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Old Yesterday, 02:56 PM
Danny B Danny B is offline
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Attracting capital to tax havens

Armstrong, "There are already 13 nations in default of their national debts. If interest rates go up 1%, we will see another almost 30 join the default list. Take interest rates up 2.5%, and the list will soar to probably 100 nations in default.

The first crack in the world monetary system will ONLY be caused by a strong dollar – not a weaker one. First, you get the dollar rally, then you get the dollar collapse. So keep this in mind. If you buy gold and then see a decline, will you panic and sell the bottom, which is typical? That becomes the game.

There are other places to have dollar accounts. But the USA is not part of the reporting system back to Europe. Most other places are. The USA has become the new tax haven for the world – not American unfortunately."
America created FACTA where all other States must report the bank accounts back to American tax authorities. At the same time, America does NOT report foreign earnings to overseas tax authorities. This makes America a tax haven. The rise of the dollar will blow up many $trillions of dollar-denominated debt.

Here is an interesting graph of interest rates, https://s3.amazonaws.com/cm-us-stand...ury+yields.png
As interest rates rise, the defaults kick in. Then, the contagion kicks in.
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Old Today, 02:48 AM
Danny B Danny B is offline
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Winding down,,, interest expenses,,, tax cuts

In summer of 2005, I ended up with a lot of time on my hands. Reading on the net about our financial situation / future, I came to the conclusion that America was going to crash relatively soon. I stocked up on grains & stuff and knuckled down to a job
Like MANY other would be preppers and prognosticators, I did an unrealistic time compression. After a few years of reading, I concluded that there would be some years before thins got really bad. Living in L.A. I wanted to know when the next big earthquake would be. That would definitely upset my plans. There are only 4 roads into L.A. and all of them have high bridges on them. I was here for the '71 San Fernando earthquake and , it was a real mess.
I left the day before the Northridge Quake but, came back the same day. Again, a real mess.
Since a big earthquake would really mess up my plans, I made a trip to Scotland on the off chance that Swein Macdonald, the highland seer could tell me when the big one would hit. Swein was quite famous for calling the London Daily Mail and telling them that an oil tanker was going to run aground in Scotland. 10? days later, it did just that. I paid my 15 quid and listened to him. Must have been an off-day.
While visiting Viewhill, Ardgay, Sutherland, I went to the pub and talked to the men at the bar. They told me that Swein was nothing compared to his father. He could find anything or anybody that was lost, etc. It was very interesting to consider that second-sight could be inherited.

As the years go by, we tend to think that the financial problems will eventually blow over. Nothing has happened yet. This is only true if you happen to still have a job and your health. What is approaching is a sovereign debt default. Pox Americana is at war with other central banks, most notable the European Central Bank. Because the eurozone project was so ill-conceived, the Euro currency is ripe for a good, old stab-in-the-back.
The EU banks report about $1trillion in non-performing loans.
"In other words, the ECB will assume that the environment which started in 2016 with the ECB's launch of its corporate QE, and which pushed yields and spreads to record low levels, will persist indefinitely, even as the ECB itself also admits it will soon start tightening financial conditions, resulting in chaos in the bond market, a surge in defaults and hundreds of billions in more NPLs."
The BOJ and ECB continue to talk tightening. I haven't seen much.
Here are some comments from the article.
The ECB Reserve Requirement is 1%.
This means that if Europe hits an iceberg, then 99% of the passengers are going for a swim.


The 800lb gorilla in the room is the squillions in QE junk bonds Draghi has acquired at taxpayer expense.
When the SHTF, he'll be hanging from a lamp post.

...the squillions in QE junk bonds...

Funny how few people, even among those who pay attention to such matters, actually realize that this is the problem, and it's utterly insurmountable. I continue to laugh at the financial gurus screaming "Oh noes!!! It's the big one!!!" because it isn't time yet. However, the question is most definitely when, not if.

And folks wonder what Brexit is all about! The perpetual fratricide in Europe is just being played out in yet another arena.
Now go back to putting money into your 401K asap......
ROTFLMAO (rolling on the floor laughing my a** off).
It isn't 'your' 401k or 'your' money. It's the bank's money and you are merely a very junior and unimportant unsecured creditor.

They haven't for the past decade. One would think that the loan loss ratio would have fallen significantly in the 10 years since the financial crisis and that the loss provision would increase but it hasn't.

In the US, banks had a delinquency rate of 7.5% in 2009, at the end of March 2018 it is 1.82% across all banks in the US across all products. And 80% of the loss has already been provisioned.

The above it true. Loan losses in American banks are VERY low because all the bad loans were stuffed into Freddie and Fanny. So, American banks will survive but, Freddie and Fanny will go up Like Krakatoa.

Here is Paul Craig Roberts to give you some kind of feeling for timing. I'll print excerpts but, you should read the whole thing.
"In the wee hours this AM, the yield on the 10-year treasury note hit 2.993%. That's close enough for gubermint work to say that the big 3.00% inflection point has now been tripped. And it means, in turn, that the end days of the Bubble Finance era have well and truly commenced."
"there has been no acceleration in the main street economy---just the rigor mortis spasms of a stock market that has been endlessly juiced with cheap debt."
"Thus, since the pre-crisis peak in Q3 2007 nonfinancial corporate sector value added is up by 34%, but corporate debt securities outstanding have risen by 85%; and the overwhelming share of that massive debt increase was used to fund financial engineering, not productive assets and future earnings growth."
"during the past 10 years, net value added generated by US nonfinancial corporations rose by just $2 trillion (from $6.1 trillion to $8.1 trillion per annum), whereas corporate debt rose by nearly $3 trillion (from $3.3 trillion to $6.1 trillion)"
"That's because the share shrinking effect of stock buybacks and largely cash M&A deals is going to dramatically abate, while interest expense per share is fixing to soar.

On the first point, there were 264 billion S&P 500 (ex-financials) shares outstanding at the pre-crisis peak in 2007 compared to only 239 billion or 10% less at the end of 2017. Accordingly, upwards of one-third of the gain in per share earnings during the last decade was owing to share shrinkage, not aggregate profits growth"
"Secondly, even if the 10-year UST rate settles at only 3.75% and the rest of the yield curve rises accordingly, it will have the effect of increasing pre-tax interest expense for the S&P 500 by about $44 per share; and thanks to the new 21% tax rate, that will show up as a $35 per share hit to EPS."

"And we have no doubt that the stock option obsessed occupants of the corporate C-suites will again make haste to throw labor, inventories and fixed assets overboard with malice aforethought once the market breaks, and earnings are hit with the headwinds of rising interest expense and FX impacts.

To be sure, the usual suspects are again out in force on bubblevision offering a way out. Their response to today's 3.00% moment of clarity is that the Fed is on the verge of making a great "mistake", and that Powell and his Posse will see the error of their ways before it is too late."

"Here is just one example of why the Keynesian consensus at the Fed and on Wall Street is missing the forest for the trees. To wit, we have now completed a full-10 year span since the Q4 2007 pre-crisis peak, and real GDP growth has averaged a mere 1.43% per annum gain.

But that's not the half of it. The cumulative gain over that 10-year period amounts to 15.3%, but that was accompanied by a mere 0.5% gain in industrial production, and a 5% drop in the output of manufactured goods.

What saved the day for even the tepid gains in real GDP was soaring increases in government transfer payments and health care spending---with the latter growing by 29% in real terms over the same period."
"So after the deficit broke toward 10% of GDP in the fall of 1981, he (Reagan) reluctantly signed three consecutive tax increase bills in 1982-1984 that saved the day by recouping 40% of the revenue lost in his treasured tax cut of 1981."
Contra Corner » The Delusions of MAGA And The Return Of Honest Bond Yields, Part 4
EVERY segment of the American economy is flat in it's back. Tax increases at this point would just add poison.
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Old Today, 03:14 AM
Danny B Danny B is offline
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Location: L.A. Ca.
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Time runs short, russia buys even more gold

Surging oil prices to enrich sovereign wealth funds: JPM
Benefits will fall more to stocks than bonds, euro than dollar

Right, all the oil producers are going to jump into the stock and bond markets.
4/24 Russia buys 300,000 ounces of gold in March – GoldCore
This is from Russia Today. I'm sure that they are going to jump into stocks.
Nobody is going to buy the Euro. Even Draghi has admitted that growth has stopped, https://www.peakprosperity.com/blog/...economy-cooked
Russia produces 240 tons of gold per year. They still went out and bought 10 tons more.
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Old Today, 03:03 PM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 3,708
Shoot the politicians first

All quiet with the same old problems getting a bit bigger.
"According to the Federal Reserve, pensions — public and private combined — were roughly 27% underfunded as of last year."
Daily Reckoning contributor Charles Hugh Smith:
" Corrupt politicos promised the moon to public employees, and now the fiscal chickens of insolvency are coming home to roost."

As the late Canadian Prime Minister Mackenzie King styled it:
“The politician’s promises of yesterday are the taxes of today.”
Zero Hedge’s pseudonymous Tyler Durden:
Funds collected from taxpaying Americans will be spent to satisfy the ridiculous retirement promises and obligations made over the past few decades, and while the immediate recipients of the funds, i.e., those looking at near-term retirement, will be made whole, everyone else, i.e., taxpayers, will lose."
"Politicians promise… taxpayers pay."

Politicians make promises that they will never have to pay for personally.
Politicians start wars that they will never personally have to fight.
With no risk and no accountability, what else do you expect?

So, we have hit a peak and, there is nowhere to go except down.

Dollar bonds, https://i0.wp.com/dollarcollapse.com...00%2C376&ssl=1
You can see why a stronger dollar will wipe this out.

4/25 China prepares to mass produce hypersonic vehicles – Zero Hedge This is great news. M.A.D. without nukes. Nothing can be protected. This brings us that much closer to peace. Even the S-300 could bring peace.
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