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"Although free markets are commonly associated with capitalism" Capitalism is the ONLY production system. All the rest of the "isms" are distribution systems. If I cut down trees and make a log house, that is capitalism in it's most basic form. It is a "mechanical" system. Communism is a social system.
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bonds are dangerous and stocks are ugly
America's post-war lock on manufacturing brought us high wages. As our competitors re-tooled, our wages went down. GOV and the financial system got bigger even though American earning power was diminishing. GOV took more and more for taxes. The financial system blew larger and larger bubbles. Our wages continued to shrink and the necessary bubbles continued to grow.
The current bubble is in GOV bonds. GOV demanded that the banks buy and hold GOV bonds as reserve assets. Should anything bad happen to GOV bonds, that will reflect on the assets of banks.
"What Goes Up Can Also Come Down" | Zero HedgeHussman Funds - Weekly Market Comment: Warning with a Capital "W" - February 15, 2016Comment
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Kunstler
My long, witty, informative post disappeared into the aether. I'll just leave you with Kunstler; Repricing Reality | KUNSTLERComment
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The best horse in the glue factory
China, " total social financing, or TSF." "TSF in January came in at a whopping $522 billion. That's up from $276 billion in December" 1/2 trillion in a month is some serious money. "outstanding credit accelerated to 15.1%"
China TSF numbers for January - Business Insider
Ron Paul; No Fed Bailout Will Stop Economic Freefall Next Time30 to one. More devaluation is coming."
Argentina, In summary the 1945 peso was devalued by 10 trillion to one between 1945 and 2015 Silver, Gold, the Argentina Peso, and Exponentially Increasing Prices | SilverSeek.comComment
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Been there, done that
"We will not have any more crashes in our time."
- John Maynard Keynes in 1927
"There will be no interruption of our permanent prosperity."
- Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928
"There may be a recession in stock prices, but not anything in the nature of a crash."
- Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929
"Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months."
- Irving Fisher, Ph.D. in economics, Oct. 17, 1929
"This crash is not going to have much effect on business."
- Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929
"There will be no repetition of the break of yesterday... I have no fear of another comparable decline."
- Arthur W. Loasby (President of the Equitable Trust Company), quoted in NYT, Friday, October 25, 1929
"We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices."
- Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929
"This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years."
- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929
"Buying of sound, seasoned issues now will not be regretted"
- E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929
"Some pretty intelligent people are now buying stocks... Unless we are to have a panic -- which no one seriously believes, stocks have hit bottom."
- R. W. McNeal, financial analyst in October 1929
"The decline is in paper values, not in tangible goods and services...America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin."
- Stuart Chase (American economist and author), NY Herald Tribune, November 1, 1929
"Hysteria has now disappeared from Wall Street."
- The Times of London, November 2, 1929
"The Wall Street crash doesn't mean that there will be any general or serious business depression... Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before."
- Business Week, November 2, 1929
"...despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation..."
- Harvard Economic Society (HES), November 2, 1929
"... a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall."
- HES, November 10, 1929
"The end of the decline of the Stock Market will probably not be long, only a few more days at most."
- Irving Fisher, Professor of Economics at Yale University, November 14, 1929
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Marc Faber on Cashless Society Insanity and Why Wall Street Hates Gold | Gold Silver WorldsSwiss Politicians Slam Attempts To Eliminate Cash, Compare Paper Money To A Gun Defending Freedom | Zero HedgeThe Economist is the mouthpiece for the PTB. It is strange to see them pessimistic.Sure,,, more debt creation is just the answer.What a party pooper.
The sad part getting even sadder, Fallout from ZIRP. Yeah right, we're broke as hell and the FED wants higher prices.Marvellous, now, we can't buy anything but food.Comment
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The Federal Reserve and the Global Fracture | Global Research - Centre for Research on Globalization
Paul Craig Roberts also has an excellent article; The US Economy Has Not Recovered and Will Not Recover - The Unz Review
People don't have any money and even Wal Mart can't make it; The US Economy Has Not Recovered and Will Not Recover - The Unz Review
Those who have all the money like it that way. They plan to foreclose on everything that the have-nots are holding. BUT, when a people feel that they have no say and no stake in society and the economy, they they tend to turn wicked.
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As War on Cash Escalates, Cash Lovers Fight Back | Wolf Street"Capitulation": Longest Streak Of Equity Outflows Since 2008; Biggest Gold Inflows Since 2010Gold inflows and commodities outflow. Some fools still call gold a commodity.
Bert Dohmen, founder of Dohmen Capital Research, 'Is it too late to panic?' Because...the advice given by so many analysts is 'Don't panic, don't sell, don't panic.' And I say, 'Yes, panic!' And it's not too late to panic. Panicking at the right time can save you a lot of money...
Bert Dohmen Is Uber-Bearish and Here's Why | FS Staff | FINANCIAL SENSEYou bet!Comment
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The Euro
Feb. 16, "The euro continues its fall and the likelihood of reaching 116 is starting to dwindle. Even the British Telegraph has come out and stated that the bail-in plan for government bonds in Europe risks destroying the entire euro system. We have to understand that those in power are clueless. All they do is try to defend their prior decisions by insisting they are correct and the world is wrong. When we look at the volatility and panic cycles starting next week, it appears the crisis may emerge in Europe"
https://www.armstrongeconomics.com/m...t-of-2016-202/
March is going to be a busy month with the collapse of both the Euro AND the re-fi/rollover collapse in commodities.
I'm not trying to make light of this. A billion people are going to die in the next 10 years. I didn't cause it and I can't stop it. I can only try to give some warning. If people won't pay attention to self-survival, mother nature will have the final say.Comment
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Still sliding down
The labor market crashed. The central banks pumped in hundreds of $ trillions to make up for lost purchasing power. This is failing. The solution; The data showing gobs of money leaving China is now omitted. This is nothing particularly new. GOV scrubs the bad news. What could go wrong? Economic Insanity and Political Reality
"No-one acknowledges that falling oil prices are a symptom of the global
metastasising deflationary depression that's occurring right now."
Read more: OPEC Is Out of Business, But Dollar Crash Will Save the Oil PriceNo doubt about it.
My last post had a couple of notes about the Euro breaking down. Now; "Trading On Eurex Suspended "Until Futher Notice" Due To Technical Issues
Tyler Durden's picture
Submitted by Tyler Durden on 02/22/2016 06:15 -0500"
'Technical issues" means that the exit doors are too small for the rush.Comment
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Thanks for your positng Danny B.
I hope your wrong
But I feel your right. Aln
"the Fed has painted itself in a corner: If it raises interest rates, this will cause the stock and bond markets to go down. That would reverse the debt leveraging that has kept these markets up. Higher interest rates also would bankrupt Third World debtors, which will not be able to pay their dollar debts if dollars become more expensive in their currencies.
But if the Fed keeps interest rates low, pension funds and insurance companies will have difficulty making the paper gains that their plans imagined could continue exponentially ad infinitum. So whatever it does, it will destabilize the global economy." from hereComment
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Socialism, GOV debt and inflation
Alman, you are correct. The CBs intervened to save the private banks at the cost of killing the economy first, and then the banks later.
America was founded as a democratic republic. All democracies fail after about 150 years and the founding fathers knew this. With the 17th amendment, we moved closer to being a democracy. We took a big lurch further in that direction when women got the vote. The central focus of a man is providing security for his family. The central focus of a woman's life is her insecurities. This has nothing to do with intelligence. Women are a lot more security minded and more likely to look longingly at the promises of security provided (temporarily) by socialism. Socialism always breaks the bank. Democracy is socialism-lite.
The Grace commission created by Ronald Reagan reported that not one dime of our income taxes goes to GOV.. I'm not positive just which segments of taxing this covers. GOV just prints the money that it needs. The FED claims that we need 2% inflation. This gives them cover for printing bucks for GOV programs. U.S. GOV spends; "by the 2010s federal spending checked in at over 20 percent of GDP, state spending amounted to 8 to 9 percent of GDP and local spending exceeded 10 percent of GDP."
FED GOV spending in France is 48% of GDP. They are far more socialist than America.That only benefited the workers and not the parasites.Silver Linings: Keynesian Central Banking Is Heading For A Massive Repudiation | David Stockman's Contra Corner
"The U.S. owes nearly one third of total world government debt with $18.91 trillion. That is 105% of its GDP and with a population of 322.8 million, is equal to $58,576 for every American man, woman and child."
Watch all of the government debt in the world grow in real time - MarketWatchComment
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Non-stop growth of debt
America the beautiful screwed every country in the world that it possibly could. American bankers used GOV, the World bank, the IMF and the military to rape every country. Any leader that tried to escape the trap was killed. Perkins wrote "Economic Hitman" to expose this. He has recently written 14 new chapters to his book. The whole world has good reason to hate the American financial establishment.
The Evil Empire Has The World In A Death Grip -- Paul Craig Roberts - PaulCraigRoberts.org
Now, that most of the world has been bled white by the mega-parasites, they are looking inward at doing the same thing right here. Financial Time Bombs Hiding In Plain Sight | David Stockman's Contra CornerThe Fatal Flaw That Has Doomed Our Economy |Relying on a Pension to Retire? Food Stamps Might Be in Your Future | Casey ResearchMarvellous idea. Devalue the Yuan and it will be that much harder to pay $ trillions in dollar-denominated debt,,,, that they already can't pay. Big oil is dying.Promises,,, we don't need no stinkin promises.Comment
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Death by ZIRP for the banks,,,, attraction of gold
Banks live or die on "spread". They need to borrow cheap and lend dear. When the economy contracted, there wasn't enough spread for them to survive. Rather than letting nature take it's course, the got the FED to cause ZIRP, to bring back some spread. That worked for a while but, the fundamentals never went away.
Peter Schiff; "In the past I argued that even a tiny, symbolic, quarter point increase would be sufficient to prick the enormous bubble that eight years of stimulus had inflated. Early results show that I was likely right on that point."
Peter Schiff Warns "The Fed's Nightmare Scenario Is Becoming Reality" | Zero Hedge18 Bucks for a Gallon of Milk…This is What a Currency Collapse Looks Like | Casey ResearchWhy is Gold Rising Again | AVERY B. GOODMAN'S BLOGComment
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