Economic pressures

[Danny B]

Bank of Japan?s sovereign debt endgame is the naked emperor | Financial Post
The primary bond dealers in Japan are stuck with a ton of negative-yield bonds and, they want out. "It's A Seismic Shift" - Japan's Biggest Bank To Quit As JGB Primary Dealer | Zero Hedge

So, what does the future hold for GOV debt?

https://mises.org/blog/course-us-government-will-default-its-debt

Marc Faber Says All Governments Will Eventually Default! | BenzingaThe Only Thing That Grows Is Debt - The Automatic Earth

[Danny B]

Collectivism

Hundreds of years ago, the immigrants that Came to America came here to WORK and create a new life. Since America was not a monarchy, there was more respect for private property. This induced almostPredicting the Efficacy of a Coming Revolution | Zero Hedge
The attacks on Trump supporters say a lot about just who is in the free-$hit army. There is no limit to how much the army wants and expects; Commissioner says fraud from Obamaphone program approaching $500 million | Washington ExaminerTHE MOST INSANE, DESTRUCTIVE CENTRAL BANK SCHEME TO DATE – STARTED YESTERDAY - The Daily Coin | If you've got gold, you've got money

[Danny B]

ClubOrlov: The Money Cult Very strange idea / plan "They keep the credit bubble going a little longer by paying people to borrow money.

It's very simple, our economy has run out of growth momentum, oftwominds-Charles Hugh Smith: Pity Poor China: There's No Easy Fix to the S-Curve The economy was stalling out and everything was financialized to provide more juice. How much juice???
It Took $10 In New Debt To Create $1 Of Growth In The First Quarter | Zero Hedge

"They" seem to be stimulating the borrowers by giving the free+ money. BUT, they are killing every lender / investor who depends on interest-income. It remains to be seen just how long this can go on. Bill Gross: $10 trillion negative yield 'supernova' will 'explode'

GOV is pumping $ trillions into the markets to try to retain confidence but, there is the Tobin Q to consider, Despite "The Biggest F##king Bailout Ever" This Analyst Says S&P Will Drop 80% | Zero Hedge

"After recent (and in some cases very dramatic) bearish conversions by the likes of JPM, BofA, Citi and UBS, the only bank that steadfastly held a bullish view on stocks during the recent market squeeze higher was Goldman Sachs.

Not any more.

On Thursday, Goldman strategist David Kostin appeared on CNBC, where he too join the bearish crowd and said that based on the threat of margin collapse" ,,,, http://www.zerohedge.com/news/2016-0...ge-drop-market

" global bank lending to China crashed by one full quarter. . In total, cross-border banking liquidity decreased by $651 billion to $26.4 trillion." http://www.theepochtimes.com/n3/2086...ancial-system/
About that $ 26.4 trillion,,, there is a problem.

https://www.rt.com/business/345982-china-us-debt-mervyn-king/

It sounds like the plan is already on the menu.
First, the former head of the BIS talked about the necessity of a debt jubilee and now Mervyn King is talking about a debt cancellation with China. the jubilee would shaft the central banks. There is going to be a whole lot of shafting going on.
" on April 28, the bull market in U.S. stocks became the second-longest of all time." Yep, slash interest rates and stocks will go up. http://www.valuewalk.com/2016/06/int...st-level-ever/

With ZIRP & NIRP, the FED manages to squeeze out another drop of productivity out of one sector of the producing economy. At the same tiome, it completely wipes out the credit structure and interest income.

[Danny B]

The anatomy of the great reset

Will the banks crash first? Will GOV crash first? What will the crash look/unfold like? Can the banks keep their doors open even if they are insolvent and/or illiquid? The banks aren't doing too well. Tyler Durden Blog | European Banks Are Crashing | Talkmarkets

How do you preserve your savings when EVERYONE is trying to steal them? A paper, unbacked fiat currency is just a "packet" of information that tells others that you have been productive. When GOV over-prints a currency to tell others that GOV has been productive, it destroys confidence. People try to flee to a currency that hasn't been over-printed. How Would You Survive Hyperinflation in Venezuela? | Ready Nutrition
Just 2 years can make a big difference; Venezuela: A Prepper's Nightmare Come to Life | Ready NutritionFormer Fed President: "All My Very Rich Friends Are Hoarding Cash" | Zero Hedge

[Danny B]

Public employees don't want to be affected by the economic downturn

Arkansas spends $ 36,475 to maintain one mile of two-lane highway for one year. New Jersey spends $ 1,102,343 to maintain one mile of two-lane high way for one year. The bloated public jobs system demands a bloated pension system. That more-or-less works while the economy is expanding. The economy is shrinking. Largest NJ Public Employee Pensions Bankrupt, Moody's Report Says | People's Pundit Daily

Previously, many State and local GOV entities made a lot of money by confiscating the property of anybody convicted in the drug business. They have fought long and hard to prevent the legalization of pot. It is expensive to get a drug conviction so, they have streamlined the process;
"Now, the Oklahoma Highway Patrol has a device that also allows them to seize money on prepaid cards.
It's called an ERAD, or Electronic Recovery and Access to Data machine"
"Here's how it works. If a trooper suspects a person may have money tied to some type of crime, the highway patrol can scan and seize money from prepaid cards. OHP stresses troopers do not do this during all traffic stops, only situations where they believe there is probable cause. "

""If you can prove can prove that you have a legitimate reason to have that money it will be given back to you. And we've done that in the past," Vincent said about any money seized.

State Sen. Kyle Loveless, R-Oklahoma City, said that removes due process and the belief that a suspect is presumed innocent until proven guilty. He said we've already seen cases in Oklahoma where police are abusing the system. " NO, they wouldn't do that.

https://www.armstrongeconomics.com/international-news/north_america/americas-current-economy/oklahoma-police-can-seize-your-entire-bank-account-on-a-traffic-stop-without-any-charges-at-all/

"Anything of value that is stored in a safe-deposit box is now considered money laundering. Governments want their taxes and all the laws are changing to ensure they get their money." https://www.armstrongeconomics.com/w...ing-for-money/Of course they rejected it.
"Before that vote, nearly every district attorney in the state signed a letter against the measure. Numerous police chiefs and sheriffs did the same." Yep, no matter how much the economy shrinks, they want the gravy train to continue. Will California stop police from taking people's property without a criminal conviction? - LA TimesSan Jose Victim’s Lawyer; Police Forced Trump Supporters to Walk THROUGH MIDDLE OF MOB (VIDEO)

Evidently, public employees don't want to see Trump elected.
This isn't just a local problem. The G-20; "blaming the private sector for not paying enough taxes for them to squander. They issued their Financial Action Task Force on Money Laundering (FATF), which is really the directive to hunt down money globally for taxes."
"Additionally, they employ negative interest rates without realizing that they are wiping out pensions, life insurance companies, and accelerating unfunded pensions in government. Their solution? More taxes. They actually laid it out in the Finance Minister & Central Banker"

https://www.armstrongeconomics.com/world-news/g20-blames-your-psychological-problems-for-their-failure/

The simple fact is; every additional $1 dollar in taxes results in a $3 shrinkage of the economy. GOV is the new "highwayman". https://www.washingtonpost.com/news/...did-last-year/

They take it by any means possible, legal or not.

[Danny B]

Unfolding Brexit sham,,,, equities peak

The next big thing on the horizon is Brexit. "Leave" is far ahead in the polls but, Scottish independence votes showed us that Stalin was right when he said, "it doesn't matter how you vote, it only matters who counts the votes." The Scots got the shaft, How Scottish Independence Was Stolen - Educate Inspire Change

Part of the reason for WW II was that German productivity buried the English,,, they lost market share. The current Eurozone arrangement is very beneficial to Germany and they don't want it to end. They weren't worried about Greece leaving the EU but, they want Britain to stay; Germany Panics Over Brexit - Largest Newspaper Begs Brits "Please Don't Go" | Zero Hedge

George Soros is spending a great deal of money to increase the flow of refugees into Europe. At the same time, he is betting that, that same flow will destroy the Eurozone. Soros Bets Against Europe While Funding The Mass Migration He Admits Will 'Collapse' The EU" In particular, he says that the Brexit would spell the end of the EU."
Soros is a very busy guy.
I'm sure that we will hear a lot more about Brexit in the coming week.
Soros Buying Gold On BREXIT, EU ?Collapse? Risk | Zero Hedge

Equities; "The excellent folks at Advisor Perspectives highlight the Fed’s Labour Market Conditions Index as suggesting a recession is imminent (the cumulative peak is an average of 9 months ahead of the start of recession and we are now four months beyond a peak. "
'CONDITION RED ALERT' recession is imminent - Business InsiderSo, there are a lot of people who are temporarily rich.Maybe they should attack low wages.

[Ruphus]

Inflation and deflation

In a positive interest rate environment the currency naturally must become inflated. In a negative interest rate environment currency must naturally become deflated. The rest of the world is deflating their currency to prevent hyperinflation from money printing. The US is not, but why?

All foreign money is abandoning their government bonds for US bonds. This strengthens the dollar vs other currency and allows the US to keep positive rates and print money I'm guessing.

[Danny B]

Running the presses to pay the investors and bureaucrats who don't actually produce a

Many years ago, John Doe built a widget. He figured his costs and added a bit of profit and sold it. Much later, some corporate lawyer came up with the idea of "performance pricing". The demanded price would be as high as possible with no relation to actual cost. Under a gold standard, the money supply rises about 3% a year. This wasn't enough to pay for the highly inflated prices demanded by the corporatocracy. The gold standard was tossed and the printing presses went into hyperdrive.

This allowed for enormous growth in the class of people who called themselves "investors". The money bubble flowed from the FED to the treasury to the primary dealers to the bond market to the investors to the borrowers. Since the borrowers had access to more funds, the sellers just kept raising the prices. Because of the reserve currency status of the U.S. dollar, prices rose more in America than most other places. The price for housing in America is legendary. The same is true for education. The schools just demanded more and more money from their victims. This allowed them to pay huge salaries to legions of bureaucrats. The teachers don't get the money. The GOV made money available for education so, the price went sky-high. These Debt Slaves are the Government’s Largest Asset Class, and it will Haunt the Economy for Years | Wolf Street

All this bubble money went into everything except wages. Credit terms were stretched out over and over to compensate for falling purchasing power.

This "investor class" has made a LOT of money but, most of it is expressed / denominated as debt that requires future collection,,,, from unemployed people. The bubble shifted from one class to another. German 10 year bunds are at negative interest rates because nobody trusts the ECB. Investors would prefer to be in tangibles but, they already blew that niche all to hell.
Chinese Private Investment Is CrashingMaybe the third time is the charm

Volume is WAY down on the stock market so, it is easy to manipulate. The numbers go up but, nobody believes it. The VIX is the "fear index" and it is rising. Tyler Durden Blog | VIX Soars Most In 10 Months As Stocks Dump, Gold Jumps | Talkmarkets

[Danny B]

Vote Brexit,,, break the super-state

The French GOV spends 57% of the GDP. This tends to hold wages higher. The French are rioting in the streets at the prospect of GOV money being reduced.
They don't want labor reforms where it would be easier to fire people.

Socialism is un-earned gains for the poor. Fascism is un-earned gains for the rich. The Eurozone is a pure fascist overlay on European States to drive down wages and costs. There is to be NO DEMOCRACY in the Eurozone. It was shoved down everybody's throat.
Pritchard lays it ALL out. It's pure fascism led by people like Tusk; Brexit vote is about the supremacy of Parliament and nothing else: Why I am voting to leave the EU

[Danny B]

Peak family,,, peak credit,,, peak growth

Without the "governor" of gold, the bankers and GOV were able to grossly inflate the money supply. Naturally, wages didn't keep up. Women had to enter the workplace to make ends meet for the family. Family size and cohesiveness suffered. Our new-found poverty reduced population growth and economic growth. Our souther border was thrown open to make up for lost population growth. BUT, this also depressed wages. Our low-wage competitors did the same. As our purchasing power fell, jobs were outsourced to lower the labor cost,,, and final prices. The prices went down but, so did our national purchasing power.
Labor's share of GDP just kept falling. The impoverished youth are unable to find employment and start families. The West has HIGHLY inflated prices and shrinking wages. The money supply rose at three times that the economy grew. It is currently at ten times. It takes $ 10 of new money to create $ 1 of growth.
Our entire system is built on a foundation of growth. 150,000 young people a month try to enter the workforce. BUT, 102 million of working age are not in the work force. 51% of Americans receive a check from GOV BUT;


The entire financial system has lived and grown for limitless money inflation. This has come to an end and there is no plan "B" to fall back on. GOV (the CBs) are buying all the stocks and bonds because nobody has any confidence in all the rigged markets. The CBs are running out of steam because money printing has it's limits.

Here is the central bank asset graph; http://www.oftwominds.com/photos2016...-sheet6-16.png
Charles Hugh Smith writes about "The Pathology of Power" oftwominds-Charles Hugh Smith: Pity the Poor Central Bankers: Playing Masters of the Universe Is No Longer FunBrexit Vote Is Only the Beginning | Danielle Park | FINANCIAL SENSE Imagine that. For the next 4 years ALL the funds will have to survive with no interest income.
We have reached "peak credit" and debt saturation.

[Danny B]

The Taylor Rule

We are currently suffering under the economic guidance of J.M. Keynes. BUT, he wasn't the only feces-for-brains economist. Say's Law is a good example;
"Say's law, or the law of markets, found in classical economics, states that aggregate production necessarily creates an equal quantity of aggregate demand." Funny, there is no mention of wages and purchasing power.

These various "laws" devised by deluded people in academia have little bearing on the real economy. The INVESTORS are the one that deal with reality and are more likely to devise accurate rules and interpretations.

John Taylor, "The Taylor rule debuted in 1993 and continues to grow in its appeal thanks to the simplicity with which it can be executed. Though Taylor engaged the mandatory calculus to build his model, the inputs are elegant in their straightforward real world ease of application. At the risk of being overly simplistic, the Fed should set interest rates based on targeted vs actual employment and inflation levels; an ideal interest rate is consistent with full employment which is theoretically in sync with potential economic output."
The Vanity Of Central Bankers And The Common Sense Rule | Zero HedgeCollapse of the American Consumer

[wayne.ct]

Physics, Models and Reality

Probably 1 percent or less of the population understand the relatively abstract concepts around physics, chemistry, economics, money and there are many other such ideas. Do this one percent even understand ONE of these fields? Each of these fields has one or more models which they use constantly. Whether you believe me or not, for each one that understands there are probably two or three that think they understand but really do not understand. On top of that, there is the question of whether or not these people understand the faith and trust they put in their models. A few are able to take a step back and say they are able to see the divide between the model and the reality of how things really work. Does this or that individual person consider what they consider to be the true reality? Do they put more faith in the model or in reality itself? Do they consider the model and the reality to be one and the same? I assert they are not identical, they are not one, they are not the same. The notion that we somehow OUGHT to trust the model and ignore the reality is vacuous. It is not thoughtful and it is not reasonable. Reality is about to rise up and squash the error-compromised models. If you have eyes to see this you will readily see that too many people are willing to trust the models and encourage other people to trust the models when the models are not trustworthy.

[wayne.ct]

It's broken

The economic system of models is broken. The majority don't care or don't understand. They will all suffer. We will likely suffer, too.

[Danny B]

Faux economic gods

Wayne, very good information. Too many people are immersed in that river in Egypt,,,,deNile.
It is often said, "you can avoid reality but, you can't avoid the effects of ignoring reality."
I can walk into a room and cut loose with a big fart and clear the room. I can clear it even faster by talking about the economic situation. We crashed in 2008 from predictable circumstances. These circumstances were held at bay for a few years but, they never went away.
15 Facts About The Imploding U.S. Economy That The Mainstream Media Doesn?t Want You To See

There is no escaping the fact that the financial system is inextricably tied to consumption. The bankers tried to get lift-off from the world of consumers but, they never achieved escape velocity. They are about to do a SPECTACULAR re-entry. The $ 10 trillion (and growing) of NIRP bonds is expected to create a supernova I like the imagery.
Consumption and the consumer are the gods of the economy, NOT the financiers. The population of 15---64 year olds is the driver of everything. Their numbers are falling and we are entering The Demographic Ice Age.
There is NO escape. Hambone's stuff: Why This Time is Completely, Utterly, Totally Different...Like the Difference between a Hurricane and an Ice Agehttps://www.youtube.com/watch?v=abfVSddVbII

[Danny B]

The effect of Brexit

I want to continue to write about Brexit. It may be the straw that destroys all remaining confidence. The bureaucrats and kleptocrats created the European Union in such a manner that there was no going back,,, no plan "B". In 2009, they created a tentative "Plan B".
The British are getting a clear view of just how bad "remain" would be. They want out, https://mishtalk.com/2016/06/16/mass...rious-trouble/
There is NO doubt that Brexit would roil the markets enormously; What The First 100 Days After Brexit Would Look Like | Zero HedgeNo Koolaide for the Swiss
What you are seeing is wild swings as capital tries to flee the burning building. Gold doesn't burn.

I post on the Drive on Wood forum. Collapse came up on passing. One writer in the midwest wrote, "it's CRAZY to think that GOV isn't going to come around and take care of things/us".

GOV has created this enormous "dependency class" that it can no longer afford or care for. "They" are dancing as fast as they can but, the music is soon to stop. Peter Schiff Warns: "The Whole Economy Has Imploded... Collapse Is Coming" | Zero Hedge

Agenda 21 would have all of us in the cities because that is the best control scenario. BUT, it is the worst survival scenario.