencies—through Paypal and other “e-money” providers such as Alipay in China, or M-Pesa in Kenya.
Virtual currencies are in a different category, because they provide their own unit of account and payment systems. These systems allow for peer-to-peer transactions without central clearinghouses, without central banks.
In the long run, the technology itself can replace national monies, conventional financial intermediation, and even "puts a question mark on the fractional banking model we know today."

"If privately issued virtual currencies remain risky and unstable, citizens may even call on central banks to provide digital forms of legal tender"
This article is very important as the world is slowly shifting focus on just what CAN be money. The comment section from the article is even more enlightening. I'll copy several.

naive crypt0-muppetz unable to comprehend the IMF's endgame in their SDRcoin
this IMF gambit also removes all cash from equation, and hence everything is perfectly tracked.
I don't know why they'd (the elites) need to be afraid of anything. It's much like Obamacare... designed from the beginning to usher in something far worse. It's a global financial "head fake"

The power that cryptos possess cannot be denied.

Yes it can.

Crypto currency is an asset class. National currencies are traded for crypto with an exchange rate. Crypto are an escape valve from national currencies, and cryptos have "value" due to imposed scarcity. Crypto value is largely due to their security (and scarcity) - allowing transactions to avoid taxation, and to move purchasing power around the world outside of "one world government" scrutiny.

Asset classes are not money, even if they take on a form of purchasing power. Money gets its power from the law. National monies are "good for taxes, and the payment of debts." Crypto currencies do not have any legal basis, and are not good for taxes. Good luck getting goods and services priced in a crypto unit. Money's true nature is law, and cryptos do not have legal sanction - cryptos are an asset class invented by the market.

LaGarde is a total dumba$$ if she doesn't understand that private corporate bank money gets its entire money power by law, by an act that says their "bank money notes" are good for paying all taxes and debts. Yes, the sovereign rights of the people were usurped when private banking corporations took the money power for themselves. The power of the state will step in and enforce legal contracts denominated in the national private banking unit. Cryptos are not a legal device.

LaGarde is either casting hypnosis, or is fundamentally confused on the nature of money.
Money is not an asset class. It is a legal device that is used to transact. It can transact goods and services. Or, money can be used to buy asset classes. In the case of crypto, it is bought with money via an exchange rate. Crypto is PRICED as an asset class - it is not money. Don't be cofused because crypto has purchasing power.

The works of mankind, are what mankind produces, and his product is PRICED. Prices are denominated in a legal monetary unit.

Money is related to goods and services by way of volume of said money. Too much money chasing after goods and services - inflation. Too much money chasing after asset classes e.g. crypto, makes crypto price go up.

If you store money as savings, it is not an asset. It is latent demand. Money serves both as demand in the now (for transactions in the now) and latent demand, which demands from the future.
Much of the power of crypto is founded on it's not being a legal device. It can be owned as a matter of right.
Bitcoin is being artificially manipulated to get people to put those FRNs into cyberspace where they can be taken, thus balancing all the debt that was created.
anyone who believes they will escape the taxman through Bitcoin doesn't understand the IRS.
If the IMF is interested in Crypto-currencies, it is only in order to seize control over them and assimilate them into the government / CB complex
Never forget, that (((They))) will NEVER EVER relinquish control of their Babylonian Money Magic (aka fiat currency, fiat debt, fiat credit).

Not without losing an all-out war against the People.

If they have to, they will copy and piggyback the Crypto movement, so that they can eventually roll out their own as the New FRN.

ALL of the above is highly influenced by the ability of the State to get into any computer system. As long as this is true, your money is not safe. The new quantum computers may very well change all of this.
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Old 10-04-2017, 02:59 AM
wayne.ct wayne.ct is offline
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Fiat Money

Something that has no intrinsic value but has perceived value is known as fiat. Somebody or some institution of society authorizes and produces this fiat. E.g. it costs a few cents to produce a $20 FRN with no intrinsic value but because the restaurant perceives it has value they are willing to trade it for a meal. A middle-man perceives the bit coin has value and electronically converts some bit coin into FRN equivalent on the fly. NOT because the bit coin is scarce. It works solely because the middle-man perceives it has value. The problem in all this is two fold. Firstly, both bit coin and FRN are fiat. No intrinsic value on either side of the transaction. Secondly, without computers and the Internet the exchange is not possible. Implicitly, this only works when the infrastructure is in place. Also, where computers are involved there is no privacy or security. Lastly, there is the specter of government intrusion at some point during or after the transaction.

The last two points are not understood or appreciated by most bit coin fans. Yet these two statements are true and devastating to bit coin. In support of this claim I submit the following hypothetical but entirely plausible scenario or future case. The government exercises its overreaching power and passes legislation or regulation stating that every bit coin exchange is regulated and taxable. Anyone and everyone that is a party to any such exchange is required to pay a prescribed fee or penalty as decreed by the government or suffer accordingly. The result is an end to private bit coin as a generally accepted form of exchange. Consequentially all crypto-currency becomes a part of the government and banking cabal.

The bit coin fans think or claim that they can stay one step ahead of the government and my hypothetical scenario will never happen. Call me skeptical. It will happen much sooner than never. I think I already see the foundation being laid to put this regulation into place. If you value your privacy, don't do bit coin.
There is a reason why science has been successful and technology is widespread. Don't be afraid to do the math and apply the laws of physics.
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Old 10-04-2017, 04:10 AM
Danny B Danny B is offline
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Tax distribution,, ZIRP poison,,, Our turn at bat

The current deck of cards has at least a dozen jokers in it. I'm avoiding making predictions about crypto currencies.
The last couple of posts illustrate the confusion between all the things that we consider wealth, assets, money, currency and store-of-value. There are plenty of other confusing areas. Tax reform is supposed to lighten the tax burden of the middle class. C. H.Smith writes about the tax burden.

"Among the 148 million income tax filers, the bottom 53 million owed zero taxes in the most recent year (2014), and the bottom half (74 million) paid an aggregate total of just $45 billion. So let me be very clear. There was still $4 trillion left in the collective pockets of these 122 million taxpayers — even after the IRS had its way with them!
By contrast, the top 4% or 6.2 million filers paid $802 billion in Federal income taxes. That amounted to nearly 58% of total Federal income tax payments."
"2. Few commentators draw a distinction between earned income (wages and salaries)and unearned income (dividends, interest, and more broadly, rentier income streams from the ownership of productive assets."
"If we separate out these sources of income and types of wealth, we can distinguish two separate classes of high-income taxpayers"
"These high-earners are tax donkeys--they pay much of the nation's income tax but have to work hard for that privilege. "
GREAT graphs, oftwominds-Charles Hugh Smith: What If the Tax Donkeys Rebel?

"In effect, stocks are viewed as good investments because they have been going up, and the evidence that stock prices will go up is that stock prices have gone up. Every additional market advance makes stocks look even better, based on past returns. Indeed, the more extreme valuations become, the more convinced investors become that extreme valuations don’t matter.

And that’s why we’re all gonna die. "
"A similar issue confronts the argument that stock valuations can be held at permanently elevated levels so long as the Federal Reserve keeps interest rates at depressed levels. The problem here is that if investors believe that future interest rates will remain locked at these lows, it will almost certainly be because growth has failed to accelerate as well. "
ZIRP is killing, savers, hedge funds, pension funds, insurance funds and just about everything else. You just can't have it both ways.
"What investors presently take as a comfortable environment of pleasant market returns and mild volatility is actually, quietly, the single most overvalued point in the history of the U.S. stock market. "
GREAT graphs, https://www.hussmanfunds.com/wmc/wmc170925.htm

"Due to slowing illegal immigration, record low birth rates, and young adult migration...depopulation is under way for large portions of the US"
These entwined issues are driving the Federal Reserve's interest rate and monetary policies to delay the resultant economic dislocations and property value collapses in affected regions. But thanks to Japan's more advanced crisis, the Bank of Japan's full game plan (which will almost surely ultimately be the Fed's plan) for dealing with this crisis has already been revealed. Hyper-monetization.

Hyper-monetization is the outright trade of newly created digital fiat for existing assets. This simple process of perpetually reducing the quantity of assets outstanding and simultaneously increasing the supply of money available to chase the remaining assets is the plan. Hyper-monetization explains why continued unchecked appreciation of "bubbly" urban real estate is a really good bet, why financial assets will continue rising, why bond yields will continue declining...but also why the overall economic situation will only deteriorate further and faster across much of America."
GREAT graphs, https://econimica.blogspot.com/2017/...rban-rise.html
The credit bubble can never be allowed to deflate. A falling population threatens to do just that. Eventually, we will all be "Japanese" where the GOV just prints unlimited currency with no plan to pay off the debt.
GREAT graphs.

The West has promoted births in populations that do not have the resources to raise children. Non-producers tend to raise families of little non-producers. The financial burden on the State just keeps growing.
Up to 600,000 expected to apply when L.A. reopens Section 8 housing list this month after 13 years - LA Times

Armstrong, "You will notice that the collapse of communism took place all by itself with the peak of the first 8.6-year wave from the birth of this Private Wave that began in 1985.65. This current wave of 2015.75 is 25.8 years from the 1989.95 event. This is the wave that should likely begin the collapse of socialism, which I have dubbed “Big Bang”. This should culminate in a major political reform 31.4 years from 1989.95 and that will be right after the conclusion of this wave in 2020 – 2021.35."

"This is also the most dangerous part of this political transformation process historically, for government will not go quietly into the light. They will rage against the fade of the light and their power. Policy makers have promised everything yet funded nothing. It has been one scam after the next. They have used economic growth as the pretend growth that would lead to boosting living standards. Yet it has been a constant rise in taxation to fill their pockets that has reduced the living standards for the middle class."
"Russia failed to rise, as did China, for they did not invest in the economy, but rather simply relied upon its resources to bring in cash. The wealth of a nation is based upon its people – not its raw resources of commodities."
"The hyperinflationists have been dead wrong. They cannot grasp that government is not that stupid, but instead is rather evil."

"Legislation like FATCA is shrinking the world economy at an alarming rate, confirmed by the collapse in the VELOCITY of money, which is in meltdown mode. The G20 nations are now all sharing info in search of money that they can confiscate. The local police are just robbing the people; the police are no longer there to protect the people but are revenue agents with guns and wheels.

The frightening rumors coming from behind the curtain are pointing toward a real dark age of constructive communism. You will technically still own your house, but eliminating banks and taking all accounts into the management of government is their solution"
"Social programs will be sharply reduced. They assume they will be able to fund them by controlling all accounts and eliminating paper money. This is the collapse in socialism that I have been warning about. They are arming the police as effective military weapons to ensure the people do not revolt against their power. Everything they envisioned as the social fabric is coming undone because their power and position comes first."

"Government played a part too, by allowing the buildup of social entitlements to win or maintain office. "
"Europe and America depend on government, whereas in former Soviet regions people do not trust government and have learned to rely upon family.

This time the Sovereign Debt Crisis is different. In 1931 when government defaulted, they wiped out the rich and bankers. This time, pension funds and insurance companies will be undermined and that will wipe out the future for many. Those in the West will have to learn the same lessons as the people who lived under communism – It’s our turn up to bat."
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Old 10-04-2017, 04:28 AM
Danny B Danny B is offline
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CITI & CDOs,,, bond shorts

Reportedly, the banks are not profitable. They have turned BACK to derivatives to appear profitable.
"The leader of this effort is none other than Citigroup (NYSE:C), which has surpassed JPMorganChase (NYSE:JPM) to become the largest derivatives shop in the world. Citi has embraced the most notorious product of the roaring 2000s, the synthetic collateralized debt obligation or “CDO” security, a product that fraudulently leverages the real world and literally caused the bank to fail a decade ago.

“It’s an astonishing comeback for the roughly $70 billion market for synthetic CDOs, which rose to infamy during the crisis and then faded into obscurity after nearly destroying the financial system,” reports Bloomberg."
What could go wrong?
Armstrong said that public debt is going to crash.
10/03 Active bond traders have never been more short Treasurys – Zero Hedge
The treasury can only hold the sharks at bay by continuously pumping in more "money". There is always the possibility that something could go POP without warning. Remember that; if a bank goes bust, it will take your deposit to make the senior bondholders "whole". It's all legal.
Everybody else will get a haircut.
10/03 Dollar surge sends emerging currencies reeling – Reuters A high dollar makes emerging market dollar-debt unpayable.
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Old 10-04-2017, 03:02 PM
Danny B Danny B is offline
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Doubt creeps in to sovereign bonds

Here is a graph of the returns on a 10 yr. Treasury note if you just continuously roll it over.
"The true DANGER AHEAD lies in the universal belief that treasuries (and other sovereign fixed income) offer a perfect hedge "
"Buying sovereign bonds against your risk asset portfolio will not only fail to save you in the next market crisis, but will instead be the source of the crash."
"But the global financial system has permanently changed. Quantitative easing, negative interest rates, Central Banks with balance sheets that are 40%, 50% even 95% of GDP. If anyone claims they know how this will unwind, or that they know everything will be fine, then ignore them. This is one of the craziest monetary science experiments ever concocted."
" There you have it. Sovereign bonds, instead of being a great saviour, will instead be the cause. "

"According to the Federal Reserve’s September Z.1 Flow of Funds report, the value of US equities jumped $1.5 trillion during the second quarter to $42.2 trillion, a record 219% of GDP. "
"A report by the International Institute of Finance released in June estimated that global government, business and personal debts totaled $217 trillion earlier this year. "
"according to a World Economic Forum study, the world’s six largest pension saving systems – the US, UK, Japan, Netherlands, Canada and Australia – are expected to experience a $224 trillion funding shortfall by 2050.

Noland’s warnings come during a time of exceptional public trust in governments, central banks, regulators and other institutions. "
"Noland believes that markets will eventually seize up as in 2008."
"The practical effect will be that the Federal Reserve’s balance sheet, far from shrinking as is currently projected, could actually expand, to as high as $10 trillion and possibly more.

Noland’s track record in this respect is impressive. The last time the Fed talked about unwinding its balance sheet back in 2011, he inked a column titled “No Exit” which predicted that the policy would fail (it did), "

The FED tried to exit in 2011. It has talked up EXIT ever since then. The Chinese central bank talks exit. Mario Draghi of the ECB continuously talk EXIT. There is no such thing as a temporary rescue of a failing business / model. The FED is charged with maintaining full employment. Globalism distorted employment to such a degree that, there is no hope in that department.
The State prints money and pushes it into the upper loop so that the bankers and bureaucrats never go broke. Subsidising parasites does very little to help the producing economy.
Benjamin Franklin and Adolph Hitler created money solely for the lower loop. The economy did VERY well.
Here is a 5 y.o. vid of a Canadian girl who talks about how Canada has been SCREWED ever since it got a C.B.
Everyone marvelled at her intelligence and perspicacity. The legislature did absolutely nothing to correct the obvious flaws in the system.

Last edited by Danny B; 10-05-2017 at 02:56 AM. Reason: spellink
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Old 10-05-2017, 03:33 AM
Danny B Danny B is offline
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Empires in their death throes

The nation Dates of rise and fall Duration in years
Assyria 859-612B.C.247
Persia 538-330B.C.208
(Cyrus and his descendants)
Greece331-100 B.C.231
(Alexander and his successors)
Roman Republic
260-27 B.C.233
Roman Empire
27B.C.-A.D.180 207
Arab Empire
A.D.634-880 246
Mameluke Empire
1250-1517 267
Ottoman Empire
1320-1570 250
Spain1500-1750 250
Romanov Russia
1682-1916 234
1700-1950 250
This is an excellent article. I do notice that he left out the Eastern Roman Empire headquartered in Constantinople.

Another great read; Chodorov, The rise and Fall of Society.

"The American empire is coming to an end. The U.S. economy is being drained by wars in the Middle East and vast military expansion around the globe.
Alfred W. McCoy writes in his book “In the Shadows of the American Century: The Rise and Decline of US Global Power,”
Empires in decay embrace an almost willful suicide. Blinded by their hubris and unable to face the reality of their diminishing power, they retreat into a fantasy world where hard and unpleasant facts no longer intrude. They replace diplomacy, multilateralism and politics with unilateral threats and the blunt instrument of war.
"This collective self-delusion saw the United States make the greatest strategic blunder in its history, one that sounded the death knell of the empire—the invasion of Afghanistan and Iraq. The architects of the war in the George W. Bush White House, and the array of useful idiots in the press and academia who were cheerleaders for it, knew very little about the countries being invaded"

In 1989, Russia collapsed. The whole world could have disarmed and enjoyed the "peace dividend". It was not to be. The neocons and various warmongers forged ahead with extending the empire. This was partly our legacy handed down from the British empire. Much more than that, it was a bloodthirsty strategy forced on us by a small bloodthirsty tribe from central Asia.

"They assured the public that U.S. troops would be greeted by grateful Iraqis and Afghans as liberators. They promised that oil revenues would cover the cost of reconstruction. They insisted that the bold and quick military strike—“shock and awe”—would restore American hegemony in the region and dominance in the world. It did the opposite. As Zbigniew Brzezinski noted, this “unilateral war of choice against Iraq precipitated a widespread delegitimation of U.S. foreign policy.”

"While rising empires are often judicious, even rational in their application of armed force for conquest and control of overseas dominions, fading empires are inclined to ill-considered displays of power, dreaming of bold military masterstrokes that would somehow recoup lost prestige and power,” McCoy writes. “Often irrational even from an imperial point of view, these micromilitary operations can yield hemorrhaging expenditures or humiliating defeats that only accelerate the process already under way.”

"The brutality abroad is matched by a growing brutality at home. Militarized police gun down mostly unarmed, poor people of color and fill a system of penitentiaries and jails that hold a staggering 25 percent of the world’s prisoners although Americans represent only 5 percent of global population. Many of our cities are in ruins. Our public transportation system is a shambles. Our educational system is in steep decline and being privatized. Opioid addiction, suicide, mass shootings, depression and morbid obesity plague a population that has fallen into profound despair."

“The demise of the United States as the preeminent global power could come far more quickly than anyone imagines,” McCoy writes. “Despite the aura of omnipotence empires often project, most are surprisingly fragile, lacking the inherent strength of even a modest nation-state. Indeed, a glance at their history should remind us that the greatest of them are susceptible to collapse from diverse causes, with fiscal pressures usually a prime factor. "

Side note, The S&P 500 Poised To Lose $10 Trillion In Value | Zero Hedge

“So delicate is their ecology of power that, when things start to go truly wrong, empires regularly unravel with unholy speed: just a year for Portugal, two years for the Soviet Union, eight years for France, eleven years for the Ottomans, seventeen for Great Britain, and, in all likelihood, just twenty-seven years for the United States, counting from the crucial year 2003 [when the U.S. invaded Iraq],” he writes."
You can thank GWB and his cronies.

"Many of the estimated 69 empires that have existed throughout history lacked competent leadership in their decline, " Does he mean obummer?
"A discredited elite, suspicious and even paranoid in an age of decline, will see enemies everywhere. The array of instruments created for global dominance—wholesale surveillance, the evisceration of civil liberties, sophisticated torture techniques, militarized police, the massive prison system, the thousands of militarized drones and satellites—will be employed in the homeland. The empire will collapse and the nation will consume itself within our lifetimes"
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Old 10-06-2017, 04:14 AM
Danny B Danny B is offline
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GDP and debt

Kissinger informed the Saudis that they WOULD sell oil only in dollars. They had no military so, they accepted the deal. America promised to protect Saudi Arabia. Since then, pox americana has stolen a huge amount of Saudi gold AND refused to liquidate a couple?$trillion in GOV bonds that Saudi holds. Saudi has just signed on with Russia to buy the Russian S-400 missile defense system. Saudi is selling oil to China in Yuan. They are going to need those S400s

"First, it's important to understand that increased GDP does not necessarily increase wealth or improve quality of life. A GDP calculation is measuring-stick for economic activity....nothing more. A GDP figure makes no representations as to the quality, efficiency or economic utility of the activity producing the GDP"
here are a few examples of things that would significantly increase GDP.

Building a Superhighway, Bridge or Bullet Train connecting two uninhabited deserts or islands. (I+G)
Building a Ghost City. (I+G)
A military build up. (I+G)
Producing millions of tons of steel and cement held in a developer's CIP inventory. (I+G+C)
Creating even more manufacturing capacity (factories and mines) for steel, cement, etc.(I)
Building infrastructure. i.e.) Public works, water, power plants, tunnels, wells, utilities etc. (I+G)
Manufacturing phones, computers, clothing and consumer goods for export. (C+NX)
"So you get the point.....although it looks good on paper, incurring debt to build/finance things that aren't economically viable, produce little (or no) economic utility or fail to generate earnings and cash flow doesn't work too well over the long haul. At some point, the lenders won't be paid back"
"Nearly 60pc of new credit this year is being used to repay old loans. It takes four times as much new credit to generate a given amount of extra of GDP as it did a decade ago. “China’s rising indebtedness has come to represent all that is disconcerting about their economy,” they said in a report entitled “The Sum of All Fears”.
"Viewed another way, when we add the current, 2016 BIS figure, roughly US$28 Trillion of China's Core Debt plus the estimated US$37 Trillion +/- of Shadow debt (RMB 253.5 Trillion), we have a Debt/PGDP ratio approaching 900% of "Productive" PGDP. The Comparable, relatively constant, US ratio (250% +/-) is shown in blue below."
China's Shadow-Lending Ecosystem Could Be As Large As $40 Trillion, PBOC Guesses | Zero Hedge
China is going to have to revalue gold MUCH higher to escape from this debt trap.

GDP minus the federal; debt, https://dailyreckoning.com/wp-conten...7_GDP-DEBT.png
"since 2008, this artificial stimulus has averaged 7.45% of GDP. The arithmetic… is quite simple; without the artificial stimulus created by spending the proceeds of newly issued Treasury bonds, our GDP has declined an average of 7.45% each year since 2007! "
"Prominent economists Carmen Reinhart and Kenneth Rogoff have shown that annual economic growth falls 2% per year when the debt-to-GDP reaches 60%.

When it hits 90%, growth is “roughly cut in half.”
When did the U.S. debt-to-GDP ratio nick 90%?
In 2010… shortly after “something broke” in the economy.
What is America’s current debt-to-GDP ratio?
About 105%.

"People saying: this system isn’t working. We want a better one — or else we’d rather just tear it all down. Stagnation predicts right-wing swings. The harder the stagnation bites, the harder the swing. And this degree of stagnation is producing more and fiercer extremism — larger and larger groups of people saying no system, only tribalism is better than this one."

"Money cannot be “scarce” for a nation with a sovereign currency. Real resources can be scarce, not a nation’s sovereign currency. Modern Monetary Theory is based on reality, it explains how the monetary system in a nation with a sovereign currency actually functions. Most monetary theory taught in conventional economic classes is a fiction arising from carryovers from the era of the gold standard in which nations lacked a sovereign currency."
"Republicans and New Democrats “whose goal is to shrink government” will “point to deficits and debt as their proof that we cannot afford” the safety net. Of course they will. They constantly promote that propaganda."
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Old 10-06-2017, 02:45 PM
Danny B Danny B is offline
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Mo debt,,, the pension debt pacman

"So, in less than a month, the U.S. Government public debt increased by a stunning $500 billion. Along with the half trillion Dollars worth of new public debt, the U.S. Treasury will have to pay an additional $11 billion a year in interest payments based on an average 2.2% rate."
"They" claim that we could never just print this money.

"Did the Fed's #2 Quit to Avoid Blame for the Coming Inflationary Storm?
by Phoenix Capital... - Oct 5, 2017 11:28 AM
Vice-Fed Chair Stanley Fischer recently resigned unexpectedly from the Federal Reserve."
Is the FED planning some drastic move that would restrict GOV spending?

"Social Security, by comparison, has a roughly 3-to-1 ratio of workers supporting retirees, but KERS’ ratio is less than 1 to 1.
" the number of retirees drawing a pension from the Kentucky Employees Retirement System (Non-Hazardous), the struggling $2.6 billion fund that serves most of state government, officially topped the number of active workers paying into it.
Read more here: Kentucky pension crisis: State retirees now outnumber workers | Lexington Herald Leader

The Illinois legislature passed a huge tax increase and then,,, ran away. https://mishtalk.com/2017/10/05/20-o...d-of-retiring/

FED GOV is broke. State gov is more broke. Municipal gov is more brokerer.
"To our great 'shock', Chicago residents win the award of "most screwed" with over 60% of their tax dollars going to fund debt and pension payments. Meanwhile, there are a dozen municipalities where over 50% of their annual budgets are used just to fund the maintenance cost of past expenditures."
All this money going to debt and pension funding squeezes out all other funding. The rubber meets the road in the municipal bond market. If investors dump munis, it is all over for the cities.

The CBs are trying to hold back deflation even though wages and earning power have been severely deflated. They pump in money to try to get the credit bubble to grow. It NEVER works out the way that they had planned.
"As Wallstromg sarcastically points out, the big irony in this is that "the current monetary policy regime, which aims for "price stability", started in 1995."

10/06 Tesla only made 260 cars last quarter—big trouble ahead – Casey Research Their market cap is larger than GM. What could possibly go wrong?
10/06 Trump expected to decertify Iran nuclear deal – Reuters They told him that there won't be any blowback.
10/06 S&P 500 sets sixth record high close on tax overhaul optimism – Reuters Nothing but blue skies ahead.
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Old 10-07-2017, 02:41 PM
Danny B Danny B is offline
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Mysterious inflation

I read unimaginable amounts of BS trying to find some truth.
10/06 Tesla only made 260 cars last quarter—big trouble ahead – Casey Research
10/07 Tesla cars are flying off the lot, stock looks ready to break out – The Street
10/06 The big banks are coming for bitcoin – Zero Hedge
10/06 Banks now want a piece of bitcoin – Fortune
10/07 Rates are jumping as jobs report showed hidden signs of inflation – CNBC
10/07 BLS caught fabricating wage data – Zero Hedge
10/06 US payrolls fall 33,000 on storms, jobless rate at 4.2% – Bloomberg
10/06 What hurricane? Full-time jobs surge – Zero Hedge

You get the idea. I have to do a lot of reading.

Everyone and their uncle were predicting hyperinflation. Now, they are mystified that it hasn't appeared. The stock market is flying higher than it has before in history. It is at 2.7 times historical valuation. The dolts just refuse to look to the upper loop of the economy while looking for hyperinflation.
"Two weeks ago, Janet Yellen finally - and shockingly - admitted that neither she, nor her Fed peers, "fully understand inflation" and that the "shortfall of inflation this year is more of a mystery."
"while the Fed may have failed to stimulate inflation in real economic prices - and especially wages - it had unleashed hyperinflation in asset prices."
"while traditional inflation measures may not call for aggressive tightening, we believe high valuation (e.g. cyclically adjusted price-earnings, or CAPE, multiples above 30x) is a sign of inflation in financial assets that is hard to miss. This is the elephant in the room."
As aggregate earning power in the West crashed, the banks became insolvent. The CBs rescued the banks by pumping in boatloads of pixilated liquidity. This liquidity flowed into assets because the middle class was consumption constrained. The upper loop is busy inflating everything in sight.
"And while SocGen is battening down the hatches, the French bank is surprised by how little credibility the Fed's stated tightening intentions have in the market, because as it writes, when looking at its monetary newsflow indicator "Nobody seems to believe the Fed dots" and with good reason. To wit:" "This Is The Elephant In The Room": Even SocGen Is Now Calling It A Bubble | Zero Hedge
"And while stocks remain oblivious, expecting to be bailed out the moments there is even a 3% "crash", bonds are starting to get nervous"
Richard Koo talks about inflation, https://www.youtube.com/watch?v=8YTyJzmiHGk

Here is a comparison of the many bubbles, Infographic: The Everything Bubble Is Ready to Pop | RiskHedge
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Old 10-08-2017, 04:39 AM
Danny B Danny B is offline
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We'll never know when it is time to short the market

The stock market is of secondary importance compared to the bond market. BUT, stocks are what everybody is looking at. The FOREX trades $5 trillion a day but, everybody is looking at stocks.
The stock market started flashing red back in 2014. Several fund managers jumped in to short the market. They have been skinned alive since then. Everybody who tries to short the market gets shot down.
By almost ALL indicators, the stock market is far up into nose-bleed territory. Armstrong says that it is not overbought because lots of people are still on the sidelines. He somehow ignores record valuations, record margin debt and a few other major indicators. The stock market is at new records as far as valuation but, it is not at the maximum previous duration.

"Bank of America Merrill Lynch (BofA) runs something it calls the “Sell Side Indicator.”
It is a thermometer of sorts, a thermometer of investor emotion."
"BofA claims, “It has historically been a bullish signal when Wall Street was extremely bearish, and vice versa.”
"When this BofA thermometer is one standard deviation above its four-year average, the S&P 500 declines almost half the time, according to analyst Joe Ciolli via Business Insider.

It is now nearly two standard deviations above its four-year average.
History has witnessed 13 previous price collapses, according to famous Yale economist Robert Shiller.
And he says, “The U.S. stock market today looks a lot like it did at the peak before all 13 previous price collapses.”
"If the bubble has entered its terminal phase, the past suggests it may expand miles and miles before Judgment Day.
Yes, this is the second-longest bull market in history."

"Since its beginning on March 9, 2009, the S&P 500 has risen 267.61%. It has lasted 3,108 days. But… it needs more than another 1,300 days to set the duration record and has to almost double again to rival the return of the market over the 13 years that began in 1987."

A long article on the sheep mentality of investors, Sheep Logic - Epsilon Theory

"Worse yet, house prices across the country remain grossly inflated. In fact, they’ve far surpassed their pre-2008 housing bubble levels, according to the Case-Shiller US Home Price Index."
"Take the Barclays “Skyscraper Index,” for example. Gathering data from the past 100+ years, the index examines historical booms in large commercial construction projects (primarily skyscrapers), and their tendency to precede economic downturns."
3 Uncommon Signs That An Economic Collapse Could Happen Soon
Puerto Rico is in deep trouble, "It Will Be A Disaster": Puerto Rico To Run Out Of Cash On October 31 | Zero Hedge

"The bull market in everything is really a global realization that government is in trouble. We are looking at money getting out of banks and government to REDUCE the risk of government as we move forward. So this time it is different. Normally, we have one sector at a time in a bubble, commodities, stocks, real estate, tangible assets. We normally do not see a bull market in everything unless there is a wave of movement away from government."

The EU is bust. More taxes are needed. NO problem. Just pass retroactive taxes. 15 years should do it, https://www.armstrongeconomics.com/i...-for-business/

Last edited by Danny B; 10-08-2017 at 08:22 PM. Reason: mis sdelling
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Old 10-08-2017, 09:02 PM
Danny B Danny B is offline
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Liar loans,,,, maintaining confidence

In the run-up to the 2008 crash, FED GOV penalized banks who refused to create liar-loans. The FEDs were going to magically raise the rate of home-ownership. This would send business to the banks for purchases that were not merited by the stated wages of the borrower. The borrower could state anything that he wanted. The banks resold the loans to other investors who had not the slightest possibility of verifying the inherent risk. These investors had to take the word of the rating agencies that the loans were good.
The banks got all the up-front money. The rating agencies rationalized that the the loans deserved the same credit rating as the loan creating bank. The banks paid the rating agencies for these glowing reports. When too many NINJA borrowers sent in too much jingle-mail, the big mortgage lenders went belly-up. EVERYBODY had exposure to the credit system and, it locked up.
We can complain about greedy banks but, their greed was nothing new. When slick Willie removed Glass-Steagal, He threw all your savings into the lap of the banks. The Maestro, Greenspan argued that the banks themselves were the BEST regulators of their own business. He now laments that belief. The individual employees of the bank ran totally wild and destroyed many of their employers (banks)
You can lay the ultimate blame on the State.

When the credit markets locked up, nobody could buy anything. 1/2 of car sales were financed by lenders like GMAC that weren't banks and had no cushion.
"annual new car sales decreased by an order of magnitude, from about 16 million in 2005 to less than 10 million."
I remember reports of shiploads of BMWs that couldn't be unloaded at port because, there was no place to put them. Dealers had no room. I find NO mention of this in a search.
People spend money depending on how rich they feel,,, how much confidence they have in the economy. The FED is juicing the economy by $billions every day. The Central banks seem? to believe that if ;they buy hundreds of $billions in stocks, the stock market will never go down.

Here is a single chart that shows their attempts at deflation and, the likely outcome. It gives some indication of timing.
RISK, On a reward-to-risk basis, investors have not been this 'offside' since 1994...
Visualizing The Real Test For Market Bulls (In 1 Simple Chart) | Zero Hedge
The article has a load of good charts.

Here is a set of charts from the cheerleaders, https://www.bloomberg.com/news/artic...-era:thinking:
Scientific advances are bringing us price deflation in many areas. All we need now is free energy.
The 25 people who brought on the financial crisis.. 2012
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Old 10-10-2017, 01:19 AM
Danny B Danny B is offline
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The shape of the coming domestic war

The Bretton Woods credit card allowed pax Americana to become pox Americana. Unearned Wealth destroys morality. All the worst people occupied the behind-the-scenes power structure. $Trillions were poured into the enterprise of thrashing the world for profit. Any State that couldn't stand up to the U.S. military was sacked and looted.
Trump might stay in Afghanistan for minerals - Business Insider
Trump's Afghanistan strategy may unlock 3 trillion in natural resources

Very few States can stand up to the U.S. military. The FED and the dollar are what must be attacked to stop Tel Aviv on the Potomac. The maintenance and expansion of pox Americana depend on continued acceptance of the dollar for our imports. The West is soon to crash.
The R.O.W. is helping things along because they don't want to be looted any more.
The P.B.O.C. is hyperinflating the Chinese currency supply. BUT, all this liquidity can run where it will. The outflow from China alone is about $ 1trillion a year. Draghi claims only $60 billion a month. Kuroda (BOJ) is helping also. Hyperinflation in the asset markets is what will bring them down. There will be no credit and no trust. Only physical gold will be accepted by the East. True, they like gold very much. More importantly, America doesn't have any. The international battleground will be the oil patch.
The local battle will be between retirees and the military.

The neocons thrashed the snot out of the Middle-East. Those who have been thrashed are now flocking to the protection of Russia. Their new defense capabilities have attracted a lot of admirers.
Is This The Geopolitical Shift Of The Century? | OilPrice.com

"Government is the ultimate enforcer of promises, but we have no recourse if it chooses to break them "
"Limited though Social Security and Medicare are, we attribute one huge benefit to them: They’re guaranteed. Uncle Sam will always pay them – he promised. "
"net present value of the US government’s 75-year future liability for Social Security and Medicare. That amount exceeds the net present value of the tax revenue designated to pay those benefits by $46.7 trillion. "
"Every mathematical model of the economy’s dynamic transition path incorporates the infinite horizon fiscal gap, which is called the government’s infinite horizon intertemporal budget constraint. This constraint has to hold, which means the infinite horizon fiscal gap must be zero. Our country’s infinite horizon fiscal gap is far from zero. It would take an immediate and permanent 59 percent increase in all federal taxes or an immediate and permanent 33 cut in all federal expenditures "

"After the next recession the deficit will be $30 trillion within 4–5 years and then grow from there at a rate of anywhere from $1.5 to $2 trillion per year. "
"Many Americans think of “their” Social Security like a contract, similar to insurance benefits or personal property. The money that comes out of our paychecks is labeled FICA, which stands for Federal Insurance Contributions Act. We paid in all those years, so it’s just our own money coming back to us.

That’s a perfectly understandable viewpoint. It’s also wrong.

A 1960 Supreme Court case, Flemming vs. Nestor, ruled that Social Security is not insurance or any other kind of property. The law obligates you to make FICA “contributions.” It does not obligate the government to give you anything back."
"Notice that Larry Kotlikoff said we would need an immediate approximately 50% increase in taxes to fund our future deficits. "
Every one dollar rise in taxes results in a 3 dollar shrinkage of the producing economy. Plot THAT on a graph.
"lockbox with Social Security funds in it. That money was spent on other government programs and debts." WARS
Uncle Sam’s Unfunded Promises | Thoughts from the Frontline Investment Newsletter | Mauldin Economics

10/09 In a switch, GOP deserts its budget-cutting mantra – WaPo They have looked into the abyss and, changed their minds.
10/09 Cooking books: DOD, HUD defrauded taxpayers of $21trln 1998-2015 – Mint Press
$10 Trillion Missing From Pentagon And No One — Not Even the DoD ...
https://www.activistpost.com › Activism

The military has pi$$ed away MANY trillions of dollars. We have junk infrastructure. The military-industrial-banking complex will NOT want to shrink when fiscal reality strikes during the default cascade.
The battle lines will be between retirees and the military budget. Pox Americana will try to continue with business as usual.
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Old 10-10-2017, 03:26 AM
Danny B Danny B is offline
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Volatility will returm,,,, in the form of a mushroom cloud

I tell people that want to prep to store diesel and cash. Puerto Rico is desperately short of,,, cash and diesel.

"The promise of investor nirvana where the pains of real life no longer matter. If you only pay attention to the record highs headlines it all looks rather fantastical these days."
"We find ourselves in a very unique point in history and in a world dominated by false narratives. It is a challenge to keep an analytical grip on reality"
"The $VIX’s corollary, the inverse $XIV, embarked on an explosive near one way journey since the US election coinciding with over $2 trillion central bank intervention in just the first 9 months of 2017:"
2 $trillion,,,, what could go wrong?
"Aside from the obvious artificial liquidity avalanche we’ve had speculated about the driver of all this and the answer may simply be the promise of even more free money, specifically tax cuts."
Side note, 10/09 “Tax reform is dead. Full stop”: Cowen – Zero Hedge
“What is being proposed is a pretty large expansion of our deficits,” Fink told Bloomberg TV. The plan contains up to $6 trillion in tax cuts, according to independent analysts.”
"This new administration wants massive tax cuts. This year the military budget was already increased by $80B to $700B."
"Central bankers have flat lined risk and investors have crossed to the other side expecting nirvana & free money forever."

"What would be signs of nirvana turning into a nightmare?
Keep an eye on this thin red line:"
It will get tested again. Currently the trend line is barely 2% below current prices and it is rising steeply.
When price breaks below this line it’s time to return to real life."

"According to Hyman Minsky, economic stability is not only inevitably followed by instability, it inevitably creates it. Complacent humans being what they are. If he’s right, and would anyone dare doubt it, we’re in for that mushroom cloud on the financial horizon."

"it is time to be afraid and wake up. And that is not just true for investors or traders, it’s true for ‘everyone out there’ perhaps even more. Central bank policies, QE and ultra low rates, have distorted the financial system to such an extent -ostensibly in an attempt to save it- that the depressed, compressed volatility these policies have created can only come back to life with a vengeance"
"it’s all true. Financial markets haven’t been functioning for years, and there have been no investors either, only gamblers and profiteers, as savers and pensioners have been drawn and quartered. Central bankers have eradicated price discovery, nobody knows what anything is really worth anymore, be it stocks, bonds, housing, gold, bitcoin, you name it. "

"People mistakenly think that a market’s heartbeat can be found in for instance rising stock prices, the Dow, the S&P. But that’s simply not true. The S&P is a bloated corpse increasingly filling up with gases that will eventually cause it to explode, with guts and blood and body parts and fluids flying all around."
"The US stock market’s heartbeat manifests itself in volatility, and the overall economy’s heartbeat in interest rates. Rising and falling volatility and interest rates is how we know whether a market is in good health, or even alive at all. They are its vital signs."
"The markets the central banks’ $20+ trillion QE and ZIRP have created are bloated corpses that no longer have a heartbeat. They are zombies. But markets, unlike natural bodies, won’t die, they can’t. They will instead rise from their graves and take over Wall Street, the City, and then everyone else’s street. "

"The last time the S&P 500 moved at least 4% was nearly six years ago. In fact, the S&P 500 had four consecutive days with 4% (or greater) changes in August 2011. Other than 2008 and the crash of ’87, that is the only other time since the Great Depression to see four consecutive 4% changes. That isn’t anything like today’s action."
"Natural bodies can tend towards equilibrium, i.e. death. Markets cannot. They’re doomed to flatline, and then to always come back from near death experiences. They tend to do so in violent ways though. When volatility at last returns, so will price discovery. It won’t be pretty."

Up until now, crypto currency just is NOT the answer. The State hates it and it has been hacked TOO MANY times.
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Old 10-11-2017, 03:53 AM
Danny B Danny B is offline
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Job Loss,,,loss of confidence,,, deflation

As all of you know by now, Armstrong's main model is a model of confidence.
"Consumption was India’s big story. Its 1.3 billion population was expected to guzzle everything from iron to iPhones, driving global growth and cheering investors such as Apple Inc. and Goldman Sachs Group Inc.

For a while everything seemed smooth. Indians were the world’s most confident consumers and the $2 trillion economy was the fastest-growing big market. "
"Then, last November, Prime Minister Narendra Modi voided 86 percent of currency in circulation, worsening a slowdown that had started earlier in the year. "
"About 27 percent of Indians surveyed said incomes have fallen, pushing overall sentiment into the "pessimistic zone." Employment "has been the biggest cause of worry," the Reserve Bank of India said. Government data show food price deflation, hurting rural incomes, and supply of new houses in India’s top eight cities falling 33 percent January-September, hit by a demand slowdown, according to real estate services firm Cushman and Wakefield."
"Manufacturing jobs are forecast to fall about 30 percent this year and broader surveys show the hiring outlook is near a 12-year low. "
Even India faces low-wage competition.
"There was an absolute decline in employment between March 2014 and 2016, "perhaps happening for the first time in independent India,"
" Stressed corporates could derail the overall investment recovery for another two-to-three years, given they are using only 40 percent of capacity," Outsourced from India.
"inflation is accelerating as oil prices rise and the government already has Asia’s widest budget deficit."

Side note, "Modi went on to install the firebrand Hindu cleric Yogi Adityanath as chief minister. Adityanath responded by cancelling nearly six billion dollars’ worth of bank loans to farmers. This cancellation started off a chain of events in other states, which some estimate is likely to result in tens of billions of further debt forgiveness, raising pressure on public finances. "

NUMEROUS writers continually call for hyperinflation....a drastic rise in the quantity of "money". BUT, the economy is in deflation. How can that be?
Tax Haven Cash Rising, Now Equal To At Least 10% Of World GDP
That is just the money in tax havens. What about all the money that has moved into bonds? The bond market is valued at about $180 trillion.
Stocks are valued at about $68 trillion.
Stocks and corporate bonds depend on the production-consumption cycle to generate returns. If manufacturing jobs in India are expected to fall 30%, what does that imply for the rest of the world?
"using only 40 percent of capacity,"

As wages, employment and consumption continue to fall, productivity will eventually follow. The upper loop of the economy refuses to invest in productivity that is just going to be surplus from the start. The investor loop has moved their money to places that they figure are safe. This is galloping deflation in both the volume and velocity of money.
The State responds by pumping liquidity into the public bond market. Armstrong believes that the state will eventually blow itself up.

The FED printeth and, the rich squirrel it away. Yellen desperately wants inflation.
December 2016: 1.9%
January 2017: 1.9%
February 2017: 1.9%
March 2017: 1.6%
April 2017: 1.6%
May 2017: 1.5%
June 2017: 1.5%
July 2017: 1.4%
August 2017: 1.3%
"Why are Yellen and her colleagues in denial about the persistence of disinflation? Why are they insisting that an obvious trend is merely “transitory?”

The first analytic flaw is Yellen’s belief in the Phillips Curve. This model presents an inverse relationship between unemployment and inflation. As unemployment goes down, labor scarcity leads to wage increases above growth potential. This leads to inflation." Not with bogus numbers.
"he Fed assumes that because of low unemployment today, inflation must be right around the corner.

The only problem with the Phillips Curve is that it does not exist. It has no empirical support. In the late 1970s and early 1980s we had high unemployment and high inflation. Today we have low unemployment BS and low inflation. Both results are the exact opposite of what the Phillips Curve would predict."
"The Fed has created $3.5 trillion of new money since 2008, yet there has been no appreciable amount of inflation for nine years.

The cause of inflation is not money supply but psychology. It is expressed as velocity — the speed at which money is turned over through lending and spending. Velocity depends on behavioral psychology"
"Second, the September employment report came out last Friday. A Reuters survey of economists had expected the economy to add 90,000 jobs in September.

How many did it really add?
Zero. Less than zero, actually. The economy shed 33,000 jobs. "
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Old 10-11-2017, 04:14 AM
Danny B Danny B is offline
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Storing gasoline next to the furnace

Making waves in the swamp, 10/10 A ‘pressure cooker’: Trump’s frustration ruptures alliances, threatens agenda – WaPo
“By 2018, we just may see a completely different party forged out of the collapse of both the Democrats and Republicans we have come to know.” Trump has recast the Republican Party even though the elites are still in denial and fighting back. "
"The people now handling Trump, are doing their best to steer him clear of the Deep State to protect the inner-workings. Trump is finding it very difficult to Drain the Swamp because the Press is defending the Swamp to their last gasp of air like CNN, New York Times, and the Washington Post."
"Socialism is dying and taking the Democratic Party with it."

"Of course the majority of the people who voted Democrat fall into three main categories: (1) the people who live on government programs, (2) students who have not gotten a job for a living who think money falls from above, and (3) those who live in the past because their parents were Democrats so they just vote the party line even against their own self-interest as long as it hurts someone else as well."
"All Democrats leaders are polling below Trump. They just live in a state of denial. Obamacare is a disaster, yet they block any reform simply to protect their legacy "

So, both parties are blowing up,,, GOV borrowed $1/2 trillion in 2 weeks,,, the stock market is going to blow to the moon.,,,,GOV will need to act fast AND intelligently when the crisis unfolds.

"A root cause for Congressional ineffectiveness will be found in the simple fact that the exercise of good governmental judgment cannot possibly compete with re-election pressures. "
"Congress has merely been transformed into a school how to be corrupt and get away with it.

Congress has only at best a 31% approval rating against Trump at 41%. Democrats in Congress are at 29%"
When the crash hits, THIS is who will be in the driver's seat.

European banks will go up in flames before American banks.
"The biggest problem rises from the rules that if a bank is in trouble, they just seize the bank and sell it for €1 and all the shareholders lose everything. This is having serious impact upon the European Banking System as a whole as I previously warned. "
Strange, the EU banks just can't seem to attract investors.
"Once again, the government solution is to make up rules that totally disregard the private reality. Why would anyone buy bank stocks in Europe today if the government can seize everything and shareholders get zero? Spain’s Banco Santander bought rival Banco Popular for €1. This is Brussels’s new system to rescue failing banks without burdening taxpayers or stressing markets. This was cheered around the world because the shareholders lost absolutely everything. The bank which was valued in the collapse at €1.6 billion was bought for €1. "
Draghi wants to stop printing but, at the same time, he drives out capital.
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Old 10-12-2017, 02:37 AM
Danny B Danny B is offline
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Not much more room to kick the can

Funny vid on Millennials, Home Depot Panics Over Millennials; Forced To Host Tutorials On Using Tape Measures, Hammering Nails | Zero Hedge
Jim Willie lists 58 recent global shifts. Pretty good article.

10/11 Stock record ride ‘has reached epic proportions,’ Morgan Stanley says – MarketWatch And, how will this epic tale come to an end?
10/11 This is how the Fed will reduce its balance sheet – NY Times
10/11 What happens when the Fed finally reduces its $4.5trln balance sheet? – Elliott Wave

The PPT and the ESF are pumping money like crazy into equities and bonds. They either get it from the FED OR, they just conjure it up on their own.
New debt for old debt;
10/11 China debt-for-equity swaps turn out more like debt-for-debt – Bloomberg
10/11 S&P grades Illinois’ debt-reduction bonds a grade above junk – IL News

10/11 Russia turns cold on crypto-currencies – Reuters
10/11 China: the war against bitcoin – Asia Media
10/10 Bitcoin’s price bubble will burst under government pressure – Guardian

Slip-sliding away;
10/11 10% of New York City public school students were homeless last year – NY Times
10/11 Richard Thaler: this could be ‘the riskiest moment of our lives’ – MarketWatch He's just being dramatic. Things will get a LOT worse.
News on the millennials, 5 charts highlighting the epic housing crisis for Millennials ? one third of young adults living at home with parents.
Macron wants to cut back on the public sector in France. He has really stirred things up,
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Old 10-12-2017, 03:22 PM
Danny B Danny B is offline
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Argentine model,,, pension debt,,,BTC finding a niche

Apparently, the various patriot groups are preparing for the State to mount an assault against them. That isn't a realistic scene. Using Argentina as a model, this is what we can expect. The State can be expected to revalue the currency. The norm is to, cut off 3 zeros and print a new currency. It will also convert the 401ks and other retirement plans to treasury debt. Gov doesn't need to go around robbing people at gun point. It can just steal their accounts. The State needs lots of money to pay State employees (itself).

Look at Illinois.
New Report: Illinois Pension Unfunded Liabilities Worsened By $17 Billion In A Year

"Financial economists say real numbers are 2X or 3X worse. Also, the numbers are mostly over a year old, at least, as explained below."
Things have gotten much worse since then. The shrinkage in the pension fund is $46,575,342 every day. If it is actually 3X worse, that is almost $150 million every day.
New Report: Illinois Pension Unfunded Liabilities Worsened By $17 Billion In A Year – Wirepoints Original | WirePoints Illinois Financial News

"State and local governments are contributing around $100 billion a year to their pension systems. They need to be contributing around three times that amount to keep the liabilities from rising"
The battles will be fought behind the closed doors of the banks.

10/12 US jobless claims fall to more than one-month low – CNBC
"Second, the September employment report came out the Friday before last. A Reuters survey of economists had expected the economy to add 90,000 jobs in September.

How many did it really add?

Not zero, but less than zero. The economy shed 33,000 jobs last month. This was the first time in seven years that the U.S. economy lost jobs."
AMAZING that they can all ignore the brontosaurus in the room,,,, the 95 million who are not in the labor force.
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Old 10-12-2017, 03:23 PM
Danny B Danny B is offline
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had to break it up

Bitcoin has everybody flummoxed.
10/12 Bitcoin price soars above $5,000 to record high – Guardian
10/12 Trace Mayer: bitcoin price will reach $27,395 in just four months – Coin Telegraph
10/12 Bitcoin isn’t money — it’s a ‘censorship-resistant asset class’ – Business Insider
10/12 Bitcoin is retaking its place as king of the cryptocurrencies – Bloomberg
10/12 Cryptocurrency is more than Bitcoin – MSN
10/12 Be patient, the Fed will screw you eventually – Maven
10/12 Bitcoin is a speculative bubble that will eventually explode – The Street

Bitcoin and a few other crypto currencies will eventually settle in to a small niche. The State will NOT allow very much wealth to flow into a store-of-value that they don't have some control over. The future of the blockchain will be for trading and contracts, not store of value.
10/12 Blockchain tech fuels peer-to-peer solar energy trading in Perth start-up – ABC.net

Manufacturing is the premier value-added industry. The low-wage producers have put a ceiling on worldwide wages. The newly created liquidity continues to flow into the upper loop where it is just hypothecated into new "wealth" OR, it is pushed OUT of circulation.
Everybody (hopefully) sees the problem but, nobody can raise wages with the downward pressure from automation.
The zillionares have read history books and, they know where this leads.
The Pitchforks Are Coming… For Us Plutocrats - POLITICO Magazine

EVERY State wants / needs to keep it's people employed. The number of jobs/workers necessary just keeps falling. No State can afford to raise wages and risk losing market share. Universal Basic Income is proposed as a means to keep consumption from falling more and more. This just can't be done with borrowed money but, the bankers have always resisted debt-free money.
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Old 10-14-2017, 02:59 AM
Danny B Danny B is offline
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Setting up the muppets once again,,, Blockchain news

"Nominal global debt is reckoned at between $225 and $250 trillion, or about three times global GDP. Financial, debt-supported derivatives (financial instruments whose prices are derived from the prices of other financial instruments) are estimated at anywhere from $500 trillion to $1 quadrillion notational,"
"Globally, unfunded old age pension and medical liabilities, not counted as debt but still promises made that often have the force of law, sum to another $400 trillion."
"SLL maintains financial markets are exercises in crowd psychology, impervious to government and central bank efforts to control them, designed to separate the maximum number of speculators from a maximum amount of their money."
Side note, "and sell them to gullible, yield-chasing idiots (collecting a transaction fee) while taking the other side of the trade (collecting a huge profit once everything crashes). The instruments, of course, were CDOs, and not long after Goldman sold a whole of them, the financial system crashed and needed a multi-trillion bailout from which the world has not recovered since. "
"Ten years later, Goldman is doing it again, only instead of targeting subprime mortgages, this time the bank has focused on quasi-insolvent European banks.

And just like right before the last financial crash, Goldman is once again allowing its clients to profit from the upcoming collapse, or as Bloomberg puts it, "less than a decade after the last major banking crisis, Goldman Sachs and JPMorgan are offering investors a new way to bet on the next one."
Goldman Is Allowing Its Clients To Bet On The Next Financial Crisis | Zero Hedge

"Using conventional valuation measures, the only time stocks have been more highly valued is just before the tech wreck in 2000."
"Every financial asset in the world is either a debt claim or an even less secure equity claim—a claim on what’s left after debt is paid. Much of the world’s real, tangible assets are mortgaged.

When the debt bubble implodes, a global margin call will prompt forced selling, driving down all asset prices precipitously. Most of what is currently regarded as wealth will vanish."
Robert Gore's "Hard Core Doom Porn" | Zero Hedge

Here is a MUST READ article on the blockchain. I suspect that it will make corruption MUCH less prevalent.
Since EVERYTHING has been hacked, the world can't move forward with the present family of computers. The Quantum computer promises to make the blockchain and many other things much safer.
The Crunch # 37 - quantum computing for the mildly curious
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Old 10-14-2017, 03:52 AM
Danny B Danny B is offline
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Trump has met with Henry Kissinger three times this year. Kissinger was responsible for presenting the House of Saud with the ultimatum that created the petro-dollar. Things are coming apart rapidly and the petro-dollar is dying.
"The Petro-Dollar is seeing its last months after a 43-year reign as defacto standard. Its retirement will begin in the East, then spread to the decaying loyal Western nations. The entire geopolitical chessboard is becoming more aligned with the Eurasian Trade Zone, one nation after another. Its cornerstones are Russia, China, and increasingly Iran. It has gathered some Eastern European countries like Turkey, and will gather more. It has pursued the Middle East oil monarchies, and will succeed in lassoing them into the zone corral. Whether they deploy financial connections, or trade ties, or security links, these nations no longer see the United States and British (who walk the American dog with a monetary leash) as the leading global players any longer. The leaders are China with its financial and industrial might and Russia with its energy and commodity strength."

Fifteen years of heavy Chinese investment peaked in mining and port facilities
Australian Govt at edge of financial bankruptcy as result of US-led arms purchases"
Mexican Govt in talks with Russian Rosneft for a large scale oil deal
Mexico urgently needs funds for managing budget deficits"
Turning Point Nations On The Stage

"This fulfils the prophecy of the founder of geopolitics, Sir Halford Mackinder, made over a century ago. He described the conjoined continents of Eurasia and Africa as the World Island, and that he who controls the Heartland, which lies between the Volga and the Yangtze, and the Himalayas and the Artic, controls the World Island.ii The Chinese-Russian partnership is well on its way to controlling the World Island"

" The AIIB, which was set up by China and headquartered in Beijing, is the first supra-national organisation independent of the Bretton Woods institutions, which are all controlled by the US. These institutions, led by the World Bank and the IMF"

"She identified that Britain’s interests were aligned with her own, enabling her to cut out America from future developments. She has obtained arms-length control over London’s physical metal exchange. She had set up a non-dollar rival to the World Bank and IMF, ensuring future Asian development financing is under her control. And, with more than 80 member countries eventually joining the AIIB, she has successfully picked off America’s allies. The inclusion of the yuan in the SDR basket can be taken as an acknowledgement of China’s importance on the world stage."

"By having control of the physical market for gold, China can threaten to use it to destabilise the dollar, without destabilising the yuan. As such, it is potentially devastating, and used carelessly could trigger an economic collapse in Western capital markets, wreaking financial and economic havoc in America and other advanced nations."

"even Mr Netanyahu, the Prime Minister of Israel, has beaten a path to Mr Putin’s door several times. When Turkey, still a NATO member, decided to side with Russia along with Iran, Israel recognised that US protection was no longer good enough to secure her future. When Saudi Arabia was under American influence, Israel had felt as safe as she could be in that turbulent region. But a combination of a Hezbollah/Syrian/Turkish/Iranian axis to Israel’s north, and Prince Mohammed bin Salman’s silent coup in Saudi Arabia has fundamentally altered the balance of power."

"Saudi Arabia went along with Kissinger’s plan in 1973 to use the dollar for oil payments, and to buy US Treasuries and to deposit surplus dollars in American banks. In return, America guaranteed it would protect Saudi Arabia from outside influences. Also, part of the deal was Saudi Arabia would not support Israel’s enemies.

Now that the Kissinger deal is unravelling, it is reasonable to assume the financial deal, the Middle East’s support of the petrodollar to the exclusion of all rival currencies, will also come to an end, more rapidly than thought possible only four months ago."

"The ideal way for China to replace the dollar as the dominant currency for her cross-border trade is to encourage her oil suppliers to accept payment in her own currency, the yuan. It is clear from statements made in 2014 by Guo Jianwei, a PBOC monetary policy official, that China had already planned to wean her oil suppliers off the dollar by introducing both oil and gold futures denominated in yuan, allowing them to take at least part-payment in gold.
Persuading them to do so without unduly disrupting global capital markets should have been a gradual process, perhaps spread out over the best part of another decade. Instead, geopolitical developments have accelerated the time-table following the election of President Trump, who is noticeably lacking in diplomatic patience. His latest renegation of the Iran nuclear deal is for Asian observers classic US perfidy."

The world was willing to dump their dollars over a period of time to avoid upheaval in the capital markets. They would lose also. The plan was to; only buy from America what could be paid in dollars,,, slowly running down their dollar supply. They no longer need their accumulated dollars if the East will take other currencies for oil. America started beating the war drums and persecuting Iran, Russia, Venezuela, and other States that tried to escape the dollar corral. WE have pushed forward the timeline for dumping dollars. Tel Aviv on the Potomac stupidly tried to threaten all these States. This is a blatantly stupid move but, Netanyahoooo is desperate. He regularly goes to Moscow to suck up to Putin,,,, at the SAME time that his ISIS mercenaries are fighting Russians in Syria.


Pox Americana and NATO surrounded Russia with Missile bases to threaten them into inaction and strangle them economically. They also tried to cut off Russia from the main port in Sevastopol and their port of Tartus in Syria. The Ukrainians paid a very heavy price for the attempt to keep Russia from Sevastopol.
The strangulation attempt in Syria is not working out. The Syrians know very well that they are fighting for survival. The U.S. is winding down in Syria. The oil in the Golan Heights will eventually be the center of a big fight.

The East is going to focus, to a great degree, on gold. The Germans are buying gold.

Germans Have Quietly Become the World’s Biggest Buyers of Gold
There is a possibility that pox Americana could flood the world markets with artificial gold made by transmutation. John Bedini talked about transmutation of gold in the video, "Petrovoltaics".
If that does not happen, we can expect a world gold standard for NETTING OUT trade. The blockchain is just too good,,, too useful, TOO HONEST to ignore. Pox Americana will have to either; pay with gold OR export everything that is not nailed down.
It's going to be very interesting
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Old 10-15-2017, 02:45 AM
Danny B Danny B is offline
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Maxi-devaluation,,, Oct 18 congress

Bloomberg; "the Communist Party’s twice-a-decade congress is an event so massive nothing escapes its pull. The gathering -- slated to start on Oct. 18 in Beijing -- approaches cloaked in darkness, discernible mostly from the influence it exerts on other affairs. The meeting is expected to replace about half of China’s top leadership and shape President Xi Jinping’s influence into the next decade."

OK, so what does that mean for you?
"In contrast to the 2008 – 2010 peg, China avoided the impossible trinity this time by partially closing the capital account and by raising rates alongside the Fed, thereby abandoning its independent monetary policy.

This was also in contrast to China’s behavior when it first faced the failure of its efforts to beat impossible trinity. In 2015, China dodged the impossible trinity not by closing the capital account, but by breaking the currency peg.

In August 2015, China engineered a sudden shock devaluation of the yuan. The dollar gained 3% against the yuan in two days as China devalued.

The results were disastrous.

U.S. stocks fell 11% in a few weeks. There was a real threat of global financial contagion and a full-blown liquidity crisis. "
"China conducted another devaluation from November to December 2015.
The results were just as disastrous as the prior August. U.S. stocks fell 11% from January 1, 2016 to February 10. 2016.
"For its part, China did not want a trade or currency war with the U.S. in advance of the National Congress of the Communist Party of China, which begins on October 18. President Xi Jinping was playing a delicate internal political game and did not want to rock the boat in international relations. China appeased the U.S. again by allowing the exchange rate to climb from 6.90 to 6.45 in the summer of 2017."

"China escaped the impossible trinity in 2015 by devaluing their currency. China escaped the impossible trinity again in 2017 using a hat trick of partially closing the capital account, raising interest rates, and allowing the yuan to appreciate against the dollar thereby breaking the exchange rate peg."
"China cannot maintain a strong yuan because that damages exports, hurts export-related jobs, and causes deflation to be imported through lower import prices. An artificially inflated currency also drains the foreign exchange reserves needed to maintain the peg.

Since the impossible trinity really is impossible in the long-run"
"The most obvious course, and the one likely to be implemented, is a maxi-devaluation of the yuan to around the 7.95 level or lower."
"he geopolitical situation is also ripe for a Chinese devaluation policy. Once the National Party Congress is over in late October, President Xi will have secured his political ambitions and will no longer find it necessary to avoid rocking the boat."
"A maxi-devaluation of the yuan is Xi’s most potent weapon."
"Less dramatic devaluations of the yuan led to U.S. stock market crashes. What does a new maxi-devaluation portend for U.S. stocks?

We might have an answer soon enough."

"Macro Digest: The 19th Party Conference - The biggest Paradigm shift in 100 years?

I think next week’s 19th China Communist Party’s Conference is the single biggest event this year – a confirmation a true paradigm shift"
We tend to think as China being a recent flash-in-the-pan. Not true, https://s3-us-west-2.amazonaws.com/m...XEO3gfDjX8DRAg

maxi-devaluation of the yuan to around the 7.95 level or lower.

This would stop capital outflows because those outflows are driven by devaluation fears. Once the devaluation happens, there is no longer any urgency about getting money out of China.

The markets in the West and Australia are surviving on capital outflows from China. Take that away and see what happens.
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Old 10-15-2017, 02:58 AM
Danny B Danny B is offline
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One more thing that will eventually unwind

Kass Warns: "The Probability Of A Flash Crash Grows Exponentially"
"investors understand that there is nothing normal in the current environment of unprecedented financialization and economic disruption. The deadweight of US$400 trillion 'cloud' of financial instruments (backing into assets that are either worthless or are declining in value) must be supported by ongoing financialization."
"Thus, risks facing investors are that either CBs and/or China misjudge extent to which reflation is dependent on inflating asset values and China's fixed investment.
If the market is underpricing the uncertainty with respect to the outlook of US monetary policy, we are even more concerned that it seems totally impervious to the risk of two potentially disruptive, if not dangerous, Games of Chicken likely to unfold in the summer and the beginning of the fall...." Imagine Trump and Xi playing a game of chicken.
Kass Warns: "The Probability Of A Flash Crash Grows Exponentially" | Zero Hedge

" As shown below, through the second quarter of this year, reported EPS, which includes “all the bad stuff,” actually declined in the latest quarter and has remained virtually unchanged since 2014. (But, even that is an illusion as shares have been aggressively bought back in order to sustain that same level of EPS.)"

"The difference between reported earnings with and without the benefit of share repurchases is substantial. The chart below shows the net difference" http://realinvestmentadvice.com/wp-c...cks-101217.png

" “The monster of economic waste—over $7 trillion of dictated stock buybacks since 2003 by the self-enriching CEOs of large corporations—started with a little-noticed change in 1982 by the Securities and Exchange Commission (SEC) under President Ronald Reagan. That was when SEC Chairman John Shad, a former Wall Street CEO, redefined unlawful ‘stock manipulation’ to exclude stock buybacks.”

Yep, stock buybacks used to be considered stock manipulation, yet today, it is widely accepted by investors as “just the right measure to boost earnings in the ongoing “beat the estimate” game."
“The stock buyback mania was unleashed. Its core was not to benefit shareholders (other than perhaps hedge fund speculators) by improving the earnings per share ratio. Its real motivation was to increase CEO pay no matter how badly such burning out of shareholder dollars hurt the company, its workers and the overall pace of economic growth.“

"The bottom line is that while companies take trillions of dollars and buyback shares, it only benefits the executives of the company at the expense of both workers and, ultimately, shareholders "
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Old 10-15-2017, 03:24 AM
Danny B Danny B is offline
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Blockchain and barter

Because computers can find and tally the smallest unit, it is tempting to use computers for a barter system. Here are some comments on the idea.

"The difficult part in answering this question is that people are not always able to differentiate between bilateral barter, which does not require a unit-of-account, and modern multilateral "barter" networks that do. "
"Multilateral barter networks are not hindered by the double coincidence of wants that define bilateral barter. Polydirectional trade, sans legal tender, is thriving globally. It is a recession-positive industry that accounts for 1/3 of global commerce according to the U.S. Department of Commerce."

"Our trade credits are face money. No one but the account holder can spend them. They can't be stolen as they don't exist outside the platform. The platform simply functions as 3rd party record keeper utilizing basic double-entry bookkeeping"
"The "barter" business is booming right now and many people are surviving now because of it. From localized Time Banks, to Bartercard, to Active International, individuals, SMBs, and multinational corporations are relying on commerce sin cash to find real profits."
"Bartsome solves most of the other issues of barter probably as much as it will ever be solved without resorting to “barter bux” and other internal currency-like schemes that are arguably just another currency"

"Cryptocurrency is like currency. A medium of exchange. Bartering is exchanging goods or services, without any currency used. Barter economy is difficult, because you must find a corresponding need to make a transaction, That’s why money was invented."
"Currency and barter are conflicting concepts. This is true regardless of the nature of the currency."

BATA, undercutting the banks, https://bata.io/

"Because we don’t trust each other, we would need the help of a mutually trusted third party person or organisation (for example, a bookmaker or legal firm). This is how society has worked for centuries. We now find ourselves in a world where some of these intermediaries (for example, banks, insurance companies,"
"Do we trust the intermediary's IT systems to be secure from external hackers so that our money isn’t stolen or our personal details aren’t leaked (somewhat of a topic given the recent Panama Papers Mossack Fonseca scandal)? Are we confident that at some time in the future the intermediary won't become corrupt and sell our financial or personal information?

So, let’s imagine there was a way for me to have that $100,000 bet with a complete stranger on the other side of the world, without the need for any form of trusted middleman or legal system. In January this year this system was created."
"heart of his idea was a peer-to-peer decentralised ledger or database, which he called the Blockchain. Probably the closest thing the world had seen before this was the peer-to-peer file transfer system BitTorrent."
"Early on in the Bitcoin journey people began to realise something else. What would happen if, in addition to storing the transaction (for example, a record that I gave you a Bitcoin) on the Blockchain, you could also store a set of rules on the Blockchain. For example a multi-signature transaction that need three “signatures” for the transaction to go through and/or can only go through between 8.30 and 9pm. If we can put these rules also on the Blockchain, then we have what is known as a Smart Contract. "

"So the next chapter in the story starts with a 19-year-old Russian/Canadian who three years ago decided it would be far better to take the Bitcoin experiment and start again. Except that his vision was not to create another cryptocurrency but something much bigger: to create an open source smart contract development platform that included a Turing complete programming language. He got a group of people together who were equally passionate about his vision, crowd funded $19 million and went live with the beta (Frontier Release) toward the end of last year. "

"a distributed autonomous organisation or DAO. This is a self-governing organisation under the control of an incorruptible set of business rules (that is, they are on the Blockchain). Full transparency, no hidden deals. This is happening already. A number of companies are now planning this, Slock.it being one of the first. "
The Blockchain and how it will change your life - Barter and Trade Blog Article By Troc Zen
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Old 10-16-2017, 02:50 PM
Danny B Danny B is offline
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Draghi bailouts, oil profitability crash

China is the largest oil importer and Russia is the largest oil exporter. The Chinese central bank has opened an office in Moscow AND the Russian central bank has opened an office in Beijing. It's a safe assumption that they will NOT be pricing oil in U.S. dollars.
China Launches Yuan-Ruble Payment System | Zero Hedge

There was a huge amount of hype in the blogosphere about the gold-oil linked contracts created by China. Only problem is; they don't exist.

EVERYBODY is intently following the stock markets,,,by design.
"The global bond markets are teetering on the brink of collapse … threatening a worldwide financial meltdown."

Remember that the "bail ins" were supposed to shift the risk from the taxpayer to the bank investors. This would take the risk off the taxpayer.
"While no one has been watching, the European Central Bank (ECB) – led by “Super” Mario Draghi — has been quietly switching vast liabilities from European private banks and investment funds onto the shoulders of unsuspecting citizens across northern Europe."
"Worse yet, there has been no democratic decision by any European citizen to take on these uncollectible debts that currently total more than 1 trillion euros … and grow every day.

This transfer is the unintended side effect of Europe’s own quantitative easing policies (QE) implemented by Draghi and his merry men at the ECB."
"Eurozone banks are crumbling under approximately 1.06 trillion GBP ($1.3 trillion) of bad loans. "
"This means that 1-in-20 loans across Europe are in trouble. But when you dig deeper, it gets even worse. That’s because there are 10 EU countries that have an average bad-loan rate of 1-out-of-10, which means 10% of their loans are underwater."

The FED printed mega tons of money pixels. These flowed everywhere (except wages) and financed lots of worthless projects,,, like fracking for oil. BIG oil is constantly losing money,,, something like $ 20 billion last year.
"All that remains now is a mere shadow of the once mighty oil industry that will be forced to continue cannibalizing itself to produce the last bit of valuable oil."
"For example, Chevron was able to make considerable profits in 1997 when the oil price was $19 a barrel. However, the company suffered a loss in 2016 when the price was more than double at $44 last year. And, it’s even worse than that if we compare the company’s profit to total revenues. Chevron enjoyed a $3.2 billion net income profit on revenues of $42 billion in 1997 versus a $497 million loss on total sales of $114 billion in 2016. Even though Chevron’s revenues nearly tripled in twenty years, its profit was decimated by the falling EROI."
"Decimate", a Roman strategy of killing one out of every ten persons. Very often used when the proper word for the situation is "annihilate"

"For instance, the seven top global oil companies that I focused on made a combined $213 billion in cash from operations in 2013. However, they also forked out $230 billion in capital expenditures. Thus, the net free cash flow from these major oil companies was a negative $17 billion"
"that doesn’t include the $44 billion they paid in dividends to their shareholders in 2013. Even though the price of oil was $109 in 2013; these seven oil companies added $45 billion to their long-term debt:"
"As we can see, the total amount of long-term debt in the group (Petrobras, Shell, BP, Total, Chevron, Exxon & Statoil) increased from $227 billion in 2012 to $272 billion in 2013. Isn’t that ironic that the debt ($45 billion) rose nearly the same amount as the group’s dividend payouts ($44 billion)? Of course, we can’t forget about the negative $17 billion in free cash flow in 2013, but here we see evidence that the top seven global oil companies were borrowing money even in 2013, at $109 a barrel oil, to pay their dividends."
Imagine what the markets would do if the oil majors cancelled their dividends.

"Since the 2008 global economic and financial crisis, the top seven oil companies have seen their total combined debt explode four times, from $96 billion to $379 billion currently. You would think with these energy companies enjoying a $100+ oil price for more than three years; they would be lowering their debt, not increasing it. Regrettably, the cost for companies to replace reserves, produce oil and share profits with shareholders was more than the $110 oil price."

"Petrobras’s debt surged from $21 billion in 2008 to $109 billion last year. As Petrobras added debt, it also had to pay out more to service that debt. In just eight years, the annual interest amount Petrobras paid to service its debt increased from $793 million in 2008 to $6 billion last year"
Petrobras is owned by Brazil,,, a chief member of the BRICs
It is a State-owned company so, it is mismanaged to the MAX
Petrobras Annual Dividend Payments:

2008 = $4.7 billion
2009 = $7.7 billion
2010 = $5.4 billion
2011 = $6.4 billion
2012 = $3.3 billion
2013 = $2.6 billion
2014 = $3.9 billion
2015 = ZERO
2016 = ZERO

"Even with a $5 increase in the price of oil last year compared to 2004, these oil companies combined net income profit fell nearly 90%."
"In 2004, these seven oil companies enjoyed a net Free Cash Flow minus dividends of a positive $34 billion versus a negative $39.1 billion in 2016:"
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Old 10-17-2017, 04:28 AM
Danny B Danny B is offline
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Thoughts from Armstrong

Recap; capital can move instantly around the world. Labor can not. This allows capital to move to the lowest-overhead producer of goods. After manufacturing has been gutted, only the service economy is left. The CBs tried to create a trickle-down effect in the lower loop of the economy by pushing "money" into the upper loop. It was destined to fail.
The State is essentially a part of the service economy. But, it is also a huge parasite because it produces nothing."

QUESTION: Mr. Armstrong: I find it disheartening the more I try to advance my family to build a better future for them, the more I realize that the harder I work we do not really get ahead. I agree that taxes just keep moving higher and I am now looking for a job in my field to leave California. A friend of mine from school left Illinois and moved to Texas. He said he feels much better and is gaining ground instead of losing it. Has taxes been the driving force to create migration in advanced civilization?

ANSWER: Absolutely. I have written how Rome fell and just mapping the population of Rome you can see the fate of Illinois – people sell and just leave.
Government creates nothing to advance society or to increase GDP in any positive manner. It is a natural human response not to pay taxes and this is why taxes have been the number one reason for civil war and revolution. Taxes tend to support politicians and their pensions which they exempt themselves from everything from Inside Trading to Obamacare."

"The EU is in a death spiral. Every law they pass is to preserve their own power – not for the good of the people or Europe. Once again, the government solution always runs counter-trend to the Free Markets setting the stage for the next crisis. "
"Britain should run away from the EU and slam the door shut and then nailed it to be sure. The British should abandon the EU altogether and undeniably join the NAFTA trade agreement. If they do not, Britain will find itself being dragged down with the sinking ship."
"The Association of German Machinery and Plant Engineering (VDMA) said: “A tough Brexit is a conceivable but not acceptable scenario for the economy.”

"Criticism of the reform comes from trade unions and left parties who cannot see the opposite side of the table. They say Macron has taken an entrepreneur-friendly policy and is dismantling the welfare state. This is what the strikes are all about. Once again, we are looking at the demise of socialism. Do not forget, Communism began in France and it was sold to Marx as a great idea. "
Armstrong is also guilty of "not seeing the other side of the table". Automation and low-wage competition has made it impossible to earn a living wage for MANY people. This isn't so much a crash of socialism as it is a widespread crash in employment. That equates to a crash in SURVIVAL.
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Old 10-17-2017, 05:17 AM
Danny B Danny B is offline
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Tectonic drift in the world stage

The West has gone broke trying to maintain it's high standard of living even after it lost it’s "job". The State and bankers tried to paper-over the problem by producing LOTS of debt to keep finance going. The jobs just keep disappearing and everybody knows it.
Daily Job Cuts - Layoff News , Job Layoffs 2017 / 2016 , Bankruptcy, Store closings, Business Economy News

The bankers continue to create bogus transaction to produce fee money. World stock markets are about $70 trillion above norms. BUT, Yellen is AMAZED that she doesn't see any price inflation. The upper and lower loops meet in anything that is a store of value. (except gold). RE has gone up and it takes 3 times as much of your income as it did for your grandfather to buy a house.
"living standards for many millions of people in the west have come down and/or are laden with uncertainty, while millions of Chinese now have higher living standards. "
"Economic models are more important in central banking than common sense. The Fed has some 1000 PhDs under contract. But Yellen, their boss, still claims that ‘perhaps’ the models are wrong, with it comes to inflation, and to wage growth. They have no idea why wages don’t grow. Because the models say they should. "

"And then globalization itself is in trouble. The very beneficiaries, the owners of globalization will be. Though not before they have taken away most of the fruits of our labor. What are you going to do with your billions when the societies you knew when you grew up are eradicated by the very process that allowed you to make those billions? "
"The endgame of that process is painfully obvious way in advance. Centralization feeds central forces, be they governmental, military or commercial, with the fruits of labor of local populations. That is a process that will always, inevitably, run into a wall, because too much of those fruits are taken out. Too much of it will flow to the center"

"Money is a form of social control, and by getting the rest of us into as much debt as possible they are able to get all of us to work for their economic benefit."
"By the way, do you know where the term “mortgage” originally comes from?
If you go all the way back to the Latin, it actually means “death pledge”.
"All over the planet, national governments are drowning in debt, and this didn’t happen by accident. The elite love to get governments into debt because it is a way to systematically transfer tremendous amounts of wealth from our pockets to their pockets. "
Side note, Poland Says No Thanks To $9.2bn Credit Line From IMF
How The Elite Dominate The World ? Part 1: Debt As A Tool Of Enslavement | Zero Hedge

The world really has no way to compensate for the loss of employment. Italy has come up with the idea of raising youth employment by creating a pension crisis, https://www.armstrongeconomics.com/i...ension-crisis/

Armstrong, "ANSWER: This is a battle to the death. A cryptocurrency is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. However, this idea has also falsely embraced the notion that a cryptocurrency will be a store of value "
"The rise of cryptocurrency is a reflection that people do not trust the government. Those in power know that and see this as unacceptable. "
"They have unlinked shielded coins from their history on the blockchain. This means they can be used for tax avoidance and the government can use its Terrorist Card. They will not allow cryptocurrency to defeat taxes and BitCoin is not secure enough in that manner."

"There is absolutely no question that we are heading into a new Monetary System. The Monetary Crisis Cycle turns up next year. We saw what happened as soon as the ECM peaked in 2007 and we forecast new highs in the Dow back in 2010 (See Barrons), the War Cycle turned up in 2014 and our Political Cycle that pinpointed the political change in 2016 produced Trump, the ECM peak in 2015.75 "
"We will issue a special report on the coming One World Currency. There is just too much to address in a blog post"

The East wants to do LOTS of trade but, few people have enough income to support any kind of luxury system. They want to grow trade enormously and net out the difference in gold. The West wants to use the SDR or some kind of State cryptocurrency. The East has had quite enough of our wars and our DU everywhere.

The Bank for International Settlements transacts ONLY in gold bullion between sovereigns. This will probably be the new model for the East. Only, the B.I.S. won't get a piece of the action. The Eastern alternatives to the IMF and BIS will do the debt reconciliation. Armstrong talks about a new monetary system but, won't mention gold. Traders hate gold because it leaves them out,,, for the most part.
China knows that they will crash. They have the fastest growing debt and the fastest shrinking labor force. Their foreign markets are drying up as they have gone broke from Chinese competition. Try as they might, they can't spur domestic consumption when wages average $ 30 a month.

Pox Americana (NEOCONS) have given the world cause to unite against us and join up with China. Even Germany is pushing hard to join up with Russia.
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Old 10-17-2017, 06:53 PM
Danny B Danny B is offline
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Take your choice; money or people

One of the centerpieces of globalization is cross border capital flows. The idea sounded good in theory. BUT, only to short-sighted people in the upper loop. Great Depression I was blamed, in part, on the pools of "dark liquidity" that flowed into and out of different asset classes. We now have much larger pools that can move much farther and faster. Globalization depends on unhindered flows. Since banks no longer have to depend on the money in savings accounts to fund loans, they have even less connection to the lower loop. As we get more broke, they just extend our credit terms. The debt-service cost eventually reaches a point of diminishing returns and borrowing stops. ZIRP doesn't trickle down all that much.

The pools of capital naturally flow to where they get the best return (in the short term).
"Europe suffers from extremely high taxes, taxes and social security contributions combined, which account for around 50% of the business cost which has produced nothing but higher levels of unemployment. In the US and Asia, the comparative rates are between 30% and 40%. Europe just cannot compete in the world economy and is slowly dying."

"Macron still fails to see that higher taxes produce lower economic growth. Until politicians wake up and see themselves are the source of the problem, there is little hope in producing meaningful economic reform anywhere in the world.After all EU countries suffer from financial distress, the plan can only lead to even more taxes being collected and not less."
"The core problem is never addressed. All of these proposals on how to end the European economic paralysis simply never consider the role of government and its leftist Marxism that failed in China and Russia."
"The high tax burden prevents a dynamic renewal of the economy reducing the standard of living for everyone and perpetuating high unemployment as twice that of the rest of the industrialized world."

Armstrong fails to mention that capital will never flow back to a high-wage economy. Even if the tax burden were lessened, the cost of business would be much higher than the East. The CBs are trying to hold back deflation when the youth unemployment runs as high as 60%. The ECB tries to make up for everybody's lost wages / earning power.
An economy needs people. The bankers are focused on capital, margin and interest. They have no interest in helping people. They abhor debt-free money and lament the lack of children. 20% Of Americans are immigrants. We poach warm bodies from wherever we can just to keep the population from shrinking.
As wages slip away, the money powers will have to eventually make a decision between debt-free money and people.
Kuroda of Japan is leading the way at creating debt-free money.
51% of Americans receive a check from GOV. Armstrong predicts that GOV finances will fail. Which road will it take?

Last edited by Danny B; 10-17-2017 at 06:55 PM. Reason: one more link
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Old 10-18-2017, 03:35 AM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 3,901
Japanese plan,,, debt and death

"The Bank of Japan’s current path provides an ominous reminder of a similar era 80 years ago. These policies, which are also being followed by the other world central banks, will lead to disaster.

“One man - one kill” railed inoue Nissho, leader of the Ketsumeidan (the Blood Pledge Corps), a Japanese ultranationalist group of the 1930s committed to cleansing the country of ‘traitors’ - the leaders of business and government. "
"Korekiyo’s plan was to fund government spending by having the BOJ directly purchase all the government-issued bonds. The hope was that, when conditions and inflation improved, the bonds would be sold back into the market. Four years later, the BOJ’s balance sheet was 90% of GDP, and the economy (and for “economy” read military) was totally dependent on government spending financed by the BOJ.

As the first modest hint of inflation arrived Korekiyo attempted to sell government bonds publicly, but the auction failed. With this failure it became clear that the bonds which had been stuffed onto the BOJ’s balance sheet could never be sold."

The FED is currently talking about selling the GOV bonds that it holds. Stand back for a moment and think about it.
If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good also. Thomas Edison. Both Ben Franklin and Adolph Hitler issued money to the producing sector of the economy. Both got a war for their presumptuousness.
"There is no end in sight with the BOJ buying $60 billion a month of government debt. At this current pace the modern BOJ will by 2019 be the proud owner of 60% of the local bond market. There is no longer a market price for a Japanese Government Bond, it is an asset whose price is set by the BOJ."
Just print the money and screw the bonds and the banks.
"Central banks continue to act as the enablers to their respective governments." Governments YES,,, productive sector, NO.
"Central banks are currently furnishing the excess credit that, in the past, has been followed by an orgy of blood."
The Treasury can NOT emit currency,,, no way, Jose.
One Bank's Shocking Warning: Central Banks Will Lead To "An Orgy Of Blood" | Zero Hedge

The ECB is printing $trillions in bonds. They wouldn't dream of printing Euros. The ECB Has Bought ?1.9 Trillion In Bonds: Here Is Who Sold And What They Did With The Money | Zero Hedge

The CBs print up free money and use it to buy stocks, Advancing Time: Central Banks Massive Incursion Into Buying Stocks
C.H. Smith believes that they are trying to nationalize the stock markets, oftwominds-Charles Hugh Smith: The Endgame of Financialization: Stealth Nationalization
I don't think that things are going to work out the way that they plan.
There is just no getting around the lack of employment.

1. price rigging of interest rates by the ECB to conceal the importance of the difference between general budget deficit and structural deficit - that is, the existing debt burden that is subject to the mathematics of compound interest",,,,,,,,,
"2. European governments do not provide estimates of unfunded liabilities, so government debt excludes future liabilities for pensions",,,,,,,
"3. there is no accounting for the cost of immigration. government budgets exclude immigrations costs from fiscal calculations",,,,,,,,

Unless they reform their health and social welfare programs, they will have to
meet these unfunded obligations by increasing tax burdens as the larger
Measuring the Unfunded Obligations of European Countries
benefit obligations come due. Although spending averages 40 percent of GDP today:
By 2020, the average EU country will need to raise
■the tax rate to 55 percent of national income to pay promised benefits.
In comparison, the United States’ shortfall for Social Security and Medicare alone has been somewhat smaller than the EU average, at 6.5 percent of future GDP. But as a result of the expansion of the Medicare
program to cover prescription drugs, the U.S. fiscal imbalance is now 8.2 percent of future GDP. Putting this in perspective, to close its fiscal imbalance:
The United States would need to save and invest an amount equal to 8.2 percent of its GDP beginning now and continuing every year forever to pay expected future benefits without future tax increases"

The short observation is; when the default cascade hits, no State will be able to get back up off the floor without creating debt-free money OR killing off the old people.
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Old 10-18-2017, 02:42 PM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 3,901
Non-linear complexity-- too much for most people to comprehend

As computers take on more and more tasks, they solve problems that man could never understand. It isn't that these problems are so difficult. Things like the economy are evolving every second. You can't understand a problem that never "sits still".
Armstrong, " My math teacher said that most teachers do not use this method other than using special case formulas because its non-linear solution and that messes up people’s brain.
In physics, the professor said that nothing is random and then I went to economics class and they said everything is random so don’t waste your time trying to forecast it.
In mathematics and physical sciences, a nonlinear system is a system in which the change of the output is not proportional to the change of the input. Therefore, nonlinear problems are of great interest to engineers, physicists, and mathematicians because most systems are inherently nonlinear in nature such as weather, climate, disease, and life itself. Nonlinear systems often appear to be chaotic, unpredictable or counterintuitive. This is beyond the imagination or understanding of the average individual.
Fundamental analysis is therefore worthless because what moves a market is “belief” not logic.
Armstrong's model is a confidence model. His program, Socrates, removes much of the randomness of markets. Eventually, AI, will delineate smaller and smaller moves in markets. It will eventually reach a point to where it will "red flag" inflationary movements by the State.
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