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  #2521  
Old 12-22-2017, 06:48 AM
Danny B Danny B is offline
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liquidity searching for a home,,,doomers

The CBs created endless "liquidity" and, it had to find a home. It couldn't do this in gold. The gold supply increased about 2% per year. About the same rate that the economy grew. This rate would be fine for the producing economy but, FAR too limited for the needs of the speculators. The speculators were first in line for free money and, 2% just wouldn't do. To keep pressure off of gold, "They" created paper gold in 1984. This allowed an ever-expanding "supply" of gold for the speculators. The money supply expanded at about 7% per year. The extra 5% was what was added on as currency / price inflation over the years.
Since wage inflation always lagged price inflation, the speculators were always ahead of the game. The recent liquidity expansion has gone into hyperdrive. Everything it touched inflated and then, died. EVERYTHING except for gold, depends on consumption, in the FINAL analysis.

Gold was artificially inflated like everything else. The recent hyperdrive-press action required something else to absorb the excess liquidity. Enter cryptoS There are so many of them that they can absorb an enormous amount of liquidity. BUT, that is also their weakness.
12/22 Crypto carnage continues: bitcoin down $5,000 from record highs – Zero Hedge
12/22 Is this why Charlie Lee sold his litecoin? – Tom Luongo
12/22 Bitcoin: birth of the world’s first “teal” equity? – CME Group
12/21 Bitcoin arbitrage spreads are collapsing – Zero Hedge

Crypto really does NOT lend itself to arbitrage and speculation.
12/22 Cryptocurrencies could be ‘just mining the public’ – CNBC
12/22 Equity mania reaches fever pitch – Zero Hedge THAT always happens just before the crash.

12/21 Steinhoff disintegrates – Zero Hedge First (sort of ) Many.
12/21 Subprime auto defaults are soaring – Bloomberg
12/21 UK’s Warren Buffett says it’s time to sell stocks and bonds – CNBC
12/22 Treasury yields poised to surge – Silver PhoenixJust imagine shooting a flare gun inside a fireworks factory.
12/22 BOJ keeps policy steady, Kuroda dismisses talk of early exit – Reuters NO QT for Japan. The presses will run until they melt into the earth.
Russia just bought lots of gold. Stockman says to buy gold, David Stockman Warns "Gold Is The Only Safe Asset Left" | Zero Hedge
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  #2522  
Old 12-23-2017, 05:08 AM
Danny B Danny B is offline
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Forcing people to work, while employment is disappearing

85% of People Hate Their Jobs, Gallup Poll Says - Return to Now
https://returntonow.net/2017/09/22/8...lup-poll-says/
Sep 22, 2017 - Eighty-five percent of workers worldwide admit to hating their jobs when surveyed anonymously, according to a Gallup poll released last month. “Many people in the world hate their job and especially their boss,” the report says. Since 2000, Gallup has polled millions of employees from nearly 200 countries "

All of us have things that we would rather do than go to a job that we don't care for. We don't want to be told what to do all day.
Looming poverty forces us to go to work. Suppose everybody were given a universal basic income? We wouldn't show up for work. Due to increasing automation, hundreds of millions CAN'T show up for work.
Not So Great: 94,983,000 Americans Not in the Labor Force in May
https://www.cnsnews.com/.../not-so-g...abor-force-may
Jun 2, 2017

Unemployment is at 21.7%. http://www.shadowstats.com/imgs/sgs-...d&t=1512743154

"A landmark 2017 study even looked at the impact of just industrial robots on jobs from 1993 to 2007 and found that every new robot replaced around 5.6 workers, and every additional robot per 1,000 workers reduced the percentage of the total population employed by 0.34% and also reduced wages by 0.5%. During that 14-year period of time, the number of industrial robots quadrupled and between 360,000 and 670,000 jobs were erased. "
09/15/2017: AI could make full-time work a thing of the past
https://www.marketplace.org/.../0915...merican-work-m...
Sep 15, 2017 - 09/15/2017: AI could make full-time work a thing of the past.

The Incredible Shrinking Paycheck - Forbes
The Incredible Shrinking Pay Raise: Wages Can't Keep Up With Inflation
https://www.cnbc.com/id/48130116

Purchasing power keeps falling but, the economy MUST grow to service debt. This is papered over by the CB creating new debt-money for the State. The debt money is locked into the upper loop because the ONLY transmission mechanism is, wages. The transmission mechanism for the more well-off is, stock dividends.
The Wages for a big part of the middle class have disappeared and / or gone stagnant. The income for the upper middle class depend on dividends. ALL of these people depend on income from renting out their money. Stock dividends were previously dependent on earnings from sales.
As the wage base crashes, this is seen as falling sales, profits and dividends. This eventually shows up as falling dividends to the upper middle class. The join the ranks of the non-spenders from the lower middle class. The PTB pump up stocks to keep the upper middle class from joining the lower middle class. Valuations are at 2.7 times the historical norms. (Hussman) Armstrong says that valuations will continue to climb. As the Euro fractures, European capital joins Chinese capital in a flight to the safety of American markets. International capital flows are key to most markets.
The tax reform bill will help the banks and screw most people. Apparently, Trump is counting on the new tax laws to attract capital HERE.
https://www.armstrongeconomics.com/w...n-europe-asia/
I still can't see the DOW at 40,000 but, who knows?

The PTB try to keep us impoverished to keep us working. At the same time, automation is reducing the need for workers. The State is printing up money to try to keep things moving along.
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  #2523  
Old 12-23-2017, 05:24 AM
Danny B Danny B is offline
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Kunstler,,, power tied to gold

Grab a snack and read a bit more from Kunstler. Make sure that you are seated.
The Darkest Hours - Kunstler
Here is a VERY interesting article on the how and why of gold manipulation.
"Please keep in mind that the control of the gold price by the deep state financial elite is not some parlor game that they play for their enjoyment; it is an absolutely critical requirement in keeping the fraudulent fiat currency counterfeiting scheme from collapsing. There are literally trillions of dollars at stake, and the entire counterfeiting scam could and almost certainly would implode if gold “went Bitcoin.”
Gold EFPs: Absolute Proof That Paper Gold Is A Fraud | Zero Hedge
It's a long article but it gives a lot of information about the power structure aside from the info on gold.
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  #2524  
Old 12-23-2017, 09:20 PM
Danny B Danny B is offline
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Canada,,,, cyber crime,,, lacking baselines for accurate projections

Canadians spending nearly as much on marijuana as wine, shows report
12/23 Canadian housing affordability hits 27 year low – Zero Hedge
Alberta (Tar Sands Capital Of The World) Invests In 600 MW Of Wind power
Trudeau says Canada's oil sands must be phased out - Phys.org

12/23 Spending up far more than real income: per capita income stagnates – Mish No problem. We'll just spend til we default.
12/23 Bitcoin plunges 45% in 5 days… how low will it go? – SRSrocco Report
12/22 Panic selling turns into scramble buying as cryptocurrencies recover – ZH
12/23 France bans fracking and oil extraction in all of its territories – Guardian


Good article on the unfolding powers of cyber crime.
"Hiscox and Cybersecurity Ventures calculated that cybercrime cost the global economy $450 billion in 2016; they predict this number will reach $6 trillion in the next three years.
Lloyd's of London notes a single cyberattack can trigger $53 billion in economic losses, and pegs average losses after operating systems have been hacked at upwards of $29 billion.
While most people probably would regard terrorism as the greatest threat to the United States – say an attack on par with 9/11 – in fact Visual Capitalist cites a poll stating that cyberwarfare is the most threatening scenario at 45% compared to terrorism at 26.3%.
Ahead of The Herd

My brother is a senior IT development guy in a company in the beltway. I sent him a curious link. He immediately replied that he was changing ALL his passwords. I don't know enough to understand what all the fuss is all about. But, here is the link.
https://medium.com/4iqdelvedeep/1-4-...e-3131d0a1ae14
Here is a VERY off-the-wall article, https://renegadeinc.com/he-died-for-...-not-our-sins/
Here is a link to a long PDF book that is NOT POLITICALLY CORRECT. It does have a bearing on the economy of today.
https://katana17.files.wordpress.com...-roth-1934.pdf

Kunstler writes a review of the previous year. We (one sector) are living a life of deluded wealth brought on by credit creation. Kunstler writes about some aspects of the delusion.
Beyond Cynicism: America Fumbles Towards Kafka’s Castle | The American Conservative
Credit creation is the obverse side of the wage-crash coin. The bankers and corporatocracy expect to have full control of everything after the default cascade. They have the cameras and microphones and the guns,,, not to mention the lawbooks. They have already demonstrated their short-sightedness and stupidity.
The American birth rate fell so, the southern border was left open to avoid the population crash that befell Japan. We had a big influx of people who mostly had a good work ethic and a Christian background. Japan and the Soviet Union both showed that you can't have a shrinking population AND a growing market.
The Eurocrats formed the European union as a political union WITHOUT a debt union. They were warned at inception that it had NEVER previously worked. The whole thing will come crashing down. They were warned and went ahead anyway.
Hoping to copy the American experiment with importing workers from Latin America, the EU bombed MENA to chaos to supply a high number of willing refugees. This served American (israeli) interests as well to fracture ALL neighbors laying the groundwork for the unfolding "greater israel".
Equating muslim and black immigrants from States that have almost zero cohesion with immigrants from Latin America, was a big mistake. Much of the trash coming from Afghanistan, Pakistan and Somalia will NEVER contribute anything to productivity and growth. Instead, they will contribute to social and economic breakdown.
The Eurocrats made a painfully stupid move and have created a populist revolt. They assumed that erasing all democracy in Europe would allow them to dictate any terms that they desired. Poland and Hungary are at the forefront of the revolt that will eventually bring down all their twisted dreams.
TOO many of the "elites" are too distanced from the common people to judge / project what the outcome of their actions will be. Many of the politicians are former lawyers. Lawyers seem to believe that; you just pass a law and, everybody will comply. (Armstrong)
Automation is a new pressure just come on the scene. There is no baseline history on which to base projections of the outcome. Previously, mechanization had replaced people who used a lot of brawn. This was addressed many years ago. The Luddites. NOW, machines are replacing people who used their brains rather than their brawn. Armstrong's program, Socrates has NO baseline for integrating this new paradigm, NOR, the paradigm of reproductive choice. (Birth control).
I think that Socrates will be blind-sided.
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Last edited by Danny B; 12-23-2017 at 09:23 PM. Reason: sbelling
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  #2525  
Old 12-24-2017, 03:47 PM
Danny B Danny B is offline
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Year end roundup

Everybody is writing their year end thoughts. Kunstler is especially dark. Others are bogus BS to the n'th degree. Here is one that covers everything and is pretty much accurate.
https://www.peakprosperity.com/blog/...17-year-review
I'm going grocery shopping and will write more,,, after you read this.
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  #2526  
Old 12-24-2017, 05:27 PM
Danny B Danny B is offline
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$21 trillion buys a good fleet

The day before the cruise missile hit the Pentagon, Rumsfeld announced that $2.3 trillion was missing. 49 workers from the Naval office of budget and management were working on tracking down that missing money. Their offices were in a part of the Pentagon that had recently been "hardened" to resist attack. 48 died. There was also a similar investigation in building 7 with the FBI. That was all destroyed when building 7 was "pulled".
Recently, it was reported that $21 trillion was missing. It can't actually be missing. It is unaccounted for. We all know where it went.

"A new space corps would represent more of a bureaucratic reshuffling than a major expansion of the Space Command, which currently employs about 36,000 people and is headquartered at Peterson Air Force Base in Colorado. " Air Force Space Command > Home
" Other top defense officials have argued that the Pentagon is already making a renewed effort in space and are lobbying Congress to instead provide more funding." How much more funding?
"During a briefing with reporters last week, Air Force Chief of Staff General David Goldfein said the military’s goal was to “normalize” space as a war-fighting domain"
"In an official statement of policy, the Trump administration said the creation of a space corps was “premature” and that the Defense Department was still assessing the possibility as one option in a broader reorganization."
https://www.theatlantic.com/politics...-corps/536124/

OK, so, we have a space fleet and they are trying to bring it out in the open. The missing $trillions paid for it.
Where did those $trillions come from? The "black" section of the budget wasn't big enough.
Everybody looks at the reported movements of money to & from the Treasury and FED. Nobody sees reports from the President's working group on markets or the Exchange stabilization fund. The PPT and ESF just move liquidity wherever they want.

Ben Franklin mentioned to the European bankers that the colonies just printed whatever amount of money the productive economy needed. That brought us a war from The European bankers. Adolph Hitler created money, as needed for workers and the productive economy. He too got a war from the European bankers. Churchill made it very clear that WW II was banker's war.

The "missing" $21 trillion was most likely spent INTO the productive economy for the development of the American space fleet.
https://www.theatlantic.com/politics...-corps/536124/
https://truedisclosure.org/news/sola...esent-day.html

Both Benjamin and Adolph produced money for the productive sectors of the economy. This didn't sit well with the speculators. The Pentagon is soon to be audited. It is doubtful that the funding for the space fleet will ever be itemized.
EDIT:
Gen. David Goldfein to be second Jewish US Air Force chief - Haaretz
https://www.haaretz.com › World News › Americas
Apr 27, 2016 - Gen. David Goldfein. U.S. Air Force. Gen. David Goldfein will become the second Jew to command the U.S. Air Force.

Meet the Jew who may bomb North Korea - Israel National News
www.israelnationalnews.com › All News › US & Canada
Oct 23, 2017 - Head of US Air Force General David Goldfein is responsible, among other things, for the fleet of bombers that may soon strike rogue state.
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Last edited by Danny B; 12-24-2017 at 07:50 PM. Reason: A bit more info
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  #2527  
Old 12-25-2017, 02:55 AM
Danny B Danny B is offline
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Raging against the long, long night

China is hard at work to build their new prosperity. Otherwise known as the new Silk Road. They want to get lots of new people working and earning AND consuming. They have the right idea; get lots of people out of the fields,,, into the cities and, consuming like crazy. As nutrition gets better,,, as child care gets better, people become more intelligent.
Intelligent people have fewer children, preferring to attain quality over quantity.
Here are 3 articles that you can skim to get a good picture.
https://econimica.blogspot.com/2017/...ead-ahead.html
https://econimica.blogspot.com/2015/...of-global.html
https://econimica.blogspot.com/2017/...orph-into.html

Population (ex S. Africa) is falling everywhere. Our debt-money system is fracturing from the CBs trying to compensate for falling consumption with rising money printing. China has the fastest falling labor force. China has the fastest printing presses.
The demographic crash will wipe out budgets everywhere. Japan has given up on pretence and is printing with wild abandon. The FED claims to have shut down the QE machine but, we don't hear a word from the PPT and ESF. China has recently created more debt that the EU, FED and BOJ put together.

Here is a page with American debt year by year. https://www.thebalance.com/national-...events-3306287
Here is a page with births, year by year. https://www.infoplease.com/us/births...rth-rates-year
SOMETHING always precipitates a crash. Recent history clearly shows that our approaching date with poverty will bring a big shrinkage in the birth rate. The unfolding police State and control systems won't inspire people to bring children into an Orwellian world. Our fast approaching poverty won't either. Ditto for the approaching race wars.
Our current system that demands eternal growth will crash into the reality of a shrinking population and crashing consumption. In the face of runaway automation, there isn't anything "good" that the State can do.
The unfolding police State is hardly likely to inspire confidence in couples.

Kunstler writes about, "The Long Emergency". By it's very (current) nature, the State can't possibly inspire confidence.
The corporatocracy brings us rising fascism. The State brings us a socialist control system. Socialism is anti-family. The results are unfolding. When the markets crash, the demographic crash will eclipse everything else.
"He said that budget will “be a doozy” because of a projected $1 billion hole created by need to appropriate close to $1 billion to the pension funds on top of the $1.2 billion appropriated in the current budget."
http://www.themoreheadnews.com/news/...596a9b60b.html
We will see lots more of this.
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  #2528  
Old 12-25-2017, 04:40 PM
Danny B Danny B is offline
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No jobs means no kids = no economy

Armstrong says that everything runs in cycles. Not true.
Interest rates are the lowest in 5,000 years.
The birth rate is the lowest in history.
The Amish have large families because they need the "free" labor of their children for their non-mechanized farms. In the rest of America, only 1% of the population works in agriculture. They have help.
22 Billion Energy Slaves. "Today's energy supplies provide the equivalent of the work of 22 billion slaves." So says Colin Campbell, petroleum geologist and Peak Oil commentator. Actually the true figure may be closer to 122 Billion Energy Slaves.

Agrarian societies had large families out of necessity. That necessity is no longer there. Women were pulled into the labor force by the demands of taxes, wars and parasites. This lowered the birth rate. The predations have become so great that wages are no longer adequate to support a family for many couples.
The bankers are at the head of the line for the food trough. The boomers are next in line because they were promised support til death. Those boomers who can't get support must work til they drop. This leaves fewer job niches for millennials. The millennials are living in their parent's basement. Seeing no future, they opt out of society and lose themselves in "Second Life" and VR. In Second Life, they can escape and soar with the eagles. If Second life, VR and Youtube aren't enough, they might escape to drugs. This is slow suicide,,,,, as opposed to fast suicide by one of the many popular methods.

The Polish government encourages the Poles to breed like rabbits (vid). BUT, there are 300,000 Poles in Britain attracted by employment possibilities. There is something seriously wrong with the Polish GOV if they promote reproduction in people who have no employment prospects. This is duplicated in most other developed States. They promote fecundity in jobless populations. To further prove their stupidity, several States are flooding their nations with with non-productive immigrants ,,,, to keep the productive economy going.

Creating large families out of necessity is a thing of the past. Worldwide population growth is a thing of the past. Full employment is a thing of the past. To preserve the debt bubble, the printing presses are running in hyperdrive.
Large families made sense before mechanization of production. Most of the people who do decide to have children now limit the number to two. Greece is a good example of what happens when the bankers get their way with a country.
Shock birth rates shows Greeks may be dying out over IMPOSED ...
https://www.express.co.uk › News › World
Apr 29, 2017 - Greece population birth rate crisis GETTY. Roughly a fifth of women born in the 1970s will remain childless.


This is very much in line with the desires of VHEMT but, it is very bad for the bankers.
https://rationalwiki.org/wiki/Volunt...ction_Movement
There is a dawning perception that you must have people to have an economy. "They" could cover the land with robots and produce great abundance but, for what? Stocks and bonds are claims on future productivity. What happens if there is no future consumption?

Many decades ago, the English did not allow a couple to get married until, they had a place to live. This was done to cut down on procreation of people who had inadequate support. We are in a new era where reproduction is an expensive headache and many avoid it. This is not some cyclical thing.
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  #2529  
Old 12-25-2017, 05:09 PM
Danny B Danny B is offline
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Possibilities with AI,,Blockchain

A lot of mankind's problems are related to human nature. It is possible that AI will come up with some solutions to our problems.
Robot taught itself never seen before chess moves in hours | Daily Mail Online
"In those 240 minutes of practice, the program not only taught itself how to play but developed tactics that are unbeatably innovative — and revealed its startling ability to trounce human intelligence. Some of its winning moves had never been recorded in the 1,500 years that human brains have pitted wits across the chequered board."
"On December 6, 2017, AlphaZero took over the chess world . . . eventually solving the game and finally enslaving the human race as pets."

"Already top IT experts warn that deep-learning algorithms can run riotously out of control because we don’t know what they’re teaching themselves.
And the programs can develop distinctly worrying ideas. A system developed in America for probation services to predict the risk of parole-seekers reoffending was recently discovered to have quickly become unfairly racially biased."

Political assassination, https://www.armstrongeconomics.com/i...ove-opponents/
Socrates and BTC, https://www.armstrongeconomics.com/w...bitcoin-crash/

A very good article on integrating blockchain contracts into the existing legal system.
https://medium.com/humanizing-the-si...g-11a67c75d840
Who knows what the limits / frontiers of AI are going to be?
AI detects expressions to tell if people lie in court | Daily Mail Online
Apparently, you Aussies have developed a taste for Mexican food. https://www.digitaltrends.com/cool-t...o-australians/
12/25 Homelessness in England rises by 75% among vulnerable groups – Guardian So, bring in more Pakis and Poles and Arabs.
12/25 There’s one ledger – it’s called blockchain – GoldSeek
12/25 Ten years in, nobody has come up with a use for blockchain – Hacker Noon

12/25 ‘Bitcoin the perfect bubble, but blockchain a remarkable solution’ – Wired
12/24 Technology behind bitcoin could transform the world – Guardian


12/25 Trump is obliterating ISIS off the face of the earth – Town Hall
12/25 Japan births plunge to lowest level ever recorded – Zero Hedge Surely, there is no connection to economic factors.

Part 2 of the year in review at peak Prosperity, https://www.peakprosperity.com/blog/...-review-part-2
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Last edited by Danny B; 12-25-2017 at 06:43 PM. Reason: Duh
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  #2530  
Old 12-27-2017, 04:05 AM
Danny B Danny B is offline
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Euthanasia,,, the China cure for debt hangover,,,BTC news

A couple of days ago, the rich were ecstatic about the tax cuts. Today is a different story.
https://www.vanityfair.com/news/2017...mic-euthanasia
China has a runaway credit system. They plan to cure the problem by allowing local GOV to greatly expand borrowing and, at the same time, remove State control.
https://www.reuters.com/article/us-c...-idUSKBN1EJ065

Good graphs but, somebody has poured molasses in my computer and I'm not going to excerpt.
https://northmantrader.com/2017/12/2...od-as-it-gets/
12/26 The bitcoin hoax – Huffington Post
12/26 Five bitcoin must reads of 2017 – Futurism
12/26 The Winklevoss twins talk bitcoin futures and fears – Fox
12/26 Bitcoin’s mysterious creator appears to be sitting on a $5.8b fortune – Yahoo!

12/26 Israeli regulator seeks to ban cryptocurrency firms from stock exchange – GATA Evidently, jewesh bankers don't like BTC.,,,, along with American and Chinese bankers.

12/26 Home prices in 80% of US cities grow twice as fast as wages – Zero Hedge That is where the hot money from the upper loop flows into the lower loop.
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Old 12-28-2017, 05:05 AM
Danny B Danny B is offline
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Gann,,yield curve,,CALPERS follies,,Hussman, market psychology

The Russian Kondratief was the first person of note to talk about economic cycles.
W.D. Gann figured out the cycles many years ago and made good predictions. He doesn't have the enormous baseline that Armstrong has but, he has been pretty accurate. One little graph shows the yield curve to be trending down but, not very steeply.
https://renegadeinc.com/wp-content/u...2017/12/05.png
Pretty good read, https://renegadeinc.com/ghost-of-wd-...ash-is-coming/
The yield curve is very important, https://www.bloomberg.com/news/artic...inal-2017-push

CALPERS is $ 138 billion short. They claim that it really isn't a problem. They STILL expect to get 7% returns. They were urged to reduce that to 4%. Their reply, "CalPERS claimed that such an action “would do serious damage to many California cities, counties, other public agencies, and schools. If implemented, they would forever jeopardize the retirement security of millions of current and retired California public employees and their beneficiaries.”
The NIRP world hasn't been kind to them.
"The study cited poor fund performance, poor financial, managerial competence, politically motivated decisions, and an artificially inflated discount rate"
They are a bunch of California socialists who insisted in investing in projects that were very socially correct.
"For the 12 months ended on June 30, 2016, CalPERS investments lost 2.7 percent, or $8.2 billion. Combining the cash loss with the pension plan's failure to earn any of the 7.5 percent “assumed” investment return of $22.6 billion, the CalPERS total “actuarial investment loss” was a stunning $30.8 billion."
"an institution that lost $70 billion in the credit wipeout of 2008 and 2009"
"It’s no secret that hedge funds rank among the most expensive investment vehicles. They typically collect a performance fee, frequently 20 percent, and also take a percentage of assets under management, often 2 percent but sometimes more, even if their investments lose money. Calpers said it spent $135 million in hedge fund fees in its last fiscal year"
CalPERS Past The Point Of No Return? - ValueWalk

"Luxury spending rose 5% globally in 2017, the management consulting firm Bain & Company found. But that is a fraction of the 40% rise in net worth that people in America's top-tenth of income earners saw between 2013 and 2016, according to the Federal Reserve."
2017 was a great year to be rich - Dec. 26, 2017
You can see the problem here. The money shifts to the upper loop and, just sits there rolled over into more paper schemes. The upper loop gets more bloated. The FED must feed the credit monster because commerce is absent.
Japan urges it's companies to raise wages. Everybody is afraid to raise wages and lose market share.

Hussman, "Specifically, faced with unusual or extraordinary price advances, there is a natural tendency (particularly in the presence of crowds, feedback loops, and potential rewards) to look for explanations. The problem isn’t that logic or reason has failed, but that the inputs have been distorted, and in the attempt to justify the advance amid the speculative excitement, careful data-gathering is replaced by a tendency to confuse temporary factors for fundamental underpinnings."
Too many people pay attention to charts and not enough attention to rationale.
" The problem was that investors stopped thinking about stocks as a claim on a very, very long-term stream of discounted cash flows."
Don't forget our falling wages and falling consumptive power.
"But again, as the advance became more speculative, investors largely ignored the impact of their own speculation in producing that advance. Instead, their first impulse was again to try to justify the elevated valuations in novel ways (recall “price-to-eyeballs”). By March 2000, on the basis of historically reliable valuation measures, I projected that a retreat to normal valuations would require an -83% plunge in tech stocks. In the 19 months that followed"
Yep, hot money is driving things up. As things keep going up, more hot money flows in so that investors don't miss out.

1) Total real saving in the economy must equal total real investment in the economy;

2) For every investor who calls some security an “asset” there’s an issuer that calls that same security a “liability”;

3) The net acquisition of all securities in the economy is always precisely zero, even though the gross issuance of securities can be many times the amount of underlying saving;

4) When one nets out all the assets and liabilities in the economy, the only thing that is left – the true basis of a society’s net worth – is the stock of real investment that it has accumulated as a result of prior saving, and its unused endowment of resources. Everything else cancels out because every security represents an asset of the holder and a liability of the issuer. Securities are not net wealth.

GREAT graphs, https://www.hussmanfunds.com/comment/mmc171218/

12/27 Record high 30% of U.S. adults now live with a roommate – Zero Hedge
12/27 Case-Shiller 20-home price index just shy of 2006 bubble peak – Mish

The investor has 2 houses,,, the worker has none.
Armstrong says that the Chinese use the housing market as a bank account. There are 64 million empty buildings in China when you include commercial property. China has the fastest shrinking labor force in the world. Who is going to buy all these houses?
The BRICKS were supposed to displace the G7 as the world's leading economies. They just don't have enough internal consumption to generate the economic activity necessary.
https://www.armstrongeconomics.com/a...the-rise-fall/

12/28 5 reasons the Fed needs a bitcoin-style currency – Fortune
12/28 How the blockchain is redefining trust – Wired
blockchain, YES. Bitcoin,, not really.
BTC note, http://charleshughsmith.blogspot.com...-disdains.html
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Last edited by Danny B; 12-28-2017 at 05:07 AM. Reason: pselling
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Old 12-28-2017, 04:13 PM
Danny B Danny B is offline
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50 ways to default and leave your banker

2) For every investor who calls some security an “asset” there’s an issuer that calls that same security a “liability”
Lenders are so desperate to find yield in a ZIRP world that they are lending with less and less protection. The borrowers will be the ones that "walk" in the event of a problem.
https://dollarcollapse.com/debt/2007...-scam-lenders/

Ron Paul, “We’re on the verge of something like what happened in ‘89 when the Soviet system just collapsed,” he said. “I’m just hoping our system comes apart as gracefully as the Soviet system."
The Soviet system had the State owning all the housing,,,more or less. People didn't get thrown out on the street for not paying the rent. If the State bond market collapses as Armstrong predicts, it will be difficult for the State to stop mass eviction.
PressTV-US on verge of Soviet-style collapse: Ron Paul

The FED printed to save the banks. The money creeped over into housing. The State knows that it is very dangerous to reach a position where the common man can't afford housing. The State must NEVER let matters get to the point where it's people have nothing left to lose. NO law can ever be enforced in that scenario.

The U.S. is sanctioning Russia and,,, Russia is fighting back.
https://www.rt.com/business/414262-v...ussia-finance/
Pox Americana is persecuting 3 of the most prolific oil exporters, Iran, Venezuela and Russia. This, because they are trying to extricate themselves from the dollar system. As they are successful, more will join them. Eventually, America will find it hard to buy oil.

The PBOC prints money to backstop local GOV banks who have gotten in too deep. The new plan, "Central government control of the scale of local government bonds should be eliminated,"
“Eliminate central government control on the scale of local government bond issues, expand the scale of local government debt issues,” Xu wrote."
https://www.reuters.com/article/us-c...-idUSKBN1EJ065
The West has private banks creating unlimited "money".
China has public State and local banks creating unlimited "money".
It appears that the public banks can better tolerate the coming default cascade.
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Old 12-29-2017, 03:25 PM
Danny B Danny B is offline
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Lefties = incompetence,,,bankers = corruption

Obummer clearly proved that lefties prefer to be surrounded by other lefties who agree with them. If you are looking for fellow lefties, start looking for brain-dead people.
Armstrong on Venezuela, "A general with no energy experience was put now in charge of the state oil company. The problem has been political arrests. (this) has witnessed a mass migration of those with talent leaving the country with incompetent management. This has resulted in the oil industry simply collapsing as production is plummeting."
https://www.armstrongeconomics.com/a...-govt-with-it/
Their economy has shrunk by 32%, https://sputniknews.com/latam/201712...uro-lost-jobs/

"The bad loan (“non-performing loan” (NPL)) crisis in Europe is well known and many have been calling for this issue to be addressed. In Italy, the bad loan crisis has reached 21% of GDP. While NPLs dropped to 4.8% of all loans in the EU as a whole during the first quarter of 2017, they remained well above 40% in Greece and Cyprus, at 18.5% in Portugal, and 14.8% in Italy according to the European Banking Authority.

Now comes the bureaucrats with zero experience to save the day – or is that to create a financial pandemic in the EU? " SNAFU
"Once again, all we have is the ECU and ECB desperately trying to prevent a banking crisis as loans in default rise. However, this project is totally incomprehensible for now a well-secured loan which does not pose any particular credit risk in traditional banking can find its collateral sold."
"This regulatory logic is just totally insane" "There is no distinguishment between fully-collateralized and non-collectible loans. Nor do bureaucrats comprehend the true meaning of a “non-performing loan” that is temporary and one that could never be repaid. Bureaucrats are not capable of understanding the economy "
https://www.armstrongeconomics.com/i...cial-pandemic/
So, given the chance, the lefties hire idiots to run the economy. Given the chance, the bankers loan money to deadbeats,,,, usually to their friends. The S&L crash was a huge case of liar-loans to friends of bank execs. 1,000 of them went to jail.

With this as background, it is a good idea to take another look at Armstrong's prediction of DOW 39,000. He is essentially predicting MASSIVE capital flight from the R.O.W. to America. We have seen that investors are willing to accept ZIRP or even NIRP to park capital in something that they believe is a safe haven. Returns on the broader stock market are slightly negative when accounting for true price inflation. Earnings are non-existent.
The CBs have force-fed liquidity into the investment market in the hopes that it will flow into every nook and cranny. Each investor will look for return to protect his investment. Since most investments yield zero, the investor must move into riskier asset classes. By this manuver, the CBs give financial support to numerous zombies that could ordinarily never attract capital.
Since the Russell and the Wilshire indexes are sinking, it is doubtful that the DOW and S&P can rise in accordance with Armstrong's predictions.

Here are a couple of articles concerning how the New tax laws will affect capital flow from Europe. Pretty dense.
https://www.zerohedge.com/news/2017-...-burns-down-eu
The new law will trend to drain capital from Europe.
"And when Apple’s Tim Cook is talking about bringing back $282 billion in capital in 2018 alone, the banks that are holding those deposits and investments as reserves are going to have to scramble to find the dollars to redeem those investments.

Does anyone think Apple draining even just $5 billion a month from the European banking system won’t have a huge effect on the health of those banks?" "They began buying after Trump was elected because, rightly, they expected a strong U.S. dollar from the policies he was promoting.

For most of 2017, up through September, the dollar was weak with the USDX dropping from above 104 to below 91, a huge decrease."
So, the bankers have burned the European very badly. The lefties intend to extract revenge from the bankers.
" €800 billion to €1 trillion euro in NPLs exist among the European banks"
"In Italy, the bad loan crisis has reached 21% of GDP. While NPLs dropped to 4.8% of all loans in the EU as a whole during the first quarter of 2017, they remained well above 40% in Greece and Cyprus, at 18.5% in Portugal, and 14.8% in Italy"
With this many NPLs, an attack on the banking system will be FATAL.
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Old 12-30-2017, 01:49 AM
Danny B Danny B is offline
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QE in stealth mode

The headline numbers on unemployment are at about 4%. With just a little digging, the BLS admits that the true numbers are much higher. Investors don't want t do a little digging. The true number is about 23%.... Shadowstats.
John Hussman shows the stock market to be wildly over valued from it's historical norm. Investors have some kind of group mania that urges them to ignore the bad news and just, pile in.
Stockman, "December 1996, the NASDAQ 100 index rose from 830 to 4585 or by 450%. But the perma-bulls said not to worry"
"During those heart-stopping 30 months of free-fall, all the gains of the tech boom were wiped out in an 84% collapse of the index. Overall, the market value of household equities sank from $10.0 trillion to $4.8 trillion----a wipeout"

"During the 20 months from the July 2007 peak to the March 2009 bottom, the RUT gave it all back. And we mean every bit of it----as the index bottomed 60% lower at 340. This time the value of household equities plunged by $6 trillion, and still millions more baby-boomers were carried out of the casino on their shields never to return."
"the value of equities owned by US households exploded still higher----this time by $12.5 trillion."
"So an epochal pivot has begun----led by the Fed's committement to shrink its balance sheet at a $600 billion annual rate beginning next October. This pivot to QT (quantitative tightening) is something new under the sun and was necessitated by the radical money printing spree of the past three decades."
So, they claim.
"In the first instance, the market is not merely complacent; it is insouciant-----indulging in an eye-wide-shut orgy of recklessness that truly has no parallel, not even the mania of 1927-1929."

"ground zero of the impending bond market conflagration is FY 2019, which incepts exactly 276 days from now during the same window of time (Q4) as the Fed hits full stride on its bond dump-a-thon. Yet on top of CBO's most recent but now obsolete FY 2019 deficit deficit projection of $700 billion, the Trumpian GOP is adding $200 billion for defense, disasters, border control, ObamaCare insurance bailouts and other domestic boodle; and on top of that, now comes its vaunted front-loaded tax cut, which will rip $280 billion out of Uncle Sam's revenue collections in the same year."
"What you get is Uncle Sam fixing to sell $1.28 trillion of debt---equal to 6.2% of projected GDP---at the same time the Fed is dumping another $600 billion of existing treasury and GSE paper."
"The only other category left is foreign buyers---private investors and central banks alike---but that source of "demand" for Uncle Sam's emissions is fixing to dry-up, as well. "

"In all, what was a $1.3 trillion central bank bond purchase rate earlier this year will fade to nearly zero in 2019" So, they claim.
"Stated differently, what is "priced-in" to the world's risk asset markets is central bank footings of $22 trillion-----not the $6 trillion level prior to the financial crisis or the $17-18 trillion level now being targeted for the end of the QT/normalization campaign."
"In all, we'd say Wall Street is calling the sheep to the final slaughter. At the moment, in fact, the bleating is so loud that the gamblers are seriously debating whether the 50X gain in bitcoin in just 22 months is sustainable. "
Contra Corner » The Greatest Bubble Ever: Why You Better Believe It, Part 1

OK, so, the FED is going to stop printing. Foreign buyers are not going to buy treasuries. In 2015, there was a great drop in the purchase of U.S. treasury paper. Suddenly, the BLICS showed up to buy everything. Belgium, Luxembourg, Iceland, Cayman Islands, Switzerland.
"The US Federal Reserve is using 17 central banks working in concert through currency swaps to maintain the fraudulent monetary system, which are probably tied into Forward Rate Agreements (FRA) and Interest Rate Swap derivatives between central banks."
Belgium bought $ 420 billion even though, they didn't have ANY dollar reserves.
Exported QE Travesty: Meet the BLICS

So, while Stockman has logic on his side, the FED has corruption and a desire to survive on it's side.

12/28 Stock optimism swells as S&P 500 most overbought in 22 years – MarketWatch
12/29 US homeowners made $2 trillion on their houses in 2017 – Zero Hedge
12/28 U.S. renters paid a record high $485.6 billion in 2017 – Bloomberg
Property unaffordable for 100,000 households a year in England ..
Housing Market: Why Millennials Are Getting Priced Out - WSJ


Since the FED has purportedly stopped QE a few years ago, foreign investors are attracted to American markets. The EU banks are probably much worse than American banks so, we will see capital flight to America. As the foreign capital flows in, the banks will INDEED be stronger.
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Old 12-30-2017, 03:56 PM
Danny B Danny B is offline
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Pension meltdown,,,Chinese sepuku

12/30 Commodities end 2017 with a bang in longest rally on record – Bloomberg
"Aluminum, the poster-child for hopes of a Beijing-led supply shutdown, has been piling up in Shanghai at a worrying pace. The stockpile of metal available for order has hit a record 634,000 metric tons,"
China's Commodity Beast Enters Hibernation - Bloomberg Gadfly
https://www.bloomberg.com/.../china-...-into-hibernat...
Nov 15, 2017

12/30 Only one US state pension has funded level above 50% – AI-CIO No problem. Vaccinate away the problem.

"While a public employee does have a 'vested right' to a pension, that right is only to a 'reasonable' pension — not an immutable entitlement to the most optimal formula of calculating the pension," Judge James A. Richman wrote. "
Lawsuits threaten pension cuts for California state workers
So, the State will decide if your pension is reasonable or not.

12/30 Chinese ’shadow debt’ an $18.5trln market set to collapse – Express.co.uk
"Since then, Chinese authorities have proven they are still able to control their economy. But stability has come at the cost of ever-increasing debt levels. The International Monetary Fund warned in October that China's banking sector assets have risen steadily to 310 percent of GDP from 240 percent of GDP at the end of 2012. "
https://www.cnbc.com/2017/12/28/chin...lysts-say.html

Kunstler, "You may detect that I’m not exactly a fan of the president, but I rather admire his standing up to the permanent bureaucracy that we call the Deep State, and especially its elite poobahs, who have driven this polity into a deeper ditch than the voters realize. "
"After more than a year, the RussiaGate narrative is looking like something fished out of the Goodwill Industries dumpster,"
"The Tax Plan? Real tax relief just doesn’t mean a whole lot without a reduction in the size and scale of government. Its unstated purpose is a temporary stimulant replacement for Federal Reserve money-printing."
The Year in Trump - Kunstler

Russia responds to Trump's tax plan, https://www.armstrongeconomics.com/w...mp-tax-reform/
China responds to Trump's tax plan, https://www.armstrongeconomics.com/w...ting-in-china/
So, America, Russia and China are reducing their tax receipts. The corporatocracy is foundering because consumption is crashing. The State squeezes out one more stimulus to try to save a system in terminal decline. Everything done to save the financial system is killing consumption. Giving more money to corporations is just one more negative in the negative feedback loop. NONE of the money will go into wages.

We are now starting the 2018 Outlook Report and this is going to be a shocker. We are looking at the start of a Panic Cycle Year in many markets. This warns we can see dramatic volatility that will make your nose bleed."
https://www.armstrongeconomics.com/p...utlook-report/

BECAUSE America had the reserve currency, it could print with wild abandon. BECAUSE the America dollar was the store-of-value for States, they demanded that we print with wild abandon. This gave LBJ, et al the opportunity to splurge on stupid projects like the welfare-warfare State. If foreign States wanted to have a domestic store-of-value, they had to sell us stuff for a lower price than we sold for. This demand for dollars, coupled with the requisite lower prices for stuff resulted in America running a permanent trade deficit.

In a certain sense, America was forced to go off the gold standard by the ever-increasing demand for dollars. In the mid-60s, we upshifted the printing presses. We diluted the value of the dollar because everybody was demanding them. Because of this dilution, gold was leaving the U.S. treasury at the rate of 100 tons a week in summer of '71. Nixon was forced to close the gold window. This allowed America to REALLY get the presses going.
https://www.zerohedge.com/sites/defa.../GPC122817.jpg
The Bretton Woods agreement used the U.S. dollar as a proxy for gold. The main weakness of this arrangement was; foreign States demanded a fast rising pile of dollars when the gold supply only grew at 2%. Nixon didn't really understand what the consequences would be. China has come out and said that; his actions were more momentous to the world than even the world wars.
No gold peg has EVER survived. If Nixon had a good sense of history, he would have devalued the dollar vs gold.
"Roosevelt took much greater action to end the gold standard than did Nixon when Roosevelt let the dollar "float" in 1933 to combat the shrunken monetary supply during the depression. ..."
“Most economists now agree 90 percent of the reason why the U.S. got out of the Great Depression was the break with gold,”

This ALL gets back to an immutable law. Your currency and your store-of-value can NOT be one and the same. Gresham's Law states that the strongest currency will go into hiding to serve as a store of value. Because millions of people and dozens of States HID their dollars, America was able to PRINT without a risk of hyperinflation.

The West severely manipulates the price of gold downwards so that; the dollars will continue to be hidden away as a store of value. Therefore, the East can patiently wait for the inevitable crash that will exorcise the dollar from it's status as the store-of-value. China is NOT trying to avoid a crash. China recognises both Triffin's Dilemma and Gresham's law. They would like the Yuan to be a "good" currency with wide acceptance. They know that the Yuan can never serve as a store-of-value.
Their shadow banking system is ready to blow. They propose removing all State control from the system so that it can regulate itself.
They have prepared by accumulating the long-accepted store of value,,, gold. By removing State control, they have indicated that they are ready to pull the pin on the debt hand grenade.
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Last edited by Danny B; 12-31-2017 at 09:53 PM. Reason: mistreaks
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Old 12-31-2017, 04:04 AM
Danny B Danny B is offline
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Doug Casey

Doug Casey is a perma-bear, preaching doom & gloom for many years. He has an article on Zero Hedge that very clearly explains the essence of an honest banking system vs our current system. It is worth a read. The comment section is a fascinating examination of the various power-plays between the controllers.
https://www.zerohedge.com/news/2017-...-happen?page=1
Cryptocurrency expert kidnapped for $1 million bitcoin ransom
Happy new year to all
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Old 12-31-2017, 11:15 PM
Danny B Danny B is offline
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Trying to preserve the value of the collateral

The robots walked in the front door AND, the humans got tossed out the back door. https://www.wired.com/story/2017-was...daily_list1_p1
As the wage base crashed, the CBs unleashed their magic pixel machines.
"In the U.S., Total Securities (Debt and Equities) are approaching $90 TN, or about 450% of GDP. This compares to cycle peaks 379% in 2007 and 359% in early-2000. It was as if 2017 was the year that central banks convinced the markets the party doesn’t have to end. Let the good times roll."
"I never bought into the comparisons of 2008 to 1929 - nor the “great recession” to the Great Depression. 2008 was for the most part a crisis in private Credit, with government debt and central bank Credit (fatefully) unscathed. In contrast, the bursting of the super-Bubble in 1929 unleashed a global systemic crisis of confidence in finance and policymaking more generally. In important respects, 2017 reminds me of reckless “caution to the wind” late-twenties excess in the face of darkening storm clouds "

" Importantly, another year passed with Beijing unwilling to forcefully rein in rampant excess. The situation becomes only more perilous, with global markets increasingly confident that Chinese officials dare not risk bursting the Bubble."
China can't bring down the Western hegemon with just a small "pop"
"’The debt issuance is pretty much off the charts everywhere"
Credit Bubble Bulletin : Weekly Commentary: A Phenomenal Year

" Active stock managers average 109% exposure to the asset class. That is not a misprint. The average exposure is greater than 100% such that active stock managers are "leveraged long."
https://seekingalpha.com/article/413...e-depreciation
The CBs try to keep the party growing even after the wage-base collapsed. They figured that; if they pumped liquidity into every nook and cranny, the middle class would feel rich and start spending again. With ~ 100 million not in the labor force, that wasn't a very good plan.

"Credit is the foundation of the current financial system, for credit enables consumers to bring consumption forward, that is, buy more stuff today than they could buy with the cash they have on hand, in exchange for promising to pay principal and interest with their future income."
"If a lender loans me $500 to buy a new table saw, and I default on the loan, the table saw is the collateral. Unfortunately for the lender, the market value of the used tool is perhaps $250 at best. So the lender loses $250 even after repossessing and selling the collateral.

If the lender loaned me $500 to buy champagne and I default, there is no collateral at all; the loan was based solely on my ability and willingness to pay principal and interest into the future.
When I say that all credit is not equal, I’m referring to the creditworthiness of the borrower. "

"Central banks are now trapped. If they raise rates to provide low-risk, high-yield returns to institutional owners, they will stifle the “recovery” and the asset bubbles that are dependent on unlimited liquidity and super-low interest rates.

But if they keep yields low, the only way institutional investors can earn the gains they need to survive is to pile into risk assets and hope the current bubbles will loft higher.

This traps the central banks in a strategy of pushing risk assets—already at nose-bleed valuations—ever higher, as any decline would crush the value of the collateral underpinning the titanic mountain of debt "
https://www.peakprosperity.com/blog/...stem-will-fail
12/31 Value of US housing market climbs to record $31.8 trillion – HousingWire
In the U.S., Total Securities (Debt and Equities) are approaching $90 TN
All homes in the country are now worth a cumulative $31.8 trillion.


Stockman, " Yet what is coming down the pike is nothing less than a drastic, permanent downward reset of financial asset prices that will rattle the rafters in the casino."
"Accordingly, the GOP assumes $30 trillion of extra GDP over the coming decade or nearly 23% more than would be generated by the actual growth rate (blue line) of the last decade; and consequently, $6 trillion of extra revenue."
"Schwab's retail clients have never, ever had lower cash allocations than at the present time---not even during the run-up to the dotcom bust or the great financial crisis." BAaaaa
12/31 These 11 of 19 bear market warnings have been signalled already – MunKnee We don't need no stinkin warnings.
"That is, what is fundamentally different about the greatest financial bubble yet is that there is no possibility of a quick policy-induced reflation after the coming crash. This time the cycle will be L-shaped----- with financial asset prices languishing on the post-crash bottom for years to come. Hussman has shown this very clearly.

And that is a truly combustible condition. That is, 65% of the retirement population already lives essentially hand-to-month on social security, Medicare and other government welfare benefits (food stamps and SSI, principally). But after the third financial bubble of this century crashes, tens of millions more will be driven close to that condition as their 401Ks again evaporate. MORE VACCINATION !
Blazing on down, https://pbs.twimg.com/media/C8bEwCVWsAE36Pz.png
http://davidstockmanscontracorner.co...eve-it-part-2/
Side note;
Over 100 Seniors Die After Receiving Flu Shot During Study
https://healthfreedomidaho.org/over-...t-during-study
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Old 01-01-2018, 06:21 PM
Danny B Danny B is offline
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January 1, part one

Most of the economic news is just noise, BS and pabulum. I'm trying to wade through and post as little as possible. The average person does not want to wade through mountains of data that can either be ignored OR reduced to one sentence. I still have to get a coherent message across though.
My posts have tracked the ever-growing bubble and, all the naysayers who say that it can't grow indefinitely. The wage crash has caused CBs to try to compensate by loading up on debt. Debt is; pulling future consumption to, today. The missing consumption of today is pulled from the future.
As we move into that future, we don't have the earnings to continue to consume. Those earnings are already spent. This sets us up for defaults. The CBs are trying to protect the assumed value of all the physical collateral so that all the loans don't appear to be "underwater".
In the housing crash, people who owned a home that was worth less than the outstanding balance of the loan just, walked away. The price of a home MUST be relative to the wages in the same area. The wages are gone. The hot money flows in and maintains the prices even though local wages can not do this.
The hot money maintains / supports collateral (assets, RE, etc) when the wages in the lower loop can no longer suffice.
GDP is a measure of the money in all the assets and markets. Productive gdp has been falling for years. The GDP number has been slowly elevated by adding more debt to the overall numbers.
EVERYBODY in the financial sector is trying to maintain the value of the collateral.

America was previously a high-wage & high-price economy. As the wages fall, we must revert to a low-wage & low-price economy. The low-wages are here. Maintaining the value of the collateral is an attempt to preserve / maintain the high prices. The FED, in all their brilliance, expected that monetary stimulation would be temporary and close-ended.
Did they really believe that high wages would return?
The various CBs have pumped in an estimated $200 trillion. They are aghast that hyperinflation hasn't arrived.

They create hyper-inflation of the money supply. But, the money is all debt that can only be vitiated by the lower loop. As we cut back on consumption, they are forced to compound the debt pile to keep it alive.
Kinda like building a snowman in August (northern hemisphere).
Stockman insists that the debt can't grow forever. Japan is trying to make a liar out of him.
The nominal paper debt can theoretically grow without limit if it just sits there without an interest burden. The State printed so much money that there is no place for it to flow. The State figured that investors would just park money in GOV bonds.
Just the same, interest rates are starting to rise in the 10 year market that is the benchmark for most loans. U.S. FED GOV must lie about how much new debt it is creating. The new debt dilutes the value of the old debt. BUT, new debt must be created to meet the demands of growing debt service.
The FED ends QE but, the PPT and ESF have a printing press in the back shed.
The EURO was supposed to be a huge competitor to the dollar. BUT, Mario Draghi is a GS man. He visibly fired up the presses to service the EU bond market. Is it any accident that the FED does stealth QE while GS Draghi does OPEN QE?
U.S. debt hopes to be the least ugliest house on the block and, attract all the capital outflows from the more ugly houses. The Chinese need to have gold-backed Yuan bonds to keep capital from flowing out. It is in their best interests to eventually, crash the physical gold market. The new, higher price will allow gold-backed Yuan bonds to absorb all that excess capital that is floating around the world. The CBs created an extra $ 200 trillion. Various States are trying to suck that capital into their bond markets. Globalism mandates unlimited hot-money flows, Be careful what you wish for.
As confidence shifts, capital shifts.
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Last edited by Danny B; 01-02-2018 at 02:14 AM.
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Old 01-02-2018, 02:30 AM
Danny B Danny B is offline
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The fallout from de-dollarization

There is a lot to read. Post WW II, everyone demanded dollars to hold as reserves. This allowed America to saturate all markets with dollars. This huge saturation contributed to stability of the dollar. No small force could cause much of a change. America printed bazillions of dollars that were spread around the world. China has printed bazillions of Yuan but, they are all in China. They have done a bunch of currency swaps but, that isn't the same thing. The Yuan can never be a reserve currency because, there just aren't enough of them in circulation. China has printed with wild abandon but, nobody is going out of their way to accumulate Yuan. AND, there is a $trillion in capital flight out of China.

China needs to absorb and stabilize the flow of hot money. Once that confidence is lost in Western bond markets (apparently, in Europe first), hot money will be scrambling to find a safe haven. ALL CBs have grossly inflated. Commodities depend on consumption from a shrinking work force.
Corporate bonds depend on earnings. Gold doesn't depend on consumption. It is likely to attract a lot of hot money. Same is true for silver because so many nations have used monetary silver in their history.
Here is a good vid on de-dolarization. Keep in mind that; as the dollar is killed, it takes down the rest.
https://www.youtube.com/watch?v=LWVc...ature=youtu.be
This article isn't particularly good but, the comments are very interesting.
https://www.zerohedge.com/news/2017-...all-eurodollar
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Old 01-02-2018, 03:23 AM
Danny B Danny B is offline
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Solar minimum and crop loss

Russia is limiting carbon transport in the Northern Sea Route. TASS: Business & Economy - Putin introduces exclusive right for Russian vessels to carry oil and gas over NSR
Russia wants to switch over from Petrol to gas, https://www.rt.com/business/414447-r...as-fuel-putin/
That makes more sense than electric cars.

"And based on these calculations, the stock market enjoyed less adversity in 2017 than any other year in history going back over 100 years"
“‘I would expect 2018 to be an almost repeat of 2017,’ said Saut, chief investment strategist at Raymond James. ‘People are still way underinvested."
https://realinvestmentadvice.com/201...cord-12-29-17/

There is no doubt that the financial system is headed for collapse. At the same time, there is no doubt that we are moving into a solar minima.
Our magnetosphere is getting weaker and failing.
https://www.youtube.com/watch?v=1x8tyDotgAg
Crop losses are growing worldwide, https://www.youtube.com/watch?v=olxCOGPg9LE&t=88s
The minima will affect all regions but, especially the northern hemisphere. Mt. Washington had a wind-chill index of minus 89f. How will these changes affect agriculture?
https://www.youtube.com/watch?v=sn0gnrTm2pM&t=171s
China has long been getting ready, https://www.youtube.com/watch?v=acoExDbRlrE
Eventually, there will be a mad scramble for farmland that has an Adequate growing season.

http://agfax.com/2017/03/30/usda-ag-...ps-commentary/
Crops fall victim to Winter 2017's drastic temperature swings - CBS News
Brutal Drought in the West Is Decimating This Year's Wheat Crop ...
What if several of the world's biggest food crops failed at the same time?
https://phys.org › Earth › Environment

https://www.youtube.com/watch?v=rtYWTzTLLjQ
We face an economic collapse at the same time as we face a major disruption of the growing season.
Plant a garden,,,, in a greenhouse.
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Old 01-02-2018, 04:29 PM
Danny B Danny B is offline
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Doubtful DOW,,, fading empire

ALL economic models are simplistic in that, they try to be steady state and ignore time.
"Virtually every model created tends to be predominately flat with a minimum of dynamic variables lacking understanding of TIME."
"The Value at risk (VaR) model is a measure of the risk of investments. It estimates how much a set of investments might lose, given normal market conditions, in a set time period such as a day."
"So you can see, such models are incapable of determining TIME and as a result, they will always fail during a CONTAGION that they cannot see coming."
"only TIME determines the success of any model and making broad assumptions of probability have ALWAYS failed. If you cannot model TIME and CONTAGION, you will be wiped out during a crisis and VaR will fail just as Black-Sholes."
https://www.armstrongeconomics.com/a...y-models-fail/
Armstrong is calling for an eventual rise of the DOW to 39,000. Americans are fully invested in the stock market. Foreign CBs are heavily invested. Foreign funds are invested. Apparently, he expects a lot of money to come from somewhere.

It's true that it wouldn't take a huge amount of money to bring the DOW to 39,000. Maybe a few $trillion.
"What would charts like these look like without $20 trillion in central bank intervention, negative/low rates and a global debt construct that has expanded beyond $217 trillion? "
How much of the $217 trillion would it take to reach 39,000? Here are a bunch more charts.
"Ultimately this will cause massive pain as the underlying economy is not keeping pace with the multiple expansion. After all 2017 represented a continued expansion in wealth inequality, debt, leverage, government spending and further allocation of capital to the few. Nothing, and I mean nothing, has been done to address structural challenges facing the global economy."
https://northmantrader.com/2018/01/0...arket-lessons/
"We see hedge funds closing left and right as anyone trying to use active judgement in these markets gets ground up as passive participation has completely taken over:"
This is a good article. One has to wonder if it is possible for massive capital flight to pump up the DOW to 39,000 while everything else is laid to waste. Armstrong predicts a flight from public debt to private debt. Suppose that everyone dumps Treasury bonds and flees to stocks and corporate bonds. GOV goes bankrupt and tries to print it's way out or, something else equally desperate. Remember that GOV spends 24% of the GDP. How could the stock market keep rising with a bankrupt State?

" Warfare is often the death knell of a declining empire—both in its extreme financial cost and in its ability to alienate the peoples of other countries. In the new millennium, the US has invaded more countries than at any other time in its history and appears now to be in a state of perpetual warfare. This is being carried out both militarily and economically, as the US imposes economic sanctions on those it seeks to conquer.

This effort has become so threatening to the world that other major powers, even if they do not have a history of being allies, are now coming together to counter the US."
"But this does suggest that those who live within the present empire—the US—will be the last to truly understand that the game is all but over. Americans seem to be hopeful that the dramatic decline is a temporary setback from which they will rebound."
"Yet the US is hanging on tenaciously, and like any dying empire, its leaders are becoming increasingly ruthless, both at home and abroad, hoping to keep up appearances."

" In the latter days of the British Empire, we Brits seemed to be under the illusion that, even as our power base crumbled, we might somehow retain control by threats and bluster. The UK was utterly wrong in this and only succeeded in alienating trading partners, colonies, and allies by doing so.

The same is happening again today. China, Russia, and the rest of the world, when faced with American threats and bluster, will not simply fold their tents and accept that the US must be obeyed. They will, instead, create alternatives. And they are doing so exceedingly well and quickly."
The Next Empire | International Man

Historically, the reserve currency was always the currency of the strongest military power. Historically, the strongest currency was backed by gold. Because of tech changes, this is no longer possible. BUT, it is possible to back sovereign bonds with gold. China doesn't need to have a strong currency if it has strong sovereign bonds. Armstrong is predicting a long rise in the stock market. What if we go into hyperinflation and the 39,000 level as actually a drop in perceived wealth? The stock market hasn't had ANY gains for the last several years when measured against inflation (Stockman)
Armstrong claims that hyperinflation only occurs in peripheral economies. We already have hyperinflation in the upper loop. It is slowly creeping into the lower loop. RE, medical care and education.

China figures that pollution costs them 15% of gdp from losses tied to health issues. They're trying to fight pollution without slowing growth.
https://www.theguardian.com/business...ories-slowdown They are trying to balance; pollution + health + credit growth.
2 graphs on financial stress, https://www.themaven.net/mishtalk/ec...ckuSzrv-sn98Hw

David Einhorn speculates that markets are permanently broken. https://www.zerohedge.com/news/2018-...solved-full-qa
1/02 Major platform liquidated its customers’ bitcoin cash for bitcoin – Fortune Reportedly, BTC cash is superior to BTC because BTC fees are FAR too high. Somebody is trying to suck up more fees.
1/01 Bitcoin tensions rise; investors claim banks freezing their accounts – SMH

1/02 Maturing bonds about to drain billions of dollars from Tesla? – Seeking Alpha Tesla was bought / supported by rich tech giants trying to help get electric cars off the ground. BIG competitors have entered the markets and it is doubtful that investors will roll over their investments.

12/30 The dark side of the internet of things – Toronto Star
12/30 ‘Whoever controls cyberspace will control the world’ – Telegraph
12/29 Information warfare: the year ahead – Security Boulevard
12/26 2018 will be the year of cyberwar – Macleans

There is a slowly dawning perception that malware and attacks can make big changes in the world.
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Old 01-03-2018, 03:48 AM
Danny B Danny B is offline
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Breaking pegs,,, 44 problems

"The Impossible Trinity theory was advanced in the early 1960s by Nobel Prize-winning economist Robert Mundell. It says that no country can have an open capital account, a fixed exchange rate and an independent monetary policy at the same time."
https://dailyreckoning.com/china-bat...sible-trinity/
Keep in mind that changes are coming VERY fast. China is trying to maintain the impossible trinity. China is printing boatloads oh Yuan AND trying to maintain the value of the Yuan. It isn't working.
https://asia.nikkei.com/Politics-Eco...n_cid=NARAN012

They have broadened the "range" of their dollar peg. Pegs never work and capital is fleeing. Pox Americana used a slightly different scheme to prevent capital flight. FACTA has made it impossible for Americans to have accounts in foreign banks.
1/02 Oil trades near strongest levels since mid-2015 on Iranian unrest – Reuters Oil goes up,,, the rest of the economy goes down.
1/02 Bitcoin soars above $15,000 after report of “monster bet” by Peter Thiel – ZH
1/02 Bitcoin fever to burn out in ‘spectacular crash’ – CNBC
1/02 Bitcoin starts new year by declining, first time since 2015 – Bloomberg


If you are one of the unfortunate people, you really don't care what the stock market does. You WILL care in the future. For now, you just want a warm meal and a warm bed.
"#3 According to the Washington Post, one out of every ten young adults in the United States has been homeless at some point over the past year.

#4 The United States has lost more than 70,000 manufacturing facilities since China joined the WTO in 2001.

#7 Incredibly, the number of retail store closings in 2017 was up 229 percent compared with 2016.

#10 According to the most recent numbers that we have, 41 million Americans are currently living in poverty.

#12 Ever since the beginning of April, Congress has had an average approval rating of less than 20 percent.

#18 Back in 1960, an average of $146 was spent on healthcare per person for the entire year, but today that number has skyrocketed to $9,990.

#19 Thanks to Obamacare, an appendectomy is ten times more expensive in the United States than it is in Mexico.

#20 Thanks to Obamacare, a family of four in Virginia is now facing the prospect of paying $3,000 a month for health insurance.

#21 It is being projected that the average rate increase for Obamacare plans will be 37 percent in 2018.

#25 One survey that was conducted in 2017 discovered that 78 percent of all full-time workers in the United States live paycheck to paycheck at least part of the time.

#26 According to the Federal Reserve, the average U.S. household is now $137,063 in debt, and that figure is more than double the median household income.

#32 At this point, 20 percent of all U.S. households have “either zero or negative wealth”.
44 Numbers From 2017 That Are Almost Too Crazy To Believe

Lastly, 1/01 Canadian zoo moves penguins indoors because of cold temperatures – Independent
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Old 01-03-2018, 03:52 PM
Danny B Danny B is offline
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Stealth UBI,,,solar downturn

Even Martin Armstrong has his blind points. I need to give him a good schoolin.
Armstrong is COMPLETELY down on universal basic income. On the SAME page he shows the percentage of people working for the State.
https://d33wjekvz3zs1a.cloudfront.ne...Work-Force.jpg
It has increased enormously. US GOV spends 24% of the GDP. This means that a lot of jobs in the service sector also depend on GOV money.
https://www.armstrongeconomics.com/a...y-or-rational/
He doesn't want UBI, but, sees no problem with bloated GOV jobs programs.

Don't think that those jobs come cheap.
"According to the report, the number of federal employees making $200,000 or more increased by 165 percent between fiscal 2010 and 2016. Federal employees making $150,000 or more grew by 60 percent, with the number making more than $100,000 increasing by 37 percent in the same time period. "
"“There is a new ‘minimum wage’ for federal bureaucrats – at 78 departments and independent agencies, the average employee made $100,000 or more,” OpenTheBooks said in a statement.

In fiscal 2016, the United States Postal Service and the Department of Veterans Affairs employed more than half of federal employees. USPS employed 32 percent of all disclosed federal employees, totaling 621,523 people on the payroll; and the VA employed the second-most employees with 372,614."
'Mapping the Swamp' report finds 30,000 feds earn more than any governor | Fox News

Armstrong adequately covers the historical aspect of global cooling. He shows all the plagues, etc. He says that this time will be BAD and last for many years.
"So keep an extra supply of canned goods."
https://www.armstrongeconomics.com/h...t-10000-years/
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Old 01-05-2018, 02:34 AM
Danny B Danny B is offline
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creating new debt to save jobs

#4 The United States has lost more than 70,000 manufacturing facilities since China joined the WTO in 2001."
OK, so the wage base collapsed. The bankers didn't want to see the value of their collateral collapse. Greenspan initiated the "Greenspan put" where the FED would underwrite the price of all the asset classes. Like a broken record, I continue to report the unsustainable rise in the price of assets. The crash of the wage base has forced the CB to create mountains of new debt to support the price base. ZIRP was supposed to keep the cost of debt service manageable.
This might be fine for stocks but, it did nothing for bonds. The FED had to buy most of the bonds. The FED was increasingly tasked to buy the stocks too.
The FED has stepped onto a moving sidewalk that just goes faster and faster. The FED must block any crash in asset prices. The level of State debt is an indication of the speed of the sidewalk. All State power comes from the barrel of a gun, and, the FED has no guns.
"The problem with that is the central banks didn't create "money" out of thin air; they created an unprecedented quantity of debt "
"Vast pools of liquidity sloshing around the trading floors and in the derivatives pits derived from a palpable desperation that was incubated by the unbridled greed of bankers. Under the guise of "saving the system," the global moneychangers saved only their cumulative net worth and retirement funds residing in their precious bank stocks. "

"when the plug is pulled from this bathtub full of rampant speculation and wild-eyed greed, none of those fancy catchphrases will save their clients from cataclysmic losses and the kinds of drawdowns in personal wealth from which there is no return, save a lottery win or messianic intervention."
"bankers will have their gated communities and private island sanctuaries within which to ride out the storm while the public is left cold and naked on the bathroom floor."
http://www.24hgold.com/english/news-...Ballanger&mk=1

"And although the unemployment rate fell to a 17-year low of 4.1 percent, the labor force participation rate dropped to 62.7 percent, "
How can people sign their name to BS like this?
"As history has shown us, all bubbles pop. Until then, certain companies are the equivalent of the living dead. The Bank of International Settlements (BIS), or central bank of global central banks, defines zombie firms as “firms that could not survive without a flow of cheap financing.” The latest BIS Quarterly Report labelled one of every 10 corporations in emerging (EME) and advanced countries as a “zombie.”
So, 70,000 manufacturing facilities have closed. What would happen if 10% of ALL corporations folded?

"Even Jamie Dimon, chairman and CEO of JPMorgan Chase, concurred. He called the tax cut a “QE4” (another round of quantitative easing, added to the three rounds the Fed executed over the past decade to reach $4.41 trillion in credit)." These lying 8astards should stick to lying. Truth is more dangerous.
https://www.truthdig.com/articles/ne...orse-last-one/

GOV debt is extremely high. GOV would very much like to inflate away the pain of repaying this debt. They figured that hyperinflating the upper loop would hyperinflate the lower loop. The Feces-for-brains never considered that the lower loop has to actually work for their money. The inflation of the upper loop was suppose to trickle down as wage gains. They had some idea of the downward pressure on wages from low-wage States. Apparently, they completely ignored the pressure on employment from automation.
"A 9% reduction in hours worked at wages below $19/hour.
A reduction of over $100 million per year in total payroll for low-wage jobs, measured as total sum of increased wages received less wages lost due to employment reductions. Total payroll losses average about $125 per job per month.
The findings that total payroll for low-wage jobs declined rather than rose as a consequence of the 2016 minimum wage increase "
"Bank of Canada estimates Minimum Wage Hikes Could Cost Canada's Economy 60,000 jobs by 2019.

By the way, and as discussed in Staggering Rent Increases in 2017, the median U.S. rental now requires 29% of median monthly income, "
Inflation bleeds over from the upper loop but, wages do NOT.
https://www.themaven.net/mishtalk/ec...OUmBFEb3BvhOag
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Old 01-05-2018, 03:14 AM
Danny B Danny B is offline
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Squeezing the producers to maintain the financial parasites

A good article on control fraud and money laundering, oftwominds-Charles Hugh Smith: It's Not About Democracy: Control Fraud Is the Core of our Political System
Ron Paul, “We’re gonna have a sudden, cataclysmic end which is sort of what happened to the Soviet system. "
https://www.rt.com/usa/414931-ron-pa...rica-meltdown/
Here is an excellent article on reversion to the mean.
https://northmantrader.com/2018/01/03/yearly-charts/
We're working harder and getting less pay, https://cdn.americanprogress.org/wp-...eeze-fig11.png
The unions are no longer able to help us, http://www.industryweek.com/sites/in...ss-Incomes.jpg
The money is just not there, https://www.google.com/imgres?imgurl...act=mrc&uact=8

The crash of wages translated to a crash in consumption, AND a crash in banking. This was temporarily papered-over with new debt creation. BUT, unfolding automation is still chipping away at worker compensation.

1/04 Stock markets hyper-risky 2 – SafeHaven
1/04 Stock-market investors should ‘brace for a possible near-term melt-up’ – MarketWatch
IGNORE THIS
1/04 ‘Fat cat Thursday’: top bosses earn workers’ annual salary by lunchtime – Guardian
1/04 US auto sales fall for 2nd year at top auto companies – Wolf Street

I wonder if they are related?
1/04 Dow breaks above 25,000 for the first time ever after strong jobs data – CNBC LOVE those strong jobs !

1/04 Pakistan ditches dollar for trade with China after Trump’s denunciation – GATA
1/04 New pipeline doubles Russian crude oil supply to China – Zero Hedge

They may quote price in $$ but, you can bet that they settle in Yuan or Rouble.
1/04 Security flaws put virtually all phones, computers at risk – Yahoo! NOT my flip phone.
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Old 01-06-2018, 04:19 AM
Danny B Danny B is offline
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Armstrong,, Japanese woes,,, Kunstler

Armstrong has an interesting paper on the correlation between global cooling and plague. He also speculates that; "The Global Warming crowd may be setting society up for mass famine and death because they are deliberately pointing everyone in the opposite direction"
https://www.armstrongeconomics.com/w...-an-omg-event/
The 2007-2009 Crash was caused by a credit bubble offered to insolvent home buyers. Armstrong claims that the 2007-2009 Crash was not a bubble in asset prices. So, a housing crash that wiped out the banks does not qualify as a bubble because it did not hit the stock market.
"How the market responds to our Energy Models is critical for long-term forecasting. Look at the chart for 1929. Here you see that there is a huge spike in energy which peaked in February 1929."
He doesn't qualify what his energy models are based on. He put an arbitrary line on the graph to show positioning.
"Now compare this to the Energy Models for the 2007 high. We do not have a BUBBLE formation at all and the high came on the reaction high following the major high for the move. This confirmed this was by no means a BUBBLE "
https://www.armstrongeconomics.com/f...quity-markets/

He sounds like Greenspan claiming that nobody can ever see or predict a bubble. The 2008 crash wiped out the banks. It took an immediate $700 billion (TARP) and a follow-up $5 trillion? to save the banks,,, that haven't been saved anyway. He is a fool to look at just one market like the DOW and ignore RE, bonds, commodities, corporate debt, etc.


Armstrong, "Private Blog – Gold & the $1,000 Level" He's talking $hit here. The only possible way for this would be if Bedini's process got out in the wild.
Business insider writes about debt levels, Global debt his a record $233 trillion, but debt-to-GDP falling - Business Insider

Japan, "When government officials conducted a tally of total births last year, they counted roughly 941,000."
"One of the main traits of the demographic time bomb is that young people focus a lot of their time on work instead of socializing, largely to keep up economically."
"Long work hours are leading to a rise in cases of karoshi, or "death from overwork."

A October 2016 report that examined karoshi and its cause of death found more than 20% of people in a survey of 10,000 said they worked at least 80 hours of overtime a month — a signal of just how desperate young people are for extra income."
Terrifying signs Japan has become a 'demographic time bomb' - Business Insider
So, they work the Japanese to death and nobody has time or money for kids.
Japan ranks 184th out of 200 countries in its birth rate. The country has lost 1 million people out of its population of 128 million in just the last seven years"
"Each year, the nation is shuttering 500 schools."
"Obviously, the experience of Japan is not wholly transferable to the U.S. But the transformation of Japan’s low-tax, low-regulation model into nearly its opposite is a cautionary tale."

Read more at: Japan Economy: Its Woes Are Cautionary Tale -- U.S. Needs Tax Reform | National Review
So ream them to death with taxes to keep all the zombies going AND
They have no time , money or energy for a family.

Kunstler has gone out on a limb and made a LOT of predcitions.
"Call NASDAQ to land at 2,700. Calling for a US dollar index (DXY) of 79 by December. Calling for gold $2,500 and silver $60 twelve months from now. There it is, like so much meat on the table."
http://kunstler.com/cluster****-nati...rong/#more-%27
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Old 01-07-2018, 04:08 AM
Danny B Danny B is offline
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There is generally a "melt-up" before the "blowoff top"

"On a price to sales basis, the S&P 500 is nearing peaks reached back in the dotcom bubble, while the cyclically adjusted price-to-earnings ratio kept by Yale economics professor Robert Shiller is at levels topped only by the heights hit before the dotcom bubble burst in 2000 and the Great Crash of 1929."
https://www.ft.com/content/4f59ea46-...0-857e26d1aca4
1/06 S&P 500, Nasdaq post best week in more than a year – Reuters
1/06 Price to sales ratio for S&P 500 surpasses 2000 tech bubble peak – Financial Sense
1/06 Global shares smash through records – Independent
1/05 Bullish fund assets jump off the chart – Dana Lyons


The rising cost of the militarization of the world, Tomgram: Engelhardt, Seeing Our Wars for the First Time | TomDispatch

1/06 Millennial deaths surge as opioid crisis deepens – Zero Hedge
1/06 Popular new Amazon service just comes to your house and kills you – Onion

The relationship between the stock market and the oil price.
https://www.zerohedge.com/news/2018-...omy-blows-2018

In 2003--2004, two depts of big federal agencies reported that a RE bubble was forming. BOTH departments were disbanded. In the same general time period, numerous banks were penalized and fined for not making liar loans. The fix was in. The banks would pump money into the housing market. When the eventual defaults materialized, FED GOV would just make the banks whole again.
This pumped up the economy. It also killed off LOTS of small banks. The big banks got bigger.

Buffet, “Between the first computation in 1982 and today, the wealth of the 400 increased 29-fold–from $93 billion to $2.7 trillion–while many millions of hardworking citizens remained stuck on an economic treadmill,” he wrote. “During this period, the tsunami of wealth didn’t trickle down. It surged upward.”
“In 25 years–a single generation–1.2 percent annual growth boosts our current $59,000 of GDP per capita to $79,000. This $20,000 increase guarantees a far better life for our children,”
Somehow, this feces-for-brains moron thinks that 1.2% annual GDP growth automatically translates to 1.2% wage growth. Wages have been flat for 40 years.
Warren Buffett Destroys Trump's Economic Policy Without Mentioning Him Once
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Old 01-07-2018, 05:22 PM
Danny B Danny B is offline
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The money-renting zombie

As we get closer to the end of the debt super-cycle, it becomes more difficult to explain the process. It takes a lot more reading also. I keep reading about the "tight labor market" and other BS. I have claimed that we won't see hyperinflation. I have also claimed that we won't see much price inflation. Real income is falling,,, employment is falling and aggregate purchasing power is falling. This tends to limit spending and (somewhat) forestall price increases.
On the other side of the equation, we see money bleeding out of the hyperinflated upper loop of the economy. It tends to flow into anything that can be considered as a store-of-value. Hot money also tends to flow into sectors that are considered as "necessities". There has been enormous price inflation in anything connected with the medical sector.
Education is considered essential and the cost of that has been inflated.

"The average cost of tuition and fees at a private, non-profit, four-year university this school year was $31,231—up sharply from $1,832 in 1971-1972 (in current dollars)."
"government aid that once came as grants have transitioned to student loans."
http://i2.cdn.turner.com/money/2011/...ition3.top.jpg
"Germany has abandoned tuition fees altogether for German and international students alike. "
"Germany encourages the flow of international students with free tuition and 18-month post-study work visas. In 2016, German universities ... “Of course, we invest a certain amount of money [in their education], but what we get back is worth so much more. "
OK, so, the bankers got their financial claws into everything. Everything is done for short-term gains regardless of the long-term costs. We spend enormous amounts on medical "care" and are sicker than many countries that spend far less.

The banks survive on "spread". The consumer was broke and the only spread that could be generated was by lowering the prime rate from the banks. That has started to turn upwards and the defaults will climb also.
https://i2.wp.com/northmantrader.com...76%2C300&ssl=1
The consumer is/was broke. Extending more credit to keep the fees coming into the banks is a fool's game. At the same time that ZIRP created a bit of income for the banks, it destroyed everybody's interest income. The GDP is a measurement of how much money is in the economy. The bankers just create more and more until it flows into every corner.
http://www.yesmagazine.org/blogs/dav.../image_preview
ZIRP brought spread to the bankers and kept their system alive for 10 more years. Personal savings are gone and debt service is rising, https://i0.wp.com/northmantrader.com...76%2C328&ssl=1
Here is a long term chart of the FED funds rate. LOTS of free money to keep the "money-renters" in business. There are just TOO MANY people trying to rent out their money.
https://i1.wp.com/northmantrader.com...76%2C396&ssl=1

The bankers try to preserve the value of all capital to keep loans from defaulting. The bankers try to keep ALL speculators from losing money.
Socialism is the firewall between Darwinian pressures and the non-producers.
QE is the firewall between money-renting and the reality of an economy that has lost it's manufacturing base.
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Old 01-07-2018, 06:29 PM
Danny B Danny B is offline
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BTC,,, accelerating to the blow-off top

An interesting article on BTC. "China is a major mining center with huge operations powered by nearby hydroelectric dams to get the best electricity rates. In fact, it’s been calculated that a single bitcoin transaction now uses up as much electricity as a home might use in a month."
"One estimate calculates that at its current trajectory Bitcoin is on track to consume 100% of the world’s electricity production by 2020."
https://www.peakprosperity.com/blog/.../value-bitcoin
"Bitcoin itself does not hold any value. The value in bitcoin is provided by the miners. No miners = no Bitcoin value.

The army of Bitcoin miners require a huge amount of electricity and computing capital investment to run. As long as the costs of running the Bitcoin miners is lower than the value received, then it should persist. But as soon as the puzzle-solving becomes too hard, meaning too few Bitcoin rewards are granted per solved block (currently at 12.5 Bitcoin per block) to justify the expense, then the miners will start shutting down. It's simple cost/benefit math."

"Debt is irrelevant and matters not. It’s different this time. That’s the message from politicians, markets and participants. Tax cuts pay for themselves (they do not), leverage doesn’t matter (it does) and the increased costs of servicing the debt as a result of rising rates will be offset by imaginary real wage growth to come (they won’t). But the calmest market waters in history continue to keep these illusions alive as asset prices keep levitating from record to record.

Debt does matter and it was ironically left to Janet Yellen to voice any remnant concerns about the sustainability of debt to GDP: “It’s the type of thing that should keep people awake at night” she said.

The red part of this graph shows the negative credit balance of investors.
https://i2.wp.com/northmantrader.com...49%2C399&ssl=1
https://northmantrader.com/2018/01/04/the-debt-beneath/

"Of course, for someone who is actively and professionally managing money, Grantham - like so many of his peers - had no choice but to admit the gaping cognitive dissonance that results from investing in the current "market", where one can avoid participating and see their AUM withdrawan promptly, or one can, in the immortal words of Chuck Prince, continue dancing as long as the music plays.

But how to determine if, after nearly nine years of constant market levitation, the music is finally dying down? Conveniently, Grantham also presented his favorite indicator which allows him to determine if "market momentum is increasing to a frenzy" - the acceleration of price, or said otherwise, the non-stop surge that accompanies the final melt-up."
This is an excellent article about how professional money managers must stay in the markets until the last possible moment. A LOT of hedge funds have closed because that managers were too prudent to continue to gamble.
"They recognize the importance of a true psychological event of momentum increasing to a frenzy. That is to say, acceleration of price. The average time of the final bubble phase of the great equity bubbles shown in Exhibit 1 is just under 3.5 years, with the average upcycle of real acceleration just 21 months."
He does a very credible job of showing that the rate of acceleration "defines" when the blow-off top is imminent. The results are pretty consistent.
https://www.zerohedge.com/sites/defa...80103_GMO1.png
"But historically, when dealing with real bubbles, being late has not been materially different in time and pain than being too early, as you can see. "
Leave too early,,, you get killed. Leave too late,,, you get killed.
"the US and almost all global markets, "the strongest indicator – stronger than pure pricing or value – was indeed price acceleration."

But if upward acceleration is indeed the best bubble indicator, then there is a problem, because as we discussed earlier today when we commented on the Dow's move above 25,000 for the first time ever, the broader market is approaching exponential "speed" to the upside."

"However, no matter if one looks at the move on a relative or absolute basis, a clear sign of just how relentless and rapid the market's recent upward acceleration has been is that the Dow’s latest 5,000-point run - which started roughly around the time 2017 rolled in, shortly after Trump's election - was more than three times quicker than its 844-day rally to 10,000. In fact, it will have taken the equity index only 238 sessions to advance from 20000 in January 2017 to 25000 Thursday."
https://www.zerohedge.com/news/2018-...m-has-just-one

When this happens, the money-renters will be broke and, they will stop spending. They won't be able to meet the margin calls and, the brokerages will crash. Since QE has blocked ALL price discovery, NOBODY will get back into the markets. EVERYTHING will be NO-bid.

So much for stocks,,, what about bonds?
"Just one of the above charts would be a big wake up call…but taken together, they are SCREAMING “INFLATION!!!!!!” (in commodities)

As this is a MAJOR problem for the Bond Bubble.

As I explain in my bestselling book The Everything Bubble: the Endgame For Central Bank Policy, US sovereign bonds (also called Treasuries) trade based on inflation expectations.
Put simply, when inflation spikes higher, so do Treasury bond yields.
When bond yields rise, bond prices fall.
When bond prices fall, the Bond Bubble bursts.
When the Bond Bubble bursts, the EVERYTHING bubble follows."
https://www.zerohedge.com/news/2018-...nflation-crowd
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Old 01-08-2018, 03:34 AM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,201
State debt,,,Breakup of England,,,perpetual regulations

An article on GOV debt, “Combined, the largest 50 countries in the world owe nearly $65 trillion. That is a staggering 90% of their combined GDPs! "
Sovereign GOVs have a printing press. U.S. States do not have a printing press. Here are a couple of graphs showing State debt.
How Indebted is Your State? - The Sounding Line
There is over a $trillion bubble in auto finance with a fairly high default rate. Just the same, auto sales are falling.
https://wolfstreet.com/2018/01/03/us...mw-and-others/

New Zealand is a very nice place,,, especially if there is a nuclear war. It has attracted a LOT of hot money.
https://www.stuff.co.nz/business/mon...ut-one-country
Armstrong, "Eventually, the United Kingdom will break apart formally, but with the collapse of Brussels and the EU Project, we are also likely to then see AFTER 2032, the general trend toward decentralization of governments as a whole. Hence, we will see England break apart into the old Anglo-Saxon regions as we will see the United States break apart. "
https://www.armstrongeconomics.com/i...nited-kingdom/

1/07 2018 will be the year humanity directly ‘sees’ our first black hole – Medium We will "see" it from a satellite view over the financial district of NYC.
1/07 White House asks for $18 billion to build 700 miles of border wall – Zero Hedge $25.7 million a mile. That must be a pretty impressive wall.
1/07 QE party over, even by the bank of Japan – Wolf Street There is a general feeling that QE has failed to fix anything. Japan tried for 20 years. They have a crashing population and a falling market share. Creating more debt didn't seem to help.

"The perpetual accumulation of regulations slowed U.S. economic growth by 0.8 percent per year on average, according to a 2016 paper by the Mercatus Center. The economy in 2012 would have been $4 trillion—or 25 percent—higher, if the amount of regulation had remained at its 1980 level. This equates to a nearly $13,000 loss for every person in the United States."
https://www.theepochtimes.com/govern...h_2403287.html
This $13,000 loss isn't entirely true.


> Democratic Senators are considering introducing legislation that will provide new benefits for many more Americans. The Americans With No Abilities Act is being hailed as a major legislative goal by advocates of the millions of Americans who lack any real skills and ambition.
>
> “Roughly 50 percent of Americans do not possess the competence and drive necessary to carve out a meaningful role for themselves in society,” said California Sen. Kamala Harris. “We can no longer stand by and allow People of Inability (POI) to be ridiculed and passed over. With this legislation, employers will no longer be able to grant special favors to a small group of workers, simply because they have some idea of what they are doing.”
>
> In a Capitol Hill press conference, Nancy Pelosi pointed to the success of the U.S. Postal Service, which has a long-standing policy of providing opportunity without regard to performance. At the state government level, the Department of Motor Vehicles also has an excellent record of hiring Persons with No Ability (63 percent).
>
> Under the Americans With No Abilities Act, more than 25 million mid-level positions will be created, with important-sounding titles but little real responsibility, thus providing an illusory sense of purpose and performance.
>
>
> Finally, the Americans With No Abilities Act contains tough new measures to make it more difficult to discriminate against the non-abled, banning, for example, discriminatory interview questions such as, “Do you have any skills or experience that relate to this job?”
>
> “As a non-abled person, I can’t be expected to keep up with people who have something going for them,” said Mary Lou Gertz, who lost her position as a lug-nut twister at the GM plant in Flint, Mich., due to her inability to remember “righty tighty, lefty loosey”. “This new law should be real good for people like me. I’ll finally have job security.” With the passage of this bill, Gertz and millions of other untalented citizens will finally see a light at the end of the tunnel."

>
> Said Sen. Dick Durbin, II: “As a senator with no abilities, I believe the same privileges that elected officials enjoy ought to be extended to every American with no abilities. It is our duty as lawmakers to provide each and every American citizen, regardless of his or her inadequacy, with some sort of space to take up in this great nation and a good salary for doing so.”
> This message was approved by Jesse Jackson, Al Sharpton, Diane Feinstein, Barbara Boxer, Maxine Waters, Elizabeth Warren & Nancy Pelosi........all Americans With No Abilities whatsoever!!"
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