Economic pressures

[Danny B]

http://www.energeticforum.com/redirect-to/?redirect=http%3A%2F%2Fwww.telegraph.co.uk%2Ffinance%2Feconomics%2F11750178%2FFrances-staggering-debt-levels-are-far-more-worrying-than-ours.html

It's kind of late to catch on.
No money honey.
No kidding. The FED caught on about the same time as the French.
Yes, the poor are getting louder.
Like the State of Illinois, the France refuse to consider fiscal prudence. Socialism rots the brain in a couple of critical areas. Even with generous welfare, muslims in France burn about 40,000 cars a year to show their displeasure. Cut off the welfare in a collapse and watch most of Marseilles burn. Paris won't be far behind.

Hugo Salinas Price has been campaigning for a long time to get various governments to mint a silver coin so that people could have a secure store of value. He seems like a really nice guy. I'm afraid that he just doesn't understand. The bankers don't want ANY store-of-value that they can't diminish.
He does have a very GOOD plan for how to go about it.
.:Plata:.

[Danny B]

Demographics The Central Bankers' Nightmare | Oye! Times

Academia considers economics to be a science. It probably is if you take into account a 1,000 variables. Academia considers a dozen and NONE of them are related to people.
The result,

Central Banks;

It would appear that the CBs (outside of Japan) are going to take away the punchbowl. Everyone at the party is falling-down drunk on all the free money. Even the feces-for-brains at the FED have started to notice that they have been consistently wrong for many years. so, they are going to tighten just when Trump, et al need a LOT of money. What will the result be. Illinois gives us a clue.

[Danny B]

History of the State and respect for private property

"Property Law of the People's Republic of China
The amendment states "Citizens' lawful private property is inviolable.".
The law does not change the system of land tenure by which the state owns all land. However, in formalizing existing practice, individuals can possess a land-use right,"
"Gong Xiantian of Peking University, argued that it violated the constitutional characterization of the PRC as a socialist state."
Wiki

This is a very important distinction. Socialism does not allow for private ownership so, people won't invest time, effort or money into something that only has a shaky claim.
Armstrong, "Consequently, China will surpass the United States and the West because our Rule of Law is collapsing. Courts rule in favor of government routinely and once that happens, no property is secure any more. They are just confiscating cash presuming it is criminal in some way be it taxes or otherwise and they do not have to prove anything. This is demonstrating that the West will not be able to survive long-term without a security of property. Hence, you can see it coming. If China respects property rights, then capital will migrate to Asia and leave the West due to the lack of a Rule of Law."

https://www.armstrongeconomics.com/international-news/rule-of-law/country-risk-how-it-is-critical-to-investment-flows/

It's true that Western GOVs are stealing everybody blind to try to keep GOV operating. The future question: who will steal more? Who will respect private property more? Who will levy the highest taxes? "They" wanted instant transfer of capital. Will they try to block this if capital transfers to the "wrong" jurisdiction? What will China do when they run out of water?

https://www.armstrongeconomics.com/international-news/rule-of-law/country-risk-how-it-is-critical-to-investment-flows/

With the LONG history of communism and socialism in China, I doubt that they will respect private property when push comes to shove.
It is easy to forget that the U.S. government will kick you off your land if you don't pay them yearly taxes. So, who really owns the land?
With the unfolding climate change, China will be hit hard by the growing drought.

https://image.slidesharecdn.com/wriyear2015-150111011337-conversion-gate02/95/world-resource-institute-46-638.jpg?cb=1420960570

https://www.armstrongeconomics.com/international-news/politics/macron-to-reduce-french-parliament-by-one-third/

Right on the face of it, this tells you that the socialists have feces-for-brains. The French debt can never be reduced without blowing up the entire economy AND the muslim a-holes on the dole. Macron wants a close marriage to Brussels,,, and Brussels wants austerity. The French bond market will detonate like a fuel-air bomb if the French GOV slows down spending.
The EU Commission and EU parliament are now infighting. https://www.armstrongeconomics.com/i...lash-of-words/
What will they do when the bond market blows?

Then, to complicate ALL of this, will the blockchain negate the taxing powers of GOV?

[Danny B]

The poison spreads. Another freebie for Trump

The financial industry absolutely screams if a financial transaction tax is proposed. "The Tobin tax was developed with the intention of penalizing short-term currency speculation, and to place a tax on all spot conversions of currency." "the tax rate he suggested was 0.5%."
NOPE, can't have that. No matter how much money was raked in by the financials, they wouldn't let loose of a penny. This isn't stocks and bonds, JUST currency speculation. NO!
It's a complicated labyrinthine mess but; wages fell WAY down,,, the economy turned WAY down. Bank business fell way down. $Trillions were conjured up to save the TOO-NUMEROUS banks. Interest rates were driven down to make money cheaper and debt easier to service. Interest rates were crashed to keep high-interest-rate debt from defaulting.
The "cure" for saving bad debt (NIRP) was the poison that killed interest income. The banks felt that all that free money would allow them to still turn a profit as long as they could still add a couple of percentage points on top.

There are between 10,000 and 15,000 hedge funds.
"There were 5,926 insurance companies in 2015 in the United States (including territories)"
"The P&I 1,000 Largest Retirement Funds: 2015"
"The single-employer program protects 30 million workers and retirees in 22,000 pension plans. The multiemployer program protects 10 million workers and retirees in 1,400 pension plans. " Pension Benefit Guarantee Corporation.

https://www.willistowerswatson.com/en/insights/2016/09/The-worlds-300-largest-pension-funds-year-ended-2015

https://www.bloomberg.com/news/articles/2017-07-07/in-america-s-richest-state-the-capital-flirts-with-bankruptcy

ZIRP is poison to the investment funds. They grey-haired demented school marm who is presiding as the front man at the most powerful CB is trying to raise interest rates to return some kind of income to all the many thousands of funds that are slipping away. The banks avoided paying out $400 billion in interest every year. That may crash ALL savers and ALL funds but, they believe that the banks will be OK. We'll see.
If she raises rates a few points, the majority of businesses will fail outright.

Aussie has the highest consumer debt so, naturally, they will have a VERY impressive crash.

Just, "hold your beer and watch it happen."
Ah yes,,,,,,,,, the consumer remains under capitalized.


Not completely off-topic.
Keep in mind that the pedophile papacy attacked Trump for wanting to block the muslims. Turns out that the Vatican build a walled city centuries ago to,,, keep out the muslims.
Round two.
Global warming is a scam to collect carbon taxes and give them to wonderful people so that they can pump out LOTS more babies. There have been ENORMOUS amounts of data collected over the centuries about global temperature.
The dirty commie rat Merkel is pissed off at Trump because he says that global warming is a BIG, bogus scam. Off in the wings, the party is BLAZING. The "hockey stick" guy is about to have his hockey stick jammed up his waiting sphincter. There was just FAR TOO MUCH previous data. His hockey stick ERASED the Medieval Warm Period . He sued the guy who claimed that he was a fraud. It went to court and the bozo couldn't possibly show the MWP missing so, he refused the judges order to show his data. The fates went against him and he is going to get a good roasting.

https://www.technocracy.news/index.php/2017/07/04/fatal-courtroom-act-ruins-michael-hockey-stick-mann/

About that climate change,,,,,,,,,,, it's the sun. Pendejo!
"the U.S. will be represented by a president who embraces protectionism, forcing Germany and China into an informal alliance pushing the merits of free trade and action against climate change."
Yeah, Germany is a $trillion ahead and the rest of Europe is a $trillion in the red.
"G-20 nations have struggled in particular to bridge the divide with the U.S. on climate change after Trump announced he would pull out of the landmark Paris Agreement. "
The more you struggle, the STUPIDER you look.
"Another source of strife was U.S. pressure on China to cut its steel output," We buy almost NO steel from China.

http://www.ita.doc.gov/steel/countries/pdfs/imports-us.pdf

[Danny B]

All the funds are starting to unwind,,, even the "FANGS" http://www.zerohedge.com/sites/defau...706_eod5_0.jpg

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/07/05/20170705_eod4_0.jpg

Lots of graphs with lots of red arrows pointing down.
"They're Selling Everything" - Bonds, Stocks, Oil, Gold, & Dollar All Tumble | Zero Hedge

CC from here on, that is the abbreviation for cryptocurrencies.
"China Central Bank Advisor: "Bitcoin As A Currency Could Collapse Entire Economies"
The article is very interesting because it gives just a small window into the future possibilities of CC.
"Sheng Songcheng, a counselor at the PBoC, dismissed digital currencies like bitcoin as assets that lack the value basis of a legitimate currency. "Bitcoin does not have the fundamental attributes needed to be a currency as it is a string of code generated by complex algorithms, and does not have inherent value... But I do not deny that virtual currencies have technical value and are a type of asset," he said cited by Reuters. Apparently he is unaware that paper currencies - the type preferred by central bankers - is made of either strings of linen and paper or strings of 1s and 0s, and - while also having no inherent value - can be infinitely created out of thin air. "

"Sheng warned that the deflationary nature of digital currencies - unlike fiat money there is a hard limit on how much can be reated - would mean that they would not function well as a currency or medium of exchange in modern economies."
"His objection is to be expected: after all no central bank wants to be constrained in how much "money" it can print to stimulate inflation"
"Which, however, does not explain why various central banks like the ECB and BOE do hold a favorable outlook on digital currencies. One footnote here is that unlike Bitcoin, the digital currencies envision by central banks would be entirely under their control, in effect simply replacing one form of fiat for another, and better yet, making it digital so there is no place to hide the next time rates go negative."

"Bitcoin is not debt based. Every part is mined and paid for. Fiat is debt based and is created out of thin air, there is NO WORK involved. That is the real issue. "
China Central Bank Advisor: "Bitcoin As A Currency Could Collapse Entire Economies" | Zero Hedge Where do they find these adjectives? Millions will die.
Millions will be on the streets.
Old news
Is there any mention of cops killing filmers?

[Danny B]

Idiocy, poverty and the birth rate.

The news talks about how Trump has made enemies out of the rest of the G-20. http://www.zerohedge.com/sites/defau...708_g2-0_0.jpg

The G-20 is just a house of fighting cats.
China just kicked Britain in the teeth, https://www.hongkongfp.com/2017/07/0...ndover-treaty/
South Korea just wants to avoid getting vaporized. Italy is like a keg of nitrogen triiodide balanced on top of a flagpole. Macron wants to jump in bed with Brussels when 35% of the French want a complete EU divorce.
ALL 4 wheels just fell off the global warming wagon, Articles: Things Get Hot for Michael Mann
Theresa May is standing under her own proverbial powder keg. The Japanese printing press is throwing off sparks and slowing down, no matter how hard they twist the rheostat.
Brussels is threatening France with Austerity because France is so wildly OUT of compliance with EU debt rules.
The population bomb is unsolvable under current "thinking" so, nobody goes near it.
Elon Musk: The world's population is accelerating toward collapse and nobody cares
NOPE, not the least bit prepared.

Did the G-20 come up with a cure for total economic malaise? NOPE, There is NO saving it now.

http://media.peakprosperity.com/images/chs-degrowth-chart1.jpg

Did the G-20 come up with a cure for crushing public debt?

http://media.peakprosperity.com/images/chs-degrowth-chart4.jpg

Ditto

Is Japan going to lead the way out of the economic doldrums?

http://media.peakprosperity.com/images/chs-degrowth-chart5.jpg

https://www.peakprosperity.com/blog/109555/inevitability-degrowth

Who cares if Trump has pulled away from the G-20?

No kidding. Maybe that had something to do with ZIRP.


"According to the most recent Bureau of Labor Statistics release, the UE (unemployment) rate fell to 5.5% as of February. The last time the UE rate was this low was May of 2008.
5.5, imagine that

http://www.investingchannel.com/article/337425/Presenting-The-Amazing-BLS-Math-How-America-Added-17-Million-People-In-7-Years-And-Zero-Full-Time-Jobs#.WWKKiY9xiR-

"So the dropping fertility rate is bad. How do we get it to increase? Economists are (as you might expect) at a loss for explanations, much less solutions. Here are some of the theories. " Just maybe, poverty has something to do with it.

https://www.theguardian.com/money/2014/dec/10/why-arent-there-more-babies-us-fertility-rate-declines-economists-baffled

http://www.marketwatch.com/story/americas-falling-fertility-rate-explained-in-four-charts-2015-08-18

https://www.businessinsider.com/why-labors-gdp-share-is-on-decline-2015-9

Sep 22, 2015 - Follow Business Insider: Why Has Labor's Share of Gross Domestic Product (GDP) been declining for 40 Years?

[Danny B]

Socialism,,, anti-human nature

Socialism is a state where; the earner and the spender are different people. People who never had to work for the money spend it with less thought. The money runs out. If the earner is getting a bad deal, he loses motivation.
In Japan, the "salaryman" is famous for working tortuous hours. By tradition, he gives his check to his wife and she gives him an allowance of her choosing. MGTOW is a situation where a man does a cost / benefit analysis of a partner situation. The men in Japan have rightfully rejected this situation in favor of spending their money on their priorities.
Marriage and the birth rate have crashed through the basement.

All government is socialist, in that it takes from the producer and gives the money to some bureaucrat or other parasite. When the taxes get too heavy, it removes motivation. The 100% failure rate of socialism has never stopped it from being popular.

https://www.youtube.com/watch?v=sElz_P6QsZo

The rise of monopolies, https://thedevelopmentset.com/monopo...a-41bdefff929e

https://realinvestmentadvice.com/the-breaking-point-death-of-keynes/

[Danny B]

Stock Market Tsunami Siren Goes Off | Wolf Street
Using the 1980 baseline methodology, inflation is running right at 10%.

http://www.shadowstats.com/imgs/sgs-cpi.gif?hl=ad&t=1497462527

Alternate Inflation Charts

https://www.theinstitutionalriskanalyst.com/single-post/2017/07/09/US-Equities-Unwinding-the-Yellen-Leveraged-Buyout

US jobless rate levels debated at Fed - Business Insider

https://www.caseyresearch.com/the-inevitable-crisis-just-became-imminent/

So, Illinois hopes to raise $5 billion. BUT, they already have $800 million in interest penalties. Their pension debt jumped $18 billion in just one year.
https://files.illinoispolicy.org/wp-...v-1024x830.pnghttp://www.washingtontimes.com/news/...summer-recess/

We have steady price inflation and falling wages. The end result is; personal consumption has crashed.

http://static4.businessinsider.com/image/5956a7fed084ccc9018b6d91-1200/pce-price-index.png

Surviving on plastic.

What to do when you can't afford to pay the cops?

[Danny B]

Armstrong and the general picture

Merkel hasn't won an election in quite a while. She has to combine seats with some other party. She definitely doesn't want the news about the crashing German pension system to come out. FAT chance.

https://www.armstrongeconomics.com/international-news/germany/germany-pensions-system-crisis/

https://www.armstrongeconomics.com/world-news/pension-crisis/the-pension-crisis-the-crash-burn/

https://www.armstrongeconomics.com/world-news/civil-unrest/the-survival-of-the-people-always-depends-upon-the-army/

Catalonia REALLY wants to get away from Spain,,, primarily the bureaucracy in Madrid. https://www.armstrongeconomics.com/i...ak-from-spain/

" Merkel thought she could score a major diplomatic triumph by getting everyone together to gang-up on Trump over the climate accord."
"What took place was that not merely was she unable to intimidate Trump, but China also insisted on being able to expand its carbon energy use agreeing with Trump."
She even "accidentally" left a mic turned on to try to trap Trump into something or other.

https://www.armstrongeconomics.com/international-news/politics/merkels-failed-g20-summit/

So, austerity is a complete failure. AND, low interest rates have failed.

https://www.armstrongeconomics.com/international-news/europes-current-economy/german-secretary-economics-warns-low-interest-rates-have-failed/

Deutsche Bank does a lot of research. Here is their conclusion, http://www.zerohedge.com/news/2017-0...licopter-money

[Danny B]

sovereign downgrades

" The global bond bull began back in 1981, when 30 year US Treasury yields peaked at 15.2%. Now, over 35 years later, long bond yields are below 3%."

https://mises.org/sites/default/files/styles/full_width/public/img_595e115946e40_1.png?itok=fdbf8Oh3

https://www.counterpunch.org/2017/07/12/nato-an-obituary/

Macron goes on to push for a European army. Nigel Farage blows that idea out of the water.

https://www.youtube.com/watch?v=hI5_pMvLZd8

If the West isn't careful it will be VERY hard pressed to find new wars to start.

Didn't Armstrong mention this?
Nicole Foss writes about "life after complexity".

https://www.theautomaticearth.com/2017/07/nicole-foss-on-life-after-complexity/

https://realinvestmentadvice.com/the-return-of-the-minsky-moment/

Deutsche Bank says that we will jump to helicopter money. I doubt that the system can roll it out fast enough. http://www.zerohedge.com/news/2017-0...licopter-money
Read that as; slowest sales in 5 months.

[Danny B]

oil losing,,,living on plastic and lies

Iran sees oil output rising to 4 million bpd by year end - Reuters
"The U.S. shale industry has already added almost a half million barrels per day since the end of last year, taking production up to 9.3 million barrels per day (mb/d)"
"major banks and investors have showered the industry with credit and equity, pouring an estimated $57 billion into the sector over the past 18 months. All of that money is being translated into a sharp rise in drilling even as oil prices slump."
"Despite efficiency improvements, the shale industry is expected to be cash flow negative by a combined $20 billion this year as oil prices sink."
Is Wall Street Funding A Shale Failure? | OilPrice.com
What happens when that $ 20 billion stops?

"12 month WTI at or below $40 (will blow the system).
How Much Longer Can Junk Bonds Ignore Tumbling Oil? UBS Has The Answer | Zero Hedge

Public debt is considered risk-free,,,,,, between defaults. It is definitely rising.

http://www.oftwominds.com/photos2017/US-debt1-17.png

We are living on plastic and lies. http://www.oftwominds.com/photos2017...Living5-17.png
The CBs have kept the party going for a long time but, are now having second thoughts. The mountain is getting too high.

http://www.oftwominds.com/photos2017/central-bank-balance-sheet.jpg

http://www.zerohedge.com/news/2017-07-13/our-financial-buffers-are-thinning

"Money" is created with a debt-load. More and more new money must be created to to fulfil the debt load. The money slowly seeps up to the upper loop and leaves less and less for the lower loop. More and more must be pumped into the upper loop to avoid defaults. The debt burden gets bigger.


The eternal fight between greed and fear.
Kunstler, http://kunstler.com/cluster****-nati...ally/#more-%27
The Overton Bubble, http://thefutureprimaeval.net/the-overton-bubble/

[Danny B]

https://www.armstrongeconomics.com/world-news/sovereign-debt-crisis/illinois-should-just-be-dissolved-as-the-solution/

"not only did the US deficit surge to $90 billion, far above the $38 billion consensus estimate, and a "NM" compared to the $6.3 billion budget surplus in June of last year, but the US also saw the biggest one month outlay on record, at $429 billion, 33% higher than the $323 billion in outlays one years ago. "
"it appears that the deficit for the fiscal year, which has three months left, will be in the $650 billion to $700 billion range, if not even higher, mostly due to the surge in "subsidy costs of housing and student loans" guaranteed by the Treasury.

Combining these two means that YTD, the deficit jumped to $523.1BN vs $399.2BN last year."
Obummer undercounted the deficit by 20% and now, the numbers have come out.
The Striking Reason Why The US Just Spent A Record $429 Billion In One Month | Zero HedgeThe Power of Lies -- Paul Craig Roberts - PaulCraigRoberts.org

We're maxing out the plastic.

WAIT, what about that $ 20 billion in negative cash flow?

[Danny B]

The Technical Failure That Could Clear The Oil Glut In A Matter Of Weeks | Zero Hedge

For every irresponsible borrower, there has to be an irresponsible lender. Stand in the line at the bank and somebody would approach you and ask if you wanted to borrow any money. It was just TOO EASY. Where does that eventually lead?
"If you believe that going from a total debt burden (government and personal debt) per household being 79% of median household income to debt per household being 584% of median household income doesn't matter and will have no consequences, you believe in magic."

http://www.oftwominds.com/photos2017/debt-totals2.jpg

oftwominds-Charles Hugh Smith: We Do These Things Because They're Easy: Our All-Consuming Dependence on DebtBecause they are stupid with no imagination.concentrated in six countries."

https://www.theguardian.com/world/2017/jul/14/globalisation-the-rise-and-fall-of-an-idea-that-swept-the-world

[Danny B]

public pensions, Fulford, Kunstler


Bitcoin is a hot potato.


I wonder if there could be a connection?

"public pensions are really about $8 trillion underfunded, as opposed to the $3-$5 trillion that you frequently see"
"In short, tweak one simple number and, like magic, your whole funding crisis "disappears."
"The teachers and state employees systems dropped their rates of return to 7 percent, while the plans for judges and general assembly members cut their rates to 6.75 percent.
All four had negative investment returns in the 2016 budget year"
"For those who missed, below is a post in which we explained why Illinois' pensions could run out of money in as little as 4 years."
"Of course, that strategy ceases to work when the pensions actually run out of cash...which could happen sooner than you think...and when it does, America's retirees will suddenly find themselves about $5 trillion poorer than they thought they were."
Illinois "Budget Deal" Is Likely The Death Knell For The State's $130 Billion Underfunded Pensions | Zero Hedge

" And with 87 percent of the county budget going to public health and public safety, " "We need you to cut 1,000, basically 1,000 positions from your (sheriff)office of 6,000."
Cook County to cut 1,100 jobs due to soda tax delay | abc7chicago.com
You thought Chicago was dangerous before,,, what next? Cut the cops but, don't cut welfare.

And then, there is Fulford, Benjamin Fulford: Clean up of Khazarian filth continues in US, Japan and elsewhere » The Event Chronicle
If Fulford doesn't give you a case of the shivers, there is always James Howard Kunstler. He has a perspective that is as bleak as the far side of the moon.
"Progress behind progressive politics in the industrial era has reached a dead end. The world is clearly not becoming a better place, but rather reeling into disorder and ecological crisis"
" The middle class has been left economically shipwrecked by the promises of globalism. The pledge of a happy retirement dissolves as the pension funds roll over and die. And the supposed paragon of enlightened American governance morphs into a sinister and corrupt Deep State of oligarchical corruption."
"The practical problems of economy approach an event horizon of energy scarcity, runaway debt from trying to mitigate it, and eventual collapse of our day-to-day hyper-complex economic arrangements."
Energy scarcity in the lower 48 and much of Europe was papered-over with the printing press. When this is no longer possible, there will be a huge difference between the price of oil and the current price at the pump. The oil barons have refused to bring Alaskan oil on-line.Holy Hell - Kunstler

The corporatocracy thought it would be a good idea to cut tariffs and wages so that they would raise their margins. Globalism went full-steam ahead. BS economics from academia coupled with regulatory capture was the perfect brew to drive down wages, taxes and tariffs. China has more EXCESS steel capacity than the entire steel capacity of America and Europe. All manufacturing concentrated in just a very few places. Globalism concentrated wealth in the 1% and the Chinese middle class. The rest of the world was left with no jobs and no discretionary spending. Survival spending was maintained by GOV welfare programs.
Survival spending financed by sovereign governments increasing their debt will reach a breaking point.
The CBs worldwide tried to pump in enough liquidity worldwide that, at least part of the liquidity would flow into GOV bonds. All this liquidity and NONE of it flows into wages.
We need more jobs or fewer people. VHEMT is on the job, VHEMT

[Danny B]

The anatomy of pump & dump

You deposit your money with the bankers. They multiply it many times over and gamble with it. They force price inflation which is injurious to wage earners. When your wages won't carry the entire debt burden, the bankers stand to lose from default. The TARP money given to the bankers was to allow them to continue to scam you rather than going bankrupt. The bankers create the debt principle but, NOT the interest burden. Eventually, the lower loop is going to run out of money. The Central Bank recharges the commercial banks so that they can always outlast the wage earner.

"We always thought that bankers add to their wealth by the interest they earn on their loans. We knew they created a deposits for us in exchange for our obligation to pay back to them afterwards the amount of that loan, plus interest. Such "lending," we all understand, is where the economy gets its money supply. The new deposit gives the economy new purchasing power and there is that much more money in the economy for people to bid for goods and services in the market economy. The subsequent payments -- "debt servicing" of course then reduces the amount of purchasing power; the principal goes back to the bank as a collected receivable, canceling out the liability created for the bank when they created the deposit for the borrower. BUT WHAT OF THE INTEREST? Certainly it is the bankers' primary source of income, but, and here is the breakthrough discovery, the interest earned is not the primary way the biggest bankers increase their wealth. Their income is interest, but their mainstay and reliance is upon, keeping those interest earnings from returning to the real economy, because when the amount of the deposit is returned to the banks plus the compound interest -- the result on the entire economy is severe deflation -- and when there is deflation, all of the bonds and idle cash balances (unspent interest earnings) increase in value -- because when there is less money in the economy everything is cheaper -- residential properties forced on the market by homebuyer default, businesses forced on the market because of fall in consumer demand, public utilities forced on the market because tax revenues of government are lower than planned -- all due to money destroyed by repayment of principal plus interest earnings kept from returning to circulation by bankers who gain in wealth, not from interest earned on their loans, but from deflation caused by withholding the interest we debtors have paid on loans. The bankers, don't want to earn interest, they want to take over the real property -- land and other assets, that working people have created and developed. Do the bankers really play this game, of get rich through deflation which they cause by not returning interest to the economy as consumers and investors? Yes. But what about periods of inflation, when bankers provide easy money for an economic boom? Yes, bankers do sometimes give the people easy money -- inflation -- but those times play a part in the wealth-by-deflation-windfall. Inflation merely rewinds the machine for another round of wealth-by-deflation.

The business cycle is caused by this game being played.
1. Easy money to encourage production. But as times are good, everyhone wants to borrowe money and the banks choose to increase interest rates -- saying they do so because of inflation -- but really they do so because they need those higher rates to end the boom when they want the boom ended. Note: If they were really charging competitive interest rates, interest rates would be lower in a boom because the risk of business failure by the borrower or job loss or insufficient tax revenue is so much smaller.
2. The banks call in loans and stop issuing loans when they want the inflationary boom to turn to deflationary hard times -- less loans, harder to get loans, businesses fail or downsize, letting go employees or cutting wages or hours -- less money means fewer sales -- and that means budgets are busted and there are defaults and foreclosures and bankruptcies -- and that is good for the bankers sitting on their unspent interest earnings -- because all of the foreclosed housing units, bankrupted and distressed businesses and distress sale public utilites come on the market and are bought up cheap. And when they have harvested with deflation what they sowed with easy money, they are ready to rewind their mechanism again with another period of easy money.

The economist Irving Fisher rightly expounded his debt-deflation theory of economic depressions, but he could not see who the depression got started. Now you know. It is a game of wealth making through deflation harvesting of an economy previously built by a boom.
And that is my theory in its first expositon. I know it is right.
I hope you will share it with others. I hope I live to write a clearer and more thorough exposition -- but I tell you all of the elements are here. Study it. Think about it. Test it against current economic thinking. You will see I am right. It will be obvious to you.
Sincerely,"
Dick Eastman

So, it is advantageous for the bankers to bring crashing deflation. At regular intervals, they must convert their thin-air money into tangible assets. OK, so the upper loop crashes the lower loop to scoop up all the tangible assets and let the 90% die where they lay.
There is one small problem. Wages have crashed. Velocity of money has crashed. Actual productivity has crashed. The tax base has crashed.
The bankers have managed to crash sovereign government. The negative fallout from globalization has brought crashing deflation to the lower loop.
The banks were bailed out by the FED. This time around, there will be nobody who can bail out the government.
Can the banks just seize the property of GOV? They dream of owning all infrastructure.