Economic pressures

[Danny B]

Trump, the big spender,,, or not

Really nothing much to report.
Trump plans to have a BIG stimulus. McConnell says that it isn't going to happen. After increasing the debt $ 3.6 trillion in ONE year for the Kenyan clown, all of a sudden, the House gets a bout of fiscal sanity.
Trumpxuberance? Until It?s Not - KUNSTLER

The Narrative Changes: Republicans "Pour Cold Water" On Trump's Massive Stimulus, Will Block Tax Cuts | Zero Hedge

"There is about $100 trillion of debt in the US carried by governments and private sector borrowers."
Yellen seems determined to raise rates at the next meeting of the FOMC. That would smoke several sectors of the economy.
The financial sector is slowly coming to the realization that nobody can pay back the existing paper. Default rates just keep climbing. "They" are coming to the slow realization that debt-money can never pay back the debts.
Global aggregate wages just keep sinking to where few people earn more than a subsistence wage.
U.S. debt is growing faster than exponentially. The banks create "money" faster and faster to service the debts that the working people can not service. The debt can be expected to compound until something blows.
At this late stage, even helicopter money can NOT save the system.

The banks can't actually run out of money. After the South American crash, the banks were insolvent. The FED told them to just pretend until they had recouped their losses. It worked.
This is a different story. Asset holders can run out of money if they get too big of a margin call.

[Danny B]

https://ccc4mr.wordpress.com/2015/02...ng-after-1974/

Their idea of stability is a fast rise in quantity and a fall in value. http://www.energeticforum.com/redire...%2Ffedebt1.png

In 2012, a 12 year old girl made the rounds talking about what a screw-job the Canadian Central Banks is doing.

https://www.youtube.com/watch?v=Bx5Sc3vWefE

Everybody thought that she was great. Did they follow through and change the law? Nope.

The State of New Jersey spends $ 1,102,463 to maintain one mile of 2-lane highway for one year.
The State of Arkansas spends $ 36,212 to maintain one mile of 2-lane highway for one year.
Between Mob rule and feather-bedding in GOV jobs, the State is going broke. They recently had to shut down all State construction projects.
They need money, "Pension Ponzi Squared: New Jersey Wants To Sell Debt To Its Own Insolvent Funds"
Pension Ponzi Squared: New Jersey Wants To Sell Debt To Its Own Insolvent Funds | Zero Hedge

Robert Muggah has come up with a set of criteria for determining which cities are like to become very dangerous. 25 Cities On The Brink Of Disaster: "Don't Be Here When Things Get Violent, Unsafe, & Fragile" | Zero Hedge



Yep, they go together like peanut butter and jelly.

Like bread and butter.
The pundits are cheering the rise in the price of oil, etc. What they seem to forget is; as the price of stuff goes up, less will be sold. With static wages and price inflation, we get stagflation. After 8+ years of trying to get high currency&price inflation to inflate away the pain of repaying the debt, it is a complete failure.
The monetary inflation in the upper loop slowly bleeds over into the lower loop and raises prices. We cut back to just essentials.

They inflate prices and interest rates,,,, we cut back purchasing.
Our debt is rising faster than exponentially. The cheering will come to an end eventually.

[Ruphus]

If you can sell your house or your extra used car right now and make a decent profit, you should go ahead and sell NOW. As interest rates creep up there will be deflation in asset pricing. I bought my fisrt house when mortgage rates were 6.25%. I "stole" it at $89000. Now rates are 3.35-4% and I can sell it for $183000. Since wages have not increased by 100% in the last 15 years, the masses used low borrowing rates as a means to better their lives. Now as rates rise again by 100% or more, no one will be able to afford the monthly payments on $183000. My gains will be eaten away unless I sell now, or I keep it and sell it for $89000 once the rates normalize at 6.5%.

https://youtu.be/esAr0qGu2S4

[Danny B]

Capital flight and the unwinding of the debt super-cycle

The "feed-me" index; Are You "Living In a Death Spiral"? These 6 States Will Collapse During the Next Recession
Three days ago; Things are coming fast and furious. GOV is always 5 steps behind the curve.

A $ 900 billion outflow from China has to go somewhere.
Fed Fallout Escalates: China Bond Market Crashes Most On Record, Yuan Plunges | Zero Hedge

Globalism sounded great to the finance industry. It could shift capital to any sector that appeared to offer a good return.
I was on a glass-bottom boat off of the Yucatan peninsula when we started to sink. A 57 ft. Striker cruiser was sent out to pick us up. When somebody spotted some whales off to the starboard side, everybody ran over to look at them. The skipper couldn't control the boat with tons of people on just one side.

The same thing is happening with the U.S. dollar. Everybody is rushing into the perceived safety of the dollar. As the dollar rises, more people perceive it to be safe.
Draghi prints more Euros,,,, the dollar goes up (less down).
There is also a hidden factor here. Investment will naturally flow to the GOV/jurisdiction that has the strongest property laws. Communist States don't have a good record of property rights. Socialist States always seem to need more taxes. Money is flowing out of Venezuela because Maduro has started grabbing private property.
China is increasing "social spending" at 15% a year. Capital flight last year is reckoned at $ 900 billion. Capital just doesn't stick around in a given State if the people in that State have low wages.

Capital is necessary to support productive industry. The function of Money is to facilitate trade. These basic ideas have been subverted in the name of unlimited profit. The exorbitant money creation from the CBs flowed into mal-investment all in the name of saving a bloated banking system. This rotted carcass that is about to explode is called a "debt super-cycle".

[Danny B]

General BS... unemployment BS

One can sure get lost trying to keep up on economic news.
Labor Department's Bureau of Labor Statistics reported on Friday.

When President Obama took office in January 2009, 80,529,000 Americans were not participating in the labor force; since then, 14,179,000 Americans have left the workforce "
"By almost every economic measure, America is better off than when I came here at the beginning of my presidency," President Obama told the people of Elkhart, Indiana three days ago. "We cut unemployment in half, years before a lot of economists thought we would."
Record 94,708,000 Americans Not in Labor Force; Participation Rate Drops in May
The BS runs deep, smelly and wide. This is true for most reported aspects of the economy.

"The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994."
Alternate Unemployment Charts
GOV knows exactly what the unemployment rate is. They just adjusted their methodology with rose-colored glasses.
Everything that I look at on the financial pages today, is irrelevant or false or old news.

[Danny B]

Italian banks,, cycles,,, loaning money to non-producers

https://www.nestmann.com/if-europe-goes-down-we-go-with-it?inf_contact_key=6aef5da3aabcd76f93215e6b019f32f85d803854cd01749a5a07c10025be2cd5

The crooked bankers made huge liar loans to irresponsible people. They should have taken loses. These bad loans were converted to PUBLIC debts and piled on the backs of taxpayers. Over 90% of the bailout money sent to Greece is just handed to the banks. The ECB prints tons of new money to keep the party going. They buy bank bonds with it.
The European Union is like a person with his leg cut off who is receiving a transfusion at the same time.

The ECB is desperate to hold off a bail-in that would kill ALL confidence.
Major Economic Warning Sign: The Euro Is Heading For Parity With The U.S. Dollar

This is an excellent article on Collateral, trust and property rights https://capitalistexploits.at/2016/1...ateral-damage/
An excellent article on cycles; https://matasii.com/cycles-the-end-o...t-super-cycle/
Africa can't collect any collateral because their birth rate is too high

When did he figure that out?
Merkel can be credited with CAUSING it. Her insistence that there could be no debt forgiveness for Greek banks is what started the ball rolling.
Yellen says 2 more rate hikes in 2017
Yep, the money is all stuck in the upper loop.
Credit-money moves from the upper loop to the lower loop when producers take out loans. When speculators take out loans, the "money" just sloshes around in the system. Finance is there to facilitate production & consumption. If it just facilitates more finance, it gets eaten up by price inflation and defaults.
Finance is so desperate to push credit that it pushes credit to non-producers. They can't pay it back. In the case of GOV, it prints new money to pay off old debts. GOV lies about the number of unemployed because it doesn't want finance to be aware of how few actual producers there are in the economy.

[Danny B]

Trump Talked, the Fed Listened: Let’s Shrink the Balance Sheet, Bullard Says | Wolf Street
Unlike bonds, stocks depend on actual consumption.



ONE WEEK; "Global bonds lost over $430 billion in market value this week (Yellen hawkishness and China bond carnage) but stocks lost even more ($525 billion)" Global Debt, Equity Markets Lose $1 Trillion In Value As Hawkish Fed Spooks Traders | Zero Hedge

Total Credit Market Debt (TCMD)https://www.peakprosperity.com/blog/...ney-under-fire

Here is an interesting but, Flawed article from Steve Keen. Debt Nation: The Problem, the Solutionsunlimited "free lunch" for the parasites.

"However, this system only works if there is a limit on the amount of debt that banks and other financial actors can push into the system, as under a gold standard. If not, the incentive is for lenders to lend ever more, hoping to get bailed out if a crisis hits. Lend without limit,,, what could go wrong?The bankers and the State are working on inflation with little success.
"their money printing ended up in the hands of financial actors, who bought a lot of stocks, rather than real people, who would repay debt and buy goods and services."

The State would print up debt money and send it to everybody. "Private sector debt would decline through direct paybacks and inflation. After households and firms have found their desired level of debt, the re-leveraging process can begin again, and the economy can grow again."
This wouldn't address the main causes of the debt bubble.

The fracture of the nuclear family means that retirees must depend on their savings and pension. 37% of families have no retirement savings at all.
100 CEOs Have as Much Retirement Savings as 116 Million Americans | Common Dreams | Breaking News & Views for the Progressive Community

[Danny B]

China can't have it both ways.

The only current financial news of any import is from China. China has cheapened the Yuan to hold on to market share of exports. This comes with a price as the Chinese try to get out of the falling currency.
"China is eager to mask the true extent of reserve outflows, perhaps in an attempt to not precipitate the feedback loop of even further panicked selling of Yuan and even more outflows, and thus, even more reserve depletion. "
China's True FX Outflows Since August 2015 Are $1.1 Trillion, Double The Official Number | Zero Hedge


Because the State is cheapening the Yuan, the Chinese put their money into property. They have about 80 million empty units of all types. 64 million housing units.
The Chinese State does NOT sell state bonds to be used as a store of value. Excess capital flows into property to the point that the average worker can NOT afford to buy.
The more that the Chinese State tries to limit capital outflows; the more out-of-reach housing becomes. Didn't somebody think of this beforehand? China is also trying to limit purchase of gold because that also causes capital outflows.


China is trying to keep cash inside it's borders; The Real Reason China Is ?Dumping? U.S. Treasuries

Several central banks are trying to do away with cash so that there is no escape from their pillaging.
Whistleblower Andrew Maguire Just Exposed The Sinister Reason For The Surgical Attack In The Gold Market As Shocking Amount Of Gold Flows Into China & India | King World News Great Britain joins the growing number of States like India that are trying to ream everybody. https://www.youtube.com/watch?v=5ms19Vgxilg

What's true in China is also true in America. LOTS of hot money has flowed into real estate because it is perceived as a store-of-value.

http://ei.marketwatch.com//Multimedia/2016/12/17/Photos/NS/MW-FC271_americ_20161217174602_NS.jpg?uuid=965287c4-c4aa-11e6-80cf-001cc448aede

More and more people are being priced out of home ownership.

http://www.marketwatch.com/story/heres-how-americans-spent-their-money-in-the-last-75-years-2016-12-17

[Danny B]

Oil, value vs margin.... peak wages

Here is a graph of central bank paper assets; https://srsroccoreport.com/wp-conten...lnas-Price.png
"As a reminder, the peak and decline of global Central Bank reserves took place right at the exact same time the price of U.S. oil fell below $100. Again, this is no coincidence."
"I am completely surprised by the lack of wisdom in the Mainstream and Alternative media analyst community. While many Mainstream analysts are probably paid to put out positive financial or economic propaganda, a good portion of the alternative media has no clue about the key factor that is driving the world straight over the cliff."

"Thus, 99% of global investors park their funds into assets that are propped up by the Fed and Central Banks:"
"As I stated in my article, The Peak & Decline Of International Reserves Warns Of Massive Asset Deflation Ahead, the global economy has already hit the wall and is now imploding."
"In that article, I posted this chart showing the falling U.S. oil price that coincided with the decline of International Reserves:"
It's a very interesting chart; https://srsroccoreport.com/wp-conten...e-Aug-2014.png

Expensive oil has less profit potential than cheap oil. His thesis is that; Much of the financial system is built around the value of oil. As the price of oil rises, it's actual value falls because the profit potential falls.

https://srsroccoreport.com/the-implosion-of-global-markets-has-started-cant-be-stopped/

"This chart from the World Bank site, shows that Global GDP fell from $78.4 trillion in 2014 to $73.9 trillion in 2015. This is a much different figure than the 3.1% Global GDP growth figure reported by the IMF:"
GDP is a very fuzzy measurement of an economy. Just the same, we are sliding towards a global-mean wage and consumption for non-essentials is falling

It's a funny inverse relation ship that is partly dictated by our wages; http://www.nytimes.com/2016/10/29/bu...ound.html?_r=0
Exxon has lost a LOT of money. With Tillerson coming into power, you can bet that economic sanctions on Russia will come to an abrupt end.

https://www.bloomberg.com/news/articles/2016-04-26/exxon-mobil-loses-top-credit-rating-it-held-since-depression

https://realinvestmentadvice.com/dow-20000-12-9-16/

Gravity will win in the end.

What a GREAT idea!
An UPGRADE,,, why not?
Here is a transcript of an interview with Jim Willie; https://www.sprottmoney.com/Blog/ask...mber-2016.html

The financial sector crushed our wages and sucked out all the money. BUT, it is debt money that they are holding. This financial bubble is full of fart gas and nobody wants to pop it.

[Danny B]

failing hyper-inflation...India crashing

A corporation has no brain, heart, conscience, nor soul. It takes the shortest, logical path to riches; Pharma Execs Arrested in Conspiracy to Create Opioid Addicts for Profit : Waking Times

The State ALWAYS tries to hyper-inflate away it's debts. The CB prints with wild abandon to cheapen the currency. The CBs printed in unison so that investment would NOT flee to a strong currency. The CBs printed in unison to both cheapen their currency AND hold on to export advantage.
The CBs are now discovering that they can't inflate away the debt if everybody is doing the same.
Longboard Funds: The Path Of Least Resistance

This should have been obvious ahead of time to the monetary wonks. Here is the conundrum. Zimbabwe and Venezuela are hyper-inflating their currencies by PRINTING money in big bills. Other States that are trying to go to a cashless society are getting rid of big bills.
ZIM showed the way for achieving hyper-inflation. It is also a question of the egg-and-the-chicken.

BUT, India has severe deflation from withdrawing their big bills. This is part 5 of a series of articles on India by an Indian. "Demonetization Has Achieved Nothing" - India's Rapidly Plunging Toward A Police State | Zero Hedge
The articles go into great detail about the problems caused by removing the bills.
Is India The Next Venezuela? | Zero Hedge
I suspect that the PTB have decided that India is due for a population reduction. It was standard operating procedure under British rule.
Then and Now: British Imperial Policy Means Famine

[Danny B]

So, will it be bail-out OR bail-in?



The Italian problem has spread to Spain; European Banking Bloodbath Spreads To Spain After Italy Fires ?20 Billion "Bazooka" At ?360 Billion Problem | Zero Hedge
This is a VERY interesting plan.
"a border tax adjustment would be equivalent to an across the board import tariff of 20% and an export subsidy of 12%. Keeping all else constant and applying standard trade elasticity impact parameters to an average of the two estimates results in a more than 2% drop in the trade deficit equivalent to more than 400bn USD, or equivalently, an almost complete closing of the US trade deficit."

"Deutsche Bank concludes that combined with potential changes to the treatment of unrepatriated earnings, "the proposed changes to the US corporate tax code could be one of the most important shifts in US tax and international trade policy in a generation."
Why Trump's "Border Tax Proposal" Is The "Most Important Thing Nobody Is Talking About" | Zero Hedge

If you have LOTS of time here is a comprehensive read on Money and Power. http://www.rense.com/general96/Money&Power.pdf

[Danny B]

U.S. economic confidence.. bring on the muppets...China again... Italy again

The border tax adjustment would probably run counter to the World Trade Organization. U.S. Economic Confidence Surges To The Highest Level That Gallup Has Ever Recorded
Sadly, this is going to be short-lived. Here is an article that lays out ALL the fundamentals. https://www.theburningplatform.com/2...s-way-comes-2/Playing Whack-A-Mole In Hell: China Battles To Avoid A Meltdown - iShares China Large-Cap ETF (NYSEARCA:FXI) | Seeking Alphahttp://www.caseyresearch.com/article...-is-inevitable

Here is a good article on the cost-benefit ration of big infrastructure projects. It essentially shows that infrastructure projects can not be made with debt-money. They add to the debt load without adding more to productivity than their cost .

https://thewire.in/88239/china-economic-mirace-debt/

CALPERS voted to continue to assume that it will receive 7% return on it's investments. http://www.zerohedge.com/news/2016-1...-discount-rate
"stocks are currently valued to deliver nominal returns of 0% (negative real returns) over the next twelve years, with the high likelihood of a 30% to 50% crash in the foreseeable future."
The alternative is to reduce benefits and/or demand more tax money from Sacramento.

[Danny B]

The upsetting of the chessboard

In 1985, Martin Armstrong and his program predicted that there would be a HUGE change in the confidence model 30 years in the future on 2015.75 On that very day, Russia proved that it can stand up against American military. Here is what else he has to say, "This, unfortunately, is setting the stage for the breakup of the United States going into 2036."

https://www.armstrongeconomics.com/international-news/north_america/2016-u-s-presidential-election/the-real-story-at-new-hampshire-college/

https://sputniknews.com/europe/20161...rty-exclusion/

Yahoo,, ever the BSer.


They already bring in the terrorists and put them on the dole. There is an easy to stop terrorism financing.

[Danny B]

Trump vs the FED

Obummer et al worked hard to hyper inflate the dollar and make it easy to pay off the debt. He and his cronies are all equally stupid. You can't hyper inflate a currency just by pumping money into the upper loop. The idiots were clear years ago about the attempted hyper-inflation; https://www.youtube.com/watch?v=ILKolTI1s50
Everything that he did was a failure except for the things that he did to drag America down.

The FED was given great independence by custom, NOT by law. It has no legal protection but, must rely on control over the politicians. The FED has now gone to war against Trump. The whole crash is to be thrown into the lap of Trump and company. This is VERY dangerous. There is NOTHING to stop Trump from just closing their doors and letting the treasury take over.
Lest you think that he hasn't the balls to do it, here is a quote from him. "Trump tells the Central Intelligence Agency it's not indispensable"
Does that sound like somebody who is afraid of the FED?
Federal Reserve Initiates End Game As Trump Heads To White House | Zero HedgePressTV-Israel sole beneficiary of Mideast wars: Iran

Now, Tel Aviv is starting new rumblings; Jerusalem Post: There will be a war, a big war - Fort Russ
Pox Americana has been left out of the Syria talks. Israel will have no influence.
Italy is going to screw as many people as possible to try to save their banks; Italy set for protests after government coughs up bank bailout costing each family £700 | World | News | Daily Express
Austerity never worked. Now, they cut all bond earnings and everyone's interest income,,,, and, wonder why it didn't fix the economy.
Think "mismanagement" with a capital "M"
Better stock up on junk from WalMart.

[Danny B]

non-performing-loansArticle: The Italian Banking Crisis: No Free Lunch -- Or Is There? | OpEdNews

It is an excellent article and I can find no fault with her reasoning.
" All of which helps to explain why banks and their representatives at the IMF and the ECB are frantically demanding a no-expenses-spared taxpayer-funded rescue of Italy's banking system.

It could also explain why Goldman Sachs took it upon itself to propose a way out of this dilemma: instead of buying Italian government bonds in their quantitative easing program, the ECB and the central bank of Italy could buy the insolvent banks' nonperforming loans.

As observed in a July 2016 article in The Financial Times titled "Goldman: Italy's Bank Saga -- Not Such a Big Deal," Italy's NPLs then stood at 210bn, and the ECB was buying 120bn per year of outstanding Italian government bonds as part of its quantitative easing (QE) scheme. The author quoted Goldman's Francesco Garzarelli, who said, "by the time QE is over -- not sooner than end 2017, on our baseline scenario -- around a fifth of Italy's public debt will be sitting on the Bank of Italy's balance sheet." Bringing the entire net stock of bad loans onto the government's balance sheet, he said, would be equivalent to just nine months' worth of Italian government bond purchases by the ECB."

This would shuffle the QE money to buying NPLs instead of bonds. A very good solution.

Tons of people took out variable rate loans from Spanish banks. The banks failed to disclose that the rates would only vary UP,,, never down. The courts have decided against the banks and the banks want off the hook because they would lose money. We'll see.
Nightmare Before Christmas for Spanish Banks – InvestmentWatch

(Sberbank) As of 2014 it was the largest bank in Russia and Eastern Europe, and the third largest in Europe, As of 2015 the bank had about 16,500 offices with over 250,000 employees.[24] According to own estimates, the bank had over 137 million retail clients and over 1.1 million corporate clients in its 22 countries of presence. Wiki.
Italy could very well take a hint from Sberbank. Their loans are approved by AI.