Economic pressures

[Danny B]

Strange, spending is relative to population

Everyone has heard; "the combined wealth of the richest one percent will pass that of the other 99 percent next year"
Here is an excellent graph showing wealth distribution.

https://cdn1.vox-cdn.com/thumbor/NkWLwHRdnkKLA9avnYy1xA5Qq94=/cdn0.vox-cdn.com/uploads/chorus_asset/file/3329452/wealth_distribution.0.jpg

Europe and North America have been on a printing binge. Those closest to the spigot are VERY rich. China has much of the wealth held by the upper middle class. India has much held by the lower middles class. Much of this is because of China's one-child policy.
A great deal of this wealth is in the form of GOV bonds. They will soon be worth MUCH less.
A great deal of wealth is held in the form of stocks. BUT, the value of these stocks depends on sales. Since the consumer is flat broke, sales will eventually crash. At the moment, U.S. GOV is spending about 42% of the gdp. The French GOV is spending about 59% of GDP. A crash in GOV bonds is bound to reduce overall spending.
The crash in spending is very closely related to the demographic crash.
Hambone's stuff: 2008 WAS A TREMOR...WHY THE MAIN EVENT IS DEAD AHEAD
Japan has a falling population and a demographic crash. For some strange reason, they just can't seem to grow their oconomy.

[Danny B]

http://www.zerohedge.com/news/2015-05-27/billionaire-hedge-fund-manager-paul-singer-reveals-bigger-short

Central banks everywhere are creating new "money" with wild abandon. As they create trillions more of debt instruments, they are, at the same time, trying to preserve the VALUE of each debt instrument. When they have an inflation target, they are, at the same time, driving down the value of the bonds.
The FED does stealth QE by claiming that, Belgium, Ireland, Cayman Islands and a few other tiny economies are doing to bond buying. All the CBs are working overtime to show that there is actual demand and value to their debt instruments. They insist that bonds have long-term value at the same time that they work to drive down this value.
This article has a billionare claiming that bonds are soon to fall in value because of bad fundamentals.
Armstrong claims repetitively and clearly that U.S. bonds will crash 2015.75
Singer is saying that now is the time to short them. It seems fated that the perception of the herd will soon focus on the fundamentals of the bond market.
The truth is; the world is awash in money (debt instruments) that can never be fulfilled,,, payed off. The law of supply-and-demand would have the value of these debt instruments reduced to almost nothing. This money has flowed into stocks but, the value of stocks is dependent on earnings. It had flowed into commodities but, commodities depend on consumption,,, just like stocks. It is flowing somewhat into real estate.
Mish's Global Economic Trend Analysis: $500 Million LA Home - Built on Spec
Currently, the rich must invest in things that other rich people will buy. We have price inflation in rich houses and toys. Eventually, it will flow into precious metals. When bonds crash, there are few areas where the money can flow. Just imagine a U.S. Treasury bond aa a big, giant, SNOWMAN.

[Danny B]

Gold is BAD,,, if you read Armstrong.

Martin Armstrong is absolutely brilliant BUT, he has a blind spot for gold. In 1961, 8 major central banks formed the London Gold Pool to manipulate currencies and gold. They formed the pool specifically to manipulate currencies and gold. They over printed currencies and the pool collapsed in 1968. Then, they tried a 2 tiered system that collapsed in 1980. Gold spiked to about $ 800--850 in 1980. Then;
"January 1980. Gold hits record high at $850 per ounce. High inflation because of strong oil prices, Soviet intervention in Afghanistan and the impact of the Iranian revolution, which prompted investors to move into the metal.

In August 1999, gold fell to an all-time low at $251.70 on concerns about central banks reducing gold bullion reserves while, at the same time mining companies were selling gold in forward markets to protect against falling prices."
Talk about lies and half truths !!
Investors are married to return, not to gold. When Paul Volker raised interest rates to about 21%, investors left gold for instruments that yielded interest profit. This is profit, not sentiment.
Central bankers have always tried to manipulate the price of the currency ( in gold).

The manipulation has been continuous. Gold Price Manipulation is Now a Global Effort
Gold Fix Study Shows Signs of Decade of Bank Manipulation - Bloomberg Business

Armstrong; "I have stated countless time that gold is NOT the hedge against inflation, hyperinflation, the anti-fiat antagonist against the dollar, or manipulation that keeps gold down; paper gold suppresses the price, and anything of the sort that amounts to promotions or excuses"
"All of that nonsense is pure BS, to state it bluntly."

Gata has documented the manipulation. They even had a trader sit down with them and tell them at just what time of day each manipulation would take place. Gold Anti-Trust Action Committee | Exposing the long-term manipulation of the gold marketThe Greek Nightmare | Armstrong Economics
When the dollar was repriced from 1/20 of an ounce of gold to 1/35 of an ounce of gold, that was a partial default. When Nixon closed the gold window, that was a major international default. GOV has been hoping to do a soft default by slowly inflating away the value of the dollar. It isn't working because they can't get a wage-price spiral. The very rich are inflating the price of high-end assets but, that is the only place that the CBs have been able to create high inflation.
Lacking a soft default, they will call for a hard default.
Edit, another link on the manipulation of the POG;

http://www.24hgold.com/english/news-gold-silver-curiouser-and-curiouser.aspx?article=6961529028H11690&redirect=false&contributor=Theodore+Butler&mk=1

[Danny B]

theft by a different name

Our currency is a debt note. Our U.S. bonds are debt notes. Stocks are going up even absent earnings. All of these instruments have an assigned value. Their actual value is related to how much confidence people have in any given instrument. This is also true of gold. The CBs are creating bigger and bigger mountains of debt notes. As the perception grows that these notes are not worth what was previously believed to be their value, their perceived value goes down. This is a form of deflation. From that viewpoint, QE is causing deflation in certain areas. Much depends on confidence. As confidence falls, people tend to hoard. This reduces velocity and , somewhat, counteracts the effect of monetary inflation.
This is part of the reason that GOV is trying to force all currency into the system. It is a lost cause because employment and aggregate earnings are falling.
"The VELOCITY of money has fallen to BELOW Great Depression levels. This is the destruction of Capitalism, and I fear the response against the banks on the next downturn will lead to authoritarianism."
So, bonds crash in october. Do we have an election in November?
"The collapse in the VELOCITY of money illustrates the collapse in liquidity in the markets, which will erupt in higher volatility we have not seen before. The VELOCITY of money declines as HOARDING rises. This is how empires, nations, and city-states decline and fall."
VELOCITY of Money Below Great Depression Levels | Armstrong EconomicsGovernment is preparing to seize 401(k) retirement plans

[Danny B]

The power of denial

Stocks are due for a 50% decline. There appears to be little doubt.
Hussman Funds - Weekly Market Comment: When Paper Wealth Vanishes - June 1, 2015In Denial: We Pursue Endless Growth At Our Peril | Peak Prosperity

[Danny B]

Flight from public debt to private debt

Stocks are expected to do a big decline. BUT, bonds are starting to crash. Armstrong says that, as confidence is lost in public debt, investment will flow into private debt.
The Fed & Interest Rates: The Nightmare That Will Not End Nicely | Armstrong EconomicsGOV is spending an ever-greater % of the GDP BUT, it never pays back anything. The more that it spends, the greater the deflation. The more that it sucks out in taxes, the greater the deflation in the productive economy.How To Spot A Bubble - The Automatic Earth
Another GOV trick; when GOV prints currency, it counts towards the GDP. When they spend it, it is counted a second time.
Armstrong; "June was a Directional Change and July is a key turning point, so everything has been on schedule so far. Break that channel and you will see the Sovereign Debt Crisis. "
Armstrong; "This is the entire reason behind the Global Market Watch. This is a tool we use to provide the biggest clients with global portfolios. Since the computer is constantly monitoring everything at all times, it allows you to see the world at a glance. No analyst can do that. In addition, the computer is never tired, sick, had a fight the night before, or distracted by romance. The computer is consistent and chugs along on its merry way."
ah yes,,, the biggest clients. Armstrong previously had in excess of $ 3 trillion under management. His program has been flawless.
If his "biggest clients,, and others believe in him and all exit before October of 2015, what will the fallout be?

https://www.youtube.com/watch?v=60gCIR9PTMQ

https://www.moneymetals.com/news/2015/06/03/better-than-cash-alliance-000716

Armstrong; "The Fed will have to act regardless of the impact upon the Federal budget. "
OK, forget the federal buidget for a moment. What about $ 440 trillion in interest rate swaps?
"Every slice of the debt crisis exposes another layer of insanity. The real question becomes, how far do we go before this whole nightmare explodes in our face? It looks like we have 2 years perhaps, at best."
"Obviously, there are so many layers to this debt crisis you cannot focus on just one fundamental relationship. This is a convergence of many trends going wrong all at the same time. This is the classic flaw in analysis. The typical attempt is always to reduce everything to a single cause and effect."
The Fed & Interest Rates: The Nightmare That Will Not End Nicely | Armstrong Economics

[Danny B]

Awaiting a Paradigm Shift

More good reading is Elliot Long waves and Generational Turnings.Greece: out of cash, out of time, out of options | CapX
So,, if you give me 7.2 billion, i will repay you 6.5 billion.

[Danny B]

Don't try to get the best of a Greek

The Greeks kicked out the old boys club politicians. They elected "lefties". The old boys are going to deliberately crash Greece to get the Greeks to kick out the lefties. Stupid people make stupid moves. The economic minister, Varoufakis is WAY ahead of the bonehead politicians. He sucked every Euro out of GOV coffers, including municiplal GOV.
Everybody and their dog is expecting a bail-in of Greek banks to preserve the bankers. Varoufakis is dragging this out so that people have time to get their cash out,,, up to 700 million Euros a day.

http://www.zerohedge.com/news/2015-06-05/greek-banks-verge-total-collapse-bank-run-surges-massively-depositors-yank-%E2%82%AC700-mill

Greece consolidated their payments and deferred them to the end of june. By then, there won't be a farthing left in the banks, EXCEPT for the emergency liquidity pumped in by the troika.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/06/ELA%20greece%20june%205_0.jpg

When the bail-in comes, the only deposits left will be Brussels bucks.

Brussels;
"Naturally, creating the currency first provided the the power to create a bureaucracy, and then handle the debt afterwards. The problem occurred when these people left, as the new crew, who were now pure politicians, never heard of phase two. This has been my criticism.

The crisis facing Europe is simply that those in power have ZERO experience in the markets, and being lawyers, they assume the answer is to write a law to dictate the result. They fail to grasp that no law will ever alter human nature. It can suppress it for a while, even cause people to become addicted to government with the Roman model of free food and circuses, but the core traits will always remain intact.

Consequently, the governments are heading in the direction of authoritarianism for they see the world only through the rose-colored glasses of their own power. This now is the NEGATIVE interest rate concept and increased taxation trend which requires the elimination of physical money to sustain their power looking at only their fiefdom in isolation. They are more than likely going to attempt this unilaterally and then impose capital controls to try to prevent the flight of money from Europe. It will fail and we are headed into a chaotic period that may result in revolution."
Brussels & the Trend Toward Authoritarianism | Armstrong Economics

Yanis is stalling until there are no Euros in the Greek banking system,,, public OR private. The bail-in will gain the bankers their own money.

[Danny B]

http://judgy*****.com/2013/05/20/har...body-is-wrong/

"Racial activist groups have tried to create their own tests to demonstrate intellectual parity of the races and attack the integrity of existing tests but the rankings are always the same; African Blacks average a 70 IQ (only 2% of Whites score this low), American Blacks are 85 (due to mixing with Whites, 20% on average), non-White Hispanics are 87, Whites 100, Asians 106 and Ashkenazi Jews at 115."
Does anybody white complain that the Ashkenazi Jews should be "hobbled"?


"And when it comes to IQ, size matters. The old science of head measurements found a 20 percent correlation of head size with IQ. The new science of MRI finds at least a 40 percent correlation of brain size with IQ."
"And when you compare black and white kids who score the same on IQ tests, their average difference in head circumference is zero."
Race, Genes, Intelligence - Facts Are Facts

Then, there are the differences in the "Peak" http://library.flawlesslogic.com/bell.gif
"If you tell yourself that the top professional and managerial jobs in this country require an IQ of at least 115 or thereabouts, then you also have to tell yourself that only about 2.5 percent of blacks appear able to compete for those jobs."
Black-White IQ Differences

"The median wealth of non-Hispanic black households dropped by more than one-third between 2010 and 2013, to $13,700, according to the Pew Research Center, citing Federal Reserve data. "
"Approximately 35 percent of African-American households have a zero or negative net worth, according to Pew."

http://www.huffingtonpost.com/eric-cooper/reparations-would-help-cl_b_7514456.html

"There is about a 70 percent chance that an African American man without a high school diploma will be imprisoned by the time he reaches his mid-thirties"

http://www.alternet.org/news-amp-politics/40-reasons-our-jails-and-prisons-are-full-black-and-poor-people

Employment is competitive and there is no getting around this. Those who lost out on the intelligence lottery will not find work.

Venezuela and Saudi Arabia have about the same population. Venezuela has MORE oil than Saudi. Saudi and ARAMCO have a high level of expertise and produce a LOT of oil. Venezuela kicked out the foreign experts and tried to produce the oil themsleves. Production fell.

http://blogs.cfr.org/levi/files/2013/01/1-17-Venezuela-exports.png

Now, the country is running out of basic necessities. The hotels tell you to bring your own toilet paper.
You just can't put incompetent people in charge of important jobs.
When the bubble pops, how can the poor live on even less?

[Danny B]

Greenspan: Social Security Trust Fund 'Nonsense' and 'Meaningless'
OK, so when the FED goes bust, how soon will people go bust?
"A recent study by the Federal Reserve finds that the surprisingly small sum of $400 in unexpected costs would put nearly half of all Americans into a position that would require selling something, borrowing money, or skipping other payments to cover it."
The Surprisingly Small Amount of Money That Would Send Many Americans Into a Tailspin
10,000 people are signing up for SS every day for the next 19 years.

Most people have a "normalcy bias" and don't want to hear any bad news. You can point out the chemtrails and people wil tell you that you are a "conspiracy theorist". They may be coughing their brains out but, YOU are crazy.


The stock market reacts to every whisper out of GOV even though it has been thoroughly proved that it is all lies.
Shadow Government Statistics - Home Page

Armstrong has an amazing record for accuracy but;
"So no worries. The majority of people will never follow this site. The majority will read what they want to believe, never to try to challenge accepted beliefs like if the ECB is buying how can bonds decline. They will read the popular news sites, and listen to the talking heads of TV mainstream. Traditionally, they will lose their shirts and that will contribute to the rising civil unrest. "
Ah yes,,, tradition.
"Government debt is uncontrollable from the central bank level. They do not create the debt, governments do that and there is no rational management concern within the political mechanism. "
What !!!! Politicians aren't rational or responsible?
The European Bond Crash | Armstrong Economics
Get your reservations in early for Camp FEMA. They wil be filling up fast.
Actually, the FEMA camps have been thoroughly debunked by popular Science. They also debunked the many rumors about 9/11.

[Danny B]

The Back-Pedaling Brigade Returns—–More Central Banking Lunacy | David Stockman's Contra Corner
MARVELOUS,,,, a pickup in wages when we have to compete with Chinese and robots. 100 million not-in-the-workforce and ,,, inflation is going to pick up. It isn't getting any better, you know.
Daily Job Cuts - Layoff News , Job Layoffs 2015 / 2014 , Bankruptcy, Store closings, Business Economy NewsWeekend Edition: Literally, Your ATM Won’t Work... - Bonner & PartnersTen Things Every Economist Should Know about the Gold Standard | Cato @ LibertyJust coincidence.Another shock that seems to have been swept under the rug is the collapse of derivatives written guaranting the profits of shale oil. Some $ 3.5 trillion as I understand.
Deutsche Bank CEOs ?Shown Door? - World's Largest Holder of Derivatives In Trouble?
The markets run on credit.
Credit depends on confidence.
Confidence depends on morality.
We're screwed.

[Danny B]

P2P banking and the Central Banks

The big banks seem to have little appreciation for the effect of emerging technology.
" they are blinded to the vision of the forest due to the tree standing in their way. The true risk is outright disintermediation as the banking function is turned into cloud-based P2P software through the blockchain."
"Death by a thousand cuts now has a venture capital version. Observe as I walk through FinTech startups literally disassemblet the almighty money center bank."
"The $665 Million Evolution in a Space Nobody Respected a Year Ago - Already Outpacing the Internet Circa 1994"
Reggie Middleton's blog | Zero Hedge

Advice from The Burning Platform; "The rule is simple. Once market internals have deteriorated, the exit rule for bubbles is that you only get out if you panic before everyone else does."

Most trading is done by computers that run similar or identical algorythms. Should there be a panic, there will be NOBODY buying.

GOV is the mega parasite that wants NO limitations. A gold standard is a limitation to expansion of the "money" supply. Around the late '90s, the various central banks sold off hundreds of tons of gold. Keep in mind that they sold this gold for paper currency that they can print in unlimited amounts. It makes no sense at all other than to diminish confidence and the role of gold for wealth storage. They finally gave up and threw in the towel. They are now buying gold.
Jesse's Café Américain: The Global Monetary Phenomenon That Almost No One Is Seriously Discussing

The curse of central banks has been with us for a long time. The money powers make war on any country that has (had) an independent central bank.

http://theeconomiccollapseblog.com/archives/guess-how-many-nations-in-the-world-do-not-have-a-central-bank

If P2P banking starves out the money center banks, how will that affect the Central Banks?

[Danny B]

Creating currency as opposed to creating wealth

The headlines are getting more interesting. Yesterday was "panic before everybody else does".
Today; "If Your BS Detector Isn't Shrieking, It's Broken"
oftwominds-Charles Hugh Smith: If Your BS Detector Isn't Shrieking, It's Broken
51% of Americans receive a check from GOV. " Over 108,000,000 Americans received means-tested benefits in latest report from Census Bureau, more than are currently employed full-time."
Obama says that Greece needs to cut down GOV payrolls to meet the demands of creditors. Mish's Global Economic Trend Analysis: Greek "Paperology"; Obama Pressures Greece; Proposal Dismissed by Creditors as "Vague Rehash"; Dismal Choices
Obama wants to assure Americans that the district of corruption hasn't run out of stupid plans yet.

Many years ago, Roberto Vaca wrote a book titled, "The Coming Dark Age". He based his reasoning on the ever-increasing complexity of systems. They are all so connected that a breakdown in one will collapse others.

Roberto Vacca
The Coming
Dark Age
(revisited)
The futuristic essay which inspired the plot of the novel "The Death of
Megalopolis"
"I read this book in a palsied fascination of horror.
I have never read a book that was at the same time so convincing and
so frightening." - Isaac Asimov

http://www.printandread.com/download/comingdarkagefree.pdf

"When the next great crash comes -- which could happen as early as the Fall of 2015 -- it will multiply and accelerate precisely because of these little-understood systemic risks which underlie almost every financial instrument, currency position and banking institution on the planet."

Learn more: The coming systemic market crash explained in new mini-documentary by the Health Ranger - NaturalNews.com

Here is an article on the progress of the bubble;

http://www.zerohedge.com/news/2015-06-08/if-things-were-bad-2008%E2%80%A6-whats-coming-will-be-far-far-worse

I found an excellent article comparing growth in different aspects of the economy.
During the 27 years after Alan Greenspan became Fed chairman in August 1987, the balance sheet of the Fed exploded from $200 billion to $4.5 trillion. Call it 23X.35X.14X.
As shown above, nominal GDP rose from $5.0 trillion to $17.7 trillion during the same 27-year period. But that was only 3.5X.
Next we have wage and salary compensation, which rose from $2.5 trillion to $7.5 trillion over the period. Make that 3.0X.
Then comes the median nominal income of US households. That measurement increased from $26K to $54K over the period. Call it 2.0X.
Digging deeper, we have the sum of aggregate labor hours supplied to the nonfarm economy. That metric of real work by real people rose from 185 billion to 235 billion during those same 27 years. Call it 1.27X.
Further down the Greenspan era rabbit hole, we have the average weekly wage of full-time workers in inflation adjusted dollars. That was $330 per week in 1987 and is currently $340 (1982=100). Call that 1.03X.
Wages have gone nowhere.

http://davidstockmanscontracorner.com/the-warren-buffet-economy-why-its-days-are-numbered-part-1/

The Industrial Revolution held the promise of extreme deflation in the price of manufactured goods. Unfortunately, this just didn't come to pass. The finance industry sucked up every bit of price deflation that tried to appear.
JUST the financial industry. EXXON corporation reported that they earn 5.5 cents per gallon on finished product. Last report that I heard was that every barrel of oil is sold 49 times before it is consumed. This added $ 27 per barrel. OLD number.

The producers have to actually work harder to create more wealth. The bankers just have to push a button to create claims on that wealth. Wealth creation is going down. The bankers are pushing ever-faster on the button to compensate for the shrinking wealth.

[Danny B]

Kicking banker butt in Scandanavia

The PTB have recently come to the conclusion that austerity does NOT work. I previously posted about Iceland.

http://www.energeticforum.com/270052-post547.html

That right there shows good cause for unlimited immigration from countries with very different standards,,,, break up cultural unity.How Swedes and Norwegians Broke the Power of the ?1 Percent? | NationofChange

[Danny B]

Ukrainians Dispossessed, Americans are next -- Paul Craig Roberts - PaulCraigRoberts.orgCartier boss with $7.5bn fortune says prospect of the poor rising up 'keeps him awake at night' - Business - News - The Independent

Many years ago, Henry Ford tried to sell his cars cheaply so that everybody could afford them. The Dodge Bros. were major stopkholders and sued him in court saying that he had the primary responsibility to his shareholders and NOT to the public. The strong price deflation that was promised by the Industrial revolution was blocked to pay rent on the money of the shareholders.
American industry tapped in to foreign demand until, foreign States had rebuilt their domestic manufacturing. The financial industry has impoverished the working class but, they have no plan or appreciation that the financial industry is far too big for the diminished economy. They have starved the goose that lays the golden eggs. ( Profits and taxes).
They plan to put a LOT of guns between you and them.
?The American Military Coup of 2012?: Encroachment upon Basic Freedoms, Militarized Police State in America | Global Research - Centre for Research on Globalization