Economic pressures

[Danny B]

Silver in China & debt saturation

http://www.24hgold.com/english/news-gold-silver-putting-loincloth-on-the-naked-bogeyman.aspx?article=1308939452G10020&redirect=false&contributor=Antal+E.+Fekete

"Today, this is the central bankers' final-and fatal-conundrum: Aggregate levels of debt are now so high, credit can no longer induce sufficient economy expansion to pay off or even service capitalism's constantly compounding debts.

Central bankers' efforts to revive economic growth, e.g. quantitative easing, low, zero and negative interest rates, are like pouring more and more gasoline into an already flooded engine hoping the additional gas will cause the stalled engine to go faster."
"Today, central bankers are trapped by conditions they created. It was their excessive expansion of the money supply after 1971 that lead to the speculative bubbles whose serial collapse resulted in the reawakening of deflationary forces not seen since the Great Depression.

To prevent another Great Depression, central bankers desperately tried to revive economic demand and growth by increasing the monetary base to increase the amounts of loans banks could make."
It is doubtful that the Central bankers started the Viet-Nam war or the "Great Society welfare program.
"But instead of loaning the money, banks redeposited the excess reserves (AMBSL) with central banks; and the hoped-for increase in circulating money (M1, M2, M3, etc.) and credit and debt (TCMDO)-and growth in economic activity-never occurred." No kidding. I suppose that it never occurred to them that we were already debt saturated.

".the increase in the monetary bases was not translated into growth in the money supply because banks have been reluctant to extend loans, choosing instead of accumulate reserves." The money supply increase was locked away in the bank vaults of the upper loop.
"Today, central bankers are attempting to offset the growing global deflationary riptide by 'inflation targeting', i.e. using cheap credit and inflating the monetary base to artificially induce inflationary demand. So far, deflation is winning; but should inflation gain the upper hand, hyperinflation, not inflation, will result as the monetary base is now too large to limit any inflationary surge."
That monetary base is locked away in bank vaults.

http://www.24hgold.com/english/news-gold-silver-hyperinflation-versus-deflationary-collapse.aspx?article=9166579456H11690&redirect=false&contributor=Darryl+Robert+Schoon&mk=1

Junk bonds are the very-risky sector of the investment world. A lot of money has poured into junk bonds by gamblers who seem to be blind to the high risk. All they look at is the proffered interest rate. Now, even that is going away.
Draghi's bubble: Negative-yielding junk bonds coming to Europe - WisdomTree Emerging Markets Corporate Bond ETF (NASDAQ:EMCB) | Seeking Alpha

[Danny B]

Governments and central banks would very much like to frighten people away from cash, but that only underlines its value

https://www.theautomaticearth.com/2016/09/negative-interest-rates-and-the-war-on-cash-4/

[Danny B]

Crash slowly coming to the upper loop

The working man in the lower loop reached "peak wages" decades ago. He was offered increasing credit to maintain his lifestyle in the face of rising prices and stagnant wages. He has recently reached peak debt. This is only peak debt for honest people. Desperate people continue to borrow.

Some of us don't borrow;

That has fallout for the banks;

The mega-bucks of new money is force-fed into the upper loop and they haven't felt the pain yet in their incomes.
The one-percenters are now destroying dollar stores - MarketWatch
It will catch up to them later on.

The Central Bankers are producing money, NOT wealth. Inside their little pea-brains, they are all in agreement that currency inflation will produce price inflation. It does to a certain extent. BUT, when you combine price inflation with falling employment and shrinking wages, you get overall deflation. The black-hole of the global-mean-wage sucks in all discretionary spending.
Fuel consumption per ounce of gold or silver; https://srsroccoreport.com/160-to-1-...to-know-about/

[Danny B]

http://www.24hgold.com/english/news-gold-silver-bills-of-the-goldsmith.aspx?article=490873094G10020&redirect=false&contributor=Antal+E.+Fekete

In recent decades, oil/energy has replaced gold as the most marketable good. For a barter economy, there has to be a universal commodity. For a long period of time, coal was the most marketable good. This was replaced by oil. Oil was somewhat replaced by uranium and natural gas. Energy is the universal commodity and lent it's demand to oil.
Wind power and solar power are technologies and NOT fuels.
If Nikola Tesla had been able to move forward with his magnifying transmitter, coal and oil would have lost importance for energy production.

The Hinkley Point plant is committed to selling power for far more than the cost of solar.
Coal is slowly being phased out. Oil can't get up off the floor. This will help gold return as the commodity with universal demand.

[Danny B]

The FED is out of bullets

The Eurozone project was doomed as soon as it got locked into a common currency. Sales would always flow to the most productive State; https://mishtalk.com/2016/09/09/germ...er-blames-ecb/Congress will be in deadlock for a long time.Get Ready for “Unencumbered” Interest Rate Policy - The Daily ReckoningAnarchy From Above - The Daily Reckoning

$200 trillion of money printing and this is what we get; http://www.zerohedge.com/sites/defau...0908_GDP_0.jpg
Bondmageddon Sparks Crude Carnage & Biggest Stock Slump In 7 Months | Zero Hedge

http://www.zerohedge.com/news/2016-09-10/era-central-planning-crumbling-and-elite-are-terrified

"This is concerning in 2016, and in particular September, because over the past year the US commercial bankruptcy filings jumped from 3% last year to 29%."

http://dailyreckoning.com/dr-content/uploads/2016/09/Bubble.WS_.jpg

http://dailyreckoning.com/four-indicators-that-could-send-markets-into-shock/

Reportedly, Hanjin involves 1/2 million containers; http://www.zerohedge.com/news/2016-0...in-ghost-ships

[Danny B]

Contradictions from Armstrong

Once again, my post disappeared when almost done. Here is the short version.
Bonds are crashing; Bondmageddon Sparks Crude Carnage & Biggest Stock Slump In 7 Months | Zero Hedge
BUT, Armstrong says that the U.S. dollar will come out on top because of our very deep and liquid bond and equity markets. https://www.armstrongeconomics.com/m...-of-september/
He also claims that sovereign debt will have a complete crash. Half of U.S. sovereign debt has to be re-funded very soon. 1/2 of corporate bonds are junk rated. Where does he get the justification to claim that American bond and equity markets will save the dollar?

"Whatever could go wrong is going wrong in a grand style. True, there are people who see nothing. They will be slaughtered for they form the majority. You cannot tell them anything. They will never acknowledge anything until they lose everything, which will come in the blink of an eye. "

https://www.armstrongeconomics.com/history/ancient-economies/the-other-side-of-2015-75/

[Danny B]

Automating banking

The "London Whale" cost J.P. Morgan a reported $ 6.2 billion loss and a $950 million dollar fine. The actual loss is supposed to be MUCH higher than the $6.2 billion cited. The banks have a plan to get around these problems;

https://sputniknews.com/business/20160908/1045108794/sberbank-make-decisions-ai.html

https://sputniknews.com/asia/20160909/1045135499/robots-india-bank.html

Obummer looks to be trying to raise some cash to keep things going until the election is over; Oil Markets Brace As U.S. Looks To Sell 100 Million Barrels From SPR | OilPrice.com

[Danny B]

Is Deutsche Bank the Next Lehman Brothers?Don't worry, this is just the start of the meltdown in sovereign debt.Credit Bubble Bulletin: Weekly Commentary: Reversals

Iconic Hedge Fund Perry Capital Loses 60% Of AUM As Investors Flee | Zero Hedge Ah yes,,, capital flight.


Yep, ZIRP is like a hand grenade in the punch bowl.
Draghi is pissing into the wind.
No kidding! This is about 5 years too late.

A comparison of debt vs presidents; http://www.24hgold.com/english/news-...n+Greyerz&mk=1
Here is a great graph showing that the FED funds rate rate is sinking at about the same rate as wages; https://northmantrader.files.wordpre...6/08/fred4.png

https://northmantrader.com/2016/09/07/time-to-get-real-part-i/

Your wages are back below 1973 levels; http://media.peakprosperity.com/imag...hing-great.jpg

http://www.peakprosperity.com/blog/101431/if-everythings-doing-so-great-how-come-i%E2%80%99m-not

"Hambone" wrote very good articles about this linkage; http://www.zerohedge.com/news/2016-0...-de-population
Here is a good graph showing who is buying treasuries..... nobody. http://econimica.blogspot.com/
The PTB is trying to maintain the status quo when the world is going through radical changes. The bankers are trying to enforce the maxim that all money is created by the private banking industry as debt and carrying an interest burden. They resist the idea of publicly created debt-free money. The upper loop is dismissive of the problems of the lower loop. BIG GOV doesn't give a rat's a$$ if you can afford to pay all the fines that they have laid on you. The PTB seem oblivious to the fact that the lower loop will take everything down when they go.
There are a LOT of people who will vote for Trump hoping that he blows the established powers to smithereens. They don't care where all the pieces land as long as the system is blown up.

[Danny B]

Visualizing The (Massive) Size Of The US National Debt | Zero Hedge

"Caterpillar has not seen a positive retail sales month in nearly 4 years " "Belgium's government announced it was considering legal action against Caterpillar over the U.S. heavy equipment maker's decision to close a manufacturing site and lay off more than 2,000 workers."
"Prime Minister Charles Michel told lawmakers Thursday that "we will take action against Caterpillar if necessary." According to AP, Michel described the expected closure of the Gosselies plant in the Wallonia region as "brutal, cruel and heartbreaking."
Belgium Threatens To Sue Caterpillar For "Brutal, Cruel And Heartbreaking" Decision To Fire 2,000 | Zero Hedge
Market forces.
Dell Fires 3000 US, Wants 5000 Visas For Foreign Workers Market forces.. The job goes to the lowest bidder.

"However, I have also warned that Social Security and Medicare go NEGATIVE next year in the United States, which of course mainstream media is not bothering to report for fear that would add fuel to the bonfire of political corruption." Wait a minute ! Half of our national debt needs to be re-funded real soon. Who is going to cough up the bucks?
"The Guardian [7] reported that Obamacare is nearing collapse. The entire structure was based upon the same scheme as Social Security that has been predicated upon exploiting one generation for the next. But with rising unemployment among the youth, and more than 30% of the youth remain living with their parents into their thirties now combined with the collapse in birth rates, this entire scheme is just a scheme that is unsustainable."

"But to get that type of reform we have to clean-house in Washington since 45% of public officials are lawyers compared to just 6% of the work force are lawyers. "
Martin Armstrong Explains Why "2017 Is The Threshold To Chaos"

Ron Paul explains the difference between martial law and financial martial law; https://www.youtube.com/watch?v=9yTWtm-mUJE

[Danny B]

The redemptions and freakouts are on the rise

Reportedly, the recent spell of tranquillity is coming to an end. Nobody can make a profit in times of great volatility so, they withdraw from markets.

http://www.talkmarkets.com/content/us-markets/friday-shock-larger-than-brexit-for-quants-bofa-expects-52-billion-in-near-term-selling-pressure?post=105917&widgetid=39

Nothing can be rolled over when"redemptions" are the order of the day.

Reportedly, OZ is facing a big problem; Australia 6 weeks from a housing collapse, US report warns - Business - NZ Herald News
Private companies have started to sell ZIRP bonds; Private-sector bonds boldly go where none has gone before

The freakouts are only just getting started.
Sorry, that decision was made years ago with TARP. Because of the status as reserve-currency, the American financial industry grew FAR too large for the underlying economy. Insane leverage was the wooden stake through it's heart in 2008. BUT, gigantic infusions of liquidity allowed it to stagger on. Ongoing infusions/transfusions are losing their effectiveness.
These are infusions of money, not actual wealth. Investment capital is being withdrawn from all sectors. The financial sector refused to shrink in2008. Now, it is going to take everything down.

[Danny B]

Oil, bonds and gold

Here are a couple of good articles that deserve a good read. Keep in mind that the "gold bugs" tend to slant their articles in favor of gold.
Gold and United States Imported Oil | The Deviant Investor
The article talks about the record low price for oil imports. Well,,, yes and no. The Bakken field is running dry.
America the beautiful has attacked and destroyed every State that tried to sell oil in other-than-dollars. This has caused the oil producers to band together to a certain extent. When Russia proved that it could stand up to the American military, this prompted the oil producers to look to the Sino-Russian alliance as protection from Pox Americana. They WILL cut off oil-for-credit.

Most of the world desperately needs oil for transportation. The low-cost producers can produce oil for $ 6--$12 a bbl. The lower 49 States are out of cheap oil. Even if we were to pump fracking oil, it would cost 10--15 times the cost of the low-cost producers. The economy can't possibly be competitive at that price. We couldn't sell our exports. All of this affects the value of the dollar.
The Coming Crash Will Create An Economic Tsunami, Skyrocketing Gold And Usher In A Whole New World | King World News

The feces-for-brains socialists at Harvard have elevated their their spokesman to infallibility. The giant circle-jerk in academia has everyone in academia convinced that they are right. NO MATTER that they didn't see the 2008 crash coming. NO MATTER that the Harvard endowment fund lost $ billions. They are STILL right. What a bunch of quacks.
Jim Grant Rejects Rogoff's "Curse Of Cash", Warns "Government Wants To Control Your Money" | Zero Hedge

The jobs have gone to our low-wage competitors. No money,,, our birth rate is falling. Even the young who are around can't find entry-level jobs. They try to survive. https://www.theguardian.com/us-news/...r-food-poverty
This is also true in Europe. We have cast off the younger generation.

[Danny B]

Oil and ZIRP drag down everything

The sale of oil generates so much profit that it corrupts everything; https://hendersonlefthook.wordpress....nal-banksters/
BUT, as the cost of the "master resource" goes up, more and more people try to find a "workaround.


What about the financial damage to the oil producers?

It's not just oil. Nuke power just doesn't appear profitable. That's why the Hinkley Point plant probably won't be built. It's not the only one. US Nuclear Plant up for Sale at Fraction of Cost
Solar and wind are eating up the oil industry. ZIRP is eating up the financial industry;

"After weeks of placid markets, the move to a chase for yield became a race to the exits, ending in a spectacular market rout. "
Jefferies: Stock market analysis and what not to buy - Business Insider
Oil stays crashed. The bankruptcies pile up. The banks bleed cash. ZIRP bleeds everything else.
The murder rate goes up; DOJ Study Finds "Real And Nearly Unprecedented" Spike In Homicides Around U.S. | Zero HedgeThe largest wealth transfer in history has already begun

[Danny B]

The Untold Story of 9/11: Bailing Out Alan Greenspan’s Legacy

[Danny B]

Volatility feedback..social security..Forward progress in our collective suicide

" the answer, as we have previously detailed - is the collapse in so-called "risk-parity" funds that force leveraged long positions in equity and bond markets to be unwound en masse."
The Last Time This Happened, Stocks Crashed | Zero HedgeWhen the cows come home.
Signs of Desperation - KUNSTLER

Chrisrine LaGarde, head of the IMF has come out with a STARK warning. She criticises globalization in that it causes a "groundswell of discontent" . What she CAN'T say is, world revolution.
IMF's Lagarde Slams Globalization, Warns Of A "Groundswell Of Discontent" | Zero Hedge

Sell your shares. The miners will be nationalized.
Maybe he isn't an "oracle" after all.

[Danny B]

Why the Fed Can’t Hold the Stock Market Together Much Longer | Casey Research Nothing new.

"The only question is what form the default will take. " "All that happened since the 2008 crisis is that government debt has been used to substitute for some private debt, while private debt has continued to grow on its own. "
"There's nothing inherently wrong with debt subject to two conditions: The debt is used for productive purposes and your capacity to repay the debt is growing faster than the debt itself."
"Unfortunately, governments have failed both conditions. Much of the money borrowed on sovereign debt markets since 2008 has been wasted. The US used most of its $800 billion "stimulus" plan in 2009 to subsidize government and union salaries."

https://www.bullionvault.com/gold-news/debt-default-091420161

So, how long can GOV keep this going?

Not much going on in the stock market. Volatility is going up though. More important is the currency market.
1. Globally, the stock market is about $69 trillion in size, trading about $191 billion in shares per day.

2. The bond markets are well north of $140 trillion, and trade about $700 billion in volume per day,

3. The currency markets are unmeasured as every currency trade is ultimately a pairs trade (meaning to buy one currency you have to sell another). However, we do know that the currency markets trade $5.3 trillion in volume per day.
Put another way, the currency markets trade over 26 times more volume than the global stock market every single day. As such they are the most liquid, sensitive markets in the world.

So major changes in the markets first hit in the currency markets. And the key item to watch is the $USD.
The US Dollar is coiling tighter and tighter into a triangle pattern. If we get a breakout to the upside, the next target is 97.

Historically, spikes to this level have resulted in a stock market meltdown soon after.
It's not that the dollar is getting stronger. ALL the CBs printed in unison with the FED being the most restrained. The dollar is only relatively stronger. Draghi and Kuroda are ahead of Yellen in the race to the bottom.
The Smartest Market in the World Isn?t Buying the Bounce | Zero Hedge

If Yellen raises the rates, the strong dollar attracts huge capital inflows looking for return. BUT, the stock market blows.
Ignore the stock market and watch the currency market.

Credit card debt is unsecured.
Well, those 3 million displaced workers won't be able to buy cars.

Armstrong wrote about the loss of confidence in GOV AND banks. The banks are hard at work to make this come true; Sorry You Can't Have Your Gold Bullion

Armstrong also said that the "slingshot move" in gold should be accomplished by January. A slingshot move up in gold is a (mostly) reciprocal move down in currency.