Economic pressures

[Danny B]

Running out of funding for welfare and warfare

This is an official report from the G-30, "Central banks were first established in the 17th century, with the primary purpose of providing war
finance to governments" Page 17
http://group30.org/images/uploads/pu...ralBanking.pdf

All government is fascist and communist at the same time. It does redistribution to both the rich and the poor in whatever portions it deems necessary. Most governments lean towards socialism to get popular approval and keep the main body of natives from rebelling. Pure socialism demands a command economy where GOV is dictating everything. This has never worked but GOV continues to pull the knobs and twist the levers hoping to make the economy run smoothly without any highs and lows.

The crash in wages brought on by our low-wage competitors has brought quite a LOW to the West. The CBs have tried to smooth out the lows BUT, they are failing. A quick shot of NIRP,,,, and then ZIRP was supposed to get the economy back on track. It was a lost cause from the beginning but, they gave it a try. Massive job losses weren't a complete surprise.
https://www.youtube.com/watch?v=J4_BrgpR8r8

The CBs blew an enormous credit bubble and maintained that they had permanently banished the business cycle. They had to be pretty stupid to ignore wages. https://www.armstrongeconomics.com/w...-a-bitter-end/

Here are the 11 bone-chilling things I gleaned from the chart:

1. They have no clue about what might happen next.
2. They have no clue how to get out of what initially was an emergency treatment
3. Even the confidence level in their cluelessness is only 70%.
10. Labor is screwed. It doesn’t figure into the chart, Well, it should.
The 11 Bone-Chilling Things I Gleaned from Yellen’s Chart | Wolf Street

"the entire trans-Atlantic banking and financial system is drowning in worthless debt and engaging in the same gambling games that led to the 2008 blowout. And the remedies being peddled by the ECB and other central banks are accelerating the blowout." https://larouchepac.com/20160825/deu...interest-rates

Jim Rogers; http://www.zerohedge.com/news/2016-0...orld-comes-end
Tyler Durden; http://www.zerohedge.com/news/2016-0...lted-rebellion

"this is what happens with the collapse in the confidence of government. What you think is yours, they view as their’s. Hillary Clinton said in Detroit that Trump is worth $4 billion. She told the audience – think what we could do with that! This is how career politicians look at the world. What can they take from us next?" https://www.armstrongeconomics.com/w...ey-laundering/

[Danny B]

If money is electronic, the PTB will have control of all of it.

There are quite a few people who have more money than they could possibly spend. Harold Hamm offers $975 mln divorce check; ex-wife rejects it | Reuters
They just like to see it grow. If you can't spend it, you have to leave it in a bank. Banks and GOV have lots of plans for your money. If you can't actually spend it, how will you know if it is there or not. Since currency now is just information, it can be endlessly duplicated.
One World Currency introduced by The Cartel - Settlement Coin | Zero Hedge

First, they need to get rid of tangible currency.
Harvard Professor Demands Ban On $20, $50, $100 Bills | Zero Hedge
The CBs have assured the crash; http://www.24hgold.com/english/news-...x+Capital&mk=1
Equities are at an all-time high but, nobody is funding their pensions plans; https://www.rt.com/usa/357407-corpor...rker-pensions/
Well, they wanted a crash to force one-world GOV on us but, I don't think that it is going to work out as planned.

[Danny B]

The runup to the default cascade

8/30 Japanese gov now the largest shareholder of 474 big companies – Zero Hedge
8/29 BOJ needs massive move to shock & awe – Bloomberg
Yellen speaks Japanese – Talk Markets
It didn't work so, do lots more of it.
8/30 Forget helicopter money: BOJ may prefer to fund rail, sewers – Bloomberg They already tried that.
8/30 Fed recommits to propping up markets no matter what – Money Metals Exchange http://data.whicdn.com/images/22508554/superthumb.png
8/30 Fed preparing to monetize ‘everything,’ Turk tells KWN – GATA
8/30 Inflation isn’t the enemy, and it needs to rise now – CBS News YES, we need higher prices while our wages are falling.
8/30 The “devastating” truth behind AMerica’s record household net worth – Zero Hedge
"household debt is out of control too. In fact, the total amount of household debt in the United States is now up to a whopping 12.3 trillion dolllars…"
" It breaks down to about $38,557 for every man, woman and child in the entire country. "
Corporate; " If you can believe it, corporate debt has approximately doubled since the last financial crisis. In other words, since the last recession we have essentially matched the total amount of corporate debt that we accumulated from the beginning of the country up to 2009."
America The Debt Pig: We Are A ?Buy Now, Pay Later? Society ? And ?Pay Later? Is Rapidly Approaching

"Abstract: Conflation of real capital with finance capital is at the heart of current misunderstandings of economic crisis and recession. " Finance is Not the Economy - The Unz Review

"Instead of calling for a repeal of Obamacare and all other government interference in the health care market, many are calling for increased penalties on those who defy Obamacare’s individual mandate in order to force them onto the exchanges."
"Government has no legitimate authority to take money from taxpayers to fund health care or any other type of welfare program. "
The Right Lessons from Obamacare’s Meltdown - The Unz Review
We don't need no stinking legitimacy.

We have real capital and finance capital. Our money is a debt note. The more debts we have the richer we are. There is a dawning recognition that automation will wipe out the job market even in low-wage States. India To Face Massive Unemployment, Social Unrest Amid Demographic Boom Productivity is shutting down for lack of purchasing power. The demographic crash brings ever-more imbalance between the number of producers and non-producers.
Every State would like to see it's people fed. Numerous States would like to see their people employed. The PTB are in panic mode because monetary policy is losing effectiveness. Downward fiscal policy like austerity just shrinks the economy even more.
With ZIRP, they can print debt-free money for the moment to keep everybody eating. They have to institutionalize debt-free money for the long-term or face mass rebellion. BUT, debt free money destabilizes everything else.

Socialism raised the birth rate particularly for non-producers. This is in line with Keynesian economics that demand an ever-growing consumption and credit edifice. We have reached peak credit and are debt saturated. The ratio of non-producers grows ever higher. GOV is trying to beat back the default cascade to keep the masses from starving and rebelling.
FED GOV has a lot of warm blooded non-performing assets that are costing a lot of money. Unfunded liabilities are reckoned at $212 trillion.
Apparently GOV prefers helicopter money to open rebellion. We shall see.

[Danny B]

Armstrong says that we are right on schedule.

Japanese economics 101 claims;
“According to the BOJ theory, they should have moved their funds into riskier but higher-earning assets. Instead, they moved into pure cash that earned nothing,”
" Now it's Germany's turn. " "The biggest irony in all of this, as we first pointed out last October, is the epic mistake that central bankers did by unleashing negative rates: instead of forcing savers to spend, it has - at least in the case of Japan and Germany - forced them to not only pull their cash out of the bank, thereby further slowing the velocity of money, but to save even more, forcing central bankers to come up with even more unprecedented "solutions" to a problem of their own creation."
Germans "Lose Faith In Banks", Rush To Buy Safes | Zero Hedge

"The ECB is truly brain-dead for they thought by moving with negative interest rates, people would spend their money and that would rekindle inflation. They are correct that people would not want to pay negative interest rates. However, they totally never guessed that they would withdraw their money and hoard it rather than spend it."
"43% of Americans keep their savings in cash these days for interest pays nothing. Yet, an amazing 53% of those cash-hoarders “plan to hide bills in a secret location at home.”

Everything is going as our model has projected. The peak in trusting banks and government is in place. From here on out, all we have is the collapse in public confidence and the 2016 elections bring that home.

All we are waiting for now is simply the Crash & Burn."
https://www.armstrongeconomics.com/w...he-crash-burn/

https://www.rt.com/business/357510-b...uclear-winter/
Maybe they shouldn't have tried to save all of them back in 2008.

Canada is in a pickle; "As Canada’s mortgage market is not securitized, the property crisis is expected to last much longer" "According to him, almost all mortgages in Canada are “recourse mortgages”, with homeowners behind on payments not able to able to walk away."
https://www.rt.com/business/357516-c...-oil-property/

"By 1991, the first scandal erupted as the commodity boys took over Wall Street and brought their manipulations to the world of finance." https://www.armstrongeconomics.com/w...s-at-it-again/
"Goldman Sachs bought the Clintons and stuffed in Robert Rubin as the 70th Treasury Secretary from January 11, 1995 – July 2, 1999, just long enough to get Glass-Steagall repealed, and then Rubin left with the ability to sell all his stock tax-free. Next came Hank Paulson who became the 74th US Secretary of Treasury under George Bush from July 10, 2006 – January 20, 2009. Paulson made sure that Bear Stearns and Lehman Brothers collapsed to reduce the competition for Goldman Sachs."

GOV wants to go to a cashless society but, when credit dies, cash is going to be the only thing left.

[Danny B]

Wages down so, manufacturing and shipping follow

The assets of the lower loop are backed by labor. The assets of the upper loop are backed by nothing. These two were mixed together and it poisoned everything. Wages crashed in the high-wage States, later followed by employment in low-wages States. The 99% just don't have the income necessary to keep the consumer economy rolling along. China wanted to switch over to an internal consumption economy. Can't happen with LOW wages. Manufacturing has peaked in China and is falling.
What Rail Freight Volume just Said about China | Wolf Street

With manufacturing falling, shipping is falling. Shippers operate at a loss and the 7th largest just went bankrupt. Goods on these ships may be locked up for 2--3 months.
"if, as expected, the company's ships remain "frozen" and inaccessible for weeks if not months, the impact on global supply chains will be devastating, potentially resulting in a cascading waterfall effect, whose impact on global economies could be severe as a result of the worldwide logistics chaos. "
Global Supply Chains Paralyzed After World's 7th Largest Container Shipper Files Bankruptcy, Assets Frozen | Zero Hedge

What happened to shipping rates is now happening to food commodity prices and farm income. USDA Sees 2016 Farm Income Crashing As Farmer Leverage Spikes to 34 Year Highs

The Laffer Curve;
"There is one other point to be made. While there are many calls to raise taxes on the rich, give more to the poor, what the chart shows is that none of that really makes much difference. Regardless of the level of tax rates – tax receipts as a percentage of the economy has remained mired between 16 and 21%. Why? Because when you raise taxes, you lower economic growth and, therefore, collect less in revenue. During recessions, tax collections are at the lower end of the range while during expansions collections are at their highest." Debt, Deficits & Economic Warnings | Zero Hedge

So,,, currency wars lead to trade wars. Then, everything slows down; Trade wars: Why the central pillar of global order is in danger of collapse as TTIP disintegrates

A German bank was the first to charge negative interest to it's retail savers,,,prompting everybody to go out and buy a safe. Now, a German bank has refused delivery of physical gold as required in it's contract. http://www.zerohedge.com/news/2016-0...ld-upon-demand

India has a huge unemployment problem. Brazil is now making news for the same thing; http://www.zerohedge.com/print/571163

The bankers want the right to produce unlimited amounts of currency BUT, they want that currency to maintain it's value. The Marxists want unlimited currency to support all the non-producers BUT, they want a huge cadre of motivated producers that will bear the burden of hard work.The bankers buy GOV bonds with the free money that GOV gave them. GOV uses this money for consumption rather than investment. It always eventually defaults.

[Danny B]

Credit expansion and the NWO

Various central bankers are printing with wild abandon but, "Of the main central banks the Fed has been largely neutralised even if they manage to add a fresh hike in September or December" Stunning Chart Shows That Central Bank Liquidity Is Now Driving All Asset Prices
Japan is up to the stratosphere; 9/01 Pimco’s Baz says Japan in a bind as total debt tops 600% of GDP – Bloomberg
BUT, "A chart we have shown before: GDP growth is evidently inversely correlated with the extent of credit and money supply expansion. In other words, reality is the exact opposite of what the world’s central planners and their countless claqueurs and courtiers keep asserting."
http://www.acting-man.com/blog/media...per-decade.png
"Depending on how you measured it, the typical white man had lost as much as 40% of his real earnings since the century began. People rubbed their eyes and looked harder; the picture came into sharper and more ghastly focus.

"The U.S. has total credit market debt of about $64 trillion. Even at a super-easy 2%, it means that it costs $1.3 trillion a year to pay the interest. Or, about 7% of GDP.

That leaves the economy in a precarious balance – where it has just enough income to pay expenses. Growth, if you believe the figures, is less than 2%. Now, add just 1% to interest rates. What do you get?"
"Another $650 billion of GDP that must be devoted to interest payments, or more than 1 out of every 10 dollars’ worth. Suddenly, billions – perhaps trillions – of investments, speculations, capital improvements, households, small businesses, and major corporations would be in trouble."
How Does It All End?

Construction spending; The Last 7 Times (Since 1970) This Happened, The US Economy Entered Recession | Zero Hedge

"As I have argued in various articles, the Fed itself may be just as sacrificial to the elites as the U.S. economy. In the process of global centralization, the Fed would eventually have to take a back seat to the IMF, World Bank and the BIS. "
"Be very wary when elites and international financiers mention “global reset,” or a “brave new world,” or a “new world order.” What they are talking about is not a program that is in your best interest. What they are talking about is the deliberate creation of chaos; a slow burning calamity that can be exploited to derive the benefits of even more centralization and even more power."
The Central Banks Are Now Ready To Launch Their 'Brave New World' | Zero Hedge

"39."The Trilateral Commission is intended to be the vehicle for multinational consolidation of the commercial and banking interests by seizing control of the political government of the United States."
"45."The most powerful clique in these (CFR) groups have one objective in common: they want to bring about the surrender of the sovereignty and the national independence of the U.S. "
"119."The environmental crisis is the cornerstone for the New World Order" Maurice strong ( U.N. environmental leader ) was quoted as saying, " Isn't the only hope for the planet that the industrialized civilizations collapse? Isn't it our responsibility to bring that about?"
"125."The ultimate aim of the CFR (Council on Foreign Relations) is to create a one-world socialist system"
http://twoday.net/static/omega/files...s_subjects.htm
So, the crash was planned to bring in world GOV.
"We are not going to achieve a New World Order without paying for it in blood, as well as in words and money."---Arthur Schlesinger, Jr.,

On the "grand chessboard", Pox Americana has crashed. It won't be the West that dictates the new world order.

[Danny B]

Never enough workers to support the debt load

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."
This is illustrated by looking the the levels of Exter's Pyramid; http://www.goldcore.com/ie/wp-conten...er_pyramid.png
The pyramid starts with gold, then currency, then near-money, then near, near money,,,, At the top is unfunded GOV liabilities. Every level is a dilution of wealth until it reaches pure debt.

“The function of money is not to make money but to move goods. Money is only one part of our transportation system. It moves goods from man to man. A dollar bill is like a postage stamp: it is no good unless it will move commodities between persons. If a postage stamp will not carry a letter, or money will not move goods, it is just the same as an engine that will not run. Someone will have to get out and fix it.

"It is ignorant superstition to think that the monetary unit loses its value because its tokens are not made of precious enough materials. The value of money is the domestic production it buys. No one is concerned that the dollar buys less because of the shrinking economic pie that comes from fewer bakeries and fewer bakers working in them."
-- Henry Ford
"Because all of our loans in the lower loop of households and domestic production and public service production (government) are deprived of circulating tokens except for bank loans and since every bank loan must be repaid by the full amont of the loan (the principal) plus compound interest -- all domestic enterprise is doomed to fail. We get the loan only long enough to build the asset, to start the business, to perfect the idea or product -- then net interest drain -- the amount we owe creditors above what the amount creditors gave us to circulate -- results in us forfeiting the farm, the factory, the patent, the developed land, the perfected asset to the banks."

"In August 2016, about 125.89 million people were employed on a full-time basis. "
How many of these people are working for GOV? How many are working for TSA or military contractors? 51 % of Americans receive a check from GOV. Employment is crashing worldwide. How many people are actually needed to produce the basic necessities in a country?
The world has reached a point of debt saturation and no more debt money can be infused into the lower loop of the economy. GOV debt is up to astronomical levels trying to support people who have no viable niche in the productive economy.
What happens when the default cascade takes it all down?

The financial sector is "earning" big returns by betting one financial instrument on top of another financial instrument. There is no actual; productivity. In the upper loop of the economy, earnings have become completely dis-associated from productivity.
In the lower loop of the economy, earnings have moved lower even with increases in productivity. A smaller and smaller percentage of people do actual productive work.
We are slowly moving to a world where most productive work is done by a few people and a LOT of machines. U.S. GOV debt is completely un-payable. Yet, GOV is trying to solder-on by increasing it's debt mountain.
After the crash, there will be insufficient confidence for GOV to sell bonds.

The number of people needed to do the actual necessary work is insufficient to pay the interest load to support the whole country. We can either survive in a perpetual state of strife and poverty or GOV will have to use debt-free money.
Jim Rickards talks about the SDR being disbursed to re-capitalized bankrupt States. This would just be another run-up to bankruptcy in another uncontrolled fiat instrument.

[Danny B]

Nobody wants to be aboard the Death Star of debt

9/01 Cash keeps pouring out of European stocks – Wall Street Journal
9/01 Chart shows central bank liquidity is now driving all asset prices – Zero Hedge
ALL the Central Bankers are buying up assets. Investors are fleeing. The results are AMAZING.

" if all this weren't enough, now they are buying the entire stock market with money provided by the Federal Reserve's quantitative easing policies"
"Or as Dark Bid's Daniel Drew previously noted, The Stock Market Is Disappearing In One Giant Leveraged Buyout "
"According to Lazonick, the American economy has transformed from a system of value creation to one of value extraction"
Fewest Stocks Traded In 32 Years - The Market Is Disappearing In One Giant Leveraged Buyout | Zero Hedge

This article is hard to get your head around but, you better understand it; We?re rapidly approaching that zero point of debt creation - Business Insider
The banks promoted liar-loans for cars. It worked for a while but, 9/02 August U.S. auto sales fall; carmakers say industry has peaked – Reuters
9/02 Ford announces “sales plateau” after 8% decline, missing estimates – Mish

There is a flight from all the markets and the CBs are trying to make up the difference.
Ms. Fitts; https://www.youtube.com/watch?v=1dAjAhy7uHo
Jim Willie; https://www.youtube.com/watch?v=0p8JVMbT5ys
The indications and prognosis is for the default cascade to start in the first quarter of 2017.

[Danny B]

Producers down, Parasites up

9/03 Chinese firms dive back into dollar bonds to refinance debt – Reuters
9/03 The world’s biggest hedge fund expects a bust in China – Business Insider OK, so, what next?
9/03 S&P warns high-yield credit quality worst since 2009 – Zero Hedge So, what happens to all those junk-bonds when China blows?

The Hanjin disaster is spreading FAST, 9/03 Retailers demand bailout after Hanjin collapse paralyses trade – Zero Hedge
When money is debt, it is FAR easier to stack it up higher and higher; ECB Throws Twelfth Zero at Inflation - Bloomberg

The CBs printed $zillions in debt money to control all markets. It is speculated that they plan to crash all markets to create chaos and introduce one-world control. The CBs have now lost control. Nigel Farage Warns "The Establishment Is Losing Control Over The People" | Zero Hedge
There is no going-back from a credit collapse. "They" may very well plan to regain control after the chaos BUT, they can't do it with confidence. They have to do it with force. Force is very expensive.

Manufacturing is the prime value-added industry. Manufacturing ran off to low wage markets. Pox Americana tried to forestall this by throwing open the southern border and forcing domestic wages down.
As a remedy for falling wages, GOV hired TONS of people to shuffle papers and intimidate people in airports. BUT ,GOV is a parasite, NOT a producer. Here is a graph that clearly shows the progression.
http://www.cnsnews.com/s3/files/styl...?itok=K_3RyF8O
SO, the ranks of producers fall and the ranks of parasites grows. It costs a lot of money to pay all these people and GOV runs a deficit of more than $ 1 trillion a year. 51% of Americans rely on a check from GOV. GOV writes 80 million checks a month. Americans are saddled with 80,000 GOV agencies. The saddle isn't that hard if you are receiving a check from GOV. These 80k agencies all charge $tons for permits and approvals.
Government Workers Now Outnumber Manufacturing Workers by 9,932,000

"government employed 17,989,000."
"In August 2016, about 125.89 million people were employed on a full-time basis. "
One out of every eleven people in the beltway are lawyers. There are millions of pages of laws in the federal register. How many law firms exist just to deal with GOV regulations? GOV uses (assumed) regulatory powers to demand generous payment to GOV workers. In the case of sovereign default, GOV workers will find that being a parasite is more risky than being a producer.
U.S. GOV spends about 24% of the GDP. What happens when it can no longer do that?

The restaurant business has been shrinking for years due to a loss of discretionary spending. Just the same, GOV reports; 9/03 Gained 520k waiters, bartenders, lost 13k manufacturing workers – Zero Hedge

[Danny B]

Honest money and crooked governments

Benjamin Franklin; "We have no poor houses in the Colonies; and if we had some, there would be nobody to put in them, since there is, in the Colonies, not a single unemployed person, neither beggars nor tramps."

Thanks To Free Money Issued By The Nation
His friends could not believe their ears, and even less understand this fact, since when the English poor houses and jails became too cluttered"
"That is simple. In the Colonies, we issue our own paper money. It is called 'Colonial Scrip.' We issue it in proper proportion to make the goods and pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one."
"The first law was passed in 1751, and then completed by a more restrictive law in 1763. Franklin reported that one year after the implementation of this prohibition on Colonial money, the streets of the Colonies were filled with unemployment and beggars, just like in England, because there was not enough money to pay for the goods and work. The circulating medium of exchange had been reduced by half."
America Created It's Own Money In 1750 How Benjamin Franklin Made New England Prosperous

Simply put, our colonial miracle came to an abrupt end because the European bankers were aghast at the idea that we created money just for productive projects and NOT to generate interest.
https://21stcenturycicero.wordpress....nd-prosperous/

"One can see that in 1932, the year before Hitler and Roosevelt both came to power, Germany's unemployment rate was 30.1% and America's was 24.9%. But within just five years, Germany's unemployment rate was reduced to only 4.6% (1937) and dropped even further to only 2.1% a year later. By contrast, FDR in 1937 still had 13.2% unemployment which actually rose to 19.8% a year later."
"Germany was a small country with coal as its only resource. Germany had been defeated in a terrible war which America won and to whom almost the entire world was deeply in debt financially. Germany was also the target of a worldwide Jewish economic boycott "
"British historian A.J.P. Taylor gave the Nazis credit for creating widespread prosperity, concluding on pages 104-05; “The Nazi secret was not armament production; it was freedom from the then orthodox principles of economics. Government spending provided all the happy effects of mild inflation;"
"Hjalmar Schacht, who was temporarily head of the German central bank and a defendant in the Nuremberg Trial, summed it up thus… An American banker had commented, “Dr. Schacht, you should come to America. We’ve lots of money and that’s real banking.” Schacht replied, “You should come to Berlin. We don’t have money. That’s real banking.”
https://forum.codoh.com/viewtopic.php?t=8347

Germany created high employment by printing interest-free GOV money for WORKS,,,, The German miracle. And what did it get them? Churchill;"WW II could have been avoided but, the bankers wanted it".
Ben Franklin told the Europeans that the colonies printed interest-free money for WORKS. That immediately got us a war.

EDIT: We can't forget the economic miracle in Lybia that the bankers killed; Libya: From Africa?s Richest State Under Gaddafi, to Failed State After NATO Intervention | Global Research - Centre for Research on Globalization

The problem is NOT interest-free money. The problem is NOT interest-free money for productive work. The problem is huge amounts of money created for speculation by the parasites who have no history or intention of working.
"We issue it in proper proportion to make the goods" YES, purchasing power equivalent to GDP.
The Marxists and the Fascists, being strangers to hard work, have no interest in a standard of living that is commensurate with the effort they expend to produce. "Money" must be created FAR in excess of actual productivity for them to survive. They survive quite handsomely at that.
The gold standard is universally hated by those who shun actual productive work. BUT by negating the gold standard, they have removed ALL restrictions on currency creation.
Jacob Rothschild referred to the failure of the "experiment"
The PTB inflated the money supply to supply a high standard of living for as many people as possible. As usual, they got carried away.

Confidence has been lost and people are deserting the markets and banks. They are all hollowed out. The non-producers certainly don't want honest markets OR, those markets would demand honest money and honest labor.

Gold is on it's way back into prominence.
The Coming Gold Super-Spike - The Daily Reckoning
"The markets are preparing for a slingshot move that will make most people’s nose bleeds." "So in the end, we will set the stage for all this craziness moving to extremes. Then ask yourself this question? Are you willing to hand your money to government and ask them to hold it for you? If we are concerned about banks, and we are concerned about government, then there is not much life but to move to the private sector."
https://www.armstrongeconomics.com/f...ling-shot-move

"The end game is really the collapse of the monetary system and hopefully that coincides with a collapse in government power. That is where gold will make the transition from the old to the new.

Therefore, what we are ultimately looking for from gold is the hedge against government to make that transition, which historically always happens. "
" https://www.armstrongeconomics.com/m...-really-worth/
"Gold has its role. Understand it for what it is. There is no knight in shining white Armour to come save the day. We are looking at the collapse of socialism (pensions etc) and this should result in massive civil unrest, which the government knows is coming and they are preparing to defend themselves against the people. We are cattle in their view. The great unwashed collateral damage over whom they never lose a night’s sleep. Never forget that." Moooooo !
"paper money will be swapped. It will not become toilet paper for then you have all out revolution and the heads of officials typically are lost during such events adorning the spikes for display."
As I've mentioned several times, paper currency will continue to be in demand.

[Danny B]

Interest drain, wealth trasnsfer and the inevitable crash

"As of March, S&P 500 companies had bought back more than $2 trillion in stock over the last five years, making buybacks the biggest source of demand for stocks since 2009, HSBC estimated." Investors don't want them.
“Under our current conditions, creating shareholder value and creating good jobs are largely incompatible,” Davis wrote in his Brookings piece. “Corporations are ‘job creators’ only as a last resort.”
This Labor Day, let’s acknowledge why our job-creation machine is broken - MarketWatch

SO, what happens when you fire all the workers to squeeze out the last penny in profits? ; WTF Chart Of The Day: US Factory Orders Tumble For Longest Streak In History | Zero Hedge
I already posted that stock trading is at it's lowest level in 32 years. Maybe the corporate raiders weren't so smart after all.

Our central bank is a private corporation owned by private bankers. The bankers choose the head of the FED. The FED head is generally a jew. Paul Volker was an exception to that rule. Talmud תלמוד: Is Paul Volcker Jewish?
"The Fed somehow lost the institutional memory that Paul Volker embodied back in the 1970’s and 1980’s. Volker's bitter medicine approach was replaced with a spiked punchbowl. Greenspan began the process, Bernanke cemented it, and now Yellen is busy keeping the party going long after the lights should have been turned off."
Apparently, the jews don't like to take the punch bowl away when the guests get too drunk. They crashed the Israeli bond market.
Sorry Losers! | Peak Prosperity
We ALL get the shaft thanks to the FED head.

• US Economy May Need Much Higher Interest Rates: Fed’s Lacker (R.) NO KIDDING, the brain dead have figured out that they weren't as smart as they thought. Shoot, let's just raise interest rates. Don't even give a thought to the ?$500 trillion in interest rate swaps that will blow all to hell.

9/04 Why low interest rates are now doing more harm than good – Telegraph "They" lowered rates. The banks wrote swaps to ensure that they could never raise rates again. ZIRP has gone on FAR too long but, the FED is locked in by the swaps.
9/04 Fed vice-chairman admits Fed sponsors wealth inequality – Mish Well, they admitted it and now, I feel OK about the perpetual screwing.
There is one silver lining to all the dark clouds; https://www.armstrongeconomics.com/a...acing-lawyers/

On the socialist side of the economy; "It’s official. Canadians now spend more on taxes than they do on food, housing, and clothing." https://www.armstrongeconomics.com/w...spend-on-food/

"The City of Chicago recently reported an alarming 50% increase in interest expense from 2014 to 2015. Last year, the city spent over $860 million in interest, before spending a dime on any public services."
http://www.chicagonow.com/dennis-byr...is-a-sinkhole/
This money withdrawn from the productive economy in the form of taxes just slows down the lower-loop of the economy that much more. The situation always has the same ending.
https://www.armstrongeconomics.com/w...-its-too-late/

" Fitch has decided to keep the BBB-minus rating on the city's $9.2 billion in outstanding general obligation bonds. That means that it is only one step above junk bonds." " the two other ratings services--Moody's and Standard and Poor's have kept the negative outlook on Chicago's general obligation bonds."

[Danny B]

Automatic Earth,,, blaming the FED

Automatic Earth has an excellent article that runs rather long but, is VERY informative. The economy is now subject to negative feedback loops; https://www.theautomaticearth.com/20...war-on-cash-1/
A chart of earnings vs price of the S&P 500. The Most Irrational Chart In the World - Take a Look - munKNEE dot.com
That's what happens when the CB buys all the stocks.

"even Yellen admitted she has no idea what will happen in just the next 3 years " "an article which set the stage for the pivot to the US issuance of much more debt, because apparently $9 trillion in new debt under Obama is not considered enough "fiscal stimulus."
ECB Board Member Lashes Out At Central Banking: Ignore "Mathematical Models", Focus On Reality | Zero Hedge

More fallout from Hanjin; Shops set for Christmas price hikes as millions of shipments stranded at sea | The Independent

U.S. Federal GOV recently announced that it was going to need a LOT more money for it's operations. The House of Representatives is responsible for originating spending bills. In a general sense, Congress notifies the treasury of the projected shortfall. The Treasury notifies the FED that it will be sending over more bonds to be monetized for cash. Congress gets the cash and the FED gets the blame. https://www.armstrongeconomics.com/q...deral-reserve/
Congress throws sticks and stones at the FED and threatens to audit it. Why hasn't this happened?
https://www.armstrongeconomics.com/q...ess-v-bankers/

Oil is expected to go lower, thereby killing even more banks and oil companies. Then it is projected to go WAY up and kill the rest of the economy. http://www.zerohedge.com/news/2016-0...ng-moon-shot:D
Deutsche bank is always in some kind of trouble; http://www.zerohedge.com/news/2016-0...s-gold-derivat

[Danny B]

The built-in self-destruct button of globalism

There can NEVER be a winner to a currency war because it drives wages down for everybody.. This drives down the whole economic picture. The Economist magazine is the mouthpiece of the "elites",,,, those who have never had a productive day in their lives. They push globalism as a master control scheme. Economics is NOT a science because there are no constants and all of it depends on human decisions.
Even the globalists are starting to recognize the one-size-fits-all just doesn’t work.

"In a paper published this year Ricardo Caballero of the Massachusetts Institute of Technology, Emmanuel Farhi of Harvard University and Pierre-Olivier Gourinchas of the University of California, Berkeley, found that in a world of integrated financial markets, a slump in some economies can eventually engulf all of them. Once a few economies become stuck in the zero-rate trap, their current-account surpluses exert a pull which threatens to drag in everyone else." "Imbalances are a global problem which cannot be fixed by any one country."
ZIRP is a facet of a currency war. Once you drag everybody down to a global-mean wage, there just isn't any escape.
More spend, less thrift | The Economist
Globalization sends the jobs and capital to the most efficient low wage producer. EVERYBODY else is left out.

Because of global-capital flows, the high-wage producers are simply left OUT of the capital flows for manufacturing. THE ANTI-CINDERELLA MAN (PART ONE) – The Burning Platform
In the short term, this benefits the low-wage manufacturer. In the long term, it impoverishes all of it's customers. THAT economy falls into a debt trap because it's previous debt load becomes unsustainable.

9/06 BOJ’s Kuroda says room for more easing, including new ideas – Reuters No kidding,,, new ideas
9/06 “No limit to monetary easing” says Bank of Japan – Mish
9/06 Draghi nears his QE3 as EB seen relying on more stimulus – Bloomberg It's never worked so, Draghi is going to keep doing it.
9/05 Furious Venezuelans chase away president maduro with pots and pans – Zero Hedge They are too poor to afford torches and pitchforks.

The Marxists gambled that they could raise everybody's standard of living by pumping in gobs of DEBT money. This may have raised the standard of living (temporarily) but, it didn't create an increase in sustainable wealth creation. NOW, the bills are coming due and the CBs are pumping in $200 billion a month to service old debt.
Here is a chart of their monetary Viagra; http://www.zerohedge.com/sites/defau...d%20more_0.jpg
How Central Banks Are LBOing The World In One Stunning Chart | Zero Hedge

[Danny B]

Corporatism as the destroyer of society

"The built-in self-destruct button of globalism"
I found an EXCELLENT article that quantifies all that I have been saying about regulatory capture and fascism. I will excerpt it but, you really need to read the whole thing. Democracy and capitalism are not perfect but, they are the best system available when you consider human nature.

"I define corporatism as an economic model, such as our existing, that prioritizes short term profit maximization above everything else even consuming all other aspects of society to attain that goal.
Recently I provided some charts that show Wall Street profits up some 800% over the past 30 years while over that same period median weekly earnings for the American worker have risen about 9%.

I’m about to prove that these trade agreements are the very essence of corporatism and together with fiat money have destroyed the natural self sustainment of capitalism through the requirement of private and public debt. In doing so corporatism has sabotaged the vast majority of American households thereby eradicating the capacity for economic growth.
And now think about a true capitalism cycle – Investment/production requiring profit, profit requiring consumption, consumption requiring income and income requiring investment

We have the Investment/production stage and now just require the consumption stage to realize profits so we can start the cycle over again. However, in our capitalism cycle it appears that consumption requires income yet all CEO’s replaced domestic income with cheap foreign income in an effort to increase profitability. And so how do corporations realize profits if there is no income for domestic consumers to consume?

This is the absolute heart of the problem and helps to clarify the difference between capitalism and corporatism.
The transaction we call a ‘sale’. The sale we call ‘consumption’. So profit necessitates consumption. Consumption can only come by way of three means, namely, income, credit and welfare

It tells the story that these trade agreements force the economy to subsidize income (i.e. consumption) per consumer with credit. That is, the trade deficits are a result of the trade agreements as depicted in the deficit charts above. And the deficits are then directly subsidized by consumer credit, which must make up the relative shortfall in income.
Corporatism embodies the worst aspects of both capitalism and socialism to form a uniquely destructive economic framework.

As I’ve discussed previously credit and welfare are a function of income and if income is stagnant then as credit and welfare increase we are moving toward their limit. And this means we are heading to a maximum level of consumption (which can only be achieved by way of income, credit and welfare).
So let’s look at the destruction of our modern society by way of corporatism, which is synonymous to the expansion of interest bearing private and public debt.
Growth in incomes, credit and population are all below 1% on a 10 year average. Consumption and welfare growth are around 4% on the 10 year average. "
The Matrix Exposed | First Rebuttal

The CORPORATION was not making as much profit as it desired. It turned toregulatory capture to get the required laws to force global-wage-arbitration (trade agreements). As the CORPORATION took an increasing percentage of the profits from trade, labor's share of profit continued to shrink. The main body of the population was forced to subsist on increased debt and welfare.
Every Trade agreement forces wages lower and welfare higher. It forces DEBT / CREDIT higher. We have now reached debt-saturation in the consuming public. This has resulted in the increasing debt load being transferred to the State. Armstrong has predicted a crash in public debt.
The State, through regulatory capture has ensured it's own death.

The CORPORATION is calling for the State to drop money from helicopters to make up for the purchasing shortfall in the consuming population. The CORPORATION has diminished it's profits by starving the wage earner. The wage earner has responded by refusing to reproduce new little workers/consumers. This further reduces prospects for future consumption.

The bankers INSIST that all money carry an interest burden. They have destroyed every economy that tried to produce interest-free money. BUT, with the advent of birth control, the have locked-in a shrinkage of future profits. A crash in public debt and welfare will only make it worse. At the same time, the burden from the demographic crash will increase demands on the State.

Decades of price-deflation brought by increasing automation were siphoned off and handed out as stock dividends. Our shrinking wages were insufficient to maintain our standard of living in the face of price inflation. China has exported massive deflation in wages & prices. This has upset the apple cart by transferring earning power to the East.
The Chinese flourished by being the low-wage manufacturer. The fiscal consequences to their markets are coming back to haunt them.
Wall street flourished by driving down wages with global wage arbitrage. The fiscal consequences are coming back to haunt them.

The money-masters have brought about world poverty, now approaching world bankruptcy.

[Danny B]

Control-P stuck in hyperdrive

Post WW II, the stars aligned to make America very rich. By the late '60s, the stars moved out of alignment. American wages stagnated due to competition. Even our new-found low wages weren't low enough for us to hold on to our previous lock on manufacturing. It didn't help at all that we were buying manufactured stuff from our main wage-competitors. Our prime value-added jobs went away.
To keep the economy going in the face of lost jobs, the bankers offered longer credit terms and the GOV offered more welfare. The mid-60s welfare-warfare broke the gold backing on our dollar. BUT, out of momentum, the world still held the U.S. dollar in high esteem.
Our dollar printing went ballistic and our GDP climbed with it. But DEBT, debt climbed BEYOND exponentially.

"You will notice as the debt increased at an exponential fashion, so did U.S GDP. Which means our GDP growth is really fictitious or based on the leveraging of debt. "
"However, if we look at the Exponential Growth rate chart, we can clearly see that the rising debt and GDP trend lines are heading up FASTER than the exponential trend. "
"According to most scientists and mathematicians, an Exponential Growth Rate is not sustainable… thus it eventually leads to total collapse. Again, the explosive U.S. Debt and GDP growth rate make the exponential trend look tame indeed."
" The U.S. debt has increased $10 trillion faster than the doubling exponential function. This is off that charts."
https://srsroccoreport.com/this-one-...g-gold-silver/
The prognosis is very poor.

Jim Rogers:" You should be very worried. There is going to be a serious economic crisis in the next year or two. We all are going to pay a horrible price for the artificial money coming out of America and other central banks. We’re all going to have a huge problem. Be worried, be worried."
https://www.rt.com/op-edge/358414-oi...-saudi-arabia/

The people became debt-saturated. The, the government became debt saturated. Congress held a gun to the FED-head and said, keep printing.