Economic pressures

[Danny B]

Nothing but debt.

Most people never think about the fact that all our money currently is debt instruments. I give you a $ 5 bill. It is just a debt receipt. A treasury bond is a debt instrument drawn against American productivity. All our paper wealth is just debt receipts. One of the claimed attributes of "money" is that it must have intrinsic value. EVERY fiat paper currency in history has collapsed because it lacked this attribute.

The U.S. dollar was redeemable many years ago. The Bankers weaned us off this convertability over the decades. In 1964, the silver was removed from coins becasue "the price of silver had gone too high." The never mentioned that the value of the dollar had gone too low.
The bankers demanded an elastic currency so that they could live the good life and expand the anglo-AMERCAN empire. Britain was successful at getting it's colonies to pay for themselves. America didn't manage this and the empire cost us a LOT.

The bankers took our currency that was a store of value and replaced it with a currency that just denoted debt. This generally works for a short time,,, historically. Generally 30--40 years. The U.S. dollar is 42 years old as an unbacked currency.

Everything that is circulating is debt, NOT wealth. This eventually causes great distortion. NO debt is ever extinguished,,,, it's just paid off with more debt. ALL this debt carries an interest load. By rolling over the debt, the interest grows enormously. GOV prints to cover interest, principle, defaults,,, everything. How much does GOV print to cover this?

"Bank of Japan and Federal Reserve are printing
out of thin air approximately, $59,737 dollars per second,
$3.584 million per minute, $215.053 million per hour,
$5,161.290 million ($5.161 billion) per day & 160,000
million ($160 billion) per month & 2 million million dollars
($2 Trillion) over the next year"

http://www.tedbits.com/mailchimp_template/20130627_TedBitsNewsletter.pdf

This is only the FED and BOJ. The debt pile grows by the minute.

What is the effect of all this added debt ( includes intererst)? The debt actually has a negative effect eventually. "Negative marginal utility of debt"
" Eventually, the madness of trying to "borrow our way to prosperity" because inescapable. The additional debt produces zero gain in GDP, and even goes to negative. That's where we are now."

http://www.oftwominds.com/photos2011/debt-saturation.jpg

2013 Crisis To Trump 2008 :: Jim Sinclair's Mineset

The GEAB group is socialist to the bone. The Eurozone was born as a socialist concept. GEAB puts a rosy slant on everything European. Time will tell if the timetable is correct.

[Danny B]

The last post mentioned "extinguishing debt". With barter, all debt is extinguished. Barter is simply a trade of tangible objects. The tangible object most in demand in normal times is gold. Trade settled with debt instruments has never worked in the long run. Gold was the standard. Gold certificates are/were the next best thing.

Here are 4 posts fropm Hugo Salinas Price on the utility of gold for extinguishing debts.

The Daily Bell - Hugo Salinas Price on Gold and the Potential for '500 Years of Darkness'

The Daily Bell - Hugo Salinas Price on the Nature of Money and Why Silver Should Be Legal Mexican Currency

The Daily Bell - Copernicus, Galileo and Gold

The Daily Bell - Copernicus, Galileo and Gold - Part II

Sr. Price also talks about a solution;
The Daily Bell - How to Get the US Economy Going Again

If you read the statistics on the economy, it is obvious that things are getting worse. While it would be charitable to try to save everybody, man isn't "wired" that way.

[Danny B]

Empire, debts and the real economy

About 1965, American leaders launched the welfare-warfare state. They printed to pay for it. By 1971, gold was leaving the treasury at the rate of 100 tons a day. Nixon was forced to close gold-convertability in August '71. After gold was taken out of the system, the presses went into over drive. This chart shows the great devergence between GDP and debt.

http://www.golemxiv.co.uk/wp-content/uploads/2012/10/debt-vs-gdp-1971-2016.png

Gold enforces discipline and banks/GOV didn't want any discipline. GOV is over-printing on a massive scale but, we don't see much price inflation. This is because there are so many dollars in circulation. They don't get diluted near so fast. About 2/3 of paper dollars are held outside America. This also helps becasue they are not in the circulating money supply. Banks and GOV increased the money supply at 3 times the rate of increase in GDP. Since they were "first spender", They got the most benefit. We got reduced purchasing power.

This went on for decades until American employment crashed. Since the debt-load is ever-increasing, the printers had to compensate for the lack of income.

http://media.resourceinvestor.com/resourceinvestor/historical/News/2011/6/PublishingImages/6-14-11-bmg-money-supply-2.PNG

One would expect price inflation to go hand-in-hand with monetary inflation. This isn't the case. The so-called money supply includes credit. The FED-created money supply went up and the bank-created money supply went down. This gave us a very confusing inflation picture,,,, temporarily.

http://static2.businessinsider.com/~~/f?id=4a39162b4b5437dc00253961

The 2007-8 meltdown was caused by too much debt in the system. There is curently EVEN MORE debt in the system.
"6) Debt crises happen because incomes can't support the servicing of the debt any longer. If there is any drop-off in economic growth, a 2008 re-run could well be around the corner. That's not trying to be dramatic; it's just the way the math pans out."

"BIS details the extent of the world's debt problem. It says total debt in large developed market and emerging market countries is now 20% higher as a percentage of GDP than in 2007. In total, the debt in these countries is US$33 trillion higher than back then."
The Markets' Worst Kept Secret | Zero Hedge

The U.S. economy is shrinking, NOT growing. Alternate Gross Domestic Product Chart
Our ability to service debt is shrinking as our debt grows. An extra $ 33 trillion will be hard to come up with.

[Danny B]

Walter Burien,,, Gary North.

As all of you well know, some "trails" are very hard to follow. Following a trail of money that reaches GOV is very hard to follow. One of the most intruiging trails is the Comprehensive Annual Financial Report (CAFR) prepared by GOV agencies.
Walter Burien has been following and exposing this trail for over 10 years. He claims that California, for example, has 19,000 GOV agencies. All of these agencies have investment funds. His site is CAFR1 CAFR1 Home Page

Then, there is Gary North who claims that Burien is full of hot air. He claims that Walter hasn't shown a single document as proof.
Walter Buriens Story of California Governments $8 Trillion in Secret Slush Funds. Where Is the Evidence? It Is Not on His Site.
Gary ridicules the idea that there could possibly be 14,000 agencies of GOV in Ca. This claim is disingenuous at best and a blatant lie at worst.

While it is difficult to follow the money, there are indications;

"* When Orange County lost a little over $1 billion in derivatives investments, they were crying "poverty" and threatening to shut down schools, police would have to be laid off etc. However someone dug into the Orange County CAFR and found out that the county had about $16 billion in profitable investments! The county, from their profitable liquid investment funds / cash position could have continued performing the same services, without collecting one dime in taxes, and could have done so for another 11.9 years from the existing funds prior to running out of money! The crying stopped. "
CAFRs: The BIGGEST Secret - $60 Trillion Invested By Fed, State, And Local Governments!
EVERY GOV agency shows a reserve fund, sometimes VERY large.

When Wisconsin got into a VERY heated budget fight, I went to the State GOV site and clicked on the CAFR report.
'Document not found, contact your webmaster"

North demands a PDF as proof of the stash. I picked a state, Wisconsin and looked at their statement. On page 102 it stated total assets at ($ thousands)
2001 $ 536,263.......liabilities $ 191,305.............Total fund balance $ 345,658

http://www.doa.state.wi.us/debf/cafr/fy01/01wicomb.pdf

For Gary North to demand proof is more than suspicious. There are thousands of GOV agencies and funds that ALL publicize the proof,,, EVERY year. CALPERS is just one fund and is worth $ 262 billion.
Current Investment Fund Values

Burien has a new article about solving our current problems.
The Key To The Whole Picture
He also has vids. Introduction to the CAFR - Why You Can't Get Ahead - YouTube

Alex Jones has a CAFR vid Alex Jones CAFR MOVIE part 1 - YouTube

Looking at a parallel system, the top richest 120 colleges in America have a new wealth of (2009) $412 billion Endowment funds of the 120 colleges and universities with the largest endowments, by rank order: 2008 and 2009
Seems to me that the schools could lower their tuition. "Last year, Harvard made more than $7 billion of tax-free investment income." Harvard has about $ 40 billion.

Burien claims the same for GOV. GOV has no funding need to collect income taxes.

[Danny B]

starvation to keep the bankers fat and happy

The legacy of the London bankers is with us even today. They get all upset when the natives (useless eaters), eat up all the profits. Way back in Ireland, all the cash crops were exported and the Irish had to subsist on potatoes. (simplified). When the potatoes had a problem, over a million Irish starved. This was while Ireland had very large food exports.
The exports were necessary so that the Irish could pay the rent.
Irish food exports during famine years 1845 - 1847

Another shining example of starving out the uselese eatrs occurred in India. The British held rotating famines and held the population to ;
"but the population of India remained at approximately 220 million for over a century prior to 1914."
Then and Now: British Imperial Policy Means Famine

Hoping for a renewal of these policies, the Banks are petitioning the FED to be allowed to speculate in commodities.
The Fed Reconsiders Letting Banks Trade Commodities - Ed Steer's Gold & Silver Daily
Since the banks can print free money and,,, it always stays in the banking system, they can buy up anything that they want.
" the federal regulator, subsequently used that estimate to calculate that speculation added about $10 per fill-up for the average American driver. Other experts have put the total, combined cost at $200 billion a year."
Playing in commodity markets, investment banks are mere parasites on the economy | Gold Anti-Trust Action Committee
Isn't that great !!!!

They are on the verge of buying up all the copper to put a stranglehold on that too.
The banks are impoverishing and killing a LOT of people but, not to worry,,,, they are making a LOT of profit.
How Goldman Sachs Created the Food Crisis - By Frederick Kaufman | Foreign Policy
They threw an extra 1/4 billion into poverty.

The natural progression of the industrial revolution causes most products to fall in price from increased efficiency. The purveyors of all these goods try to form monopolies to keep price deflation at bay. The ultimate monopoly is GOV. You can't seek out another supplier or a better price.
Any group with enough financial power can buy monopoly protection from GOV. GOV will sell anything for the right price.

All these monopolies raise their prices as the dollar falls. They lose parts of their customer base as purchasing power declines. Food will be the last to fail.

In our Keynesian economic system, the banks create the principle but, NOT the interest. The interest is extracted out of future growth. Should the future growth not occurr,, the interest is not produced. Very simple.
The European bankers in the guise of the FED are printing like crazy to pay themselvs the interest. It has been widely publicised that most of the "loans" from the FED were not payed back.
The FED has created somewhere around $ 26 trillion of new funny money. It is up to us to convert this funny money into real tangible assets. At the same time, WE must pay the interest on all this funny money. There are 8 families depending on us to slave away.
The Federal Reserve Cartel: Part I: The Eight Families | LEFT HOOK by Dean Henderson

ALL the paper money in existence is a giant debt that we are expected to "work off". Same for treasury bonds. The kids will have to pick up the tab.

http://thumbs.dreamstime.com/z/child-protester-10942776.jpg

[Danny B]

savings interest

Our current problem is that there are way too many banks. The search for profit for all them is quite a big job. They have to steal from everyone. They get free money from the FED plus they get free money from savers. It is calculated that if savers were given the normal interest on their savings accounts, they would have $ 10.8 trillion MORE.
" By aggregating the entire shaded orange area, SAVERS have missed out on a whopping 10.8 Trillion in earned interest usage. - See more at: http://theautomaticearth.com/Finance/what-ben-bernanke-is-really-saying.html#sthash.x7cBbBSy.dpuf"

Hey, it is GREAT to be a banker

[Danny B]

Government Wealth Disclosure over the years
The article also mentions that another CAFR researcher who was a federal auditor in his work career died shortly after publicising his research.
The per-capita debt in Detroit is less than the debt in a few other cities. Chicago debt is double that of Detroit.

There is a lot of publicity claiming that all the various public pension funds are going to be broke. Possibly, they are just hiding the funds to avoid payout.
The Tip Of The Iceberg Of The Coming Retirement Crisis That Will Shake America To The Core | Conscious Life News

[Danny B]

Foreign banks

As all of you know, the FED is owned by european bankers. When things crashed, the European Central Bank could only do so much. And, they had to do it slowly,,, especially because of the German watch dogs. The european banks were desperate to save tons of dollar-denominated debt in Europe from defaulting. So, the owners of the FED just had the FED print up an extra $ trillion to smooth things out.
Thanks To QE Bernanke Has Injected Foreign Banks With Over $1 Trillion In Cash For First Time Ever | Zero Hedge

A FED economist mentioned this and was promptly fired. He didn't help his case at all when he mentioned that the FED had printed up $ 18 billion in the weeks prior to the twin towers incident in New York.
Fed Economist Fired for Investigating Suspicious 9-11 Cash Transfers; and Steve Keen Exposes Financial Fallacies | Zero Hedge
Everyone knows that the FED just happened to be operating "remote" when the 2 planes hit.
There are a "few" other inconsistencies too.
9-11 WTC Biggest Gold Heist in History: $300 Billion in Bars - YouTube

[Danny B]

Delusion at Business Insider

There is an article at Business Insider that shows lots of graphs that PROVE that Amerca does not have too much debt. The charts show net worth in America at 5 times debt. "America Is Not Drowning In Debt: These 5 Charts Destroy The Biggest Myth About The US Economy
America Is Not Drowning In Debt - Business Insider
VERY STRANGE.
We all know that the wealth distribution is WAY out of wack. Huffington post reports it. Half Of American Households Hold 1 Percent Of Wealth
CNN Money reports it Wealthiest Americans have 288 times net worth of typical family - Sep. 11, 2012
Forbes reports it Average America vs the One Percent - Forbes

This makes you think about the nature of "money". A FED dollar and a treasury bond are debt instruments that are a claim on future goods and services. Those people holding the biggest mountains of debt-notes can only redeem them if there is a functioning economy. Through regulatory capture, the big corporations have avoided most of their taxes.

They are very proud of their bottom line and huge profits. This is coming to an end. They have starved out their customer.

The FEDs have pumped $ 6 trillion into the stock market since march.
Time for Fed to disprove PPT conspiracy theory - MarketWatch First Take - MarketWatch
The FEDs are buying about 91% of U.S Treasury bonds. The economy is barely limping along. All this new money is circulated to keep debt from defaulting and to keep the stock and bond markets from crashing.
The whole economy is supported by printing new dollars. All that printing puts the dollar itself in danger. The rich may take the biggest bath of all.

[Danny B]

Some Hard Truths Become Apparent When One Faces Muni Bond Realities | Zero Hedge

Somebody is going to get gored;
The taxpayer
City employees
City pensioners
Bondholders
Scranton, Pa says that they need to raise property taxes by 117%
Apparently, Detroit is going to default on municipal bonds but continue to service "general obigation" bonds. They are also expected to cut pension payments by 90%. Every city is going to have to make the decision about who gets the shaft. All the various players are going to lose something.

[Danny B]

Our money system depends on the morality and honesty of our GOVMuch of what we call GDP is actually added debt, NOT productivity

"Wise governments, if there are any, take no chances. They may feed the paper money to the people. But they hold onto gold for themselves."
Interesting perspective

Have Credit-Based Money, Will Fail

This page has a graph showing the profits of the financial sector. Keep in mind that GOV has recently pumped $ 6 trillion into the stock market and about $ 100 billion a month into the bond market.
Visualizing The 'Real' Economy Vs The 'Financial' Economy | Zero Hedge
Too many people want their money to go to work and compound itself. Like any "crowded" trade, there is too much money in the system trying to get returns. As is normal, any crowded trade will collapse. What will the collapse look like?
"$1,200 Trillion Derivatives Market Dwarfs World GDP
John Rolls Submits: The Derivatives market was only 500 trillion in 2008 when it almost blew up in all our faces. Now it is 3 times that size, what a monster balloon! When it blows no one survives that has money in the banks or in the mattress. "
From the Roaring Twenties to the Modern Financial Panic – ‘Bubbles Forever’, ‘Crashes Forever’ … More Frequent, Bigger, Costlier, Deadlier… SOMETHING WORSE THAN GREAT DEPRESSION COMING! | InvestmentWatch

In 2008, there were LOTS of signs of instability. What signs do we have now?
It Is Happening Again: 18 Similarities Between The Last Financial Crisis And Today

There are about 3 types of derivatives that are sold that resemble "re-insurance". These derivatives are attempts to spread risk so that no single institution gets crashed in the event of a blowup in one area. It is true that they greatly dilute risk exposure. In the event of a large loss, this risk exposure becomes all-inclusive. Europe is cracking apart and American banks have lots of exposure to European debt.
Europe is Cracking Apart… Are You Ready For a Crash? | InvestmentWatch
China is crashing too. The whole world is inter-connected on all this debt exposure. There will be nobody that can save the system. All debt-based systems have always crashed. I leave you with a song.
"The song was written by P. F. Sloan in 1965 when he was 19"
Eve of Destruction (with lyrics) - Barry McGuire - YouTube

[Danny B]

Comparitive bubbles

This article has an interesting graph showing the rise and fall of the money supply from 1929 compared to the rise of the money supply today.

http://www.elliottwave.com/affiliates_pr/archives/2013/07/18/Deflation-Warning-Money-Manager-Startles-Global-Conference-aa.aspx

Gold And The Endgame: Inflationary Deflation | Zero Hedge
The function of the credit markets is to move production-and-consumption "forward". You consume the proceeds of tomorrow's wages,,, TODAY. This all sounds ok until you factor in the cost of interest. Every thing that you buy on credit carries a small? bite from interest. Over the years, all these bites add up to quite a big sum. If you go bust and default, the bankers take your debt and present it to GOV to be paid.
GOV pays the bankers with Treasury bonds that also acrue interest.

In the event that your kids are unable to pay the redemption on the Treasury bonds, the bankers have an alternate plan. They demand revenue-generating infrastructure from GOV be handed to them.

[Danny B]

Japan

All the big banks are inter-connected in debt exposure. in Japan, they not only lost their jobs to low-wage competitors, they lost their workers. The birth rate is dropping and there are few young to support the elderly retired. The population shrinks 200,000 a year headed for a future shrinkage of 1 million a year.
LifeSiteNews Mobile | The Asian Tiger ― Japan ― is in danger of extinction
The Japanese PTB can't seem to figure out why economic growth has stopped. Duh,, it costs money to have kids and money is in short supply. Even the business community has figured that one out.
Ben Stein's Right: It Costs Too Much To Have Children - Business InsiderJapan: From Quagmire To Abenomics To Collapse | Zero Hedge

[Danny B]

China

America is affected by bank problems in both Japan and China.
The IMF recently warned China that credit creation was runaway. China said, "no Problem". That was about 2 weeks ago. Today, they are singing another tune.
EVERYBODY in China created credit so that everybody would be rich. Credit just moves consumption forward. Once you reach the future, you need even MORE credit to maintain your now-augmented lifestyle.
Today is the "tomorrow" that we didn't worry about yesterday.
In addition to needing additional credit to keep rolling, everybody needs "more" additional credit to pay the incurred interest from the original dose of credit.
All good things come to an end and now, credit is hard to come by.
Credit-Crunch in China and All Over Asia | Zero Hedge

Many thousands of GOV entities and bodies in China were able to create special "vehicles" that substituted for loans . Then, they used this credit to build everything that they could think of. This allowed for LOTS of corruption to steal from investors. The various GOV agencies created so many vehicles that the central GOV has NO idea how much credit has been created.

The central GOV has now panicked and demands a report. "The official People's Daily newspaper said separately on its website, citing unidentified sources, that an urgent order for the audit was issued on Friday and work will start this week."

China orders nationwide government debt audit | Reuters
The Chinese economy has a very high "stall speed". China needs about 7% growth to keep afloat. If money and credit are siphoned off into corrupt and worthless projects, it drags down wealth creation.
A credit crash in China would probably force the PBOC to liquidate U.S. treasury bonds to keep the Chinese banks afloat.
This is just one more chance for the system to go SPLAT

China isn't completely broke. They are expected to import 1,000 tons of gold this year. UPDATE 1-Chinese gold demand could hit 1,000 T this year-WGC | Reuters
They are currently importing about 1/2 of all world production of gold. They have BIG plans.

[Danny B]

Drawdown of gold

I brought a 1 oz gold coin into the bank to show them what real money is. They looked at it like it was a 5 legged lizard. Westerners have had any awareness of gold squeezed out of them. Very few of us give it much thought. EXTENSIVE reading proves that it is very important. It has been referred to as a "barbaric relic". When Ron Paul asked Bernanke why central banks hold gold, Bernanke replied "tradition".

The bankers and other parasites demand a flexible currency so that they can create boom-and-bust and reap huge gains. Gold brings discipline.
There is a 100 day wait for gold delivery in London now. The London market is the biggest in the world.
"The LPMCL clears some 700 tonnes of gold and 5000 tonnes of silver every single day."
It is well worth understanding EXACTLY what this 700 tons of gold a day does.
Gold is the universal reference point for ALL currencies.
" NONE of these commodities trade as an FX currency cross, in other words gold is distinct in that it trades as a currency cross being sold and bought long and short against all other currencies 24 hours a day. The FX price is the real determinate of how much gold can be swapped for $ or vice-versa"

Gold prices all currencies, NOT the other way around. There is much talk that the dollar can never be replaced as a reserve currency. What a joke. That may have been true before the days of computers. Since ALL currencies are referenced to gold, there is no need for a reserve currency. The gold justs sits there queitly and doesn't move. That 700 tons a day doesn't go anywhere.

Gold is the one-and-only currency cross. Traders buy and sell tons of gold to price ALL other commodities. It's just price-discovery in a computerized world with gold as the reference. What happens when the gold runs out?
"Make no mistake though from a physical market perspective, the extreme condition we are currently witnessing in gold should never happen and forewarns of an extremely serious imminent disconnect illustrating a lack of immediately deliverable supply."
Andrew Maguire discusses gold backwardation and GOFO rates | TF Metals Report

The gold is running out. It fled East. The much-manipulated gold market is dying. Indications are that it is dying soon.
FOFOA
Since most of the world's traders demand gold-referencing for trades, they will demand gold-referencing for American securities. The U.S. treasury gold is gone. The securities will be priced accordingly.