Economic pressures

[Danny B]

The CBs could pump liquidity into the markets but, they couldn't actually generate earnings. Only a well-off middle class can do that.

http://www.alhambrapartners.com/2017/02/03/way-past-humpty-dumpty/

Here is a chart of profit margins; https://mishgea.files.wordpress.com/...ng?w=803&h=846
This is the margin ABOVE to 10 year Treasury benchmark. The FED doesn't want all the wet-ink money to flow to GOV bonds. It MUST keep bond yield low so that some money will flow into the private sector. If bond yield goes up, that creates a danger of sucking all the money out of the private sector. Treasury bonds are considered zero risk so, Yellen can suck the liquidity out of the markets at any time.

https://mishtalk.com/2017/02/05/equity-valuations-an-everything-bubble-and-policy-trumpacho/

Investors are seeing falling returns for increasing risk.
TINA to the rescue. The CBs were created solely for the speculator class. All the CBs ,under the discipline of the B.I.S, try to inflate equally,,, or round-robin. This presents the investors with, there is no alternative.
This is the main reason that gold has to be suppressed.
Earnings keep falling but, investors can't leave the casino.

It almost seems like deficits don't matter. Japan is on it's way to find out what the absolute limits are. http://themacrotourist.com/images/20...verFeb0317.jpg
IT'S FINALLY HAPPENING | THE MACROTOURIST

"2008 financial crisis, which cost 8.7 million people their jobs and may have destroyed as much as 45 percent of the world's wealth."

http://www.rollingstone.com/politics/features/extreme-vetting-but-not-for-banks-w464966

That was ephemeral wealth of the speculator class. Just wait for next time.

The PTB would very much like to control the markets. BUT, they have to respond to market actions that are getting ever-faster; http://www.talkmarkets.com/content/u...ry?post=121117

Here is an article where Business Insider lists ALL the things that have recently deflated. They now claim that deflation has ended. They sing the praises of (price) inflation. There is not one effing mention of wage deflation. http://www.businessinsider.com/defla...-the-us-2017-2
When it comes to deflation,,, you ain't seen nothing yet.

No 8hit Sherlock. They create a mountain of debt notes and wonder why nobody is creating more tangible wealth.

BUT, this isn't working any more.

Britain is still following the Kalergi plan.
"Half of new homes built in Britain the next five years will go to migrants
Britain will need to accommodate 243,000 new households each year
Net *migration accounts for an estimated 45 per cent of this growth
109,000 extra homes will be needed every year by migrants and their families

http://www.dailymail.co.uk/news/article-4192506/UK-needs-new-home-five-minutes-house-migrants.html

As long as they are immigrants.

[Danny B]

Charles Hugh Smith and John Hussman

Under the present arrangement, the stock market and the bond market have no purpose other than to support speculators, Marxists and war-mongers. The crashes just get bigger and closer together. These three groups will slide down the cliff screaming, kicking and trying to grab anything within reach to try to stop the slide. They have NOTHING to offer to the productive economy. They are redundant to the capitalist system.

Smith; "If you doubt the inevitability of a system implosion/re-set, please read Is America In A Bubble (And Can It Ever Return To "Normal")? This brief essay presents charts that reveal a sobering economic reality: America is now dependent on multiple asset bubbles never popping--something history suggests is not possible."
"The charts below describe the key dynamics driving a system re-set. Earned income (wages) as a share of GDP has been falling for decades: this means labor is receiving a diminishing share of economic growth. Since costs and debt continue rising while incomes are declining or stagnating, this asymmetry eventually leads to insolvency."

" What happens when the bubbles pop, despite massive central bank/state interventions? The entire socio-political/financial system goes through a "system re-set" in which all the fantasy-based valuations, political denials, false promises and fraudulent claims collapse in a heap.
In a crisis, the privileged Elites will change the rules in a desperate attempt to expropriate the income and wealth of the bottom 99.5% to preserve their own power."
"1. They will expropriate what is easy to expropriate: financial assets in centralized institutions the state controls: banks, brokerage accounts, insurance policies, etc."
" So what's difficult to expropriate? I present some answers in my books An Unconventional Guide to Investing in Troubled Times and Get a Job, Build a Real Career and Defy a Bewildering Economy.
It's impossible to expropriate one's skills, experience and social capital. These are intangible forms of capital and so they cannot be confiscated like gold, currency, land, etc."

"The main takeaway is this: your skills, knowledge and social capital will emerge unscathed on the other side of the re-set wormhole. Land and real property you own free and clear (no debt) is likely to remain in your possession, as long as you can pay soaring taxes/junk fees during the crisis phase. Your financial assets held in centrally controlled institutions will not make it through unscathed; they are simply too easy for central authorities to expropriate."
oftwominds-Charles Hugh Smith: Which Assets Are Most Likely to Survive the Inevitable "System Re-Set"?
So the suddenly unemployed parasites will have to depend on their job skills.

"John Hussman was been warning us for years that QE/etc has pulled all the value of future returns into present asset prices. Today's investor has to make a choice: either buy now and expect no/low returns for the next 10 years; or wait for a price correction in the markets and then buy at low valuations to get appreciation from there."
"Well, not that great. Wolf Richter shows that the total aggregate revenues for the 30 companies that make up this index was actually lower in 2016 than in every year from 2011 onwards:"
"The latest Case-Shiller home price index report shows that US housing prices have, in aggregate, for the first time exceeded their previous peak seen right before the 2007 collapse:"

"dumb money" betting on a continued rally and the "smart money" anticipating a decline: " http://www.zerohedge.com/sites/defau...mb%20money.jpg

https://www.peakprosperity.com/blog/106922/murderous-complacency

Bill Gross; Bill Gross: Central bank 'financial methadone' is 'unhealthy'

[Danny B]

https://www.dailyreckoning.com.au/chinas-miracle-economy-is-nothing-more-than-fools-gold/2017/02/06/

The economic textbooks were only marginally representative of the actual economy, specifically the lower loop. The textbooks will have to be completely re-written to TRY to account for birth-control, electronic money, ultra-cheap shipping, automation, resource depletion, renewable power, the demographic crash, et cetera.
The textbooks are primarily applicable to the lower loop of the economy. The PTB are striving mightily to preserve the upper loop using the manual for the lower loop. Finance was created to support and facilitate the productive sector.
Once the cart was put before the horse, things no longer worked. The parasitic sectors have no desire to relinquish their stranglehold on the productive sector so, it is going to be a LONG road down.

The parasitic sector being mostly comprised of bureaucrats and bankers are especially susceptible to advances in automation.
Middle class jobs at risk of becoming automated says study | Daily Mail Online
The Eurozone apparatus is like a giant parasitic fungus growing all over Europe. When the sovereign bond markets crash, the bureaucrats will suddenly get a new religion. They will decry automation.

[Danny B]

Debt-pocalypse Beckons As US Consumer Bankruptcies Do Something They Haven't Done In 7 Years | Zero HedgeWhen the Money Supply Dries Up | International Man

[Danny B]

Social costs

The corporatocracy is consumed with balance sheets, margins and profits. It has no regard for people whatsoever. It may have legal "personhood" but, that is as far as it goes. Socialism is a plan for putting people way ahead of profits. Japan is a case-study of what happens when you put profits way ahead of people. The people die out and the profits leave. Without people, commerce just fades away. The corporatocracy is dancing around with trade agreements that would further impoverish the people. The corporate structure is ignorant of reproduction.
The financial system is about 99% incompatible with a shrinking population BUT, nobody told the corporations this. The bankers and corporations have sucked all the money out of the economy. Did they somehow think that they could crash our wages and still grow their profits? They did indeed grow their profits but, this is analogous to starving the goose that lays the golden eggs.
The middle class spent itself down and then, maxed out their credit.

We are debt-saturated and the bankers are counting on us repaying a few $ trillion of liar-loans. FED GOV holds about $ 1.3 trillion of student debt loans that are defaulting at over 40%. The CBs rescued the bankers with a fresh $ 150 trillion worldwide. Since commerce and confidence had died, most of this money had gone into mal-investemnt. But, mal-investments need constant

https://www.bloomberg.com/features/2017-new-unemployment/

https://psmag.com/radical-efforts-to-end-homelessness-old-sick-and-on-the-street-80ea458ea7ee#.qotva5yt0

"While the overall murder rate for the nation should end up increasing about 8% year-over-year, the surge within U.S. cities is absolutely staggering. Chicago suffered a 59% increase in homicides during 2016. Murders were up 56% in Memphis, 61% in San Antonio, 44% in Louisville, 36% in Phoenix and 31% in Las Vegas.
There were also 44,193 suicides in the U.S. in 2015"
"with the percent increase in suicides Yes but, doctor caused deaths are the third leading cause of death.
"American blue and white collar workers have good reason to fear that globalization will result in the slow extinction of the middle class; setting the United States on a dystopic course where a small group of wealthy elite reign over a large class of workers without benefits, pensions, job security or a living wage."

"And it is the carnage of the middle class that has abetted the dissolution of the American family, which in turn as led to the surge in homicides, suicides and drug overdoses in the United States.

Washington and media elites have failed to listen to the forgotten man for decades. Normalizing interest rates and enforcing fair trade agreements are absolutely mandatory for a middle class renaissance to take place. "
Sadly, it just isn't going to happen. Once confidence is lost, it takes decaeds to re kindle.

http://www.24hgold.com/english/news-gold-silver-carnage-of-the-middle-class.aspx?article=10341604386H11690&redirect=false&contributor=Michael+Pento&mk=1

[Danny B]

Everyone is losing money and trying to make up the difference with the printing press

The economy is rushing headlong into automation and artificial intelligence. Society has NO MEANS for coping with this. The corporatocracy continues to double-down on practices that reduce the purchasing power of it's customer base.
"It would be difficult to explain away such a pattern of conduct as merely the side effects of becoming a prevailing behemoth. More to the point, the mentality that allows and encourages such behavior is a fundamental component that invigorates transgressions against ethical business practices. The net effects upon society, encourages the corporatist mindset to consolidate their state sponsor cronyism. "
Destructive Centralization and the GE Corporatist Culture
This cronyism, fascism by any other name, is just an attempt by corporations to recoup / maintain profit margins with a shotgun marriage to the State. Their profits were reduced at the same time that the corporatocracy reduced the wages of their customers.
The linkage is impossible to miss unless you turn a blind eye to the problem. BUT, a corporation has NO eyes, nor brain.

The 8astard offspring of this shotgun marriage is a crashing economy. The ugly duo are trying to rescue everything bad with the printing press. Thanks to the efforts of the duo, the consumer can't consume. The ongoing production / destruction provided by the war industries isn't enough to make a profitable difference.
"COPYRIGHT 2004-2017, RONALD L. ROSEN 2Like it or not, read it and weep, every bear market since the Federal Reserve Bank began in 1913 has collapsed and bottomed beneath the green shaded area on this chart. A repeat performance means that the D. J. I. A. will collapse to below the low of 6,470"

http://www.321gold.com/editorials/rosen/rosen020617.pdf

The FED serially gooses the economy to provide liquidity for war-mongers, Marxists and speculators. This is nothing new. With the onset of a global mean wage, the printing press is enlisted to do what the fruits of the enslavement of the working man are no longer able to afford.

The stock market is going up and up but, this is just a number. It can't possibly represent true wealth if the economy is crashing concurrently.

https://www.goldbroker.com/news/gold-reveals-illusory-gains-stocks-1082

There is a worldwide push for socialism as a cure for the "evils" of automation. The lefties see diminishing job niches. They are rabidly trying to get on the free-money train. 92% of Berlin left-wing activists live with their parents | Daily Mail Online

Suicide and murder rates are WAY up. The cities are becoming less viable. They seem to breed a dependency class. The police-state is running amuck trying to deal with the crime and a populace that has no stake in society.

https://courthousenews.com/man-says-911-call-triggered-unjustified-shooting/

Notice that there is NO mention that the numbers of the China workforce are crashing.Right, just like Japan, China tries to grow their economy at the same time that it's productive class is shrinking. Ignore the demographic crash and maybe it will go away.Rock the boat and you will see just how fast the water comes in over the sides. ???? To the extent that China still runs trade surpluses, it is allocating its reserves into gold, euros, and special drawing rights (SDR or world money) and away from dollars."
Yeah right, China will stop buying U.S. debt notes and switch over to buying IMF/U.S.dollar notes disguised as SDRs. It will diversify by buying Euros when LePen promises to crash the Eurozone. Merkel is soon to be replaced with a centrist. The Italian bond market; Bonnie Tyler, We're living in a powder keg and giving off sparks.

https://dailyreckoning.com/indicators-chinese-collapse/

[Danny B]

More rocks in the financial road

"every bear market since the Federal Reserve Bank began in 1913 has collapsed"
YES, the FED is batting a perfect score. To go along with their impressive list of crashes, there is another impressive list. Every time that we are about to crash, they stand up with great confidence to tell us that everything is fine.
Alert: The Fed is Now Confident | Zero Hedge
The bankers that control the FED may very well want to yank the rug out from under Trump but, he is a wily one. He could probably pin the blame on them.

Goldman Sachs is stunned by the drop in demand for gasoline. They said that the drop would demand a recession. They seriously adjusted their numbers so that a recession is no longer demanded.
Goldman Stunned By Collapse In Gasoline Demand: "This Would Require A US Recession" | Zero Hedge

Australia depends on sending raw materials to China. China depends on export of finished goods. That has pretty much crashed.

https://mishtalk.com/2017/02/08/time-to-panic-in-australia/

China burned through a $1 trillion trying to support the Yuan. They have to find a balance between [I]capital flight[U] and loss of export competitiveness. They are currently losing ground on both counts. https://www.nytimes.com/interactive/...=business&_r=2

"Greece's debts are going to mount unsustainably, the IMF believes, unless the country undertakes serious reforms - and receives more bailouts from its eurozone neighbours"
NO reform will ever allow Greece to survive. The Troika just wants to punish them real good as a lesson. What they WILL accomplish is; the next state to leave will simply default and avoid the long, drawn-out pain.
EU faces crisis as IMF warns Greek debts are on ‘explosive’ path 

,,, So he says, while he cranks up the rheostat on the printing press.

It has a twin In OZ.

Rense, Anti-Trump 'Resistance' Aims To Make US 'Ungovernable'
Soros may get his way in the end, http://www.zerohedge.com/news/2017-0...r-city-turmoil

[Danny B]

UK: Robots Could Replace 250,000 Public Sector Workers | Soren Dreier

It's true that the State could cut way back on it's expenditures. But, the State is the employer of last resort for people who can't find a niche in the private sector.
Our cities are concentrated areas of employment. As employment diminishes, our cities become concentrated areas of crime. Up til now, the State has been able to supply meaningless employment for people who had no niche in the competitive sector. A crash of the sovereign bond market would make this impossible to finance. At the same time, a bankrupt State would no longer be able to pay for our huge public "security" apparatus.

If the State, combined with the private sector can't produce enough employment in our industrial economy, people will have to revert to a subsistence agrarian economy. This really isn't practical for most people.
Armstrong said that California will go into crash mode as we go into 2018. Los Angeles may very well be a test-case of what happens when the safety net snaps.

[Danny B]

Armstrong, talking the dollar down

I often quote Martin Armstrong because of his track record of accuracy. Here is another bit. "Marty; You gave the resistance in the Dow at 20,158 and it stopped at 20,155"

https://www.armstrongeconomics.com/markets-by-sector/precious-metals/gold/gold-dow-the-numbers/

There is an ongoing argument of the exact number but, it is generally accepted that every one dollar of additional tax shrinks the productive economy by 3 dollars. Frederick Hegel and his Hegelian dialectic demands that everybody work for GOV. I don't really see that working.
So, GOV taxes the snot out of everybody and the economy shrinks. There have been different tax schemes used with varying rates of success.

" As taxation rose, the Roman Empire declined. The Roman Emperor Hadrian when he took the throne forgave back taxes and created an economic boom."

https://www.armstrongeconomics.com/world-news/taxes/romes-flat-tax-created-the-biggest-economic-boom-in-history/

"The EU leadership is really trying to make Great Britain pay dearly for voting to exit the Community. "
"The EU think that is they can make it so bad for Britain, nobody else will leave."
" So while the EU thinks by punishing Britain they will discourage others from leaving, they are seriously mistaken. The dream of the EU is dead. "

https://www.armstrongeconomics.com/international-news/europes-current-economy/eu-in-disintegration-mode/

YES, they sold them to the muppets.
Why It Feels Like the Dot-Com Bubble All Over Again | Casey Research
Yep, they're "smoldering" at the moment.

https://www.armstrongeconomics.com/international-news/north_america/americas-current-economy/trump-tower-accord-to-replace-plaza-accord/

So, the economists all have $hit for brains and the lawyers are far worse. There isn't a one of them that understands global capital flows. They want to "talk" the dollar down to maintain export sector and employment. That has never worked before so, it is the obvious next step.
Capitalism is incompatible with automation and socialism is incompatible with human nature.

[Danny B]

Recession 2017? Things Are Happening That Usually Never Happen Unless A New Recession Is Beginning | The Daily Sheeple

"The problem with depending on a central bankers' assisted bubble, is that it defies the laws of science, the history of bubbles, and human behavior. "
The Misleading Comfort of Calm | Doug Wakefield | Safehaven.com

That qualifies as a mega-understatement.
After the great calm comes the great fear.
Translated; he sees no return of interest-income to all the millions of people who depend on it.
Ah yes,,, payback time.

True, next comes the economic BOOM.
Yuan,,, yeah, right. Here is a chart of the price of gold in Yuan. It is screaming up as the Yuan is screaming down. https://www.goldbroker.com/charts/gold-price/cny
The oil-to-gold price has been far more stable than any of the currencies.


This tells you all you need to know about French bonds.


Decades ago, the world moved from cash to checks,,, then to credit cards.,, then to electronic transactions. This was generally foreseen by organized crime. They had to take over the State to make sure that nothing they did was illegal. Congress passed a law to make it legal for congressmen to do insider trading. This was a more blatant example. Congressman Ron Paul
was always cited for his honesty. Did that indicate that the rest of congress was dishonest?
NATO is the drug-distribution vehicle in Europe. The U.S. military is used to protect drug crops in Afghanistan. If the Columbian growers don't pay up, their crops get sprayed. The Mexican Pres was financed by the cartels. In general, organized crime has a stranglehold on the general population. This permeates to anything that involves a lot of money.
Illegal Drug Trade Essential to Geopolitics, Says Former Diplomat : Waking Times
Destruction of society will continue as long as it is profitable.

[Danny B]

Oil-to-gold,,.Trump borrowing vs the debt ceiling

Britain could do 'Brexit" fairly painlessly because it still has the Pound.
France is another story. Who really knows what a new Franc would be worth?

https://www.bloomberg.com/news/articles/2017-02-10/le-pen-may-get-a-shock-if-she-tries-to-pay-french-debt-in-francs

Edit, had to break it up.

[Danny B]

second part

Grant Williams: The Death Of The Petrodollar, And What Comes After | Zero Hedge

The animal spirits that have buoyed the markets are fading fast. Consumer Confidence Tumbles As Democrats' "Hope" Plunges Near Record Lows | Zero Hedge

"As Trump hustles to nail down a tax overhaul, he faces the biggest federal debt surge since Truman"
Trump wants to cut way back on taxes and do lots of stimulus.
As Trump hustles to nail down a tax overhaul, he faces the biggest federal debt surge since Truman
This would entail a LOT of borrowing. BUT, the looming debt ceiling won't allow any increases.

http://static3.businessinsider.com/image/5792845e4321f142368ba1d4-1190-625/hong-kong-is-stuck-between-a-rock-and-a-hard-place.jpg

PricewaterhouseCoopers suggests that States like Egypt, Pakistan, Mexico, Indonesia will have the largest economies by 2050. The West Will Become The New ?Third World?: PricewaterhouseCoopers | Zero Hedge
Lots of smart people with one-dimensional thinking.

[Danny B]

Third part

"Even the central banks themselves concede interest rates are intended to eventually normalize. Their radical experiment in zero interest rates (ZIRP) and bond yield repression of the last nine years was designed to force interest rates temporarily to unnatural lows in order to jump start the economy."
The boneheads think that they can jump-start the economy while wages and employment are crashingThe S&P 500 has now reached the highest ratio to worker earnings in recorded history.

https://dailyreckoning.com/crash-will-violent/

[Danny B]

Ignore social trends and fallout at your peril

It has long been a mainstay of economic theory that; infusing money into the upper loop will result in a trickle downSo, QE was a waste of time that created lots of sovereign debt that can never be paid back. This may be a new realization BUT, it isn't a new effect.The Unintended & Deadly Societal Consequences Of Quantitative Easing | Zero Hedge

So, Norman and Strong, CB heads of America and Britain printed tons of money to save the upper loop when it had outgrown the lower loop. They tried to raise "animal spirits" in the wealthy sector to effect trickle down. The growing inequality and rising resentment caused the wealthy to adopt policies that reduced their spending.
All debts must be paid eventually,, either by the debtor or the creditor. When the debtor from the lower loop can no longer service the sovereign debt that was incurred in his name, the creditor must bear the loss.
The upper loop is adamant that everybody in their boat must be rescued. The FED rescued everybody and bought every dip in the markets. A market without corrections is a casino.
The politicians goosed the markets for every election. The cumulative effect is that the upper loop has accumulated so much "dead wood" that it will eventually have a bonfire. This will take out both the bad and the good.
We hear all the demands to audit the FED. What a load of BS. The FED balance sheet is at $ 4.1 trillion because the U.S. Treasury sent over boatloads of bonds to be monetized. The House originates all spending bills.
Audit the house of Representatives.

The upper loop thought it was great that they could leverage the global mean wage to increase their margins. Did they think it through to the eventual outcome? Impoverish the masses and there is nobody with enough discretionary income to service the debt load. The bond market can never be serviced by a populace earning survival wages. Pakistan is a good example for this.
After the upper loop impoverishes the lower loop, they have to deal with the push-back. Brexit snuck by. The upper loop didn't like it and assumed that the lower loop could be controlled enough to reject it. Killary expected to control the lower loop enough to continue the Clinton-Bush regime of terror.
The PTB are starting to catch on that they are losing control. This has emboldened the French to send a political hand grenade special delivery to Paris.
Economists: Le Pen Victory Would Lead To "Massive Sovereign Default", Global Financial Chaos | Zero Hedge
"National Front's Marine Le Pen will likely win the first round, she is virtually assured a loss in the runoff round against either Fillon, or more recently Macron, having between 20 and 30% of the vote; on the other, all those same analysts and political experts were dead wrong with their forecasts about both Brexit and Trump, and are desperate to avoid a trifecta as being wrong 3 out of 3 just may be result in losing one's job."

The British voters figured that they had nothing to lose by voting to leave. Things were so bad, they took the risk. Trump voters figured that it could only get worse with a continuation of the entrenched powers. Le Pen represents the only hope for a lot of French people who believe in France, NOT in globalism. They are energized by the success of the Anglo -American voters.

The corporatocracy can take our money BUT, they take our compliance and stability with it.

[Danny B]

This is where the rubber meets the road. As LePen looks better and better, French bank stocks will do worse and worse.
Credit Bubble Bulletin: Weekly Commentary: Bubbles, Money and the VIX
There will be more shocks from Italian elections. The German elections may offer big shocks. The America debt ceiling will offer shocks.
"Panic quickly ensues when markets suddenly sense their perceived safe and liquid holdings are at risk"
"
Italy and France will send tremors through the system. The bubble can inflate almost indefinitely. Armstrong puts the crash of the EU at the beginning of 2018.





What Form Will The Great Confiscation Take - And How Can We Prepare? - DollarCollapse.com