Economic pressures

[wayne.ct]

Why do economists call inflation deflation?

Because they are looking at the other side of the coin. One side is inflation and the other side is deflation. When it costs 10 percent more for the same item at the store, the customer says we are having inflation. The store says we are having deflation because the dollar buys 10 percent LESS that what it did earlier. So, does everyone understand now? Of course not. Hardly anyone understands anything at all. To 95% of the people it is hardly a topic worth talking about. However, when people, businesses and governments REDUCE the amount of borrowing they are doing, the multiplier effect of partial reserve banking goes into reverse. The LENDERS that profited from the LOANS the banks were writing no longer profit. They actually LOSE money instead. We had better watch out and be careful. Things are not looking good. The numbers that tell what is happening are available to anyone that wants a look see.

[Danny B]

The emerging loss of control of interest rates

Today is the tomorrow that we didn't worry about yesterday. We moved consumption forward by juicing the credit markets. WHAT NEXT?
"currently project a likely S&P 500 nominal annual total return averaging just 0.9% over the coming 12-year period, with negative total returns at shorter horizons."
" On a cyclical horizon, we continue to expect the present market cycle to be completed by a 40-55% decline in the S&P 500 Index; an outcome that would be historically run-of-the-mill from current valuations."
"until we observe a more significant deterioration in the equity market (say, below 2000 on the S&P 500) coupled with widening credit spreads and a slowing in employment growth below about 1.4% annually (it’s currently about 1.7%),"
We do NOT have employment growth but, Hussman follows the official line to avoid problems.
"At current valuations, virtually everything is priced for a decade of zero. The unwinding of these speculative extremes is likely to be chaotic, and will likely occur over a shorter horizon than investors imagine. That chaos, driven not by central bank tightening but by an emerging default cycle,"
"I can’t emphasize strongly enough that there is no economic evidence that activist monetary intervention has materially improved economic performance in recent years;" Yep, it's just a sign of desperation.

"Even allowing for a negative “shadow” Federal Funds rate, as Wu and Xia have done, results in the conclusion that extraordinary monetary policy boosted U.S. industrial production by less than 1%, and lowered the unemployment rate by just over one-tenth of 1% beyond what would have been expected from conventional monetary policy " It's called a desperate move because it really never works.
"The outcome of years of yield-seeking speculation induced by central banks is that investors across the globe have now locked in zero prospective total returns in virtually in every asset class for the coming decade."
Hussman Funds - Weekly Market Comment: The Decade of Zero and its Chaotic Unwinding - August 15, 2016

The focus of the article is that there just won't be any returns for many years. The body of the analysis is based on faulty numbers for employment AND inflation. Factoring in the price inflation and unemployment number from Shadowstats would give a more negative outcome. The return on an investment can't be quantified by the interest numbers. It must be balanced against the purchasing power of the earned interest and/or dividends. The CBs created monetary inflation to juice the markets BUT, that same monetary inflation creates price inflation that reduces the value of any returns.

THE END RESULT OF THE SUPPRESSION OF THE PRICE OF GOLD IS A REPRESSED UPWARD PRICE PRESSURE.
THE END RESULT OF THE SUPPRESSION OF INTEREST RATES IS A SUPPRESSED PRESSURE TO RAISE INTEREST RATES.

The FED keeps talking about a small rate hike,,, that never materializes because it would take the down the whole market. Here is another article talking about a BREAK in the repression of interest rates.

"Above is a 25-year chart of the U.S. T-Bond market. Of course the bull market extends at least 10 years further back than what is shown above."
"Blow-off Status! That’s how Michael characterizes the U.S. T-Bond Market. As stated in his August 10, 2016, missive, Michael noted that we are on the verge of an end to the greatest bull market in U.S. Treasury market history, which will be accompanied as well by the long-dated treasuries of Germany and Japan, the two other countries with sizeable debt markets that back two other reserve currencies—namely, the euro and the yen. As Michael stated, “The T-Bond’s long-term momentum trend is in a blow off condition (the terminal upside vertical phase of an aged bull)."

"Why is this such a big deal? It’s a big deal because when you have a blow off in any market, it is followed by a violent reaction in the opposite direction. In other words, when the long-dated T-Bond finally hits its peak—and Michael’s work suggests we are very, very close to that point in time"
"So here is what I’m thinking the most likely scenario is. If Oliver is as correct with the T-Bond market as he has been with every other market I have seen him opine on, we will likely see interest rates rise dramatically before year end"
" If the policymakers can keep a lid on them to get Hillary elected they will do so. But at some point, rates will rise and very early in that process I believe we will see a major economic implosion that could make the 2008-09 version look like a Sunday walk in the park.

With an inability of the Fed to curtail the raise in rates"
"As noted above, Michael believes all three major western world long-dated sovereign debt instruments will spin downward, sending rates skyrocketing more or less at the same time"
" If the JGB falls to 151 or lower by the end of this month or below 151.2 by the end of September, he is suggesting that will be a major long-term negative event. "
"Above right is an intermediate-term price and momentum chart for the U.S. T-Bond. A key to watch to determine if the verticality is concluding and thus preparing us for a major rise in interest rates whether the Fed likes it or not, is very close. The T-Bond price to watch now is a weekly close at 170.50 or lower. On Monday of last week the T-Bond fell to 170.65."
The Most Important Market in the World. Are We at a Tipping Point? | Kitco News
.
The focus of the article is ; the central banks losing control of the interest rates no matter how much money they print and inject.

Jim Rickards was asked by the American intelligence alphabet groups to do a war-gaming exercise about the U.S. economy. They undoubtedly look at the same data that Amstrong, Hussman, et al are looking at. They have reached the same conclusions as the private sector investors have.
BUT, the deep state and the military are determined to stay in control of everything.
https://www.theguardian.com/environm...ivil-breakdown

The Western Currencies are the backing and reference point for the SDR. China can talk about joining the SDR community because it doesn't cost them anything to talk. BUT, if Western currencies are in crash mode, the SDR will never achieve liftoff. Rickards and the NWO want a one-world currency to take up the reins after sovereign currencies crash. BUT, the spontaneous combustion of Western currencies will push gold to the forefront, NOT the SDR.

[Danny B]

Dr. Judy Shelton and gold-backed bonds

Gresham's Law states that the strongest currency will go into hiding to be used as a store of value. This is the main reason that a State can not use it's transactional currency as a store of value at the same time. After Bretton Woods, the U.S. dollar was used as a transactional currency in America and a store of value in many other States. As the world got richer, post WW II, there was an ever-increasing demand for U.S. dollars to be used as a store of wealth worldwide. The world demanded that America run a current-account deficit so that it could provide enough dollars. This was described by Robert Triffin;
https://en.wikipedia.org/wiki/Triffin_dilemma

This created a worldwide glut of dollars. BUT, we over-printed the dollar because we could. There was a never-ending demand for dollars UNTIL we cut off the gold-backing. In summer of 1971, gold was leaving the U.S. Treasury at the rate of 100 tons a week. We cut off gold conversion. The U.S. dollar coasted on, valuable because of momentum. After the cutoff, the dollar became just one more debt instrument. This momentum is running down.

One of the factors that was HEAVILY affected by the cutoff was "seigniorage".
Investopedia; "Seigniorage is the difference between the value of money and the cost to produce it — in other words, it's the economic cost of producing a currency within a given economy or country. If the seigniorage is positive, then the government will make an economic profit; a negative seigniorage will result in an economic loss."
This is in addition to being the "first spender".

At one time, you could bring your gold to the U.S. mint and they would stamp it into coins for free. This allowed more money to be in circulation. There wasn't any seigniorage and GOV made no profit. By going to unbacked paper money, GOV gained all the seigniorage. International use of U.S dollars is in rapid decline and seigniorage isn't what it used to be. The various Central Banks are all buying each other's bonds. This circle jerk is called "providing liquidity". BUT, our trade deficit is $ 45 billion a month. BUT, since every debt instrument is just additional debt, we pay old debt with new debt,,, a LOT more. This "plan" has a definite end date. We just don't know when.

When every State went off gold backing for their currency, this ensured that NO State could go back on a gold-backed currency. Gresham's Law and human nature ensure this. Any talk of a transactional currency being backed with gold is just talk.
BUT, there is another option. Sovereign bonds are NOT a transactional currency and they can easily be gold-backed.
Trump has a very astute economic advisor and she has this to say; "Would the first step in that be issuing gold-convertible bonds?

Don’t attribute this idea to the Trump campaign, but it has been something that I have been proposing for years now. A gold-backed bond was first proposed in 1981 by Alan Greenspan."
"It's Not Some Barbarous Relic" - Trump Adviser Urges Return To Gold Standard | Zero Hedge

With the Bretton Woods agreement, America promised to NOT over-print the dollar. Once again the world is at the brink of war because of criminals with printing presses. Once again gold is the only agent that can bypass the monstrous greed of the bankers and politicians. BUT, we lose seigniorage. 51% of Americans receive a check from GOV. That will become unaffordable if all GOV wealth is represented by gold.
Both Jim Willie AND history indicate that America will get a new currency for domestic use. International debts will be settled, NOT rolled over. This will be done in gold.The FOREX will disappear. GOV will try the same old trick and over-print the domestic currency.

"The fact that Trump is a builder and a businessman makes me confident that he can bring his track record of finishing projects on time and under budget to the federal government. It’s the wasteful government spending that ends up being the problem."
Ah, but this wasteful spending is what keeps the welfare-warfare State moving along. You can see why everybody with money is against Trump and everybody who has to actually work is FOR Trump.

[Danny B]

Defaults and front-running the bond market

The 2 articles from Hussman and Kitco claim that the FED will lose control of interest rates. This is expected to be brought about by an upturn in the default rate. The "junk bond" market is called "junk" because it is a market for risky investments.
8/23 Junk bond defaults to rise 5.6% in next year – CFO

In the '30s, Germany created it's own money independent of the money masters in London. Churchill said that this was the prime reason for WW II. This was the "German miracle" that brought so much prosperity. Russia is now in the process of doing the same thing.
Dollar Disaster Looms? China and Russian Currencies Break Away | Global Research - Centre for Research on Globalization

If a little bit of desperation doesn't do the job,,,, get even more desperate; 8/23 Japan is willing to cut interest rates even further into negatives – ETF Daily News
GOV is just buying up everything, Monetary policy has nationalized the Japan stock market – CNBC
Not to be outdone in the stupidity competition, the FED proposes injecting another $ 4 trillion into the economy. This is a sign of desperation squared. Fed Admits Another $4 Trillion In QE Will Be Needed To Offset An "Economic Shock" | Zero Hedge
They hope to drive interest rates way down further out on the curve. A very large part of the financial system depends on interest income. It has been WELL proven that QE doesn't help the producing economy or the bulk of consumers. SO, they propose to do more of it.
8/23 Big policies, bigger failures – Euro Pacific

David Stockman has written a book; "It also delves into the good and bad of the Trump campaign and platform and outlines a more consistent way forward based on free markets, fiscal rectitude, sound money, constitutional liberty, non-intervention abroad, minimalist government at home and decentralized political rule." Bubbles In Bond Land——A Central Bank Made Mania, Part 1 | David Stockman's Contra Corner

Stated very simply, the jews have always championed socialism and world domination. Israel destroyed their domestic bond market back in the 80s. Our bond market is close to destruction because of over-reach in both welfare and warfare. Israel has just over 4 million people and we send them about $ 10 million a day to survive. It's not the multitudes who are the problem. It is the power-mad leaders.
They claim otherwise; German President Booed, Attacked; Claims "The People Are The Problem, Not The Elites" | Zero Hedge

Stockman also writes about insanity in Japan; "Last year Japan lost another 272,000 of its population as it marched resolutely toward its destiny as the world’s first bankrupt old age colony. At the same time, the return on Japan’s 40-year bond during the first six months of 2016 has been an astonishing 48%."

The Central bankers have marched us to the edge of the cliff to save the banks. BUT, many of their actions are destroying the banks. The Central Bankers drank the koolaide many years ago and are hopeless.
"Nor is that the extent of the subzero lunacy. The Swiss yield curve is negative all the way out to 48 years, where recently the bond actually traded at -0.0082%."
"But here’s the thing. The geniuses at the ECB are not cornering the market; they are being cornered by the speculators who are recklessly front-running the central bank with their trigger finger on the sell button.

Everything in the European fixed income market—sovereign and corporate—– is now so wildly over-priced and disconnected from reality that the clueless fools in Frankfurt dare not stop. They dare not even evince a nuance of a doubt."
Wildly overpriced! What about defaults?
"Italy accounts for roughly one third of the Eurozone’s estimated €1 trillion worth of non-performing loans." The Impossible Italian Job | Wolf Street

"their trigger finger on the sell button." So, the bond buyers are front-running the CBs and will dump in an instant. The "algos" in the stock market will dump in a pico second. Any hint of a downturn will cause problems VERY fast. The 2010 "flash crash" happened in about 2.1 seconds.

[Danny B]

Transmutation of gold

I try not to ramble but, I read in so many disciplines that it is difficult to stay on topic. This post starts out about transmutation in nature. First, the background
reading.
Transmutation in Plants

Extraordinary Biology
There is most likely a connection between LENR and spontaneous transmutation. I haven't had time to search. There are indications that the alchemists had some control of transmutation; The Platinum Cannon Shipwreck - Mango Metal Report

"Chemical transmutation, specifically involving lead into gold, was first heard within the occult science known as alchemy. Then, it was that same occultism that continue to suppress using the “national security” all encompassing excuse against free energy activist John Bedini, " I believe that I've heard of him.

"In order to weaken the clout of the Rothschild banking dynasty that is protecting the status quo, both Russia and China started buying vast quantities of gold available in the open market. "
"Since then, the BRICS established direct exchanges using sovereign asset-based currencies to sustain their own economies while requiring others, especially the West, to do the same in exchange for their oil and industrial products.

Now, the financing world is separated between the East’s asset denominated and the West fiat based economies"
"Since waging war is not a feasible option considering the possibility of a nuclear MAD, or mutually assured destruction, the only option left would then be the total destruction of the financial system itself.

But how exactly should the BRICS do it?
Barely a few weeks ago, a conference was held in Geneva, Switzerland, purposely to announce the discovery of a method to transmute any element into another element in the periodic table, and beyond."
"The essence of this discovery and the technology boils down to the development of an industrial method for the transformation of chemical elements into other elements and their isotopes."
https://geopolitics.co/2016/07/14/ru...stem-obsolete/

The claims are interesting. Who knows?
Researchers Discover Bacteria That Produces Pure Gold
http://www.abc.net.au/science/articl...14/1686120.htm

[Danny B]

Bond fragility,,,, Duterte

Evidently, the CBs are afraid that interest rates are going to rise no matter what they do.
"Looking at this, it is obvious that something is very wrong. Either the data is inaccurate, or Central Banks know something we don’t. After all, they’re behaving as if they’re absolutely terrified at a time when the data is claiming their economies aren’t even in contraction!!!

Just what are they scared of?

We firmly believe the markets are preparing to enter another Crisis. With over 30% of global bonds posting negative yields, the financial system is a powder keg ready to blow.

The Bond Bubble is THE bubble. And with over $555 trillion in derivatives trading based on bond yields, this bubble is over 10 times the size of the one that nearly took down the system in 2008."
Central Banks Actions Indicate They Are Terrified?But Of What? | Gold Eagle
There seems to be a general feeling that an upturn in the default rate will push interest rates up and cause the derivative market to blow.

8/23 Emerging market debt up 24% in 2015 to $18 trillion – ValueWalk That will pop eventually.
8/23 Richmond Fed manufacturing survey collapses by most on record – Zero Hedge No money, honey. We can't buy anything.
8/23 Fed close to hitting job and inflation targets – Fortune No kidding. We must be close to 4% unemployment then.

The clearinghouse for derivatives is way underfunded for any kind of problem; https://geopolitics.co/2016/08/18/de...ancial-system/
"Aug. 16, 2016 (EIRNS)—The leading institutions of the bankrupt trans-Atlantic financial system issued a report today, warning that there are no mechanisms in place at this time which can prevent a blow-out the $600 trillion-plus global financial derivatives bubble"

The bankers make a LOT of money off drug production and distribution. Duterte is putting a dent in their profits; https://geopolitics.co/2016/08/07/du...ers-surrender/
Amazing article.

Here is his answer to the negative fallout from his actions; "My job as President is to protect law-abiding citizens…I was never tasked by any law to protect criminals," he declared."
Philippines President Threatens to Quit UN
The neocons are masters at creating un-anticipated consequences; https://geopolitics.co/2016/08/16/th...s-been-sealed/

[Danny B]

Debt as far as the eye can see

Here is an article from a writer who insists that we must have a gold standard and that it will only work if we have a debt jubilee. This is a good example of somebody who hasn't thought things through. Since our currency is a debt note, cancellation of all debts would be the definition of pandemonium. All credit would come to an end also.
https://www.sprottmoney.com/blog/the...f-nielson.html

A couple of years ago, there was a well-publicised picture of the Queen touring the gold vault of the Bank of England. STACKS of gold all around. BUT;
Just for the record, the BOE vault stores approximately 5,134.37 tonnes of gold. [2] As you can see from the chart, the BOE only owns 310.3 tonnes of that gold.
FOFOA: Eight! She can touch it but, she can't move it.

8/24 Largest oil companies’ debts hit record high – Wall Street Journal Interest is eating up about 46% of earnings. Maybe they shouldn't have borrowed in the high-yield debt market.
8/24 Companies must sort pension black holes before paying dividends – Telegraph Never happen.
8/24 Why Portugal could be Europe’s next economic disaster – MarketWatch Damn, I was betting on Italy.
8/24 Japan needs 10 trillion yen stimulus in each of next two years – Reuters Japan needs a plan "B"

8/24 A Fed rate hike now would be a disaster for the economy – CNBC No kidding. What brain-trust came to that conclusion?
8/24 Negative interest rates smashed confidence, increased inequality – Financial Review It never occurred to the PTB that confidence would fall when they killed insurance and pension funds, savers,,, fixed income, etc. ?

8/24 Illinois warns of “crippling tax hikes” – Zero Hedge Socialism combined with crippling stupidity results in crippling costs.
8/24 Revealed: ECB secretly hands cash to select corporations – Wolf Street No kidding. Who could have predicted that?
8/24 Demographic HomeMageddon underway… will last until at least 2035 – Econimica At least they didn't use the words :tsunami or "gate"
8/24 Why France is the most likely to be the next to quit the EU – Euro News Damn, I was betting on Italy
8/24 CA Supreme Court decides “grossly ineffective” teachers keep jobs – Zero Hedge Your socialist tax dollars at work.

[Danny B]

Sovereign debt slip-sliding away

U.S, Treasury bonds have been a bull market for at least 30 years. BUT; Aug 6. 2011, S&P Downgrades U.S. Debt for First Time - WSJ
Fitch Ratings has this to say; Fitch Sees $3.8 Trillion Of Losses For "Investment-Grade" Sovereign Bond Investors | Zero Hedge
Evidently, a lot of investors have been reading Zero Hedge; "It's Gone" - Why Foreign Demand For US Treasuries Has Disappeared | Zero Hedge
Another factor; since oil is sold in other than U.S. dollars, there is less need for foreign CBs to hold dollars. The U.S. dollar has slipped to 35% usage in world transactions. It doesn't matter if you have the reserve currency if nobody uses it. Previously, the central bankers were co-ordinating their actions so that nobody would have an advantage. As we slip down, they are starting to fight each other; The Era of Centralization Is Ending Right Before Our Eyes | Zero Hedge

Helicopter money would work for a while,,, maybe permanently. BUT, the State will never cooperate enough to make it happen. This writer assumes that helicopter money would be borrowed. It will never work if it is debt money. On The Impossibility Of Helicopter Money And Why The Casino Will Crash | Zero Hedge
ALL the CB plans have been BS that didn't work. Now, we are in quite a pickle; "The Global Economy Can No Longer Rely On Debt" - BIS Warns Central Bank Actions "Have Started To Backfire" | Zero Hedge

Armstrong warned about the collapse of sovereign debt. It looks like it is shaping up that way.

[Danny B]

Destruction of the old paradigms but, nothing to replace them

NIRP is wiping out almost everything across the land BUT, 8/25 Swiss government sees windfall revenue from negative rates – Reuters
Then, there is the monetary "lab rat" Japan; 8/25 Kuroda money-go-round undercuts Japan negative-rate windfall – Bloomberg
SO, GOV survives a bit longer at the expense of everything else. Deutsches bank is NOT happy with this.
Deutsche Bank CEO Warns Of "Fatal Consequences" For Savers | Zero Hedge
Here is a graph comparing Deutsches bank to Lehman Bros. http://www.zerohedge.com/sites/defau...EUpanic2_0.jpg

It appears that the State is willing to give the banks a good rogering to save it's own skin (socialism).
The banks have seen the writing on the wall and are creating a "work-around" to the reaming by Wall street and the district of corruption.
https://www.sovereignman.com/trends/...lliance-20120/
This is a VERY important precedent. Obummer was ADAMANT that GOV had to have a back-door to all encryption. Otherwise, the State would be locked out of your personal financial transactions.
"President Barack Obama said Friday that smartphones -- like the iPhone the FBI is trying to force Apple Inc. to help it hack -- can’t be allowed to be "black boxes," inaccessible to the government."

These 4 huge banks are bypassing GOV control. "Adoption of this technology could cause a gigantic vacuum of deposits out of the US banking system."
"As far as the US economy is concerned, Greenspan isn’t optimistic. “We’re in trouble basically because productivity is dead in the water"
The lead bonehead talks the same as all the other boneheads. The base problem isn't productivity. It is consumption. "We're In Trouble": Alan Greenspan Delivers Stark Warning | Zero Hedge

Zero Hedge points out a troubling truism; A Gold Standard "Comes After War, Not Before" Macquarie Warns "The Private Sector Will Never Recover" | Zero Hedge
EXCELLENT article.
8/25 Stagnant economy won’t support high stock, bond, real estate prices – GATA Ah yes. The global mean wage doesn't allow for a lot of discretionary spending.

America had a wage boom after WW II. As the rest of the world rebuilt their manufacturing capacity, the boom tapered off. NAFTA was an attempt to lower "overhead" for the manufacturing industry to meet our diminished consumptive power. When containerized shipping was perfected, manufacturing could be sent to an even-lower-wage producer. The TTP is an attempt to push manufacturing costs even-lower to meet the buying power of our ever-shrinking wages. Obviously, this is a downward spiral of the financial system trying to hold on to a large part of an ever-shrinking pie.

The working-man's share of profit from increased productivity is constantly shrinking. Greenspan, et al lament the fall in productivity but, don't seem particularly concerned with the fall in remuneration for the worker. The financial industry is FAR TOO BIG for the amount of money available for investment and discretionary spending.

The corporatocracy that demands control over GOV so that it can increase productivity and margin just doesn't catch on to the fact that it can never win. It fosters a LOW global mean wage and then, goes in search of a large body of consumers for it's products.

The article by Viktor Shvets points out that there will never be an exit from automation. GOV, finance and industry need to become aware that all the old paradigms are useless in the approaching world.
Advanced automation is incompatible with debt money. Advanced automation is incompatible wit human nature. We work for the sense of self esteem. Even if the State were to pass out debt-free money, society would stagnate.

[Danny B]

Helicopters and gold

8/25 Mobius says helicopter money will be Japan’s next big experiment – Bloomberg GOV will fire up helicopters but, the financial system has another idea.
"Tanaka Kikinzoku Group – Japan’s leading precious metals trader, refiner and manufacturer – acquired Swiss-based Metalor Group, one of the world’s largest refiners and supplier of precious metals-related products – Tanaka Buys Metalor. Furthermore, in March 2015, Japan’s Asahi Holdings – a collector and refiner of precious metals – closed its acquisition of Johnson Matthey’s gold and silver refining business. JM is one of the leading producers of refined precious metals products, including LBMA-quality 400 oz gold bars."

"Now that Asia and Russia are no longer funding the U.S. Treasury debt printing press, the Fed will be forced to begin hyperinflating the money supply to keep the Government funded. This fact is underscored by the Cleveland Fed President’s – Loretta Mester, a voting member of the FOMC – recent comment about “helicopter money.”
"Japan has been quietly pivoting economically toward China for a couple years.

This abrupt transition into the physical precious metals market signals Japan’s move to integrate its financial markets and economic system into the developing eastern bloc monetary system, which appears as if it might eventually be seeded in gold. "
Japan Is Signalling The End-Game For The U.S. | Investment Research Dynamics
Japan and China are rattling sabers over territorial disputes. Stupid Americans don't know Kabuki theatre when they see it.

Venezuela bet everything on oil. They have lost the bet. Is Doomsday Inevitable For Venezuela? | OilPrice.com
It will catch up to us eventually, "On Wednesday, US public debt was more than $19.4 trillion, or almost $60,000 per citizen and $164,432 per taxpayer."
https://www.rt.com/business/357028-u...roaches-600bn/

The economy will crash. The stage is being set to blame it on Trump; CITI: If Trump wins, it would be a disaster for the global economy - Business Insider
We just have too many major problems that have grown past the point of no return;
5 Factors That Could Turn America Into Another Collapsed Empire | Zero Hedge

[Danny B]

Jackson Hole, fiscal policy.. the State & the family

The CBs are getting together in Jackson Hole to discuss what to do about the economy. They are crying ever-louder that monetary policy is losing effectiveness and MUST be replaced by fiscal policy.
Contraction in the form of "austerity" has been well proven to be a complete dead end. Therefore, "expansion" is the only option left. The central bankers talk about fiscal policy but, don't explicitly espouse expansion.

" The passing of the baton from monetary to fiscal policy
Implementation of monetary policy globally

Monetary policy has been the dominant policy tool post global financial crisis, as central banks from around the world have repeatedly fed their economies caffeine shots in an effort to jump-start activity. The central bank baristas have moved from serving basic coffee to extra-large, triple shots of espresso just to keep the pulse ticking."

"The decreasing potency of monetary policy has led to the passing of the baton to fiscal policy, with Japan announcing a stimulus package in July and the UK poised to provide fiscal stimulus in the wake of Brexit. Additionally, the U.S. looks set to increase fiscal spending regardless of who wins the White House."
Stop worrying about interest rates. Here's what we should be focusing on—commentary

"Before the conference, deputy US Federal Reserve governor, Stanley Fischer, said monetary policy was not equipped to boost productivity growth. But governments have ignored the pleas of central bankers, leaving Fed boss Janet Yellen, the Bank of England’s Mark Carney, Mario Draghi at the European Central Bank and Haruhiko Kuroda at the Bank of Japan to carry the burden."
https://www.theguardian.com/business...entral-bankers

The good news department; "The truth is that the Federal Reserve has been planning on increasing its rate, but hasn’t been able to do so due to sluggish economic conditions. Nonetheless, things are improving there too. We’re starting to see incredibly strong jobs growth, strong growth in home sales, and growth in consumer spending"
http://www.aomarkets.com/price-gold-declines-seen-peak/
8/26 No signs of life in Fed manufacturing reports: add Kansas City to list – Mish
8/24 Existing home sales decline in July – CNBC
8/26 US Q2 growth trimmed to 1.1% – CNBC That is financial growth, not production growth.

8/26 States face pension fund gap approaching $1 trillion – CNBC
8/25 Central bankers eye public spending to plug $1 trillion investment gap – Reuters That $1 trillion would have to come from additional GOV debt.

Wal Mart is going down and closing stores. Now, 8/26 “Things are worse” – Dollar Stores’ startling admission – Zero Hedge
HERESY; 8/26 Broker Charles Schwab now recommending gold to clients – SRSrocco Report

Eventually, it will become apparent that there are just too many people for the number of jobs. If you reduce the number of people, this will further reduce the number of needed jobs. Like the austerity imposed on Greece, there is a downward spiral. The central bankers want GOV to do fiscal stimulus. Japan ALREADY tried that to no avail. They had gargantuan infrastructure projects.
Martin Armstrong's central model is a model of CONFIDENCE. Previously, when people lost confidence they did not invest in the chimera of future prosperity. TODAY, when people lose confidence, they do not invest in children and a family. Japan proves this very clearly. Armstrong's models have no baseline for this factor.

The State creates a hostile environment for the child and then wonders why nobody wants to create children. The State is focused on growth and specific goals BUT, "In fact, being a parent is valuable precisely because it is so unlike goal-directed productive work." https://www.theguardian.com/books/20...-alison-gopnik
Both the State and the finance industry are toxic to the family. The more centralized the State, the more toxic it is. If the State wants to co-exist with the family, it will have to radically change.
Globalism Is A Barbaric Relic - Voluntary Tribalism Is The Future | Zero Hedge

[Danny B]

Socialism and generous promises

Democracy and socialism always break the bank. They buy votes.
"Walstrum reports that while the typical U.S. state was spending an average of 5.7 percent more, year after year, than it had in revenue — a foolish habit, we think — Illinois governments together were spending 15.9 percent more than they had available. Imagine the compounded effect of overspending your income by 15.9 percent, year after year. "
How Illinois politicians consciously created these debt and pension crises - Chicago Tribune
"Walstrum doesn't go here, but in countless cases that lavish spending, especially in sweetheart pension deals for public employees' unions, bought incumbents the votes, campaign contributions and Election Day muscle that got them re-elected time and again. Not only did the public officials spend other people's money, they spent money that didn't exist. To cover their tracks, they borrowed vast sums and knowingly underfunded the very pensions they had sweetened."
Nothing new.

"At issue was whether the Illinois Teachers Retirement System board should lower expectations about how much the fund might earn in the stock market. For the past two years, TRS has assumed that its investments will earn an average rate of return of 7.5 percent." NOT with NIRP.
" state government would be on the hook to make up the difference, estimated to cost an extra $400 million to $500 million a year, an expense that would come due starting in July. The governor and lawmakers would have to find that extra money, " An extra $ 1/2 billion,,, no problem.
Rauner loses $400 million vote on teacher pension fund issue - Chicago Tribune

April; "This Is Going To Be A National Crisis" - One Of The Largest U.S. Pension Funds Set To Cut Retiree Benefits | Zero Hedge
Actuaries figure on a 7--8% return to pension funds.
Government-worker retirement plans had 0.36% return last year
Underperformance may lead to higher bills for states, cities
U.S. Public Pensions Post Worst Returns Since Market Crash - Bloomberg
8/26 States face pension fund gap approaching $1 trillion – CNBC No problem. We'll just squeeze and extra $ trillion out of the taxpayers.

"Unlike most government pension funds, CalPERS has become an outright lobbyist for higher member benefits, including a huge pension increase that is now consuming California state and local budgets."
"it has ventured into “socially responsible” investment strategies, making bad bets that have lost hundreds of millions of dollars."
"Accordingly, California set its initial retirement age for state workers (and, beginning in 1939, for local-government employees) at 65, at a time when the average 20-year-old entering the workforce could expect to live for another 46 years, until 66." Good math.
The Pension Fund That Ate California | City Journal

"The US Healthcare System Bubble Is Going To Burst; This Is No Different Than The Subprime Crisis" http://www.zerohedge.com/news/2016-0...ubprime-crisis

[Danny B]

Gold in Denver

"Gold and silver have been used as money worldwide for thousands of years. All things used as money have had one thing in common, they were all tangible wealth. They were all things you could touch. They were all things you could weigh and measure. Credit, however, is intangible. You cannot touch credit. You cannot weigh and measure it because there is no substance to weigh and measure. It is all imagination."
https://topstocks.com.au/threads/gold-at-usd-806

“the audits performed on 95 % of US official gold reserves — the 7,628 tonnes stored by the US Mint — this is referred to as Deep Storage gold, 4,583 tonnes is at Fort Knox, 1,364 tonnes in Denver, 1,682 tonnes at West Point. In total US official gold reserves account for the 8,134 tonnes, owned by the US Treasury.”
"Well, some of it. You see, the gold at Fort Knox is not counted and hasn’t been since 1986, if it even was then. But, the feds don’t admit that openly.

"We know where it is. We know how much there is. We know it's there. None of it has been removed," insists Treasury Inspector General Eric Thorson, as quoted by CNN." Has the Federal Reserve Sold the Gold at Fort Knox?

Alexander Lassen; "He predicted: 'Long before we wake up from our dream of prosperity through an inflated currency, our gold- which alone could have kept us from catastrophe- will have vanished and no rate of interest will tempt it to return.' " The Federal Reserve: An Astounding Exposure 1934

J.P. Morgan sold off it's gold vault in New York because they had no gold. There is fairly good evidence that there is a tunnel from their vault that goes just 90 feet to the FED vault. Why Is JPMorgan's Gold Vault, The Largest In The World, Located Next To The New York Fed's? | Zero Hedge

FOFOA has an article about local newspaper reports in Kentucky showing lots of heavy trucks leaving the gold depository at Fort Knox. The cited articles are easy to find. Reportedly, Robert Rubin sold off the gold.

In August of 2014, the Denver mint reported that it was storing gold and silver.
http://www.zerohedge.com/sites/defau...Aug%202014.png
In September of 2014, the Denver mint reported that it was storing silver.
http://www.zerohedge.com/sites/defau...ept%202014.png

http://www.zerohedge.com/news/2016-0...us-mint-denver

The Central bankers seem to be in panic mode even though we aren't technically in a recession. There is over 5,000 tons of gold traded every day,,, almost entirely paper trades with no delivery. In May of 2016, there was an emergency shipment of gold from Switzerland to America that matched almost perfectly ounce-for-ounce of the physical deliveries demanded from the COMEX warehouses.

Then, there is GLD. It is never audited. They say, trust us. http://www.goldensextant.com/GLD.html

[Danny B]

They can't find the money and don't even know what it looks like.

"We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money System. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon."
From Gold to Federal Reserve Notes excerpted from the book Web of Debt The Shocking Truth About Our Money System And How We Can Break Free by Ellen Hodgson Brown

"We say in our platform that we believe that the right to coin money and issue money is a function of government .... Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank and that the government ought to go out of the banking business. I stand with Jefferson... and tell them, as he did, that the issue of money is a function of the government and that the banks should go out of the governing business"

Greenspan; "The problem is that we cannot extract from our statistical database what is true money conceptually, either in the transactions mode or the store-of-value mode. One of the reasons, obviously, is that the proliferation of products has been so extraordinary that the true underlying mix of money in our money and near money data is continuously changing. As a consequence, while of necessity it must be the case at the end of the day that inflation has to be a monetary phenomenon, a decision to base policy on measures of money presupposes that we can locate money. And that has become an increasingly dubious proposition."
http://www.alhambrapartners.com/2016...the-reckoning/

This, from a long-time moneymaker, https://www.rt.com/business/356148-r...world-economy/

"Stated differently, home equity was tapped out last time and wage and salary incomes have been fully leveraged for years. So households have nothing else left to hock.
Accordingly, they now only spend what they earn" The Market’s Being Set Up For A Hard Fall - The Daily Reckoning

"According to several sources, the U.S. population was 122 million in 1929 while total public debt was $16.9 billion. Thus, the average debt per American in 1929 was $139. Compare that to a population of 320 million and $19.4 trillion in debt at an average $60,625 per American today."
"What is interesting about total U.S. debt is that after each World War, the total level of debt declined for several years. For example, after the end of World War I, total U.S. debt fell from $27.4 billion in 1919 to $16.1 billion in 1930 (source). This was also true after World War II when total U.S. debt fell from a high of $269 billion in 1946 to a low of $252.7 billion in 1949."

"Over the next several, as total U.S. debt continued to increase, there were a few years that experienced declines (1951, 1956 & 1957)."
Korean War, June 25, 1950 – July 27, 1953

VERY strange coincidence. Our money is debt money. Every time that our debt load threatened to drop, we had to have a new war. J.M. Keynes advocated perpetual war. With all the wars we've been having, we definitely have a high debt load; https://srsroccoreport.com/wp-conten...erican-NEW.png
Is perpetual warfare the 8astard child of debt money?
https://srsroccoreport.com/gold-debt...reat-collapse/

Edit; "In the World War [I] a mere handful garnered the profits of the conflict. At least 21,000 new millionaires and billionaires were made in the United States during the World War." http://wakingtimesmedia.com/donald-s...st-understood/

Ummm, about that money I owe you,,,, "Stanley Druckenmiller has been telling people to get out of shares and into gold. So you go buy an ETF that is betting on being short the S+P and you buy a pro-gold ETF. The S+P goes down 1000 points in a week as gold goes up $800.

You sit back smoking a big fat stogie and sipping on a dry martini with just a twist of lemon and think about how rich you are. But when you contact your broker, you find that you are penniless. You have lost every cent you invested. With 5,000 ETFs and $500 trillion in derivatives, when the system blows and it will very soon, the risk is no longer market risk. It’s counterparty risk. " http://www.321gold.com/editorials/mo...rty082416.html

[Danny B]

Hyperinflation of debt money? The tectonic battle between gold and the SDR

There are numerous forecasts for hyperinflation. The first entry in a google search is CORRECT. The next 5? entries are incorrect.
Hyperinflation Definition | Investopedia
Investopedia
When associated with depressions, hyperinflation often occurs when there is a significant increase in the money supply not supported by gross domestic product (GDP) growth, resulting in an imbalance in the supply and demand for the money. Left unchecked, this causes prices to increase, as the currency loses its value.

It's simply an increase in the money supply. Price inflation can result from an increased supply of money chasing a fixed supply of products. not supported by gross domestic product (GDP) growth. The so-called GDP of America IS growing but, all the growth is in financial assets and not in actual productivity.
How does this equation work out when the increase in the money supply is actually an increase in debt? Debt-currencies are a financial asset. They are not tangible, nor is their value derived from expended labour. More precisely, they are liabilities of banks, and as any accountant knows, it is a bank’s assets – and not its liabilities – that have value.
The U.S. dollar was once backed by gold. When the mountain grew too large, it was claimed that the mountain was backed by our industrial capacity. It was later claimed that the U.S. dollar was backed by the "full faith and credit of the GOV"

The CBs worldwide have created about an extra $ 200 trillion (OF DEBT) and can't understand how we can still have deflation. Venezuela has hyperinflation because the money is chasing decreasing supply of goods. The FED calls for a 2% (price) inflation rate at the same time that it GROSSLY inflated the money supply. QE acts like anti-matter to wealth by destroying investment income. When you destroy all possibility of future earnings, you destroy all interest in future investment.
America’s biggest economic problem: Nobody is investing for tomorrow - MarketWatch

GOV loves NIRP. "Meanwhile, the European Central Bank (ECB) demands interest rate payments from the banks which deposit their money at the ECB."
https://mises.org/blog/how-central-b...ddle-class-dry
From this point of view, NIRP is a mechanism to perpetuate socialism at the cost of all future development.

Essentially, GOV piles on more debt to create price inflation. They want a wage-price spiral to diminish the pain of paying off the debt. Asset prices are going up while wages are going down. Earnings are in the basement while asset prices are in nose-bled territory. What could go wrong?

There has been a war on gold to keep it from being considered as a store of wealth outside of GOV/banker control. The crash of the London Gold pool was a decisive loss to the inflationists. The U.S. dollar is on it's way out as a worldwide store of value. The next battle with gold will be heating up in the next ?year? The sovereign bond market is in the process of crashing. That won't inspire any future confidence in the bond market. The fight to the death is between gold and the SDR.

“Two tectonic plates; there’s the natural tectonic plate—deflation—and then…the policy plate of inflation—which is money printing, currency wars, QE, operation twist, negative interest rates, and zero interest rates…”
"So debt deleveraging, demographics and technology are causing deflation now, and I would call that the natural state of the world. However, central banks cannot have deflation. They cannot allow it. "
"Central banks could throw up their hands and it could go deeply into deflation. Or, central banks could pull a few more rabbits out of a hat and it could go into inflation."NOT going to happen without helicopter money.

"It really doesn’t have so much to do with how much of it you print (which is an important economic concept), but rather the real fundamental basis of any form of money is people’s confidence in it." He lists this point and then drops the ball.

"The next financial crisis will be too big for the central banks to bail out.
What’s bigger than the central banks? The only thing bigger than the central banks is the IMF.
So the IMF will conduct a bailout using special drawing rights, using their printed money, the SDR," Not going to happen.
Jim Rickards: "There Will Be A War On Gold" - Sprott Global Resource Investments Ltd.
Rickards wrote a book, "the Death of Money and the New Case for Gold."
How can he write about the death of fiat currencies and then think that the R.O.W. will accept a new fiat paper, the SDR?
The cascade default of the credit system will take out every non-tangible instrument. That includes your bank balance. The paper dollar will go UP in value because they are so rare.
Rickards writes about a loss of confidence in currency and then proclaims that the SDR is the new currency. It's been around for decades and nobody wants it.

8/28 Confidence in the Fed sinking fast from Greenspan to Bernanke to Yellen – Mish Yep, everybody is getting tired of all the shuking and jiving out of the FED with no rate increase.
8/28 Renewable energy generation breaks records every month in 2016 – Eco Watch Think that might affect the price of oil?
8/26 EV revolution set to cripple more than just the oil industry – Oil Price