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Old 01-08-2018, 03:22 PM
Danny B Danny B is offline
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The timing of the meltup

It was assumed that Killary would win and nobody covered their tracks. "As soon as Hillary lost the election, all the foreign governments, including Saudi Arabia, withdrew their “donation” for a smoke-screen charity."
It was assumed that Merkel would win so, the pension crisis was held off until after the election. It is not working out that way. Germany, like England is coming apart.

Grantham wrote about the coming Meltup. His graphs were showing about a 3 1/2 year peak area. John Hussman has good replies showing that 3 1/2 years may be a bit too long. https://twitter.com/hussmanjp/status...825984/photo/1

What happens is; Everybody is afraid of missing out (FOMO) This keeps reluctant money-renters from leaving the markets. At some point, the rise is just too steep and, fear overcomes greed. The CBs are hard at work trying to inspire greed. IF the CBs have truly dialed back stimulus, one would expect fear to make a pretty fast appearance.

Don't look now, but Morgan Stanley wealth just took their high yield allocation to zero. They have exited the junk-bond market. How many others will take this as a cue to get out?
Just how much of the market can the CB buy?

"The average pension fund assumes it can achieve a 7.6% rate of return on its assets in the future."
"The trouble is that for stocks to return anywhere near 8% they would need to fall more than 50% first. "
"Currently, the index trades at roughly 2,690 thus it would take a major stock market crash for investors to have the opportunity to invest at a level that would enable them to achieve anything close to what pensions now require."
The stupidity here is frightening. If the stock market crashes 50%, consumption will crash with that. These knuckleheads expect dividends to stay static if consumption crashes.

"Shares are expensive – keep buying them. That appears to be investors’ consensus view. “Looking into 2018, we believe that the concerns about a bubble for US equities are overdone,” he says. “Compared to past crises [2000, 2007], we don’t see excess in terms of flows." Open your effing eyes.
"Prices have climbed so high that the average yield on stocks in the S&P 500, the broadest US index, has slipped below 2%. "
"One flashing light was the extreme difference between the performance of US “value” stocks – the type of reliable profit and dividend-earners he tends to prefer – and “growth” companies. The disparity was “greater than at any stage in stock market history”, Woodford said – yes, even including the 1929 Wall Street crash.

Woodford, who manages £15bn, famously sat out the dotcom bubble of the late 1990s and cleaned up afterwards."
"Grantham is the British-born veteran fund manager who in 1977 co-founded Boston-based GMO, which today manages $75bn (£55bn) of assets. The firm’s fame partly derives from its skill in having identified, and dodged, the last two big market blow-ups – the dotcom bubble of 1998-2000 and the US housing crisis that preceded the financial crash of 2007-09."
"He defines a bubble as being “excellent fundamentals euphorically extrapolated”.

1/08 11 Saudi princes sent to supermaxes for protesting utility bills – Bloomberg MbS wants to show everybody that he is ruthless. Sooner or later, the other royals are all going to chip in a few Rouble and hire a good Russian hitman.
1/07 China unveils world’s first solar-powered highway – Green Matters
Thieves shut China's solar highway after just five days | South China ...
1/08 Ron Paul: Sessions should be fired over marijuana move – CNN A LOT of Americans are going to need to be stoned to cope with the coming collapse.
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Old 01-09-2018, 04:03 AM
Danny B Danny B is offline
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More immorality,,, more meltup,,,at what cost?

If you are into the markets, here is a technical examination of the divergence between stocks and Treasuries. It has previously been a good indicator.
"According to the Bank of International Settlements, in 2016, the yuan constituted only 4 percent of the world's currency trades. "
"just 1.1 percent of the world's forex reserves were held in yuan versus 63 percent in dollars"
The dollar saturated the markets post WW II because everything else was destroyed. That isn't the case now and China can't expect the Yuan to saturate anything. They probably know this and plan to rely on gold.

C. H. Smith, "The status quo delights in celebrating gains, but the costs required to generate those gains are ignored for one simple reason: the costs exceed the gains by a wide margin. As long as the costs can be hidden, diluted, minimized and rationalized, then phantom gains can be presented as real."
"You see the point: the cost are skyrocketing but the gains are diminishing. "
"The financial media is euphoric over the billions of dollars of profits "
"This is how our entire status quo maintains the illusion of normalcy: by avoiding a full accounting of the costs of a system set to maximizing profits by any means available, a system of public-private pillage overseen by the protected few at the expense of the vulnerable many."
oftwominds-Charles Hugh Smith: Yes, But at What Cost?

OK, how did we get to this point? A corporation is a mindless pile of money that will do anything it can to grow. Since it is "eternal" and has immunity from prosecution, "anything" can, and does include murder, genocide, slavery, addiction and every other evil.
Baxter Pharmaceutical sent deadly contaminated flu vaccine,,,
Several European countries have banned a flu vaccine produced by the Swiss pharmaceutical company, Novartis

The opioid crisis was done specifically to boost profits. As long as the rich can buy the regulators, they can kill-for-profit as many as they want.
It wasn't always like this. How did we get to the point that profit defined EVERYTHING? A corporation has officers who make the decisions. Lee Iacoca personally made the decision to build the Pinto with it's gas-tank flaw. It was simply cheaper to pay the lawsuits than to fix the car.

How did corporate America reach the point where every decision of the board was done strictly on profit with NO other consideration?
Seeds Of America?s Collapse | Real Jew News
Our cops have killed 1,000 Americans in the last year. When did shoot-first,,, ask questions later become S.O.P. ?

OK, back to the melt-up.
Why does money inflate? What a stupid question.
Power corrupts. These corrupt people get to control the issuance of money.
Zimbabwe is flat broke. Gideon Gono, the head of the CB lives in an 80 room mansion.

"Dow Jones Global Index $DJW Weekly RSI at 89.87 There is no historical reference even approaching this:"
OK, the speed of acceleration is just crazy. If debt is growing faster than exponentially, how long can the CBs keep a lid on things?
"It is no wonder that we see people such as GMO’s Grantham capitulating and calling for a melt-up in stocks. But excuse me, the $NDX is up 10 years in a row, the $DJIA is up 10 quarters in a row and global stocks are up 14 months in a row with RSI readings never seen before. Does that not qualify as a melt-up already having occurred?"
"To summarize: From my perch markets are engaged in a historic blow-off move fueled by artificial liquidity & complimented by a temporary earnings boost. The combined resulting excess in conjunction with no visible improvements to structural problems will worsen the impacts of an eventual recession. "
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Old 01-10-2018, 04:13 PM
Danny B Danny B is offline
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Extreme greed fuels the melt-up

More melt-up news.
" With dumb-money running close to the highest levels on record, it has generally led to outcomes that have not been favorable in the short-term."
"This past weekend, I discussed the surge in market exuberance in terms of both individual and professional investors. Of course, such surges in exuberance are generally indicative of the “capitulation phase” as the last of the “holdouts” finally jump back into a market which “can seemingly never go down.”
“There are many factors from economic, monetary, geopolitical, and financial which have ignited each bubble, and bust, period throughout history. However, each bubble had in common the same extreme levels of confidence, exuberance, valuation and price extension that we see today. And they all ended the same, as well.”

"The extreme net-short positioning on the volatility index suggests there will be a rapid unwinding of positions given the right catalyst. "
There is SO much money "short" in the VIX that any turnaround would involve massive losses.
A good article on the reversal of volatility, https://www.zerohedge.com/news/2018-...eversal-coming
"The recent attempt by crude oil to get back to $60/bbl coincided with a “mad rush” by traders to be long the commodity."
Yes, oil is rising but, somebody must consume that oil for the price to be supported.
"With crude traders currently extremely “long,” a reversal will likely coincide with both a reversal in the S&P 500 and oil prices being pushed back towards $40/bbl. "
"Just recently, that net-short positioning has turned positive which suggests a rally in the dollar is likely."
The dollar goes up,,, exports decline and, EMs can't service their dollar-denominated debt.
"With the dollar VERY oversold currently, look for a strong-dollar rally this year. "

“Even our composite fear/greed index which is a combination of AAII, INVI, MarketVane and the VIX is now also registering extreme greed on a rolling 4-week basis.”
Herd mentality at it's finest.
"Amazingly, investors seem to be residing in a world without any perceived risks and a strong belief that the financial markets are NOT in a bubble. "
1/10 Bill Gross calls a bond bear market after Treasury yield surges – Bloomberg
Grundlatch says that Bill Gross (the bond king) is early.
"A main catalyst for Gundlach's bearishness - for both bonds and stocks - is that we are now entering an era of quantitative tightening, i.e., accelerating balance sheet unwind from all the major central banks"
"Additionally, Gundlach is confident that a "more hawkish ECB" is not priced into the market."

QE hasn't fixed anything. Have the CBs truly cooled off the printing presses,,, or, are they in stealth mode?
1/10 Japan takes away the last of the world’s ‘punch bowls’ – CNBC
1/09 Yen’s spike shows taste of what comes when BoJ really does shift – Bloomberg
The ECB and PBOC have been VERY reluctant to take away the punch bowl. Will the CBs carry through? Is this a game of "chicken"?
1/10 U.S. crude hits three-year high as prices climb in tight market – Reuters
America both imports and exports oil. Net imports are 4.1 mbd. Fracking is a losing business. If domestic oil prices go up, you can bet that our oil exports will go down,,, especially with a strong dollar.
The Asians see the falling dollar as downward pressure on Asian exports. They are working to weaken their currencies in respect to the dollar.
BUT, as the dollar goes up, they have more trouble servicing dollar-denominated debt.

12 years ago, Greenspan said that social security was "not working".
"Greenspan: "There is nothing to prevent the government from creating as much money as it wants."
"People are living longer than ever before– the average life expectancy in the US is a full EIGHTEEN YEARS longer than it was when Social Security was conceived back in the 1930s."
"The Social Security star has already exploded. But it will take the light another 15+ years to reach us."
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Old 01-11-2018, 04:10 AM
Danny B Danny B is offline
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Debt as far as the eye can see,,, NAFTA,,,cyclical collapse

China floats a "trial balloon".
"Bloomberg News reported Wednesday, citing people familiar with the matter, that officials in Beijing have recommended the Chinese government lower — or even stop — its buying of U.S. sovereign debt.

The report also notes that Chinese officials think U.S. debt is becoming less attractive compared with other assets, adding that trade tensions between the two countries could provide a reason to slow down or halt the purchases."
"Treasury prices fell, boosting yields."
Reportedly, it is game over when Treasury yields hit 3.5%.
"I think the Chinese will contribute to the removal of liquidity from the U.S. bond market," said Michael Shaoul, chairman and CEO of Marketfield Asset Management. "

"The kneejerk reaction in fixed income was fast and furious, as over 35,000 10-year futures traded in the one-minute period after the news broke according to Bloomberg, sending 10Y yields as high as 2.59%, the highest since March 2017."
From comments; "I mean with the Fed having initiated a program that will dump an additional $2,300,000,000,000+ of UST on the "market", above and beyond what will be dumped to finance the ongoing exploding debt load?? China doesn't want to take the other side of that trade?"
"China doesn't want to fund the USA's military which they see as will eventually be turned on them! Let's pay the country that labeled us an economic aggressor in their NSS to fund the war against us, LOL.

Strange coincidence that Trump last night announces how the US will revamp and modernize their Nuclear missiles and then China announces this, next day and only a week before they launch the Shanghai Energy Exchange to directly compete with the Petrodollar selling oil future contracts in Yuan!"
"The US will, you see they will open up private LLC's and such offshore in the islands and other places and use them to buy US treasuries without having to tell who is doing it. Essentially the treasury is buying the US treasuries but using a cutout to hide the fact that they are."

Trump is talking about killing NAFTA. It remains to be seen what the final effect might be. https://www.zerohedge.com/news/2018-...t-nafta?page=1

Comments; "Follow the money and the United States huge trade deficit with Mexico becomes even more disturbing as you begin to understand where the money eventually ends up. When you start thinking about all the money and jobs we shift into Mexico each year you would think by now Mexico would be rolling in cash.

A bit of research quickly confirms that the money Mexico receives by way of trading with America quickly passes through its lands and flows to Asia. It could be argued that when all is said and done we are still transferring our wealth to the far east only by the scenic route. More on the problem with this in the article below.

http://Follow The Money-The US Trade Deficit With Mexico Benefits China.html

The World bank gives bogus numbers but, they are still in a funk.

“The labor force participation rate of men 25 to 54 years old continued its long-term decline,” said one part of that report. Less-educated men are working less than guys with better educations.

Are less-educated people really working less because they want to work less? Or is this myth of full employment simply bunk?"

The Atlantic, "The United States is in the midst of one of the longest stretches of job creation in modern history. And most of that economic growth has been presided over by President Obama, and his appointee for Fed chair, Janet Yellen "

Armstrong, "Unfortunately, humans also possess at that inner level this same survival instinct that is hardwired. This makes it increasingly unlikely that willingness to change gains sufficient strength in time before the abyss is reached. Hence, we must crash and burn.

Because the government will respond in the same manner as an ameba, there is no hope that they will spontaneously look in the mirror and reach an OMG moment of realizing that they are causing the demise of our society. Consequently, they will consume our liberty until they push it to the point that society will then act only in its self-interest to survive. Historically, all governments collapse once they have consumed rights, liberty, and privileges in their desire to maintain control and in the end, die by their own greed for power. They lack any consciousness of what they are doing precisely as an ameba. There is no reasoning for there is no one single mind to reason with."

"According to the Institute of International Finance, total liabilities in the third quarter of 2017 surpassed $230 trillion (Public+Private). This is an increase of 16 trillion compared to the end of 2016. As the interest rates continue to rise, the debt servicing costs are simply going to explode. As a whole, Europe is over 100% of debt to GDP with respect to just Public Debt on average compared to the USA at about 73%. Global government public debt has exceeded $60 trillion."
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Old 01-11-2018, 04:53 AM
Danny B Danny B is offline
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Morality OR, collapse

Our country is now geared to an arms economy bred in an artificially induced psychosis of war hysteria and an incessant propaganda of fear. Douglas MacArthur
I am concerned for the security of our great Nation; not so much because of any threat from without, but because of the insidious forces working from within. Douglas MacArthur
History fails to record a single precedent in which nations subject to moral decay have not passed into political and economic decline. There has been either a spiritual awakening to overcome the moral lapse, or a progressive deterioration leading to ultimate national disaster."
Douglas MacArthur

Look around you and ask yourself; who brought us this collapse of morality? Who controls mass media? Who advocates perpetual war for profit? Who dreams of world control?

Churchill, "WW II could have been avoided but, the bankers wanted it."
"Germany’s unforgivable crime before WW2 was its attempt to loosen its economy out of the world trade system and to build up an independent exchange system from which the world-finance couldn’t profit anymore. ...We butchered the wrong pig."
-Winston Churchill (The Second World War - Bern, 1960)

There's no arguing that many of America's leaders are working hard at a personal moral collapse. The same is true for a large number of corporate leaders who only worship the god of profit.
What about religious leaders? The Popes have generally been a rotten bunch. The bishops and cardinals run pretty bad. The Priests have their own special problems with pedophilia.

Keep in mind that Germany was a very strong Christian country when it was attacked. Russia is now having a strong resurgence of the Christian faith. Those who bring us moral collapse have a real hatred of Russia and want to blow the place up. They destroyed it many years ago and, plan to do it again. Christian Europe is headed for a dark age. Christians in the ME, Indonesia and many other places are being killed in large numbers.

While organized religion has plenty of dark history of persecution, the Christians have been pretty good for the last couple of centuries. What is it about Christianity that so offends those who are working towards our moral collapse?
Christianity is a moral framework that we can teach our children. We don't have to conjure up a moral framework on our own. The Decalogue is the long, long existent framework that we pass on to each generation. The mass media tells us that morality is just relative,,,, and whatever you feel is correct in any given situation.
The mumbo-jumbo of the liturgy isn't the important part. The continuity of the norms of morality are what is important.
"There has been either a spiritual awakening to overcome the moral lapse, or a progressive deterioration leading to ultimate national disaster."
Apparently, Russia will get the spiritual awakening and, America will continue to collapse.
We spent our accumulated fortune on wars for the war-profiteers and world-dominators. At the same time that we collapse financially, we are collapsing morally. As the trust-horizon shrinks to just our immediate family, we will exclude all others. The deplorable will somewhat work together. The progressives will slit each other's throat.
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Old 01-11-2018, 04:02 PM
Danny B Danny B is offline
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The B.I.S. throws in the towel

Creating <$220> trillion of new debt to stimulate the economy was strictly an experiment. There is now a better understanding of the actual economic rules,,, rather that the various delusions that previously dictated economic policy. The various CBs have all stimulated in round-robin fashion.
Who told them to do that? Who coordinated the process?
"Policy for most central banks around the world is dictated in Switzerland by the Bank for International Settlements. Fed chairmen like Janet Yellen are mere mascots implementing policy initiatives as ordered. This is why we are now seeing supposedly separate central banking institutions around the world acting in unison, first with stimulus, then with fiscal tightening."

"Now comes the era of Jerome Powell, who will oversee the last stages of fiscal tightening, the reduction of the Fed balance sheet, faster rate increases and the final implosion of the 'everything' bubble."
"a Trump presidency would inevitably be followed by economic crisis, and this would be facilitated by the Federal Reserve pulling the plug on fiat life support measures which kept the illusion of recovery going for the past several years. It is important to note that the mainstream media is consistently referring to Jerome Powell as "Trump's candidate" for the Fed, or "Trump's pick"

"Trump, and by extension all the conservatives that support him, are meant to take the blame when the 'everything' bubble vaporizes our financial structure. "
Powell, "He even admits the existence of the Fed's "short position on volatility." This explains the strange behavior of the VIX index, which has plunged to record lows as "someone" continually shorts VIX stocks in order to interfere with any decline in markets."
Party While You Can - Central Bank Ready To Pop The 'Everything' Bubble
Best read the whole article. You may not be in the markets but, you are directly affected by the broader economy. The slaughter of the money-renters will be only one facet of the credit collapse. The CBs (BIS) tried their doomed credit expansion experiment. They ran that horse until it died in it's tracks.

The people who are actual producers are not going to have it as hard as the non-producers. The largest non-producer is the State. It has tried every stimulus imaginable to ang on to control.
"Treasury volatility as measured by realized volatility in the U.S. 10-year Treasury note has fallen to a 52-year low, according to a new report from Bank of America Merrill Lynch."
"Indeed, we have already seen a stunning flattening in the yield curve as measured by the spread between the 10-year and 2-year Treasury yields. Furthermore, the 10-year yield has failed to take its high from the first quarter of 2017, and the 30-year has remained even more contained in its moves.
Ultimately, these long periods of muted moves will lead to a mean reversion."

"The MSCI World Index has gone 19 straight months without a 5 percent pullback, its longest on record."

I'm sure that the B.I.S. is well aware that monetary inflation of the upper loop is slowly bleeding over into the lower loop. This slow progression of price inflation is forcing people out of housing. It is strangling consumption. A complete crash of the credit bubble is definitely a "bad thing". The B.I.S. is afraid of something even worse. The complete dispossession of the middle class would bring revolution.
The verdict is in on global cooling. Our weakened magnetosphere is allowing great climate volatility. The crop losses will get much worse.
The B.I.S. prefers to bring the collapse forward so that we can "reset" the financial system before the worst of the weather disasters throws everything into chaos.
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Old 01-12-2018, 03:55 PM
Danny B Danny B is offline
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Setting up the fall-guy for the great unwinding

"On the plus side for South Korea, reunification with the North could unlock trillions of dollars of energy and mineral resources"
“From an economic development perspective, North Korea and Japan are a match made in heaven: an ample supply of natural resources and labor meets world-leading technology and capital,” Koll argues.
“ Engaging North Korea constructively would not just boost Japan’s economic fortunes, but surely create a historic legacy for Abe worthy of the Nobel Peace Prize.”
WaPost - It’s Time To Accept A Nuclear North Korea
The fix is in. There is money to be made in in North Korea.

"students graduating under a $1.3 trillion pile of student loan debt. (Not to worry though: Goldman Sachs is promoting a way to profit from this debt by stuffing it into other assets and selling those off to investors, a la shades of the subprime mortgage crisis.)"
"The Wall Street and London megabanks are scrambling out of this debt by securitizing it — packaging and selling it on — knowing it is not payable. U.S. banks’ securitization of debt — corporate junk, auto and credit card debt, student debt, etc. — has grown by $1.1 trillion or 25% just during 2017."
The banks are securitizing everything in preparation for the big unwinding. The default cascade will catch the investors who bought the notes, rather than the banks themselves.
1/11 China just reminded the United States Beijing is its banker – CNBC
1/12 Reports China will stop buying US Treasury debt is ‘fake news’ – Business Insider
TRUE, but, it got the desired results.

Here is an important article from the CFR.
"As shown in the left-hand figure above, profits at private-sector enterprises rose 18 percent between 2011 and 2016, while profits at state-owned enterprises (SOEs) plunged by 33 percent. As shown in the right-hand figure, however, the share of corporate liability growth accounted for by SOEs soared from 59 percent in 2010 to 80 percent by 2016. This is the opposite of what one would expect in a market economy."
Apparently, private industry is to be thrown on the funeral pyre of credit excesses AND, State enterprises will come out OK. China is capitalist when it is convenient AND communist when it is necessary.
Private industry goes on the chopping block, https://www.bloomberg.com/news/artic...ebt-coming-due
A warning on Japan,,,, I doubt this, https://www.marketwatch.com/story/th...rds-2018-01-10

There is widespread talk about a reversal in the 30 year downtrend of the 10 year bond. Here is a good short article on the subject.

1/12 Fed’s Bullard says inflation miss has ‘cost’ US lost growth – US News The feces-for-brains claims that; because prices didn't go up, America didn't grow.
Bullard goes on in depth to advocate for raising the price of everything. The MORON never mentions wages.
1/11 Will our strong economy spike inflation in 2018? – ValueWalk Will pigs fly?
"Walmart Abruptly Closing Dozens Of Sam's Club Stores, Firing Thousands On Same Day It Raised Minimum Wages"
China set the roof on wages. Consumption goes down,,, stores close.

"The U.S. debt limit was suspended in September until Dec. 8. Mnuchin began using special accounting measures to stay below the ceiling since then and has said that Treasury could comfortably fund the government at least through January."
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Old 01-14-2018, 06:32 PM
Danny B Danny B is offline
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FED,,, treasury paper,,, savings

I leave for ONE day and,,,, I'm a week behind on reading. It takes a lot of reading to make sense of all the moves in finance and economics.
ALL of the rise in the stock market is a product of wet-ink money from the FED.
"Normally, Fed tightening policies should cause an ever-increasing boost to the dollar index. Instead, the dollar is facing a swift plunge not seen since 2003."
Yeah, right. Tightening at the front door,,, while liquidity pours out the back door. The 2 big buyers of Treasury paper have cut back.
So, the FED does forward liquidity swaps with various States that use the liquidity to buy Treasury paper.
"The Fed, as well as the mainstream, have also planted the notion that the Fed “will be forced” to raise interest rates faster if the Trump Administration pursues its plans for Hoover-style infrastructure development."
OK, so, if Trump tries to do infrastructure improvements, the FED will kill everything.
"The central bankers need a scapegoat for the eventual bursting of the market bubble that they have produced. Why not simply allow that bubble to finally implode in the near term, blaming the Trump administration"
The chosenites will put a knife in his back, one way or another.

Ron Paul, "By the time the QE’s ended, the Central banks of the world had increased their balance sheet by $8.3 trillion, with only $2.1 trillion worth of GDP growth to show for it. This left $6.2 trillion of excess liquidity in the banking system that did not go where the economic planners had hoped."
THAT is because they have feces for brains.
The article has a vid and transcript. As usual, Ron Paul is painfully clear about our future.
Historically, finance was about 4--5% of the economy. The money-renters managed to bump that WAY up when released from the chains of gold. Now, they are trying to fight off a reversion to the mean.

" First, recently enacted tax reform legislation is estimated to raise the deficit by more than $200bn, on average, each of the next four years, and Congress looks likely approve substantial new spending as well.
Second, Fed portfolio runoff will increase the amount of debt the Treasury must issue to the public.
Third, the Treasury’s cash balance is likely to rise by around $200bn once a longer-term debt limit suspension is enacted, which will also necessitate additional borrowing."
"What Goldman has left unsaid is what happens to interest rates at a time when on one hand US debt supply is set to double and on the other the Fed is set to continue shrinking its balance sheets"
"What is also unsaid is just who will be the marginal buyer of this debt tsunami when central banks increasingly shift away from debt monetization."
The Treasury plans to pump out bazillions in new debt issuance. The FED plans to end debt purchases.

"Distilled to its roots, the Fed has been manufacturing “savings” from thin air for the better part of a decade. When the financial crisis hit in 2008, American savings were depleted, so the Fed had to step in to produce savings (to finance huge government deficits). Now the Fed is attempting to remove that “savings”
"It is the country’s seed corn. If there is no net savings, there can be no net investment."
It IS different this time, http://blog.knowledgeleaderscapital..../2017/09/2.png
"Not to state the obvious, but all else equal, if the Fed started shedding assets at $30 billion a month (or $360 billion a year), it would exhaust the entire stock of private savings."
"Net savings have fallen in the last 2 years from a peak of just over $700 billion to the current $355 billion. Will savings halve again in the next two years? If so, there is no mathematical way in the world the Fed can shed assets at the rate it outlined yesterday.”
"side effects of the Fed’s QE programs has been unprecedented growth in excess bank reserves parked in cash at the Fed. While these excess reserves are currently at the Fed, under the right conditions, the excess reserves could begin to flow into financial assets, like treasuries and mortgage backed securities."
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Old 01-14-2018, 07:01 PM
Danny B Danny B is offline
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Peak debt,,, peak inequality

It remains to be seen of the FED will actually shrink their balance sheet.
"Yesterday, The New York Federal Reserve announced that it actually increased their $4.2 trillion balance sheet by $1 million rather than shrinking it."
This is a good article speculating what might happen to those excess reserves.
"In FY 2017, Walmart had pre-tax profits of around $20.5 billion. The great GOP tax cut heist will save the company almost $2 billion annually, maybe more - over 10 years likely over $20 billion. "
More Post-GOP Tax Cut Heist Mass Layoffs

The finance system is facing huge challenges from the tech industry. Here is a good article exploring the possibilities.

More melt-up.
"It’s synchronized global speculation unlike anything I’ve witnessed. It’s evolved into a full-fledged speculative Bubble and intense Mania. This type of euphoria, while fun and captivating, comes with unfortunate consequences. But there will be no worry for now.
"I recall the speculative market that culminated in manic trading in the summer of 1998 – just weeks before the global system convulsed with the collapses of Russia and Long-Term Capital Management."
"The backdrop is extraordinarily fascinating because of the intensity of speculative excess in the face of key developments that hold the potential to bring this party to a conclusion. "
"This puts growth over the most recent three quarters at a staggering $2.124 TN (16% annualized)." What could possibly go wrong? BTY, where is the shrinkage I have been hearing about?
Credit Bubble Bulletin : Weekly Commentary: Mania

Look at this graph. Do you see a dip?
"Real wages are now 7% lower than they were in 1973 --and that's calculated using the official government-reported inflation rate, which we all know vastly undercalculates the actual inflation rate. (Read our report on The Burrito Index to understand why the true price inflation households suffer is more like 5x greater than the official reported rate).

So the assets held by the rich shoot the moon, and they get access to the 'money river', to boot. While the rest of us see stagnant real wages and a skyrocketing cost of living."
Good article with a great little GIF.

"All of the important activities in this land have been converted into odious rackets, by which I mean nakedly dishonest money-grubbing scams, especially the two sectors that used to be characterized by first, doing no harm (medicine), and seeking the truth (education). But everything else we do is infected by engineered falsehood and mendacity, including the news media, the law, banking, government, retail commerce, you name it. We’re living in a culture of pervasive control fraud, in which authorities set up looting and asset-stripping operations without any restraint."
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Old 01-14-2018, 07:43 PM
Danny B Danny B is offline
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Employment,,, headlines

"Lastly, as total US population growth has slowed nearly 2/3rd's (as a percentage) from peak '50's growth."
" How GDP can supposedly grow at 4% while the growth of the quantity of those capable of consuming more is growing at less than a third of previous periods and the quality of real wages are stubbornly flat...truly a mystery?"
Ah yes, the gdp number is a tally of the money in the economy.
"Despite a new peak in employment and asset prices, the net creation of full time employment over the past decade is less than a third of that seen almost five decades ago."
Don't complain, it is growing in China. Good graphs.

1/14 The household debt ticking time bomb – Investment Research Dynamics
1/13 The move to $80 oil may be quick – Forbes
The corresponding downward move in the economy will be equally quick.
1/13 Global economy has China’s back as it confronts debt demons – Bloomberg
Two drunks holding each other up.
1/12 Good news just keeps stacking up for Europe assets on a roll – Bloomberg GREAT news,,,, what about the non-performing loans that are stacking up faster?

1/13 U.S. 2-year yield tops 2% for first time since financial crisis – Bloomberg GREAT news. When it hits <3.5> %, EVERYTHING crashes.
1/14 The dollar’s declines are just getting started, Peter Schiff warns – The Street Must be all that back-door printing.

1/14 KFC accepts bitcoin in Canada now – Motherboard BTC + trans-fats.
1/14 Staggering number of people are buying bitcoin on credit cards – Zero Hedge
1/13 Big crypto exchange goes dark and users are getting nervous – GATA
1/13 Cryptocurrency creation is now as easy as breathing – GATA
That makes them even more valuable.
1/13 Bitcoin consumes 30 times more electricity than Tesla cars – Fortune
1/13 Bitcoin miners to use more electricity than all of Argentina – Fortune

1/14 Electric cars will fail, but we’ll build them anyway – Green Car Reports
NO, we won't. Short-term thinking at FED GOV has insured that we won't have the necessary rare earths.
Ahead of The Herd
When anthropogenic global warming reached a maximum stupidity point, the name was shifted to "climate change". NATURALLY, climate change is caused by man. If man caused it, man should pay up. But, not every man can pay. No problem, make the oil companies pay.
New York City Sues Major Oil Companies Over Climate Change | Fortune
Today, there is ample research to debunk anthropogenic climate change. Possibly, BIG OIL will assemble ALL of the proofs that man just doesn't have the power to overcome the power of the sun.
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Old 01-15-2018, 03:53 PM
Danny B Danny B is offline
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Confidence,,, interest rates,,, sovereign debt service

What happened to last night's long, comprehensive post?

Interest rates are at the lowest point for the last 5,000 years. Interest rates generally reflect confidence. Our low-wage competitors took away our employment and high wages. We started serial crashes.
Stock market crash – 1987
Junk bond crash – 1989
Dotcom bubble – 1999 to 2000
Global financial crisis – 2007 to 2008
One result of all these crashes was, falling confidence. The welfare-warfare State could NOT service it's growing debt with high interest rates. When confidence could no longer depress interest rates, they were artificially depressed by flooding the markets with "liquidity". The oceans of liquidity forced interest rates down BUT, they also killed interest-income to many millions of banks, funds, retirees and savers. In trying to substitute liquidity for confidence, the State further eroded confidence.
The confidence is gone because the income is gone. This is true of both interest-income AND wage-income.
TARP was a case of buying confidence with liquidity. When the CBs propose reducing the creation of new liquidity, they are actually proposing that confidence can now take over the job of maintaining low interest rates.
We continue to slide down to a global-mean wage. The asset markets maintain their high values only because of liquidity injections. The production-consumption cycle has been short-circuited by automation. The predations of the finance sector has put the wealth in the hands of those who can't spend it.
The CBs are demanding / dreaming that private investors buy State bonds.
"Rising interest rates will always at first support a currency as should be expected with the Euro short-term. However, that will be the trend provided the confidence in government remains. If confidence collapses, then suddenly the interest rates will continue to rise exponentially and the currency will collapse along with asset values."
When confidence declined, this is when we see the highest levels of interest rates.
This is what will happen in Europe. It is all depending upon the fleeting whims of confidence. Only a complete fool thinks that a trend set for a few days will continue forever."
"These remain possible and will help to create the impression the euro will rally and the dollar will collapse. That will suck everyone in and then you have the stage set for the slingshot in the opposite direction."
In order to create the greatest amount of chaos, you always have to swing to extremes. If we are going to really create total havoc that will bring down the monetary system as we head into 2021 and force some sort of a new Bretton Woods, the only way to do that is a dollar rally."

"ANSWER: Central banks can only control short-term rates for brief periods of time. They cannot control the long-end. The problem the ECB has is by backing off of QE, it will require private buyers to replace them, which will not happen at negative to low rates. The interest rates will be set by the private sector – not the ECB. The QE program has degenerated from an economic stimulus to simply life-support for member states. "
"Once the government have to turn back to private buyers, that is when you will see rates rise sharply to try to sell new debt."

So, the cost of sovereign debt service will go way up. Do we shrink GOV by 90% to manage the cost?
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Old 01-15-2018, 04:09 PM
Danny B Danny B is offline
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The banks have a plan,,, take your money

"The major cause of the upcoming financial meltdown, as with the pre-2008 conditions, is globally systemic gambling against national economies; called derivatives. Derivatives are sold as a kind of betting insurance for managing fraudulent banking profits and risk. So, why fix systemic banking fraud when the final result allowed these same banks to make even more money in the aftermath of the national and personal financial destruction they originated in the first recession?"
"Instead, thanks to Dodd-Frank, derivatives suddenly have “super-priority” status in any bankruptcy. Applied to Dodd-Frank this means that all these bad bank bets on derivatives will be paid off first … before you may have your savings cash."

"The public, however, has an estimated total US cash deposits of US$7.36 trillion ,,,FDIC is armed with a paltry US$25 billion war chest to pay depositors. "
When YOUR Bank Fails, Don’t Walk … Run! | The Daily Sheeple
The banks have already started securitizing everything in preparation for the meltdown. That $ 7.36 trillion is considered (by law) to be a simple investment in the bank.

"Bitcoin investors may not recognise their motivation as such, but the impulse behind computer-generated currency is revolutionary: to take the production and control of money away from government."
"There’s too much money in the world right now, sloshing from investment to investment and bloating every bolt hole one can think of to stash with capital (an unholy proportion of which is founded on debt). Because it costs central banks nothing to turn on the pumps."
The article fails to mention that the State can strangle BTC at any time.
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Old 01-16-2018, 02:09 AM
Danny B Danny B is offline
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Collapse and groundwork for next international agreement

Couple notes from Armstrong;
"Yes. This is the beginning of the Monetary Crisis Cycle that will go into 2021. That is probably where we will see the dollar rally break the world monetary system."
"So far, everything is running its course. We are finally getting closer to the 125 threshold of resistance in the euro and the pound sterling has rallied with many starting to bet that BREXIT will not happen. "
" In order to create the greatest amount of chaos, you always have to swing to extremes. If we are going to really create total havoc that will bring down the monetary system as we head into 2021 and force some sort of a new Bretton Woods, the only way to do that is a dollar rally."
The original Bretton Woods agreement locked in all currencies to America's gold stash,,,, about 25,000 tons. Nobody could inflate their currency to gain advantage. In the early '60s, various American politicians got visions of grandeur for all the good that they could do with an unstoppable printing press. The welfare-warfare State was created. Europe noticed that the presses were running much too fast. They demanded gold instead of paper dollars. The gold supply shrank to 8,000 tons.
It fell on Richard Nixon to stop the blood-letting of gold from the Treasury.
"On August 5, 1971, the United States Congress released a report recommending devaluation of the dollar."
On August 11, 1971, the British GOV (London bankers) notified the U.S. Treasury that they intended to carry off 1/3 of the remaining gold.
"on August 15, 1971, President Richard Nixon officially closed the gold window.
He was subsequently impeached. If he had revalued the gold-dollar ratio, it would have been a different story. This was the final break in the Bretton Woods agreement. The money presses went into hyperdrive and the world went back to competitive devaluations,,, the thing that Bretton Woods tried to prevent. The petro-dollar was a huge blessing to America but, a drain on the rest of the world. Triffin's Dilemma caused the R.O.W. to demand that we print ever-more dollars. We traded these dollars for all kinds of good stuff.

Armstrong posits a NEW Bretton Woods agreement. The old agreement was locked in to American gold AND American politicians. Wealth attracts the corrupted. Bretton Woods ended,,, the petro-dollar is on it's way out.
What new system will be proposed? Will it be re-anchored to gold? There is NO possibility of having a new "reserve currency".
Gresham's Law and Triffin's Dilemma make it clear to everybody that no sovereign currency can be a reserve currency. The SDR is useless and hopeless.
The West previously held gold as the premium reserve. The East has moved Big Time into gold. China had saved gold for centuries BUT, "In 1937 when Japan invaded China, thus helping themselves to 6,600 tonnes of gold " AND, The gold that was smuggled out of China to Taiwan between 1948 and 1949 amounted to 115 tons."
The East has clearly indicated that they prefer gold as a store of value. The next Bretton Woods conference will be held in 繁體字
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Old 01-16-2018, 02:58 AM
wayne.ct wayne.ct is offline
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Which would you rather have?

A little gold or a little paper money? (a.k.a. cash?) Too many people "need" the cash to maintain their "comfort" It has to do with security and delayed gratification. Too many people are deceived and misguided or worse. When they wake up to the truth it will be very late in the overall process of monetary destruction. It may be too late for some to save themselves and they will end up in a very bad spot. The time to become educated about these things is here and now.
There is a reason why science has been successful and technology is widespread. Don't be afraid to do the math and apply the laws of physics.
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Old 01-16-2018, 03:35 AM
Danny B Danny B is offline
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Examining the objectives of the next monetary conference

Globalization's foundations are rotting away, spawning parochialism, nativism and xenophobia. If this stage of capitalism is not sustainable, what in the world comes next? Yanis Varoufakis writes.
Back in 1991, a left-wing friend expressed his frustration that "really existing socialism" was crumbling, with exaltations of how it had propelled the Soviet Union from the plough to Sputnik in a decade. Wrong but, go on.

I remember replying, under his pained and disapproving gaze: "So, what? No unsustainable system can be, ultimately, sustained." Now that globalization is also proving unsustainable, and is in retreat, its liberal cheerleaders resemble my friend when they proffer similarly correct, yet irrelevant, exaltations of how it lifted billions from poverty. Temporarily

Progressives who had opposed globalization, like my left-wing friend in 1991, can take no solace from the manner in which globalization is retreating.
At the discursive level, neo-parochialism is now trumping globalization's oeuvre in the United States, in Brexit Britain and elsewhere. Labour-saving technological change, meanwhile, underpins jobless deglobalization everywhere. None of these developments augur well for those who once believed in a borderless commonwealth of working people.
It's the non-working people who love open borders.

Humanity has been globalizing since our ancestors left Africa, the earliest economic migrants on record. Moreover, capitalism has been operating for two centuries like "heavy artillery," in Marx and Engels' words, using the "cheap prices of commodities" to batter "down all Chinese walls," "constantly expanding market for its products" and replacing "the old local and national seclusion and self-sufficiency" with "intercourse in every direction, universal interdependence of nations." An then came crony capitalism

It wasn't until the 1990s, when we noticed the unleashing of momentous forces, that we required a new term to describe the emancipation of capital from all fetters, which led to a global economy whose growth and equilibrium relied on increasingly unbalanced trade and money movements. It is this relatively recent phenomenon – globalization, we called it – that is now in crisis and in retreat. Let's agree to call it money PRINTING

Only an ambitious new internationalism can help reinvigorate the spirit of humanism on a planetary scale. But before arguing in favour of that antidote, it is worthwhile recounting globalization's origins and internal contradictions.

At the Mount Washington Hotel in Bretton Woods, N.H., world leaders gathered in the Gold Room in July, 1944, to sign an agreement that created the World Bank and International Monetary Funds, pillars of what would come to be called the Bretton Woods monetary system.


In 1944, the New Deal administration in Washington understood that the only way to avoid the Great Depression's return at war's end was to transfer America's surpluses to Europe (the Marshall Plan was but one example of this) and Japan, effectively recycling them to generate foreign demand for all the gleaming new products – washing machines, cars, television sets, passenger jets – that American industry would switch to from military hardware. We had a lock on manufacturing and loaned them money to buy our stuff.

Thus began the project of dollarizing Europe, founding the European Union as a cartel of heavy industry, and building up Japan within the context of a global currency union based on the U.S. dollar. Yeah, we also forced them to buy about a $trillion in U.S. treasury notes.This would equilibrate a global system featuring fixed exchange rates, almost-constant interest rates and boring banks (operating under severe capital controls). Thanks to gold.

This dazzling design, also known as the Bretton Woods system, brought us a golden age of low unemployment and inflation, high growth and impressively diminished inequality.
Alas, by the late 1960s, it was dead in the water. Why? Because the United States lost its surpluses and slipped into a burgeoning twin deficit (trade and federal budget), Let's not forget $13 trillion for wars. Since then we have spent $25 trillion on the war on poverty. rendering it no longer able to stabilize the global system. Never too slow to confront reality, Washington killed off its finest creation: On Aug. 15, 1971, then-president Richard Nixon announced the ejection of Europe and Japan from the dollar zone. Unnoticed by almost everyone, globalization was born on that summer day. It was a flawed creation because it depended on honest politicians.
Mr. Nixon's decision was founded on the refreshing lack of deficit phobia particular to American decision-makers. Unwilling to rein in deficits by imposing austerity (that would have done more to shrink the country's capacity to project hegemonic power around the world than shrink its deficits), Washington stepped on the gas to boost them. Consequently, the United States functioned like a giant vacuum cleaner, sucking in massive net exports from Germany, Japan and, later, China. However, what gave that era (1980-2008) its energy and character was the manner in which the United States paid for its expanding deficits: by means of a tsunami of other people's money (European, Japanese and Chinese net exporters' profits) rushing into Wall Street in search of higher returns.

But for Wall Street to act as this magnet of other people's capital, there were two prerequisites. One was Wall Street's unshackling from New Deal-era regulations. Bank deregulation was central in this audacious reversal: William Jefferson Clinton took care of thatFrom recycling Amercian surpluses, via transferring them to Europe and to Japan, the United States was now recycling the supluses of the rest of the world rushing into Wall Street, completing the loop necessary to pay for America's deficits and keep globalization in rude health.

The second condition was the cheapening of American labour and the substitution of growing wages with escalating credit, provided via Wall Street. This cheapening of American labour was essential to helping push Wall Street's capital returns above those of Frankfurt and Tokyo, where competitiveness was based instead on enhancements to productivity.
Opening the southern border ensured downward wage pressure.

Through it all, neoliberalism emerged from the margins of political economics to dominate our discourse after the end of Bretton Woods. But it was nothing more than the sermon that steadied the hand of politicians repealing New Deal-era protections for workers and society at large from the motivated abuses of Wall Street bankers and predators such as Wal-Mart.

In summary, what we now call globalization was the result of a brave new financialized global recycling mechanism of immense energy and ever-increasing imbalances – with the rise of neoliberalism, wholesale bank deregulation and Wall Street's "greed is good" culture as its mere symptoms. Before long, the Soviet Union and its satellites collapsed, with the new rulers keen for a piece of the action and the Chinese Communist Party determined to survive by staging a managed insertion of China's workers into capitalism's proletariat.

Financial capital's inexorable march and two billion workers entering the global labour market ensured a stupendous redistribution of income and wealth. While billions of people were lifted from abject poverty in Asia, large swaths of Western workers were discarded, their voices drowned out by the cacophony of money-making in financialization's epicentres.

In 2008, a financial crisis began to close globalization in a steel trap of its own making.
To be comntinued
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Old 01-16-2018, 03:36 AM
Danny B Danny B is offline
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"Speculators may do no harm," John Maynard Keynes once hypothesized, "as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation." Which is precisely what had happened by 2007: Atop the tsunami of European and Asian profits rushing into Wall Street, bankers built oversized bubbles of exotic forms of private debt that, at some point, acquired the properties of private money. In their minds

When these bubbles burst in 2008, the recycling loop sustaining globalization was broken – despite energetic money printing by central banks and the Chinese government's breathtaking credit and investment spree. U.S. deficits, even after returning to their pre-2007 levels, could no longer stabilize globalization. The reason? Socialist largesse for the few Crony capitalism– plus ruthless market forces for the many – damaged aggregate demand, repressed entrepreneurs' sales expectations, restricted investment in productive jobs, diminished earnings for the many and, presto, confirmed the entrepreneurs' pessimism. Adding more liquidity to such a mix makes not an iota of difference, as the problem is not a dearth of liquidity but a dearth of demand. True, the capital bubble did nothing for wages

Wall Street, Wal-Mart and walled citizens – those were globalization's symbolic foundations. Today, all three have become a drag on it. Banks are failing to maintain the capital movements that globalization used to reply upon, as total financial movements across the globe are less than a fourth of what they were in early 2007. Wal-Mart, whose ideology of cheapness symbolized the devaluation of labour and the gutting of traditional local businesses, is itself being squeezed by the Amazon model, whose ultimate effect is a further shrinking of overall spending. And the walls that were the nasty underbelly of the "global village" are now a source of political discontent, exposing the absurdity of a system that promotes the free movement of money and trucks while people remain fenced in. Over-simplification

Looking at the world from an Archimedean distance, globalization has been caught in a steel trap of its own making. Its crisis is due to too much money in the wrong hands. Humanity's accumulated savings per capita are at the highest level in history. All in the hands of people who can't actually spend it. However, our investment levels (especially in the things humanity needs, such as green energy) are particularly low. In the United States, massive sums are accumulating in the accounts of companies and people with no use for them, while those without prospects or good jobs are immersed in mountains of debt.
In China, savings approaching half of all income sit side by side with the largest credit bubble imaginable. Europe is even worse: There are countries with gigantic trade surpluses but nowhere to invest them domestically (Germany and the Netherlands), countries with deficits and no capacity to invest in badly needed labour and capital (Italy, Spain, Greece) and a euro zone unable to mediate between the two types of countries because it lacks the federal-like institutions that could do this.
Won't work
And if these discontents were not enough, there is also the rise of the machines. By 2020, almost half the professions in Europe and North America will be susceptible to automation. Robots require a few highly paid designers and operators but may replace millions. This generates labour shortages and labour gluts in the same city at the same time. The middle class is in for another hollowing out, wage inequality is about to rise again in the richer countries, while developing countries will soon realize that having large young populations offers no respite from poverty: With robots getting smarter and cheaper, deglobalization takes over, and countries such as Nigeria, the Philippines and South Africa will bear the brunt of relocalization (especially with the evolution of 3-D printing).

Is it any wonder that parochialism, nativism and xenophobia are rearing their ugly heads everywhere? Rather than focusing on the role of Facebook, Russia or some unexplained, newfangled fear of the "foreigner," the so-called liberal establishment (which is neither liberal nor particularly well-established, judging by recent electoral results in Europe and the United States) should look instead at globalization's rotting foundations, which render it unsustainable.

But if globalization is no longer viable, what's next? The answer offered by the so-called alt-right, the xenophobes and those who invest in militant parochialism is clear: Return to the bosom of the nation-state, surround yourselves with electrified fences and cut deals between the newly walled realms on the basis of national interest and relative brute strength. The fact that this nightmare is presented as a dream is yet another failure of globalization: Mr. Trump is a symptom of Barack Obama's failure to live up to the expectations he had cultivated among the victims of globalization and its 2008 spasm.
Lest we forget, our problems are global. Like climate change, they demand local action but also a level of international co-operation not seen since Bretton Woods. Neither North America nor Europe nor China can solve them in isolation or even via trade deals. Nothing short of a new Bretton Woods system can deal with tax injustice, the dearth of good jobs, wage stagnation, public and personal debt, low investment in things we desperately need, too much spending on things that are bad for us, increasing depravity in a world awash with cash, robots that are marginalizing an increasing section of our work forces, prohibitively expensive education that the many need to compete with the robots, etc.
Robots work for free,,, you don't compete with them.

National solutions, to be implemented under the deception of "getting our country back" and behind strengthened border fences, are bound to yield further discontent, as they enable our oligarchs-without-borders to strike trade agreements that condemn the many to a race to the bottom while securing their loot in offshore havens.

Our solutions, therefore, must be global, too. But to be so, they must undermine at once globalization and parochialism – both the right of capital to move about unimpeded and the fences that stop people and commodities from moving about the planet. In short, our solutions must be internationalist. And the goals of an International New Deal are pressing.

First, we need higher wages everywhere, supported by trade agreements and conditions that prevent the Uberization of waged labour domestically. Not going to happen

Tax havens are crying out for international harmonization, including a simple commitment to deny companies registered in offshore tax havens legal protection of their property rights.

We desperately need a green-energy union focusing on common environmental standards, with the active support of public investment and central banks.

We should create a New Bretton Woods system that recalibrates our financial infrastructure, with one umbrella digital currency in which all trade is denominated in a manner that curtails destabilizing trade surpluses and deficits.
A one-world digital currency is a "bridge to far". There are just TOO MANY hackers. There are just too many States that would demand to have control over issuance. gold will be drug in out of the shadows once again. Trade surpluses are created by HARD WORK. The Greeks and Italians have never had trade surpluses. As long as we consider all people to be equal, there can never be one financial system for all.

And we need a universal basic dividend that would be administered by the New Bretton Woods institutions and funded by a percentage of big tech shares deposited in a world wealth fund.
UBI would motivate too many people to stop working. It would ruin most people.
The financial genie needs to be put back in its bottle, with capital controls domestically and globally to be imposed by co-ordinated action in the Americas, Europe and Asia. Money must be democratized and internationally managed in a manner that shrinks both trade deficits and surpluses. The robots must become humanity's slaves, a feat that requires common ownership, at least partly. Yanis is brilliant but, he has too little understanding of human nature.

All this sounds utopian. But no more so than the idea that the globalization of the 1990s can be maintained in the 21st century or replaced profitably for the majority by a revived nationalism.

Who should pursue this internationalist agenda? Progressives from Europe and North America have a duty to start the ball rolling, courtesy of our collective failure to civilize capitalism. Capitalism was civilized as long as there was a limit maintained on money creation. I have no doubt that if we embark upon this path, others in Asia, Latin America, the Middle East and Africa will soon join us. At DiEM25, the Democracy in Europe Movement that I proudly co-founded, we take this duty seriously. We are determined to take this agenda, which we refer to as the European New Deal, to voters across the continent in the May, 2019, European Parliament elections. With globalization in retreat and militant parochialism on the rise, we have a moral and political duty to do so.
The great powers are re-arming and talking about war. There is going to have to be a LOT of death before they will talk about cooperation
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Old 01-16-2018, 04:27 PM
Danny B Danny B is offline
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Dollar moves,,, endless war to solidify B.I.S. / Rothschild control

Consumer price inflation,,, probably understated.
"Since the Global Financial Crisis the “War on Deflation” has been fought exclusively with monetary policy: 654 rate cuts since Lehman bankruptcy, $12.3tn of purchases of financial assets by global central banks, central bank balance sheets expanding to $23.4tn "
So, "we" have this great war on deflation. The war is fought EXCLUSIVELY in the financial markets.
"Germany’s biggest trade union, IG Metall, is threatening all-out strikes unless employers meet demands for an inflation-busting 6 per cent pay hike this year. "
Suddenly, inflation is the huge risk that threatens euro zone stability | South China Morning Post

The war on deflation is fought everywhere EXCEPT wages for the main body of consumers. The CBs are absolutely mystified as to why their policies are not working. ALL the markets are going up. http://www.financialplanningsouthafr...th-africa1.jpg
The feces-for-brains are starting to notice that the markets go up exactly correlated to how much free money they are provided.
Plant a garden.

Armstrong said that the dollar would fall and everybody would pile into the Euro. Then, the dollar would rise and wipe out everything. The dollar IS falling. Most of this is driven from moves from China.
Treasury paper is not looking to good either, https://www.zerohedge.com/news/2018-...easurys-tumble

The oil companies are being sued for causing climate change. The research is out there that definitively proves that ALL their precious models are garbage. The oil companies could easily assemble the research and blow the "anthropogenic" people out of the water. The U.N. has come out and revealed that global warming is a scam to shift money from rich (not really) countries to poor countries.

AI marches on and humans get squeezed more every day. NOBODY has a cure for efficiency so, NOBODY talks about the problem.

Pox Americana is rattling sabers at a few selected countries.
"In the year of 2000 there were eight countries without a Rothschild owned or controlled Central Bank:

North Korea
The only countries left in 2003 without a Central Bank owned or controlled by the Rothschild Family were:

North Korea
The only countries left in 2017 without a Central Bank owned or controlled by the Rothschild Family are:

North Korea
Cuba doesn't have any resources so, we leave it alone. North Korea has $15 trillion in rare earths. Afghanistan has $ 15 trillion in valuable minerals AND, the U.S. generals say that we will be in Afghanistan for the next 50 years.
Syria has LOTS of oil that the chosenites want. They also want to block the Russian oil & gas pipelines from going through Syria to Europe.
Iran is the big deal. They have lots of oil and lots of missiles. They also aspire to be a regional leader.
We bluster around and send in lots of battleships and armaments to scare these States into compliance. BUT, China is building a military base in Afghanistan,,,, Russia and Iran have bases in Syria. Pox Americana says that they will be in Syria indefinitely,,, fighting terrorists.

So, the West wages unending war for the London Bankers,,, not to mention, Tel Aviv.
The East has developed banking systems to side-step the Rothschild systems. The West has produced TONS of liquidity to substitute for confidence. The East has bought TONS of gold to augment
confidence. Eventually, this will have a huge effect on interest rates.
Meanwhile in Russia; "President Putin has been under heavy pressure from outside and inside: Western sanctions and intended oil price crash. Despite efforts by the Rothschild-controlled Central Bank of Russia (hereafter referred to as CBR) and the use of dozens of billions of foreign exchange reserves – the value of the ruble against the dollar has, therefore ,declined by 39% during the past few years."

"Under the Constitution, the CBR belongs to a foreign State – the City of London – and is taking orders from London and Washington’s controlled IMF. CBR can only print money corresponding to its cash in foreign currency, that being the dollar"
"Moreover, President Putin is under pressure from the West, which wants to overthrow and replace him with Western-minded puppet oligarchs. Thus, the US ambassador to Moscow, John F.Tefft, is said to have made it very clear in this statement: “We will displace Putin from office and install our own people as leaders of the Russian government.” It was reported that Tefft even mentioned the appointed ministers by name!"

" The Central Bank of Russia is a member of the BIS." https://en.wikipedia.org/wiki/Central_Bank_of_Russia
"Moscow Times has been quoted by stating that President Putin has been under tremendous internal and external pressure to the extent that he must become “another Stalin“ in order for him and for Russia to survive the Western isolation efforts and the economic war currently waged on Russia. This means a final (staged) breach with the Rothschilds crime syndicate via Washington– after the first schism due to the Khodorkovsky - Yukos share confiscation by President Putin."
"Ever emboldened by its totally illegal regime change policies in Iraq, Egypt, Libya, Syria, Ukraine, etc., Washington and its allies are now foolishly pursuing the same in Russia."

You get the idea. We make war on any State that isn't under Rothschild control. The East has built "mechanisms" like the AIIB, etc to escape the control of SWIFT, IMF World Bank, etc. Pox Americana is holding a summit to decide what to do in the case of North Korea. Russia and China have been excluded from this summit. Dangerous times !!!
Fulford claims that the missile attack on Hawaii was real and, was a false-flag attack to start the war with Korea.
Tel Aviv has openly attacked the Russian base in Syria. Things are getting desperate in the war to maintain Rothschild control. Several years ago, there was a staged attack on American forces near Iran to provoke a war there.

"some Bush advisers secretly wanted an excuse to attack Iran. “They intend to be as provocative as possible and make the Iranians do something [America] would be forced to retaliate for,” she told Newsweek."
"CentCom Commander Fallon: Attack On Iran ‘Will Not Happen On My Watch"

How far will the war-mongers go in their efforts to bring Rothschild control to the mineral of Central Asia,,, the RE in N.K.,,,, the oil in Iran and Russia? The drone attack on the Russian base was stopped. How many false-flag attacks can be neutralized?
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Old 01-17-2018, 05:44 AM
Danny B Danny B is offline
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Has the rollover started?

Armstrong's model is a confidence model. Mountains of credit require mountains of confidence. Here is one of his entries showing exact correlation between his predictions and, actual values.
The CBs bought confidence and stability with tons of liquidity. They may be able to produce unlimited liquidity but, this eventually no longer translates to unlimited confidence. It appears that markets are starting to roll over.

There are other factors to puncture confidence.
GS is eating feces in the commodity markets, https://www.zerohedge.com/news/2018-...-lowest-record
The Chinese credit rating agency has downgraded U.S. GOV credit, https://www.zerohedge.com/news/2018-...-detonate-next
Armstrong says that this is a farce because we have no intention of paying it off anyway.

"Excluding the tech mania of 2000, today stocks are more highly-valued than at any other time during the past 140 years, even including the peak at the end of the Roaring 1920s."
"The Dow zipped from 25,000 to 26,000 in just seven trading days, its fastest 1,000 points ever."
What could possibly go wrong?

"As it turned out, the reason behind the crash was that the investment banks’ fancy trading algorithms had gone completely haywire.

Several of the largest banks had developed autonomous software that was capable of trading billions of dollars without the need for human beings.

And at 2:45PM that day, their software started to fail… inexplicably selling stocks to the point that prices collapsed nearly 10% in minutes."
Student loans, https://www.zerohedge.com/news/2018-...s-default-2023

"For the first time ever in its almost 90-year history, the S&P 500 rose every month in 2017."
And as Mike pointed out in his 2018 predictions, the CAPE (Cyclically Adjusted Price-Earnings) ratio has now matched its 1999 level, the second highest reading in over 100 years of data. The CAPE now has a higher reading only in 1929.
"Mike Maloney believes this is the year overvalued stocks begin their descent. If he’s right, the decline could be higher than the historical average, since this is the second longest bull market in history. "
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Old 01-17-2018, 04:49 PM
Danny B Danny B is offline
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Financial cocaine? Viagra? from China

The markets ALWAYS peak and cycle. Investors ALWAYS seem to believe that the good times will go on without interruption.
"Bets that the S&P 500 will rise still further have gotten so intense that one has to pay a huge premium for CALL options"
So, will the markets continue to rise? We definitely are in a melt-up but, how much longer will it last? Who / what is fuelling the melt-up?

"These investigators have discovered that any liquidity reductions to date have been vastly offset by large liquidity additions from elsewhere.
But where?
Emerging markets… led by China."
"Zero Hedge reminds us that last week China reported its foreign exchange reserves recorded their 11th consecutive monthly increase.
In December, Chinese reserves increased $20.7 billion alone… and totaled $129 billion for the year.
“Against that background,” affirm Citi’s arson investigators, “it is no surprise that equity markets have been so well supported…”
"In February 2016, the world’s central bankers hied themselves to the fair city of Shanghai.
Their purpose, says Jim Rickards, was to weaken the Chinese yuan without appearing to do so…
The previous two occasions when China devalued (August 2015 and January 2016), the U.S. stock market took violent staggers."

"The solution, says Jim, was a stealth devaluation…
The dollar would weaken under the Shanghai Accord.
And since it is pegged (softly) to the dollar, so would the yuan:"
"The Chinese central bank subsequently unleashed a torrent of liquidity into the market.
And since the Shanghai Accord of February 2016… the S&P has finished in the green a record 21 of 22 months."
"It again appears to be China’s stealthy asset purchases across global capital markets that has resulted in the market melt-up observed in the end of 2017 and start of 2018."
"Will (mainly) Chinese liquidity infusions continue outpacing projected balance sheet reductions by the Fed and ECB?"

It was well known that the PBOC was printing more than the BOJ, FED and ECB combined. It should come as no surprise that much of this flowed into exterior markets. It had to flow somewhere. Markets are now dependent on the Chinese printing press. The FED and ECB are talking about reducing asset purchases. They haven't done much yet. So, pretty much all markets are expected to keep rising "forever" on Chinese liquidity.
China was sequentially raped by the West. Eventually, they may return the "favor". 他妈的你 Tā mā de nǐ

"The chart below shows the CAPE from 1870 to 2017. Two conclusions emerge immediately. The CAPE today is at the same level as in 1929 just before the crash that started the Great Depression. The second is that the CAPE is higher today than it was just before the Panic of 2008."
Big Thanks to the Chinese printing press.
"But today’s CAPE ratio is 182% of the median ratio of the past 137-years.

Given the mean-reverting nature of stock prices, the ratio is sending up storm warnings even if we cannot be sure exactly where and when the hurricane will come ashore." PARTY ON !
"Some bubbles are driven by narrative, and others by cheap credit. Narrative bubbles and credit bubbles burst for different reasons at different times. The difference is critical in knowing what to look for when you time bubbles, and for understanding who gets hurt when they burst."
This is a pretty good article for understanding bubbles.

Previously, the FED was pedal-to-the-metal to save Western banks when the production-consumption cycle crashed too much to continue to support them. The FED printed to save the financial system. The PBOC prints to keep the lower loop producing and working.
There is a $1 trillion a year capital outflow from that they "try" to staunch. Add to that China’s foreign exchange buying spree of 2017. China is buying tons of gold to stabilize their currency system. At the same time, they are pumping $trillions into Western markets.
Western markets have lapped up these $trillions and ,,,, are betting that they won't stop.
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Old 01-18-2018, 05:35 PM
Danny B Danny B is offline
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How high can we get before it all turns to smoke?

China is in a game of "chicken" blowing bubbles in the West, in the belief that; when the default cascade hits, their gold will save them where our monumental BS will let us down. The capital outflows combined with their huge purchases of foreign currency have inflated the snot out of western asset markets. Investors (muppets) in the Western markets believe that these valuations will continue to go up and up. It doesn't matter how high they are already. They will rise forever.

"This next chart, from Doug Short, shows that investors today are employing more leverage than ever before. Even when you adjust margin debt for the overall size of the economy it’s at a new record high and, to my knowledge, this doesn’t include the asset-backed loans at major financial firms which have become so popular in recent years."
So, investors have been given an intravenous drip of monetary viagra / cocaine that has brought them a feeling of euphoria that will never end. The more leverage they apply, the richer they get.

"Finally, from a technical standpoint, the monthly RSI reading of the Dow Jones Industrial Average shows the stock market is now more overbought than at any other time during the entire history of this index which was created way back in 1896 (chart via Nasdaq.com)."
I suspect that this cocaine is going to decompose into fentanyl.

"An extremely elevated CAPE is mainly a U.S. phenomenon. While our investors are paying $33 for $1 in earnings, Canadians pay $20, Germans $19, and the British $14, and that’s not counting many emerging markets in the low teens."
Ah yes,,,, the Chinese have specifically targeted the markets of the Great Satan
at this point, my computer completely froze up.

"This improved version of the CAPE ratio (improved because it has a greater negative correlation with future 12-year returns) shows equity valuations have now surpassed both the dotcom mania peak in 2000 and the 1929 mania peak."
"This is an earnings driven rally, and the best is yet to come."

But is it? Kalesnik cites several reasons why the “new era” of earnings is a myth." "Kalesnik states that although total earnings track GDP over long periods, earning-per-share trail by a wide margin."
" Because of the widespread dilution, Research Affiliates reckons that since 1871, EPS has risen around 1.5% a year in real terms, lagging total earnings by around 2 points."
"According to Research Affiliates’ findings, the rule reliably applies to EPS. Long periods of fast EPS growth are usually followed by extended stretches of sub-par performance. Over the period from 1871 to October of 2017, Research Affiliates found that on average, after EPS had expanded by 10% a year in real terms for a decade, it posted 0 annual increases over the following 10 years. And horrible stretches of 5% earnings declines gave way to glorious interludes of 4.5% expansion."
CAPE Fear: Wall Street Is Ignoring High Price-Earnings Ratios | Fortune

The FED printed to save corporate America. China came along and threw more gasoline on the fire. ZIRP drove all the money out of savings and, into risky investments. Like the dotcom crash, investors throw money at anything that they see. With ZIRP, the banks saved about $ 400 billion a year in un-paid interest on savings. The holders of those savings moved further and further out on the risk scale because that giant wave of liquidity diluted earnings of everything. All of this speculation served to move earnings forward in time. The CBs are trying to hold back the eventual return to the mean.
Unlimited printing is following down a road of diminishing returns. The ECB and BOJ have backed off the gas a bit but, not the FED. The PBOC is backing off a bit on domestic credit but, still pumping liquidity into foreign currency reserves. All this monetary Viagra has served to hold off the financial orgasm for many years.
The cocaine effect has erased all worry in the investors.

"Thus it is fair to say that this is now the most overvalued, overbullish and overbought stock market of all time."
"From another perspective, it’s pretty well acknowledged by economists that total earnings (from which EPS are derived and on which they depend) can’t in the long-term outpace the overall economy. "
We don't need no stinkin long-term.
1/18 Stock market optimism hits highest level since crash of 1987 – Zero Hedge PARTY ON!
1/18 4 Social Security statistics that are actually scary – Zero Hedge Wait til they become every day reality.
1/18 New Jersey governor ignores pension crisis, wants more spending – New American New Jersey,,, why doesn't this surprise me?

1/18 Ripple co-founder loses $44 billion on paper – CNBC
1/18 Why cryptocurrencies lost a stunning $370 billion in 10 days – MarketWatch
Too much volatility for most investors.

The effect of the crash will bring portfolio reductions of about 50--90% of value. It will depend on individual portfolios. Since leverage is at all-time peaks, everyone will get a margin call. Since savings are at an all-time low, these calls won't be met. The only thing that will sell with be gold. This will tend to drive the price of gold lower. BUT, so many people have paper gold that just can't be converted or sold. Nobody except Buffet will be able to raise cash to meet margin calls and buy distressed assets.

When the margin calls break, the exchanges will crash. This will freeze up ALL credit. Most assets are leveraged so high, it will take a long time to sort out who really owns them. Armstrong said to have 1 month of cash / expenses on hand. The CBs have managed to pull consumption forward from at least 10 years in the future. Hussman says that stock market returns will be zero for the 10 years following the great unwind.
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Old 01-19-2018, 04:23 AM
Danny B Danny B is offline
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Mixed news

Chinese mobile payments are 90 times the size of American mobile payments.
When shipping was containerized, it threw all of our manufacturing into global low-wage competition. Just how low are those wages?
"The top 1% of Indian adults, a rich enclave of 8 million inhabitants making at least $20,000 a year, equates to roughly Hong Kong in terms of population and average income.
The next 9% are like to central Europe, in the middle of the global wealth pack.
The next 40% of India’s population neatly mirrors its combined South Asian poor neighbors, Bangladesh and Pakistan.
The remaining half-billion or so are on a par with the most destitute bits of Africa."

1/19 China’s local government debt growth almost doubles in 2017 – Economic Times
1/18 Australian household debt-to-income ‘one of the highest in the world’ – AFR
1/18 All eyes on the 10y treasury blowing above 2.60% – Zero Hedge 1% higher and it blows corporate America out of the water.
1/17 How coal dies — super cheap renewables plus battery storage – Think Progress
1/19 Trump says solar tariff decision coming soon – Reuters They shouldn't try to save coal.
1/17 Police arrest more people for marijuana use than for all violent crimes – WaPo
Northern California’s Calaveras County Votes To Ban Weed

Had to do it,,, the lawyers were losing money.
1/18 German far-right “reich citizens” organize militia – Zero Hedge So, is Merkel finally happy?

1/19 Hackers have stolen about 14% of digital currencies – GATA
1/19 Bitcoin investors seek refuge from volatility in gold – manual
1/19 Craig Hemke: Comex positioning indicates gold smash imminent – GATA
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Old 01-19-2018, 04:27 PM
Danny B Danny B is offline
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Taxing,,, not taxing,,, how long can it go on?

Jim Willie predicted that we would see QE to infinity. A LOT of funds and investors have gone broke betting that this expansion would stop at some point. They were correct on their idea but, wrong on the timing. The FED inflated the upper loop in hopes that some of it will flow into the lower loop. This has happened to the prices in the lower loop,,,, just not to the wages. There is a cement ceiling on wages imposed by the R.O.W.
America was destined to morph from a high-wage & high-price economy to a low-wage & low-price economy.

To hold back nationwide default, the FED pumped liquidity into every nook and cranny. All this was done to preserve the perceived value of the nation's capital. This has worked to gloss-over a bankrupt nation. Only 2 companies have AAA rated credit. 10% of companies don't have any earnings. About 50% of companies would go bust if interest rates rise to historical norms. The FED knows that they are doing great damage to the economy with QE.
They initially wanted to save the financial system. But now, they are trying to save everything; capital, credit, manufacturing, AND the State.
With close to 100 million NOT in the labor force, just how viable is the U.S. economy?

The Chinese said that America's breaking of the Bretton Woods agreement was the most momentous thing that we have done,,, more-so than the world wars. Here is a chart of the money supply.
Since the money supply went up commensurate with the national debt, you can well imagine that the State was doing a lot of the spending.
Manufacturing is the prime value-added industry. Government is mostly parasitic. Manufacturing jobs peaked in June of 1979. Since then GOV employment has continued to grow.

"There were 21,995,000 employed by federal, state and local government in the United States in August, 2015 according to BLS. "
The latest tax plan has reduced the tax income to FED GOV even more. FED GOV is piling on ever-greater piles of bond sales.The FED says that they are going to reduce purchase of Treasury paper.

Traditionally, the State always tried conquest and theft to keep State coffers full of gold and silver. Here is a good article from Armstrong on the hunt of taxes.
This hunt for taxes causes capital to go into hiding.
1/15 EU to target UK tax haven territories as trade negotiations begin – Independent Was Brexit an excuse to go after all the British controlled tax havens?

Currently, gold is not valuable enough to make it worth confiscating. States everywhere are on a hunt for every dime that they can steal. Civil Asset Forfeiture has brought in a couple of $billion but, the State always needs more. The non-producing people vote to live as well as the producers. This takes a lot of money. Since it is not available as taxes, it must be printed.
45% of Americans pay no taxes. 51% of Americans receive a check from GOV. Marxist Obummer kicked things into a higher gear.

"The more any government interferes with the free markets, the greater the risk that your funds will be frozen and you will not be able to trade."
"We are bringing this model back into play because there are rising concerns among our European clients that if they hedge against the decline of the Euro and government bonds in the EU when the collapse unfolds, they will be targeted for undermining the government. "
"With the hostility in Europe eliminating the ability to short government bonds in a pathetic attempt to prevent the collapse of the EU bond market,,,"

"This is the rise in the stock market and the shift of capital from government bonds to equities. This will all end in a monetary crisis event perhaps as soon as 2021."
A lot of politicians bought a lot of votes because they had a printing press in their back pockets. By squeezing gold out of the system, they were able to be a LOT more generous to the voters. Now, the State is trying to prolong it's generosity. Armstrong predicts a shift out of public debt. This has already happened, in that nobody wants to buy treasury bonds. The FED does forward currency swaps and other schemes to keep State debt from vaporizing. The State is making ever-greater demands from the bond markets. The presses must run ever-faster.

Armstrong, "This is simply how Empires, Nations, and Citystates collapse. They are always the same – a constant search for more power to retain their control. Then it all snaps. That comes typically when a government can no longer feed its own workforce to keep the people in check."
"What most people do not know about history is the fall of government typically comes from tax rebellions."
"raised taxes excessively setting in motion the collapse in VELOCITY of money once again as people hoarded their wealth creating the essential element to the destruction of an economy as you see in Europe today. Once capital begins to hoard and hide from the government tax collectors, the beginning of the end appears."

OK, so, taxes are not going up in America. At the same time, national income is going down. EVERYTHING is being carried by the printing press.
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Old 01-20-2018, 03:20 AM
Danny B Danny B is offline
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Deflation,,, pulling in more muppets

The private banks create most of the money supply. They create the principle but, not the interest amount. That sum must come out of new loans. The Central Banks are deathly afraid of deflation. The CB tops-off the system with free money to ensure that there is enough money in the system to service the debt. This money was pumped into every corporate nook and cranny. Banks hold a few $trillion of excess reserves. Corporations are buying back their stock. Some of this flow into the upper loop has recycled back to the State as taxes.
100% of stock gains are from free money. The corporations shouldn't complain about the taxes because, it was free money to begin with. Just the same, the fought for a tax reduction. They also admitted that none of them would plow this newly saved money back into spending, hiring and R&D.

This money is frozen OUT of the circulating economy. Deflation of the money supply. There are supposed to be about $23---27 trillion in tax havens. This too is money outside of circulation. Deflation should be defined as a reduction in the circulating supply of money. The CB is "pushing on a string" in trying to inflate away the debt. Corporate debt, for the most part, is money pulled out of circulation. As the "money" supply is growing, the velocity is falling. As consumption crashes, more money is sidelined because it can't be put to work in the lower loop. The FED is deathly afraid of both deflation AND wage increases. They focus on creating price inflation while fighting wage inflation.
As long as the Central Bank is owned by private banks, they will always bring about their own demise.

Passive investment funds substitute diligence with diversification. Everybody is locked in to the same algorithms. They bet on the whole spectrum figuring that the whole market can't possibly go down.
Passive investing boom creates a frightening risk, Morgan Stanley says
Hidden Trigger For Another (Flash) Crash: Passive Investing - Forbes
The hidden dangers of passive investing - Financial Times
The trap of passive investing - Business Insider
The Worst-Case Scenario for Passive Investing (Part I) - Bloomberg

Warnings from Morgan Stanley, Forbes, Business insider and Bloomberg. Of course, you can ignore them. They're all idiots.

"Mutual funds and ETFs that focus on stocks garnered $58 billion in fresh money during the period that ended Wednesday, "
"New money didn't just go into exchange-traded funds that passively track market indexes like the S&P 500 and Dow industrials."
"U.S. funds showed the strongest money gains with $6.4 billion for the week"
"The latest Investors Intelligence poll of professional newsletter editors saw bulls outnumber bears by 66.7 percent to 12.7 percent, the biggest spread since April 1986"
What caused Black Monday, the stock market crash of 1987 ...
"Mutual funds and ETFs that focus on stocks garnered $58 billion in fresh money during the period that ended Wednesday,"

So, does this qualify as a "melt-up?"
"US stocks will likely run higher for another 11 years, Wall Street's Tom Lee says
Thomas Lee, head of research at Fundstrat Global Advisors, says Friday on CNBC's "Halftime Report" that he and the firm's technical strategist think stocks peak in 2029. "

The attraction of the black hole of greed is impossible to resist. When the event-horizon is reached, ALL those algos will react at once.
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Old 01-20-2018, 04:43 AM
Danny B Danny B is offline
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How to inspire a nightmare

Read Kunstler before you go to bed.
Fever Pitch - Kunstler
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Old 01-20-2018, 02:27 PM
Danny B Danny B is offline
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EVERYBODY knew that "they" would always come to a last minute deal and avoid a shutdown,,,, like always.
"In a late-night vote, Senate Democrats joined to block a bill that would have kept the government running until mid-February. The shutdown is only the fourth government closure in a quarter-century. It will only partially curb government operations.

Uniformed service members, health inspectors, and law enforcement officers are set to work without pay. "
If no deal is brokered by Monday, hundreds of thousands of federal employees are set to be furloughed."
Government braces for shutdown as Senate fails to meet deadline for spending deal | Fox News

Trump Tells Fox - Shutdowns Are President’s Fault
Wallace - If There Is A Shutdown, It Will Last A While
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Old 01-20-2018, 03:22 PM
Danny B Danny B is offline
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Weakening dollar,,, BLINDED by cocaine/viagra

Meltup news. Michael Ballanger,
"I was taught by the Jesuits years ago that what creates inflation is rapidly escalating growth in money velocity, a far more potent inflation barometer than the growth of money supply. Velocity is how fast money is turning over while money supply is the total amount issued. If the total amount issued sits in savings accounts or gold, it is a depressant upon activity because there are reduced transactions. "
"the Citigroup Panic/Euphoria Model—and it now resides squarely in "euphoria" mode,"

The least ugly house on the block.
The US dollar index may crash. Yep, it might. But vs. what?

Please don't tell me the dollar will crash vs Bitcoin. Bitcoin is too small to matter.
Besides, that "crash" if you wish to label it as such, has already occurred. Bitcoin is now highly likely to crash vs the dollar.

Crash vs. What Major Currency?

The European banking system and Target2 system are insolvent.
The Chinese banking system is insolvent.
Chinese State Owned Enterprises (SOEs) are insolvent.
It takes massive amounts of debt for China to grow. China has one of the world's largest property bubbles.
The US has a debt problem. But Japan's and China's are worse. The demographics in Europe, Japan, and China are also worse than in the US.
The Yen and Japan's 20-year QE experiment are accidents waiting to happen."
"OK the US dollar "may" crash. But if you are predicting that, please tell us against what. "

" The U.S. dollar just had its worst year in 14 years.
Last year, the U.S. Dollar Index (DXY) fell 10%. This index tracks the dollar’s performance against a basket of currencies.
Now, I realize this might not sound like a big deal. But it was the index’s worst annual performance since 2003.
A 10% decline is basically the equivalent of a crash for a major currency like the dollar."
"You can see the euro’s up 17% over the past year."

Armstrong said that the dollar would go down, and then, turn. Since the Euro is up and the dollar is down, everyone will pile in to Euros. Just like they are rushing into stocks now, they will rush into the Euro.

“The job market ended the year strongly. Robust Christmas sales prompted retailers and delivery services to add to their payrolls. The tight labor market will get even tighter, raising the specter that it will overheat.”
"Most Districts cited on-going labor market tightness and challenges finding qualified workers across skills and sectors, which, in some instances, was described as constraining growth."
NO problem. They will train dishwashers to write code.
The "tight" labor theory concern is that employees will job hop, demanding higher and higher wages, which in turn will push up inflation forcing the Fed to hike rates more than it wants to."

Hourly wage growth, https://imageproxy.themaven.net/http...60CHJM-E4Ot70A
Good graphs, https://www.themaven.net/mishtalk/ec...iUOJ1N4x-WjZPg

S&P 3 year earning growth, -3.84%
OK, so, the current meltup is justified b y the strong growth in earnings.
Price-to-earnings, "The current ratio of CAPE to GDP growth of 19.77 has far surpassed the 1999 peak and all points back to at least 1950. At the current level, it is over three times the average for the last 66 years. "
EVERYONE is piling in to stocks for fear of missing out. They justify this with projections of future earnings. Passive investment funds are a means to invest without doing anydue diligence into earnings or fundamentals. Capital inflows to funds show that people have just thrown caution to the wind because they KNOW that they are going to get rich.

Pox Americana is rattling sabers all over the world because it makes them rich.
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Old 01-21-2018, 05:46 PM
Danny B Danny B is offline
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Choked out by WalMart

Well, the big boys pulled out of bitcoin and left everyone else holding the bag. 1/21 Your cryptocurrency masters getting hilariously rich, and you’re not – Medium
J.P. Morgan says that the big money players in the stock markets are soon to do the same.
https://www.zerohedge.com/news/2018-...aking-imminent When peak euphoria and stupidity are reached, the smart money will pull out. Financial coitus interruptus
Figure 5 shows the disparity between actual GDP growth and the S&P.
Figure 30 financials shows that the banks haven't made any money since the 2008 crash.

I can't excerpt this. It is just TOO good.
I built a wood-gas truck. From this article, it shows 21 oil & gas companies that have a P/E of over 190 including Haliburton.

Here is a longish article on worldwide credit. Much of the first part is quite interesting. I'll just do one excerpt.
"Chinese exports were up 10.9% in December. China ran a $54.69 billion trade surplus in December, the largest since January 2016. Foreign reserves rose to a larger-than-expected $3.140 TN, the highest level in 16 months."
The Chinese load up on foreign currency,,, mostly U.S. dollars. This pumps up the American credit bubble. The British destroyed China by forcing the opium trade on the emperor. The Chinese are pumping up the West with monetary cocaine / Viagra.
Credit Bubble Bulletin : Weekly Commentary: You Can Only Worry For So Long

“Even though the FOMC has raised its target range for the federal funds rate by 125 basis points over the past two years, financial conditions today are easier than when we started to remove monetary policy accommodation.” Force fed from China.
The FED says that they are going to have to put on the brakes because unemployment is SO low.

Investors believe that the markets will go up forever. Here is a graph.
"Consider the psychology in play: central bankers have sought to convince private-sector players that central banks will never let markets decline, and so the smart strategy was to buy the dips, and buy every new high–in essence buy, buy, buy and don’t bother hedging long positions, as there was no need to squander money on hedges against declines that would never happen.
Now the central banks are facing runaway asset bubbles that are the direct consequence of their promoting the belief that “central banks will never let markets go down.”
The FED got this started and the PBOC is keeping it rolling.
Once again, we see that international capital flows must be taken into account.
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Old 01-21-2018, 09:07 PM
Danny B Danny B is offline
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Will the State use the Blockchain to end banking?

This post is about a new subject that I am trying to grasp,,, as far as the possibilities and probabilities.
1. The State never willingly gives up control.
2. Computers are very good at keeping track of everything.

The G-30 published a 100 page document on a study of Central Banking. In the Synopsis page, they state, "Central banks were first established in the 17th century, with the primary purpose of providing war finance to governments"
Originally, the King couldn't start a war if he couldn't pay for it. Often, he could get the bankers to loan the money for war. It made sense to loan money to both sides so that the bank would always get repaid. At times, State finances weren't great enough for war and, the State went off the gold standard to expand the currency supply. War is good business for bankers because a leader will spend whatever is required to ensure victory.
"President Lincoln needed money to finance the War from the North. The Bankers were going to charge him 24% to 36% interest."

Lincoln turned down the N.Y. bankers and printed "greenbacks" to finance the war. After the Battle of Bull Run, the South was just a few miles from D.C and could have easily taken it. But, the bankers wanted to prolong the war. They also didn't want the North to lose.

Banks & war,,, they go hand-in-hand. BUT, the State and the banks have an uneasy alliance.
"The War of 1812 proved a financial catastrophe for the United States. One of the main reasons financing the war proved difficult and costly for the United States is that few preparations had been made prior to a declaration of war in June of 1812. Another factor was the dissolution of the national bank, the charter for which expired in 1811"
GOV killed the national bank in 1811 and got a war in 1812. Later, Andrew Jackson killed the Central Bank in 1833.
What if the State could somehow operate independent of the banking system?

Natalya Kaspersky
"Bitcoin is a project of American intelligence agencies, which was designed to provide quick funding for US, British and Canadian intelligence activities in different countries. [The technology] is 'privatized,' just like the Internet, GPS and TOR. In fact, it is dollar 2.0. "

"I used to think “fintech” meant the end of physical cash - replaced by mobile payments platforms owned by big multinational firms and currently led by China, in established currencies regulated by national governments and international agreements.

I now wonder whether the ultimate fusion of technology and finance will mean “the end of money,” at least as we have known it for the last millennium."
"Dimon’s first point was that “blockchain” — a globally distributed ledger of financial transactions made secure by advanced cryptography and competition among “miners” (computers competing to execute and record transactions, and being compensated for doing so) — has massive upside. But to become central to mainstream commerce, blockchain will have to lose its unregulated open source roots"

"All are powerful indicators that the leading edge of “conventional” finance is taking very seriously the prospects for very radical financial innovation."
"Finance meets technology, harnessing the combined power of Wall Street and Silicon Valley. Not only the end of cash, but also the end of money. That is the prospect and potential of fintech"
The Banking Mafia loves a "cashless society" when they have the TOTAL Control & Records of ALL financial operations as well as total control (allowing or denying) of every single individual activity. If the nodes in the blockchain are all controlled by the banks you not only have one currency but one central authority.

OK, so, the State never shrinks. Many millions of bureaucrats want to continue to draw salaries. Since the State is not a producer, it must take from the actual producers. The bank is not a producer so, it must take from the actual producer. Who has the guns? Who has an absolute control structure?

I think Lynette Zang may be onto something with this ACC chain. Just as your car, your trailer, your boat, your house, your business etc are already on the IRS and property tax records, these will be recorded onto digital centralized blockchain or hashgraph ledgers whether you like it or not. You will only get digital currency "credits" for these on the "government digital ledger" if you have physical assets, former fiat currency you have turned in Indian Rupee style, stock certificates, social security benefits, pensions or even surrendered physical gold and silver that have been entered on the ledger. If you don't list these, then guess what, no digital currency credits for you, and you won't be able to buy anything, because you will be "digitally broke."

Indeed, we may wind up going to the extremes: local barter vs new world order digital currency. But the bottom line, this digital currency will have to be backed by something, as simple unbacked fiat currency dies a slow death, and you, the peon, will bear the burden of providing the GOV with proof of your assets if you want to partake in the new digital world. Welcome to the new world of ultra control.
Lynette Zang has several interesting vids.

Everything that might be of value to the State is registered to your SS number. Previously, it was impossible for the State to keep track of EVERYTHING. Is the State creating a situation where it no longer needs the bankers?
Martin Armstrong's program, Socrates writes it's own reports without any human intervention or prompting. War is very inefficient but, profitable to the bankers. Will an AI-controlled financial system do away with war because it is so inefficient?

The State will have to come up with some EXTREMELY innovative solutions to deal with the problems that will show up after the default cascade. Granted, politicians are the worst people to run a State. While there are a lot of forces trying to greatly diminish the population, this would completely erase the State as we know it. We are rapidly falling into global cooling with the crop losses and plagues that are attendant.
Will the State erase the banking system in the face of great adversity to maintain the power of the State?

How will the State react when money stops working?
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Old 01-22-2018, 03:12 PM
Danny B Danny B is offline
Platinum Member
Join Date: Oct 2012
Location: L.A. Ca.
Posts: 3,898
Capital flight = deflation,,, Cryptocoin, not yet

"So The S&P has NEVER been this over-valued, NEVER been this overbought, and NEVER gone this long without even a minor correction."
New money is flowing in by the $billions every week.
The Chinese are a VERY recent arrival on the investment scene. They just are NOT sophisticated enough to resist gambling with ponzi schemes. They are getting taken to the cleaners.

Many of them don't trust the government, Over Half of Chinese Millionaires Are Thinking About Leaving China - The Sounding Line
Then, there is Europe.
2012 IMF warns of threat to EU banks from capital flight | Business
2012 IMF warns eurozone on capital flight - Financial Times
2016 Capital Flight in Eurozone Continues | MishTalk
2017Eurozone Capital Flight Intensifies: Target2 Imbalances Widen Again ...
2018 Banking union is not enough to save the eurozone - Financial Times
Eurozone inflation falls further below central bank target - Independent.ie

Capital flight is responsible to a great degree for the inflation in American asset markets.
Martin Armstrong – Down 39000 or Higher! « Financial Survival Network
There is always a possibility that asset markets can go further up into the stratosphere. Bankers wanted global capital markets with no impediments. The PBOC has created more new debt than the ECB and BOJ put together. The flip side of capital flight is; DEFLATION. Globalism has benefited just 6 States. Much the same, unlimited capital flows have had negative effects on all but a few States.
Armstrong talks vaguely abut a new "Bretton Woods." This would take unprecedented cooperation. Pox Americana isn't going to cooperate with anybody.

1/22 IMF calls for global coordination on potential bitcoin regulation – Strategic Coin
1/22 U.S. rating agency to issue cryptocurrency grades Wednesday – Bitcoin
1/22 The bull and the bear case for cryptocurrencies – Forbes

Bitcoin is just a bunch of nonsense.
1/19 Hackers have stolen about 14% of digital currencies – GATA
As long as the State wants access to EVERYTHING, crypto has no future.
1/10 FBI chief calls unbreakable encryption ‘urgent public safety issue’ – Reuters
The NCS itself was hacked. How safe is your cryptocoin?
1/22 15 year old hacker impersonated CIA director in massive data breach – Zero Hedge

The blockchain has great possibilities. Some of the crypto coins have good possibilities.
1/20 Menacing malware shows the dangers of industrial system sabotage – Wired
1/17 Trust war: dangerous trends in cyber conflict – War on the Rocks
1/16 The future of high-tech espionage – Wired

Untraceable stores-of-value have no future if they exist ONLY in cyberspace.
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Old 01-23-2018, 04:32 AM
Danny B Danny B is offline
Platinum Member
Join Date: Oct 2012
Location: L.A. Ca.
Posts: 3,898
Trust,,, the dollar is still king

Trust moves along with confidence.
"This year, however, the gap all but vanished, with trust in government in particular plummeting 30 percentage points among the informed public. America is now home to the least-trusting informed public of the 28 countries that the firm surveyed,"
Here is a graph that shows stocks vs CPI, GDP, wages and salaries. The stock market has outrun ALL of them.

The writer seems to think that this is proof of impending doom. The bonehead makes NO MENTION of cross-border capital flows. His site is called "Real Investment Advice"

Jim Willie, "community of nations works to avoid the King Dollar." "broadbased dumping of USTreasury Bonds "
Armstrong, "China reduced its holdings by 1% or $ 12.6 billion to $ 1,176.6 trillion and Japan reduced its positions by $10 billion to $ 1,084 trillion. I seriously doubt that the foreign US bondholders slightly reducing their holdings in November by 0.1% to $ 6,343 trillion qualifies as “dumping” dollar debt."

Armstrong, "The dollar is used worldwide because it is trusted while other countries routinely cancel currencies. India made headlines last year cancelling their high denomination notes overnight. This may force people to pay their taxes and prevent them from hoarding cash. But it is also why the US Treasury and Board of Governor’s staffs estimate that nearly 60% of all U.S. banknotes in circulation, or close to $500 billion, is held outside the United States. "
"There was a 1996 article on this, they called the Money Plane when everyday, planes full of $100 bills were flying to Russia. They were shipping $100 million per day. This is why the dollar is the world’s RESERVE CURRENCY. The majority of it is used outside the country because everyone else cancels their currency routinely. The US currency has NEVER been cancelled so the very first note from 1863 can still be spent"

Notice that the Russian Mafia ONLY wanted paper. There is a HUGE difference between paper currency and paper bonds. Here is a pic of a stash of cash from a Colombian drug lord. https://i.imgur.com/yj8U6.jpg
He reported a shrinkage from decomposition, etc of about 10%. He could have converted it to gold but, the paper dollar is more widely accepted than gold. While dollar notes are widely accepted, dollar bonds are NOT. The Italian Mafia has printed up hundreds of them. Each one is tracked and registered with the Treasury.
The paper dollar has the advantage of longevity over every? other currency. Not sure about the Swiss Franc. When U.S. GOV goes flat broke, the paper dollar will still be the premium paper instrument. U.S. bonds will be a different story.

1/22 Inequality gap widens as 42 people hold same wealth as 3.7bn poorest – Guardian
1/22 More than 10% of $3.7 billion raised in ICOs has been stolen – Reuters
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