Economic pressures

[Danny B]

CBs buy sovereign debt with free money

Here is a good, easy article about the debt that Uncle Sam is carrying, as compared to his income.
Running On Empty | RIA

[Danny B]

https://www.zerohedge.com/news/2018-08-28/world-ganging-against-dollar

https://www.theautomaticearth.com/2018/08/social-media-vs-the-constitution/

The blob State.
"There are no civil servants who voted Leave. All were horrified at the result and have schemed for two years to thwart the electorate."

"true nature of the project, a Federal Europe. Powell forecast that when the British became aware of that we would vote to come out. We did. Still there was no honesty about the nature of the EU. Still the debate is all about trade, which is of course irrelevant"
There will be a fake Brexit, dressed up to look like Brexit but will fool nobody! | Claudio Grass

https://matasii.com/rickards-warns-prepare-for-a-chinese-maxi-devaluation/

Reportedly, world trade is collapsing.

https://www.zerohedge.com/news/2018-08-29/these-4-charts-show-how-world-trade-has-collapsed-just-one-year

[wayne.ct]

bank reserves

https://qz.com/1180434/europes-central-banks-are-starting-to-replace-us-dollar-reserves-with-the-chinese-yuan/

A chart was in this story to which you shared a link. (Share of allocated foreign exchange reserves)

It looks like data from all the central banks was aggregated to produce this chart. But is it only European central banks? What would this have looked like ten years ago? I could not find such a time series. Perhaps someone with Bloomberg access and knowing how to generate such a chart could come up with one.

Let's conjecture that ten years ago the 63 percent was 100 and that 50 percent was some sort of critical turning point, then ...

37 percent change in ten years equals 3.7 percent per year on average.

Straight line ... we have 13 percent to go from 63 to 50.

That would be about four years to get from 63 to 50.

It would be nice to see a chart....

OK, what about all central banks or all commercial banks worldwide?

If US banks amount to 90 percent of xxx then what significance is there really to this chart that only considers EU banks? Does it not seem extremely complex to ferret out the situation?

Ok, let's look at the other side of the case. Any of the relevant players could upset the apple cart and it would only take a matter of weeks to destroy the world economy or balance of power.

[Danny B]

Global wages fall = global trade falls

Money in circulation has far outrun actual tangible wealth. This would normally cause hyperinflation of prices. This monetary inflation has been mostly corralled in the upper loop which has seen the stock market go up by huge multiples. We do have hyper-inflation but, it is mostly dangerous for the speculators. The speculators don't see any danger.

https://www.zerohedge.com/news/2018-08-29/complacency-hits-epidemic-levels-traders-have-never-been-more-unhedged-risk-event

Eventually, this euphoric bubble finds a pin. The prime candidate at the moment seems to be Turkey. We should find out fairly soon.

https://www.armstrongeconomics.com/uncategorized/the-rumors-are-that-turkey-will-default/

For the time being, the various banks are allowed to create money out of thin air and, but GOV bonds. This all works fine until the West hits a bump in the road that is just too big for credit markets to ignore.
Russia has dumped all of it's U.S. sovereign debt so, it can't be easily punished if it allows Turkey to join up after dumping Western debt.

World trade has fallen badly and, the credit markets are going to take a huge hit. The East can default whenever it decides that default is advantages.

https://www.armstrongeconomics.com/armstrongeconomics101/economics/why-are-robots-changing-the-future/

The speculators would happily suck the life-blood out of the working class to increase their wealth. They are too short-sighted to see that they are NOT independent of the welfare of the working man.

[Danny B]

The end of the Central Bank?

The G-30 published an important paper on the creation and role of the Central Bank. After the forward, on page one,,, at the bottom, the G-30 have this to say, "Central banks were first established in the 17th
century, with the primary purpose of providing war finance to governments and managing their debts. "

http://group30.org/images/uploads/publications/G30_FundamentalsCentralBanking.pdf

It was never about doing something beneficial for the people. The controllers of the printing press were / are only concerned about war and State debt. There has been FAR too much of both of these abominations.

In the Report From Iron Mountain, It is stated, "concludes that a lasting peace would not be in society's best interest because warfare is the main organizing principle of government, as well as the primary driver of both cultural values and scientific progress. It states that warfare's main purposes, far from being to settle disputes between nation-states, are to control unemployment, reduce the population, drive scientific and artistic development, provide legitimacy and growth to the government, "

"cultural values" Here is a vid of a Viet nam vet executing a cop in cold blood. So much for the values learned in war.

https://www.youtube.com/watch?v=LsrC5QV_Yrc

Pox Americana teaches and demands that it's soldiers learn to kill with no remorse. Cultural values learned from the State are abominable.
"scientific progress" Mankind has reached the pinnacle of success where he can kill every living thing on the planet.
"artistic development" You are out of your BLOODY mind.
The advent of the Central Bank has coincided with the worst and bloodiest episodes in the history of mankind. Will this era come to an end,,, dunno.

https://www.youtube.com/watch?v=rQKqsNMS6sM&t=283s

The monetary inflation created by the Central Bank to save the private banks has destroyed all markets. There is no such thing as honest price discovery. As honest price discovery disappears, so does confidence. This is playing out in the States with a weaker currency. Argentina has to pay 60% interest to try to attract investment. Italy has elected a populist government and, investors are getting nervous and, leaving.

https://www.zerohedge.com/news/2018-08-30/italian-bonds-are-tumbling

The ECB has been printing steadily for almost 10 years. They now claim that they are going to stop. That should destroy just about everything.
Taps Coogan: ECB's Balance Sheet Has Outgrown the Eurozone Three Years Running - The Sounding Line

South Africa plans to steal all the white-owned land. So, investors are running away from S.A. also.

https://www.zerohedge.com/news/2018-08-30/rand-tumbles-government-warns-catastrophe-unless-land-reform-allowed

So, various emerging markets are crashing. The ECB plans to cut out money printing. Evidently, the situation looks SO BAD that the Germans want to send money to Turkey to hold back contagion. The ECB might end up like the BOJ and, never be able to shut off the printing presses..

https://www.dollarcollapse.com/emerging-market-chaos-spreading/

It is often speculated that the CBs will eventually be forced to relent and, fire up the presses once again.

"But, decades of declining births, a falling childbearing population, and failed attempts to turn this around (detailed HERE and HERE) mean a secular downturn in demand is underway in China but more broadly across East Asia. Couple this with a falling base of importer nations, and domestic plus international demand will fall indefinitely from here. Falling core populations, decelerating and declining energy consumption, and falling economic activity all go hand in hand (detailed HERE and HERE). "

"A fast falling childbearing population (yellow columns below) with continued deeply negative fertility rates equals a continued collapse in births."
"Rising wages in the face of declining demand and consumption seems unlikely. Growth has ended and decline will be the central feature for decades, if not centuries. How we decide to handle this new reality will determine the financial and economic systems. "
"the world is faced with how to deal with the growing inequality among (and within) nations, resultant overcapacity, ongoing urbanization versus large scale rural depopulation, and a general bankruptcy / reorganization of all the promises made that required perpetual growth to make them come true."

https://econimica.blogspot.com/2018/08/on-precipice-of-secular.html

They took our wages. They took our confidence. We refuse to procreate.

So, emerging markets are looking like a default. Student debt is defaulting more than claimed.

https://www.nytimes.com/interactive/2018/08/25/opinion/sunday/student-debt-loan-default-college.html

The tax reduction was a shot of adrenaline. Bernanke, Armstrong and Schiff all claim that this shot will wear off going in to 2020.

We've had a serious deflation in purchasing power. A fall in the birth rate. A rise in the price of energy. A fall in employment.
NOT TO worry,, the credit bubble is still growing.

[Danny B]

95,745,000: Record Number Not in Labor Force
BUT, it is the taxes that are curtailing spending.

"We see this with central banks setting targets for 3% inflation and they cannot reach that level."
Look at the stock market and tell me that they can't get 3% inflation.
https://www.macrotrends.net/1358/dow...-last-10-years

https://www.armstrongeconomics.com/uncategorized/the-significance-of-the-velocity-of-money/

Armstrong, "They point out that corporate-buy-backs will also reach an all-time high in 2018. They present this as evidence that somehow these purchases are not legitimate. In truth, the excess cash has led companies to buy back shares "
Buybacks were illegal manipulation until recent legal changes.
"Excess cash"
Debt for US corporations tops $6 trillion S&P Global
Corporate debt is equal to nearly half of U.S. GDP

https://www.armstrongeconomics.com/markets-by-sector/stock-indicies/dow-jones/the-us-share-market-reality-exposed/

Armstrong has his own agenda. He says that public debt will CRASH but, that the private debt / sector will do OK. FED GOV spends about 30% of the GDP. There is no possibility of the private sector coasting through this mess.


This "turnaround" in exchange rates can result in an increase in debt repayment costs reaching an effective interest cost of 60% or higher.

There will be some arm-twisting but, Italy can't survive without the ECB printing press.

The weak currency States have to use their hard currency reserves to try to uphold the value of their home currencies. They pump dollars into the FX markets buying their own currency. How long can that go on?
Here is a graph.

https://www.zerohedge.com/sites/default/files/inline-images/EM%20external%20funding%20need.jpg

"More importantly, what this ratio shows is how long a given emerging market has before it runs out of cash. And, as the chart below shows, if we were investors in Turkey, Ukraine, Argentina, or any of the other nations on the left side of the chart - and certainly those with less than a year of reserves to fund its external funding needs - we would be worried."

https://www.zerohedge.com/news/2018-08-30/which-emerging-markets-will-run-out-money-first-here-answer#comment-12292411

You can bet that these weak States will stiff foreign debt holders to preserve capital for domestic use. Panic now and, avoid the rush.

Prime Minister Narendra Modi's Rise From Tea Seller to Prime Minister
Slowly evolving;

Eventually, the blockchain will bring some honesty to markets.

German construction workers seal inflation-busting wage deal
12/5/2018, "German unions and employers on Saturday agreed on an inflation-busting pay hike of roughly 6 percent"

https://www.nationalreview.com/2018/08/state-public-pension-liabilities-major-reforms-needed/

[Danny B]

Looming deflation,,,dis-solution of empire.

Government around the country is spending $ billions to (allegedly) help the homeless. Apparently, it is a big scam in most cases.

https://sultanknish.blogspot.com/2018/08/the-billion-dollar-homeless-scam.html

Charles Huge Smith makes a back of the envelope calculation of the nominal wealth that will be lost when the bubble pops.
"That's $30 trillion up in smoke, and we haven't even gotten to pensions and $15 trillion in "other financial assets." Whatever they are, we can bet that $10 trillion in pension entitlements and "other financial assets" disappear, too."
"So a reasonable estimate is post-bubble, household net worth drops by 40%, or $40 trillion. "
oftwominds-Charles Hugh Smith: Once the Bubbles Pop, We're Broke
John Hussman shows a much larger deflation with his calculations.
Chris Hedges has a lot of experience from his many years of work around the world. Here is his report.

https://www.macleans.ca/politics/worldpolitics/why-the-american-empire-has-lost-control-and-its-failure-is-imminent/

The emergence of the Eurasian land powers
(Crosspost) https://consortiumnews.com/2018/08/2...n-land-powers/

Once again, Armstrong claims that it is impossible to manipulate markets. Once again, he is leaving out a historical perspective. The price of tulip bulbs was completely manipulated in the short run,,, just like gold. The long run is a different story.

https://www.armstrongeconomics.com/armstrongeconomics101/understanding-cycles/cyclical-synchronization-the-global-economy-make-manipulation-impossible/

"Our Democracy is based on Untenable Myths of Privilege"
Once again, the ills of crony-capitalism and corporatism are blamed on democracy and capitalism.

https://medium.com/@Michael_Spencer/wealth-inequality-isnt-personal-until-it-s-an-epidemic-b0317b178ffa

The loss of morality in the legislature allowed in regulatory capture.
Regulatory capture allowed in high inflation in prices with almost no inflation in wages. Blame it all on corruption.

[Danny B]

Fallout from the rise of the 10 year,,, Venezuela

As I already posted, the Central Banks can buy U.S. public debt at no cost. The CBs are all just financing each other. Actually, they are just financing the FED. BUT, "US Fed lent $3.3tn to multinationals, billionaires and foreign banks"
The bankers look out for each other. Private investors are a different story,

OK, so, a "short" bet is a bet that interest rates will go up.
Alarm! 10Y Treasury Shorts Reach All-time High, Net Shorts For VIX, Gold and 10Y Treasuries Near Record

https://confoundedinterest.net/2018/08/30/alarm-10y-treasury-shorts-reach-all-time-high-net-shorts-for-vix-gold-and-10y-treasuries-near-record/

Corporate America has debt equal to 50% of the GDP ($6 trillion) Raising interest rates will make it much harder for them to service their debt. Powell is determined to raise interest rates. The market is betting that this will happen.
Raising rates is a full-on attack on both Europe and the East. China, in particular is sliding down.

So, everybody is betting that the 10 year note will go up. What about the fallout? I already mentioned corporate debt. What else?
As interest rates go up, everything else goes down. RE will fall.
Here is a long, detailed article from 8 years ago, proving that interest rates on Treasury notes will eventually go to zero.
Why US Treasury Notes Will Eventually Yield Nothing :: The Market Oracle ::
Keep in mind that you must subtract the price inflation rate from the paid out interest rate on a bond. Price inflation is running just over 10%.
Alternate Inflation Charts

"Zimbabwe wrote the book on trying to print their way out of economic dysfunction and eventually stopped printing with a z$100 trillion bill. As we all know, a printing press that never stops promotes inflation that eventually makes the printing press irrelevant. Not long after the introduction of the z$100 trillion, Zimbabwe thought about introducing the z$1 quadrillion bill. "

Venezuela, "In 2010 VEF-USD traded just above 8 bolivares per dollar in the black market. As of today it stands at more than 8.7 million bolivares per dollar" Here is the graph. The date of 11/17 marks the start of the rise. that is when Venezuela first defaulted.

http://www.acting-man.com/blog/media/2018/09/2-VEF-USD-black-market-rate-linear-31-Aug-2018-a-1024x577.png

Venezuela ? An Economic Catastrophe in Charts |
Socialism kills motivation at all levels. Price controls are especially corrosive. State-caused monetary inflation means that far more money is chasing the same amount of goods. This causes price inflation. If the State institutes price controls, the producer has no motivation to produce. He just closes up shop.
Chavez / Maduro inflated the lower loop. Greenspan / Bernanke inflated the upper loop. Armstrong said the hyperinflation is reserved for peripheral economies. Central economies don't suffer it. BUT, Germany was a central economy when the Weimar hyperinflation hit.

Powell seems to be betting that his attack on the rest of the world will not set off a debt crash in America. Long before we had instant worldwide capital transfer (1930), the crash of Credit Anstalt in Austria brought worldwide contagion to the banking system. Deutsche Bank is soon to have a shotgun wedding with Commerz Bank. The Italians are on track to bring down the ECB. Turkey is on track to bring down the Spanish banks.
There will be plenty of default contagion to bring down American banks.
Then, there is the looming Bexit that will / would be a disaster for British banks.
A hard Brexit is looking increasingly likely ... - The Independent
https://www.independent
Powell is going to light something, somewhere.

[Danny B]

China fighting market forces

DEFINITION of 'Plaza Accord' A 1985 agreement among the G-5 nations (France, Germany, the United States, the United Kingdom and Japan) to manipulate exchange rates by depreciating the U.S. dollar relative to the Japanese yen and the German Deutsche mark.
The dollar had gotten too strong and, it was messing up international trade.
"Plaza Accord" refers to an agreement made at the Plaza Hotel in 1985, between the United States and its primary economic allies, to engage in massive selling of the dollar in the foreign exchange market at a time when the dollar had skyrocketed in value against other currencies."

Once again, the U.S. dollar has gotten too strong,,, mostly because of the actions of the FED. It is fast wiping out weaker currencies. They will soon run out of dollars to support their home currency. Both the FED and the private banks are deflating the currency supply just when the R.O.W. needs lots of dollars.
So, what does China have to say about this?
Dollar Poised To Soar As China Refuses New Plaza Accord
"The Federal Reserve monetized debt. It took existing debt and swapped it for Federal Reserve notes. The effect was not a resumption of credit growth to pre-crisis levels because banks create new money when they create new credit. Even with massive federal deficits in the wake of the 2008 crisis, deflation in the financial and household sector overwhelmed credit growth. "
"The Federal Reserve did achieve a transformation of debt into equity. Instead of making new loans, money flowed into stocks. The wealth effect caused by rising stock prices is a fraction of the wealth generated by productive credit creation. "
The boneheads could NOT make new loans because there was no demand.
"Until the 2016 presidential election, the U.S. stock market moved in lock-step with the Federal Reserve's balance sheet, so much so that the chart below only has one axis. The percentage changes in the Fed balance sheet and S&P 500 Index are too close to be a coincidence."

"Most importantly, emerging markets inflated like crazy and in countries such as China, if the private economy wasn't willing to lend and borrow, the government forced state-owned banks and companies to do it."
"The solution everywhere is trying to add more debt to overly indebted nations, economies, corporations and consumers. For various reasons including demographics and absolute debt levels, the U.S. (in aggregate) refused. American banks retreated from eurodollar funding after 2008 and the Europe after 2011."
"The financial system is moving in a deflationary direction, but "everyone" believes inflation is right around the corner because central bank policies are laying the groundwork for higher inflation. The flaw is there's no catalyst. Base money isn't multiplying into new credit. Each round of QE (and the Chinese stimulus burst in 2016) is better understood as preventing a deflationary collapse."

"For today, however, it still looks like emerging markets have made the larger error in the short-term. They are heavily "short" dollars and the Federal Reserve isn't interested in helping. Moreover, neither are the emerging markets. "
"Chinese Ambassador to the United States Cui Tiankai said here on Thursday that China would not accept a Plaza Accord imposed on it.

"On what to do next, for China it is very clear," Cui said. "I wish to advise people to give up the illusion that another Plaza Accord could be imposed on China. They should give up the illusion that China will ever give in to intimidation, coercion "
China is fighting the impossible trinity, huge capital outflow, shrinking workforce, crashing overseas markets AND,
2016 - The Asian colossus is losing 6.5 percent of GDP to pollution-rated costs.

https://globalsecurityreview.com/perfect-storm-chinese-economic-instability/

https://www.nytimes.com/2018/02/28/world/asia/xi-jinping-china.html

Powell has pulled the plug on dollar creation just when many States need them most. The implosion should be spectacular.

[Danny B]

Ah, Mr. Powell,,,, about those interest rates that you want.

"By mid-2016, American oil production had declined by nearly a million barrels a day and some 150 oil and gas companies filed for bankruptcy."
"And yet only five of the top 20 fracking companies managed to generate more cash than they spent in the first quarter of 2018. "

https://www.nytimes.com/2018/09/01/opinion/the-next-financial-crisis-lurks-underground.html

The Uncomfortable Hiatus - KunstlerThe American Dream Is Getting Smaller, And The Reason Why Is Painfully Obvious… – Investment Watch Blog

https://www.silverdoctors.com/gold/gold-news/martin-armstrong-warns-from-here-on-out-this-will-not-be-a-video-game-this-is-real/

https://www.armstrongeconomics.com/world-news/civil-unrest/civil-unrest-for-2019-post-election/

A nation is held together by shared values. This is becoming increasingly rare in What used to be America.

[Danny B]

Currencies crashing,,Mega contagion

The lower loop of the economy has lost ground for decades. The upper loop just extends our repayment schedule further and further out. At some point, the interest costs outweigh the the rationale of using credit.
In 1998, long term capital management

https://www.oftwominds.com/photos2018/Currencies9-18.jpg

"The illusion that the U.S. is immune to the unravelling of debt and asset valuations won't last. When the defaults start piling up, so will the losses, and when asset bubbles pop, incomes and spending decline. Although few seem to notice, almost half the profits of the S&P 500 corporations are earned overseas."
Yep, we're last.
oftwominds-Charles Hugh Smith: The Global Financial System Is Unraveling, And No, the U.S. Is Not immune

https://www.theburningplatform.com/2018/09/03/10-years-later-no-lessons-learned/#more-182542

[Danny B]

Bond markets circling a black hole

The orbit of a rock circling a black hole gets more defined as it gets closer. The same is true for our economic malaise as we circle ever-closer to worldwide default. Here is the list (reposted) of failing currencies.

https://www.oftwominds.com/photos2018/Currencies9-18.jpg

By my rough reckoning, the population of the affected States is about 2.5 billion people. That is WITHOUT China. The Emerging Markets and many other States borrowed in dollar-denominated loans. Then, they used these cheap dollar loans to invest in higher-yielding securities and higher yielding markets. This is called a carry-trade.

Investors assumed that the FED would continue to print forever. Keep in mind that all that QE has destroyed the pension funds. The stock markets went up EXACTLY parallel to the FED printing. Estimates for the "retrenchment" call for losses in equities of 50---90%. So, the pension funds might get higher interest rates on their investments but, at the same time,. the value of their portfolios will be cut by 50---90%
The bankers were all rescued at the cost of destroying everything else.
The carry trade has resulted in everybody being carried out on their shields.

The feces-for-brains at the Central Banks assumed that they could always rescue the system by pumping in more liquidity. Bernanke was the standard bearer. Kuroda was his lieutenant. (BOJ).
The CBs more-or-less follow the BS from Keynes. They also embrace the quantity of money theory The mined gold supply increases by about 2% per year. The economy normally grows about 2% per year. The years under a gold standard show little to no price inflation. The PTB weren't happy with this limitation. The quantity of money must be commensurate with the quantity of goods.
The upper loop ramped up the money supply,,, all debt. But, wages, productivity and population were / are falling. The upper loop discovered that ONLY the upper loop had the "ability" to service all this new debt. They are printing madly but, to no avail.
Powell has apparently decided that enough is enough. Time to pull the plug on Bernanke's grand experiment.

Trump tries to talk down the dollar to reduce our trade deficit. BUT, our stuff is now too expensive to attract foreign buyers / importers.

The hot money is fleeing jurisdictions like Italy and India and Turkey, et al. Italy wants $250 billion of debt forgiveness and, is going head-to-head with the ECB. Investors don't like the sound of that. The wind is whispering that Turkey is going to default. They want to stiff the West and align with Russia. They control the Bosporus so, Russia must be very careful.
Here is Italy, https://capitalistexploits.at/2018/0...dog-wont-hunt/

Apparently, the gold and silver markets see the writing on the wall.

https://www.dollarcollapse.com/gold-silver-2008/

Jim Willie; Good rundown here.
GOLDEN JACKASS.COM - The Golden Jackass Knows Gold, Currencies & Bonds"
Fulford always has at least some truth to his articles.

https://kauilapele.wordpress.com/2018/09/03/benjamin-fulford-9-3-18-good-side-of-rothschild-family-says-trump-will-stage-financial-reset/

You saw in Greece that they punished the entire country to save the bond holders. Will that happen worldwide?
More from Argentina.
"Argentina, but it applies to the entire world for what happens in Argentina is merely the beginning of the global debt crisis. We can see from the chart that the dollar has been soaring. However, the Array picked August as the Panic Cycle and that has been spot on. "
"Unfortunately, it does not look like this is going to calm down. We may be headed into a real Emerging Market crisis by October."

"Now we have Portuguese and Spanish banks who would not lend to their domestic economies for there were way too many nonperforming loans so they ran and bought Turkish debt."
"Rates will soar in Europe if Draghi actually stopped buying and then we will see a global debt crisis you cannot imagine."
He retires in a few months.Wait they need those bond markets to support all the muzzies and bureaucrats.

Napoleon seems to have had bad luck with the weather caused by volcanoes.

https://www.armstrongeconomics.com/international-news/nature/napoleon-was-defeated-by-volcanoes/

He also made a stupendously bad decision by refusing to let James Watt build him a steam-powered warship.


Well, he may not bend but, he will certainly break.

Yeah, well, they didn't inspire any confidence by expropriating private farms.
Gold and silver are indicators, https://www.dollarcollapse.com/gold-silver-2008/

If the industrial economy does not have a job niche for you, you have to turn to the agrarian economy. I don't see anyone even presenting some kind of a solution.

[Danny B]

Unfolding bond wars

Here is a graph of credit growth for the G4 + Swiss.

https://www.zerohedge.com/sites/default/files/inline-images/central%20bank%20asset%20growth.jpg?itok=ZVantiZU

"while US$ liquidity is turning deeply negative, thus supporting US$. "
Powell seems determined to continue with shrinkage at the FED.
"But on the other hand, China is moving towards more stimulative position. How do we balance these factors? Unless there is a stronger private sector recovery or China becomes more aggressive, CBs must change their narrative. "
Powell is forcing the Chinese to increase liquidity in the system to make up for a Western curtailment of credit creation. The more that China prints, the more that they suffer capital flight. This is an attack on bond markets. Here is a page with a graph of the current sell-off. You can see that foreign currency bonds Have an unprecedented sell off.
Tyler Durden Blog | "The Very Definition Of Contagion": Catching Falling Knives In Emerging Markets | TalkmarketsCatching Falling Knives In Emerging Markets Catching a falling knife refers to the action of buying an asset right at the bottom of valuation just before it rises. This trick is closely related to judging market confidence. Not an easy thing to do.

Kolanovic, a 43-year-old analyst with a Ph.D. in theoretical physics has written a very interesting report.
"Central banks will be forced to make unprecedented moves, including direct purchases of equities, or there could even be negative income taxes.
Timing of when this next crisis will occur is uncertain but markets appear to be safe through the first half of 2019, he said."
BOJ and ECB are already doing that. It hasn't fixed anything. Will Powell refuse to do this?
"The forces that have transformed markets in the last decade, namely the rise of computerized trading and passive investing, are setting up conditions for potentially violent moves once the current bull market ends"

If markets fall by 40 percent or more, the Federal Reserve would need to leap into action to prevent a spiral that led into depression"

"Suddenly, every pension fund in the U.S. is severely underfunded, retail investors panic and sell, while individuals stop spending," Kolanovic said. "If you have this type of severe crisis, how do you break the vicious cycle, the negative feedback loop? Maybe you stimulate the economy by cutting taxes further, perhaps even into negative territory. I think most likely is direct central bank intervention in asset prices, maybe bonds, maybe credit, and perhaps equities if that's the eye of the storm."
This hasn't worked yet.

"The exact timing of this crisis is uncertain but will be determined by the speed in which the Fed hikes interest rates and reverses bond purchases "
Powell is pushing hard on the brake pedal.
"If central banks can head off the worst of a crisis by providing a floor for asset prices, then the status quo will probably be maintained, he said. "

https://www.cnbc.com/2018/09/04/jpmorgan-says-next-crisis-will-feature-flash-crashes-and-social-unrest.html

https://www.armstrongeconomics.com/international-news/emerging-markets/emerging-market-debt-crisis-a-reality-check/

https://www.armstrongeconomics.com/world-news/war/frances-dream-of-europe-without-nato/

The nations that first entered the industrial revolution were most adept at colonizing nations that were not industrialized. Now, that most States are industrialized enough to conduct mechanized warfare, colonies and empire are a thing of the past. Russia is demonized as an aggressor to try to keep this mentality (and spending) in force.


Old people in Japan are committing crimes so that they can get a comfy jail cell. Who would possibly invade Japan?


The Camorra (Italian: [kaˈmɔrra]; Neapolitan: [kaˈmorrə]) is an Italian Mafia-type crime syndicate, or secret society, which arose in the region of Campania and its capital Naples. It is one of the oldest and largest criminal organizations in Italy, dating back to the 17th century.

[Danny B]

Contagion,,,attacking Trump because he won't save israel,,

The world watches as the contagion spreads.

Nope, it will do just the opposite.

https://www.pv-magazine.com/2018/09/06/clean-tech-transition-could-generate-65-million-jobs-save-26-trillion-study/

Yes, using voodoo.

The manufacturing index worldwide is crashing but, commodities are going to sell GREAT.


They are NOT oblivious,,, they are avoiding the bond market.

"The "recovery"/Bull Market is in its 10th year, and yet central banks are still tiptoeing around as if the tiniest misstep will cause the whole shebang to shatter: what are they so afraid of?"
"Wait a minute: so the patient has been on life-support for 10 years and authorities are telling us the patient is now super-healthy? If the patient is so healthy, then why is he still on life support after 10 years of "recovery"?"
It was the best that they could come up with to try to save unsavable banks. Here is the graph of Chinese credit creation. It has recently dropped just a bit.

https://www.oftwominds.com/photos2018/china-credit9-18.jpg

oftwominds-Charles Hugh Smith: After 10 Years of "Recovery," What Are Central Banks So Afraid Of?

Unemployment rate matches lowest point in half a century - CNN
Ignore the 95 million not in the labor force.
The unemployment rate is historically low, and meaningless.

https://slate.com

Full employment but, with fewer people.

https://econimica.blogspot.com/2018/09/what-does-full-employment-mean.html

"Covert Coup" From Inside Trump White House Sparks Constitutional Crisis
Ex Rep - 'The Deep State Is Real...And They Don't Like Donald Trump's Disruption'
Trump Looking For Replacement For SecDef Mattis - Report
Trump has fallen out with his military chiefs
Add up all of that, and then, add it to this.


There are only weeks? left before Syria kills off the mercenaries in Idlib. The tribe is gnashing their teeth and rending their garments because Trump won't attack. They are pulling out all the stops attacking him. Not only that, the military-industrial complex are in open rebellion / attack.
This is, of course, a perfect setup for a false-flag attack. That little Rothschild $hite in Paris is all ready to go.
"Macron Needs to Attack Syria With or without the United States."

Syria needed to cleanse Idlib before it could take on the Golan,,, where all the oil is.
Partition of Syria: US and Israel eye Golan Heights oil | Asia Times
" Genie Energy's Strategic advisory board is composed of: Dick Cheney (former vice president of the United States), Rupert Murdoch (media mogul and chairman of News Corp), James Woolsey (former CIA director), Larry Summers (former head of the US Treasury), Bill Richardson, former Governor of New Mexico, an ex-ambassador to the United Nations and United States Energy Secretary[2], Michael Steinhardt, Jacob Rothschild"

Jacob Rothschild + the military-industrial complex + Netanayahoo + most of congress + millions more of the tribe are all stomping their feet to boot out Trump because he won't attack. Reportedly, the Russian dossier was a fabrication of Homeland Security. So, add HS to the list of enemies.

This is mostly an extension of the pipeline wars for israel to get control of large amounts of gas and oil that belong to Palestine, Lebanon and Syria. Meanwhile, Russia is maxxing out their gas distribution.

https://www.rt.com/business/437753-power-of-siberia-china/

After the credit collapse, America will not be able to run a trade deficit. We are out of cheap oil and, we will have to pay as we go. Wall Street and the junk-bond market are abandoning fracking. Peak-cheap-oil was held off for several years but, it will appear.

https://www.zerohedge.com/news/2018-09-04/coming-collapse-us-shale-oil-production

The idea of taking over Eurasian oil was just a bridge too far. Curiously, American sanctions helped to destroy Venezuelan oil production at a critical time when it would have been in our best interests to support them.

[Danny B]

"Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery." - Winston Churchill quotes ...
The left is betting all their cards on Socialism. Trump represents the hard workers and the overachievers. The blob State of bureaucrats are well aware that they contribute nothing to the producing side of the economy. Realizing this, they grow ever-more shrill and demanding. They are fanatically obsessed because they see the approaching credit collapse. They know that their particular niche is ONLY supported by the public debt / sovereign bond market.

Here are a bunch of quotes from Armstrong about what the world can expect from the left as the economy contracts.

"The left not merely staged a revolution seizing all the property of anyone who had it, but they then killed the Emperor and his entire family. The hatred is a pattern that will always manifest on the left. They are really blaming everyone else for their failures in life.
I did not like Obama for the fact that he supported the NSA, installed Obamacare which failed to work but supported the insurance companies, and raised taxes. Nobody I ever heard called him vicious names. It was a disagreement with politics. The left is incapable of drawing such a line and their hatred is always personal.
"the lack of intelligence and the high probability that is some person who will eventually take out their hatred and support the civil war against anyone who disagrees with them. That is why all revolutions begin from the left. These are people who cannot sleep at night hating others who typically have more." ENVY

https://www.armstrongeconomics.com/international-news/politics/caution-the-left-never-plays-nicely-with-others/

"These people who want to see Trump gone have no clue what may result in the aftermath. My concern is global. This is far beyond Trump. "
We have private debt concerns in China. We have South Africa following the mistakes of Zimbabwe and we have major change sweeping the Middle East. The discontent in Iran is building toward yet another revolution and in Japan, Abe Economics is failing. South America is in turmoil which has spread even to Mexico."
"In all honesty, throughout my career, there have been places that are in turmoil and it was crystal clear where capital would move. I honestly have to say I have NEVER witnessed a period quite like this. There is no place that is a safe haven at this point. The entire world is just coming unglued.
All we can do is now rely on the computer for personal opinions will be probably the most dangerous things upon which to base forecasts.

"The people who hate Trump so much may be crying later if he is forced out for they will find their lives completely destroyed economically if confidence in government collapses as they try to put in one of their own career politicians. We have a Panic Cycle arriving in Politics in 2021 and again in 2024. The presidential elections will be 2020 and 2024. Note that both Panic Cycles are aligned with these events. I am NOT joking about blood in the streets. Those who hate Trump so much right now will be the very people hunting others who disagree with them."

https://www.armstrongeconomics.com/international-news/politics/beware-of-political-uncertainty/

https://www.armstrongeconomics.com/future-forecasts/ecm/venezuela-the-flight-of-capital-from-public-to-private/

Rowe: Why we never see protests at trade schools [Video] - Yahoo

https://www.yahoo.com/news/rowe-why-never-see-protests-010647708.html

Agenda 21 calls for everybody to leave rural areas and, move to the cities. If the lefties are willing to burn it all down, the cities are the last place to be. Will this pit homeland security against deplorables?