Economic pressures

[Danny B]

Socialism, command economy and finance

It is reported in many places that this crash is deliberate to bring world socialism. We will be so SCREWED (the survivors), that we will embrace whatever system "they" offer us. That will be world GOV, the SDR and full socialism. Since socialism is a consumption system and NOT a production system, the whole big show must be run a "command" system,,, a command economy. This has never worked before. It appears that "they" believe that with enough monitoring and enough police, they can dictate every facet of our lives. The U.S.S.R collapsed for well-understood reasons. That doesn't stop Western European leaders from trying to do a repeat.
The EU exists only to become a superstate. Britain has no place in it

Socialism always breaks the bank. We are on our way.
"Or, as Bespoke Investment Group put it in a note Monday, "Both reported demand and reported supply of C&I loans are suggesting that credit will stop flowing to business from banks in the near future, if history is any guide."
The US economy is grinding to a halt - Business InsiderTyler Durden Blog | Three "Reality-Check" Charts For America As Initial Jobless Claims Spike Most In 16 Months | Talkmarkets

[Ruphus]

housing bubble v2.0

So I have a good source on whats going on in home mortgages.

The banks are now taking more risky loans, usually that would be FHA GOV assisted loans and packaging them as less risky. Pretty much what got them in trouble the first time.

There is something called PMI (primary Mortgage Insurance) on these risky loans. It is a few hundred dollars added to the monthly payment that comes off after you pay down the principal to a particular percentage of the loan that you didn't put a down payment on.

Regular conventional loans require 20% down while FHA only requires 3%. A standard 3% down FHA loan with PMI on it has a low "value" rating when these banks attempt to package them to hedge funds, and there is a requirement of x number or A, B, C loans in a package to sell to the funds.

This sets a certain amount of risk in every package, so in theory none can fail altogether because the A,B, and C loan amount of defaults balance out in the end.

What happened last time is the banks just rated most of the loans incorrectly as A's and B's even though they weren't. Then there were more defaults on the home loans than expected and the $hit hit the fan.

So anyway what they are doing now is telling people that they can get a conventional loan with only 3% down. Basically the bank gives the buyer a higher mortgage rate like 7% and the bank pays the PMI for them. The buyer doesn't care because the monthly payment is the same. The bank can then say the loan is Grade A with no PMI, regardless that the people are more likely to default. The banks are also one day approving folks that have been foreclosed on, one day after foreclosure. The paperwork hasn't hit yet that there was a foreclosure only that the debt has been forgiven.

This $hit is going down again.

I am not a professional so any incorrect information, please correct.

[Danny B]

Ruphus, excellent info.

[Danny B]

The smart money is leaving the markets

We're nearing the end of the debt SUPER cycle. The CBs are trying to extend but, the air is leaking out of the bubble. http://www.bestmindsinc.com/document...gic_May516.pdf

CITI says that this sucker is going DOWN; "Nothing Has Been Fixed" - Citi's Five Reasons Why This Sucker Is Going Down | Zero Hedge
"because if one is buying puts on expectations of the Fed losing control, we have bad news: the market will simply be shut down and all capital flows will be halted indefinitely before true price discovery is allowed. As such those hoping to be paid when all central bank control is lost will be disappointed. It is also why none other than JPM warned last Thursday that the best option is not to bet on financial assets, either long or short, but to move into physical assets among which, JPMorgan listed, gold"

The redemptions are really starting to pick up. Everybody wants to cash-out; In Latest Blow To Hedge Funds, Largest US Life Insurer Is Redeeming Most Of Its Investments | Zero HedgeThe coming debt bust | The EconomistJim Grant Asks When The World Will Realize "That Central Bankers Have Lost Their Marbles" | Zero Hedge

LBJ departed from a responsible budget and Nixon had to close the gold window. As soon as gold convertibility was ended, the printing presses ran at warp 7. The floodgates of redistribution were opened. Money to both rich and poor. Then, we lost our jobs to low-wage competitors. As wealth creation went down, money printing went up. ZIRP was an attempt to avoid the interest burden. BUT, ZIRP is lethal to banks, investors and the public. More ZIRP and they die. Less ZIRP and all the weak corporations die.

[BroMikey]

This is how the system has always been set up to crash.
Buy now pay later. Later never comes, just death and
an unpaid balance.

Better buy a mud hut the way things are going in the last 40yrs.

I have NEVER bought anything on credit, NEVER. I paid
cash with no interest or I didn't buy it. A house a car or
anything you want or need can be purchased this way.

Credit will eat you alive.



http://money.
howstuffworks.com/personal-finance/debt-management
/revolving-credit.htm

"Congratulations! You've been preapproved for a National Bank
Platinum Card with a credit limit of $25,000 dollars!" You consider
what you could buy with $25,000. Or how you could use it
to pay off the balance on your three other credit cards.

[Danny B]

no discretionary spending = no stock market

The mega-capitalists figured that they could make a higher margin by outsourcing our labor to cheaper markets. They didn't think it through very far. They have crashed our wages way down. This resulted in the end of discretionary spending. They brought it on themselves. As we slide down towards a global-mean wage, they lose customers. GOV tried to prop up the stock markets after the consumer had left the scene.
GOV has some ability to prop up stock and bonds BUT, NO ability to prop up wages. Consequently, stock earnings are crashed.
With earnings gone, investors have started to exit the stock market; Tyler Durden Blog | Everyone Is Selling: Largest Outflow From Stock Funds Since September 2015 | Talkmarkets

Rail traffic is down 11% from a year ago AND the Los Angeles Times is reporting that homelessness in Los Angeles increased by 11 percent last year,


The simple fact is; the economy crashes without well-paid consumers doing discretionary spending.
"Chinese consumers were being counted on by the Bilderbergers to pick up the shopping slack from a stagnant West"
Chinese consumers have no extra money to consume great gobs of stuff. https://hendersonlefthook.wordpress....ionary-spiral/Why Saudi Arabia Is Suddenly in Serious Trouble | Alternet
The money has flowed to the top where it can't do any good. The middle class has lost their good jobs. From Venezuela to Saudi Arabia, GOV subsidies are disappearing. The natives grow more restless.

[wayne.ct]

Zimbabwe

Zimbabwe has announced they are ready to begin issuing their own currency (again) You probably know what they have been using for currency the last 8 years, right? The elites think they know what they are doing THIS time, but the average person is not so easily fooled. They still don't trust their corrupt, overbearing, murderous, etc. "government". Of course, this is all over MSNBC, NOT. I meant, of course, the average person IN ZIMBABWE. Laugh now. It will all make sense later.

[Danny B]

please pass me some zeros

It makes sense NOW, " Reserve Bank of Zimbabwe governor Gideon Gono has moved into a 112-roomed mansion in the leafy Borrowdale estate"
2008 Zimbabwe knocks 10 zeros off currency amid world's highest inflation
2009 Zimbabwe removes 12 zeros from currency
2009 Zimbabwe to print first $100 trillion note
2015 Zimbabwe knocked three zeros off
2016 As an extreme example, consider the devaluation of the Zimbabwe ... its currency by knocking off 13 of its 17 zeros
"So, what would a Z$100 billion note buy you? About two loaves of bread (it won't even get you lunch - you'd need at least Z$250 billion for lunch.

[Danny B]

Of Two Minds - No Wonder We're Poorer: Wages' Share of GDP Has Fallen for 46 Years
Here's a great graph showing How we got poorer when the golden governor was taken off currency creation; http://www.24hgold.com/english/news-...on+Hamlin&mk=1

[Danny B]

Consumer bankruptcies should have a 6? month lag to accompany the borrowing.There will be many more.
"Illinois, New JerseyNew Jersey'Financial reality is not negotiable': Puerto Rico bankruptcy could send dangerous signal to states - Watchdog.org

"For people earning between $40,000 and $100,000 (i.e. not the very poorest), 44 percent said they could not come up with $400 in an emergency (either with cash or with a credit card whose bill they could pay off within a month). Even more astonishing, 27 percent of those making more than $100,000 also could not. This is not poverty. So what is it?"
The Circles of American Financial Hell - The Atlantic

"China alone injected 1 trillion dollars of credit into their economy over the last three months to save themselves from the inevitable) and when it does the economic, social and geopolitical clock will be reset quite violently. The advanced industrialized world is going down hard." You are being redirected...

Switzerland wants to give everybody money. Why does it seem that people will just stop working? http://sputniknews.com/europe/201605...ic-income.htmlKing really knows his stuff. In so many words, he espouses the idea of returning to the rules of the Glass -Stegall Act. The Book That Will Save Banking From Itself - Bloomberg View
Banking is a lucrative business. Everybody piled in to make a buck. With the crash in wages, there just wasn't enough cash / business to keep them all going. They invented derivatives to generate fees. They got repeat bailouts from GOV. All the investors losses were covered by GOV. There just isn't enough business for all of them.

[Danny B]

forever stretching our trade deficit

"Since 2014 The US Has Added 450,000 Waiters And Bartenders, And No Manufacturing Workers"
Since 2014 The US Has Added 450,000 Waiters And Bartenders, And No Manufacturing Workers | Zero Hedge
Waiters don't earn much and aggregate wages have crashed down and stayed there; America Will Soon Have More Waiters And Bartenders Than Manufacturing Workers | Zero Hedge

In 1998, our trade deficit went off a cliff; http://

https://www.321gold.com/editorials/conrad/conrad060205/1.gif

Port of L.A. inbound containers; 430,898.05
Outbound containers; 145,536.25
Empty; 215,429.30

https://www.portoflosangeles.org/maritime/stats.asp

A Third Of All Containers Shipped From Long Beach Port Are Empty
Submitted by Tyler Durden on 10/14/2015 18:16 -0400

"US Has Added 450,000 Waiters And Bartenders" Even if this were true, it would not be anything to brag about. No economy can survive by circulating internal wealth in the service economy. Our trade deficit rises by $ 1.5 billion a day. Foreign States and investors stopped buying treasury debt a long time ago. The FED is buying almost 95% of new issuance. Foreign investors don't want treasury bonds so, they don't need dollars.
All the central banks print to buy up each other's debt/bonds.

Wages crashed so, consumption crashed. It would be far worse if GOV wasn't printing money to keep things afloat. GOV runs up a big debt so, it needs ZIRP to keep interest payments under control. BUT, ZIRP wipes out the economy. The stock markets are crashing because of a lack of earnings. GOV prints lots of money to keep the stock and bond markets alive. That still doesn't fix consumption and employment.
GOV hopes to start enough wars to cut back on the oil supply and save the banks. So far, Russia and Iran won't take the bait. The neocons will start as many wars as it takes to cut back the oil supply.
America's balance of trade deficit is a huge weak point. In 2015, the United States consumed a total of 7.08 billion barrels of petroleum products, an average of about 19.4 million barrels per day. EIA
This contributes to our $ 45 billion a month trade deficit. How long can it go on?

[Danny B]

Bank stocks, Druckenmiller, Martensen

In the '60s, the CBs tried to control the price of gold. in 1968, the London Gold pool crashed because it didn't have enough physical gold for the few who took delivery. The LBMA is another attempt to control the price of gold. London is just about OUT of gold,,, again. There are over 300 owners for every bar of gold. "There is more than US$200 Billion of trading every day in unallocated (paper) gold." BUT, the gold just isn't there. http://www.gata.org/files/MylchreestReport-05-2016.pdfNo buyers.No buyersFascism at it's bestNo kidding,,, Venezuela and Brazil are just one step away from revolution. China is staring into the abyss.Credit Bubble Bulletin: Weekly Commentary: Inflection Point for EM

"hedge fund legend Stan Druckenmiller spoke" "most illustrious investing minds of any generation (with a 30% average return from 1986 through 2010) "
For Stan Druckenmiller This Is "The Endgame" - His Full 'Apocalyptic' Presentation | Zero Hedge

Chris Martensen;
"The economy no longer spins off enough surplus for the elites to take what they consider their share with enough left over for everyone else. So the wealth gap grows unchecked into politically and socially destabilizing levels."
"Those of us who can read the signs for what they are, not what we wish or believe them to be, have a special duty to first prepare ourselves for what's coming and then help others. To put on our own oxygen masks first, and then help the others around us.

For a variety of reasons, most of them rooted in archaic evolutionary brain structures, most humans are not well adapted to face change, let alone major change."
Chaos & Volatility On The Rise | Peak Prosperity

Just imagine if everybody tried to take up farming?? In the '30s, fifty% of Americans worked on the farm. Mechanization and automation displaced them. Manufacturing opened up LOTS of good paying jobs. In the last few decades, mechanization and automation have once again displaced workers. We have to employ all the displaced workers OR, they have to revert to the agrarian economy.
"There were 81,410,000 families in the United States in 2015. Of those, there were 16,060,000 families in which no member was employed, or 19.7 percent of the total."

Read more: Blog: No one works in 20% of US families
51% of Americans receive a check from GOV. Much of this is for make-work like building jet planes that can't fly. What happens to all these people if GOV goes insolvent? If / when the U.S. dollar is rejected for foreign trade, what happens to our imports. YES, U.S. GOV can print unlimited dollars BUT, it can't force foreigners to take them.

[Danny B]

Household debt, Treasury default, Mind control and Malachy

It seems that Sunday is no longer a day of rest. There is a lot going on.
"According to the most recent data from the U.S. Census Bureau, 152.9 million out of 308.9 million total Americans received some form of government entitlement benefit in the third quarter of 2012. That is 49.5% of the population" How Many Americans Are Dependent on the Federal Government?
That's just the entitlement sector, not counting the GOV employees.

Trump says that, if the economy crashes, he will discount payments of treasury debt. https://www.yahoo.com/news/experts-p...-election.html
He has a lot of people worried; Why Trump's U.S. Debt 'Default' Isn?t as Insane as It Sounds - Yahoo Finance

"The average American household has total debt of more than $90,000, which includes households that live debt free. The average household with debt owes more than $130,000." The Average American Household Owes $90,336 -- How Do You Compare? -- The Motley Fool

"The IMF and the World Bank Turn Pessimistic, Which Means We Are in Serious Trouble"
The IMF and the World Bank Turn Pessimistic, Which Means We Are in Serious Trouble

There is plenty of proof available that the economy is dying. Investors still don't react; http://www.zerohedge.com/news/2016-0...port-us-dollar

"Russia has taken a significant step which will undermine the current Wall Street oil price monopoly:
He explains that the setting of an oil benchmark price is a cornerstone of the method used by omnipotent Wall Street bankers to control world oil prices. "Oil is the world's largest commodity in dollar terms," the historian stresses.

http://www.zerohedge.com/news/2016-05-07/de-dollarization-accelerates-russia-nears-launch-ruble-priced-oil-trading-platform

Debt and energy; http://oilprice.com/Energy/Energy-Ge...e-Economy.html
The control of knowledge; http://www.24hgold.com/english/news-...redirect=False

Fossil fuel and your brain; https://www.yahoo.com/tech/tesla-fou...145709267.html

"If we end up with Killary, neither the US nor the world will survive the mistake. She will be the last American president." http://www.paulcraigroberts.org/2016...craig-roberts/

"In 1139, then Archbishop Malachy went to Rome from Ireland to give an account of his affairs. While there he received a strange vision about the future that included the name of every pope, 112 in all from his time, who would rule until the end of time. We are now at the second last prophecy."
"So will Pope Francis be the last pope? The Irish seer of the 12th century has said it will be so. Time will tell."

http://www.irishcentral.com/roots/history/st-malachy-predicted-pope-benedicts-successor-will-be-last-pope-190715001-237789421.html

[Danny B]

Matt King,, COMEX gold, money laundering tax haven

China was in a huge commodities boom up until a week ago. Now, it has gone bust. The massive flow of information brings changes too fast for markets to absorb or react.
Matt King; "none of this is "supposed" to be happening" - inflation and economic growth are supposed to be rising in a world as manipulated by central bankers as this one. Instead, the opposite is taking place."
Why Citi Is Worried: "This Is The Tipping Point" | Zero Hedge
EXCELLENT article.
"More than 300 economists, including Thomas Piketty, are urging world leaders at a London summit this week to recognise that there is no economic benefit to tax havens". There is PLENTY of economic benefit for the one percent
Tax havens have no economic justification, say top economists | World news | The GuardianFrom Golden Dollar to Petro Dollar to Narco Dollar | New Eastern Outlook
America pushed FACTA on everybody else and reserved home base as a tax haven with no reporting.
"The way is clear to make the USA the new Switzerland or Panama. Drug cartels of the world are already clearly informed and a good share of the estimated $1.6 trillion of criminal funds annually are searching new safe havens in Reno and other US hot money havens. From a golden dollar to a petro dollar to now a narco dollar"

INTERESTING article on the COMEX gold market.
"Now here's where the fraud begins. The Banks, acting in their capacity as "market makers", have a virtually unlimited power to create from thin air as many Comex paper derivative contracts as they'd like. In doing so, The Banks take the risk of being short while the Specs, in taking the other side of the trade, take the risk of being long. The fraudulent game that The Banks play is in never being forced to deliver upon of their paper obligations. The Specs simply seek gold "exposure" so they buy the paper derivative contract and The Banks sell it to them. If prices go up, the Specs make fiat and The Banks lose fiat. If prices go down, The Banks make fiat and the Specs lose fiat.

Again, though, very little physical gold is ever delivered. Thus, the only price "discovered" is the price of the derivative itself, not the actual physical metal.

Having the unlimited ability to create new contract supply gives The Banks the nearly unlimited ability to control price, too. How? Think of it this way: "

"You call up your broker at Merrill Lynch and tell him to buy you 200 shares of Coca-Cola. A market order is submitted and someone, somewhere sells their existing 200 shares of Coca-Cola to you. The supply of Coca-Cola shares is finite on any given day so price must find an equilibrium where buyers and sellers meet.

However, as we laid out at the beginning of this post, that's NOT how it works on The Comex. Oh sure, most of the volume each day is an exchange of existing contracts. However, volume is also supplied by The Banks simply creating new contracts to sell to buyers. Go back to the bullet point above. How fair and legal would it be if your broker, instead of finding a seller of existing Coca-Cola shares, decided instead to simply create some new shares out of the blue and sell them to you? You'd have your long exposure to Coke and your broker would take the risk of being short Coke.

Not only would this be patently illegal and fraudulent, think of the impact this would have on the price of the Coca-Cola shares. Since willing sellers wouldn't need to be found for new buyers, price wouldn't need to rise in order to entice sellers to sell. Your broker would simply take the risk of being short Coca-Cola, all with the hope and the plan of seeing you eventually give up and sell your Coca-Cola shares back to them, likely at a lower price and at a profit for your broker.

And, again, this is EXACTLY how The Comex operates. "
"Without having to supply any additional physical gold or other collateral, The Banks simply create new gold derivative contracts whenever demand for contracts exceeds available supply. This has the obvious effect of dampening price moves as "price" isn't forced to find a true equilibrium between buyers and sellers. And this has played out for all to see here in 2016. "

"gain, what is happening here is an overt attempt to contain and control price. If the total volume of available open interest on the Comex was anchored or tethered to a fixed amount of collateral, then the supply of derivative contracts would be relatively stable like the daily supply of available Coca-Cola shares. Instead, The Banks simply create new supply nearly every day and, in doing so, restrict and manage the daily movements of "price"

http://www.24hgold.com/english/news-gold-silver-comex-gold-open-interest--craig-hemke.aspx?article=8419436946H11690&redirect=false&contributor=Sprott+Money&mk=1

Paper gold is created just like paper dollars. There are 300 owners for every ounce of gold. Should the supply run out as it did in 1968, it would be catastrophic.

[Danny B]

China Stops Trying To Fool The World; World Is SorryNot true, it should read "global credit growth".
Demand for Chinese goods is dependent on credit growth. As demand falls, China drops it's prime rate. IT DOES NOT WORK. http://www.alhambrapartners.com/wp-c...ary-Policy.jpg

http://www.alhambrapartners.com/2016/05/09/china-trade-and-the-inevitability-of-systemic-reset/

China has admitted that there is NO way out. They have tried to get credit growth to service old debt with new debt but, it isn't working any more. Credit growth temporarily decoupled from productive growth. As the default numbers get ever-worse, it is obvious to everybody that there is a cascade of default in the future. China's Crashing - Stocks, Commodities Plunge After "Top Authority" Implies "Abandoning Loose Policy" | Zero HedgeWhy China's Debt Crisis Will Differ From Japan's
Japan impoverished it's people so they stopped having kids and the population is falling. They will never escape a shrinking economy while their population is falling. China avoided 400 million births during their "one child" policy. They have managed to max-out on productivity but, consumption is lagging. The economy goes no where without consumption. GOV and corporate america have over-charged us for everything. THAT is how they have accumulated so much. At the same time, they have driven our wages down.
We respond to lower wages by cutting back on big-ticket items and only buying survival goods. The most expensive big-ticket item is, KIDS.
Until very recently, Germany never had a minimum wage. The German population has fallen for many years.

Even the Chinese want the good life. This means cutting back on kids; http://www.wsj.com/articles/chinese-...del-1450313206

The spreading global-mean-wage means that fewer people have excess income to invest. The banks see no inflows so, they pump up credit creation.