Economic pressures

[Danny B]

Gold, interest rates and Marxism

Very quiet morning.
Keynes advocated "euthanasia of the rentier". The State always over-prints the currency. Socialism always breaks the bank because it spends "resources" on things that don't have any return. Capitalism recognises no value in improving the quality of life or bettering society. There must be a middle ground but, we aren't there yet. The Central Banks are printing up tons of money to pay for everything that the credit markets refuse to finance. The private credit markets only finance things that have a return. The CBs want private capital to stay in the markets to stabilize international trade.

There is always currency inflation and price inflation. Historically, private capital fled to gold when interest rates were too low to compensate for the loss of purchasing power lost to price inflation. This brought interest rates up to pry loose the capital. The State had to get gold out of the picture if it wanted to run the presses in hyperdrive.
The closing of the gold window in 1971 allowed the State to catapult the price of everything else. Here are a dozen graphs that show the huge divergence of prices after the '71 date;
http://www.24hgold.com/english/news-...n+Popescu&mk=1

The French Curve and gold; http://www.321gold.com/editorials/rosen/rosen101916.pdf
The West tried very hard to get gold out of the picture. The East did the opposite. Eventually, the West will have to acquiesce to the demands of our trading partners. http://www.24hgold.com/english/news-...n+Greyerz&mk=1

Gold has been the most stable store of value for thousands of years. ALL governments eventually default on their bonds. BUT, GOV is now claiming the opposite.
" Known as Basel III, the banking rules set to come into force by 2018, and starting over coming months, will force large institutions to value each asset they hold at a different rate based on what the Basel Committee sees as its level of risk when measuring the stability of their balance sheets,

Deeply liquid, instantly priced and potentially a 'safe haven' asset is good, of course. Unsurprisingly, and very conveniently for debt-laden governments, sovereign bonds fit the bill precisely. Yet physical gold is ranked with the very worst junk an investor can own, and can be accounted at only 15 cents in the Dollar. "
http://www.24hgold.com/english/news-...tor=Adrian+Ash
The "paper gold" dumps are no longer affecting the PM markets to any great degree. A few months ago, the COMEX was on the brink of default for over 50 tons of gold. There was an emergency shipment from Switzerland that matched ounce-for-ounce the shortcoming. It would appear that there isn't much gold left in the U.S.
Our "noble experiment" with Marxism is dependent on unlimited currency expansion. Our trading partners want gold

[Danny B]

Hedge funds slipping,,, slipping the dogs of war

" Hedge Fund Managers Expect ‘Massive’ 34% Pay Cut, Survey Says"
Hedge Fund Managers Expect ‘Massive’ 34% Pay Cut, Survey Says - Bloomberg
No, No, NO, we can't have that.
"With public pensions moving away from alternative managers, the industry is looking toward government under Hillary Clinton to tax American workers in order to guarantee captive money continues to flow into the coffers of private equity and hedge fund managers."
The proposal would require workers and employers to put a percentage of payroll into individual retirement accounts “to be invested well in pooled plans run by professional investment managers,” as James put it. In other words, individual voluntary 401(k)s would be replaced by a single national system, and much of the mandated savings would flow to Wall Street"
Billionaire Clinton "Hillblazer" Pushes New Tax That Funnels Middle Class Money To Wall Street | Zero Hedge

"Get ready. We will see the greatest tax increase in American history from all the inside sources behind the curtain. The Press will make sure Hillary wins. It’s over. Just turn out the lights. This is how the West collapses – running straight into the theory of Karl Marx; which Russia and China discovered did not work."
https://www.armstrongeconomics.com/i...rican-history/

"All agencies are quietly being armed just in case there may be civil unrest which arises by rigging the election to defeat Donald Trump. "
https://www.armstrongeconomics.com/w...t-martial-law/
Habeas corpus does NOT apply if they just shoot you instead of arresting you.
In other good news; "If we indeed see World War III, this time all bets will be off. I would expect the use of tactical nuclear weapons on the battlefield. Hopefully we are not looking at intercontinental nukes."
https://www.armstrongeconomics.com/w...e-last-caliph/
October 19, "Capital flows are intensifying. This is why oil is up, gold is up, euro down, US share markets up. Things are shifting quietly. Norway reports that Russian ships are on their way to Syria. Obama may get his wish all before the election in hopes of boosting Hillary."
https://www.armstrongeconomics.com/w...r-are-blowing/

[Danny B]

Bogus monetary theory and the well-travel road to perdition

Bogus monetary theory holds sway in academia. Much of it is centered around Marxist ideas that have never worked out. Recent events show that all the wishful thinking in the world will not overcome market fundamentals in the long run.
https://www.theguardian.com/business...w-it-collapsed
"The world has never before been so leveraged to dollar borrowing costs. BIS data show that debt ratios in both rich countries and emerging markets are roughly 35 percentage points of GDP higher than they were at the onset of the Lehman crisis.

This time China cannot come to the rescue. Beijing has already pushed credit beyond safe limits to almost $30 trillion"
Fed risks repeating Lehman blunder as US recession storm gathers
The CBs have taken turns, round-robin at pushing liquidity into the system. Reportedly, it is America's turn; 10-Trillion-Dollar Bye-Bye - The Calm Before The Storm | Zero Hedge

"we should see massive Federal Reserve and Government intervention in the FX and debt markets to stem what has unquestionably been a panic."
"We Should See Massive Fed Intervention" - What Tudor Jones Said 29 Years Ago After Black Monday Crash | Zero Hedge
Almost all of the investment community is dependent on money printing because profit left the scene when our wages went away. There truly is no cure for efficiency. High wages are just not going to come back. "They" will continue to pump money into the system in the hopes that commerce and the birth rate will make a comeback.
David Rosenberg Calls For A Multi-Trillion, "Helicopter Money" Stimulus Package | Zero Hedge

[Danny B]

Everybody is dumping foreign debt and foreign currency

Here is a long article stressing out about the capital outflows from China; China's Capital Outflows Are Soaring Again: Goldman Finds Sept. FX Flows Surged To $78 Billion | Zero Hedge
Here is an article about the thousands of tons of gold going to China; https://www.bullionstar.com/blogs/ko...nstream-media/

http://www.24hgold.com/english/news-...os+Jansen&mk=1
Maybe there is a connection.

"Quietly and with little if any attention, foreign Central Banks have begun DUMPING US Debt."
"Bear in mind, these SAME Central Banks are currently buying their OWN debt (national and corporate) AT A PACE of nearly $200 BILLION per month!!!
That’s correct, Central Banks are now actively DUMPING US debt and buying their own." Did a Secret Central Banking Cabal Just Turn AGAINST the US? | Zero Hedge

2009, "In 2009 Zimbabwe announced that it will issue a new set of notes which will include a 10 trillion, 20 trillion, 50 trillion and 100 trillion denomination. "
" On August 1st 2006, old Zimbabwe dollars were exchanged at the rate of 1 revalued dollar for 1,000 old dollars."
"After the Aug 2006 revaluation the currency in circulation was 46.9 billion ZWD. Over the next 18 months, the RBZ increased the currency in circulation over 15,000 times to 716,559 billion ZWD"
"Effective August 1st 2008, 10 billion ZWD was worth one new Zimbabwe dollar."
"Zimbabweans, in an effort to preserve their wealth, rushed into the ZSE (stock exchange) which returned 300,000% in 2007. While that may seem good on the surface, the reduction of value for the ZWD more than offset any capital gains, with prices for goods and services increasing at an annualized 231 million percent according to official government estimates."
http://www.24hgold.com/english/news-...or=Mike+Hewitt

Rhodesia under Ian Smith had a stable currency that was valued a bit more than the U.S. dollar. When it flipped over into Zimbabwe, it went down the drain. "inflation in Zimbabwe hit 79.6 billion per cent. " Guardian.
"Zimbabwe's currency crisis started in 2000 when the government implemented aggressive land reform." "The last official measure of inflation was 230 million percent in early 2009, "

[Danny B]

Nafta, cafta & shafta

The corporatocracy has always worked hard to stop collective bargaining. The U.S. army has often been used to break strikes. Confessions of an Economic Hitman by John Perkins shows the U.S. military being used all over the world to stop collective bargaining.
For centuries, the stock market has handed out dividends that rightfully should have been handed out as wages. The self-appointed "elites" keep the money circulating in the upper loop. Any time that the money runs low, the Central Bank prints up some more and adds it to the tax burden of the actual productive class.
You should read this article from Charles Hugh Smith. Of Two Minds - Welcome to Neocolonialism, Exploited Peasants!

The productivity of the America worker continues to keep rising. His wages haven't risen in the last 40 years. BUT, his credit terms have lengthened enormously. 50% of the cost of anything goes to the finance industry. Labor's share of the GDP has fallen precipitously.

BUT, all the trade agreements have lowered, wages, purchasing power, velocity of money and trade.
The result; the oil & gas industry formerly pumped about $ 450 billion into the financial sector every year. It is now negative $ 160 billion.
The dividends from the stock market have exceeded the cash flow by $ 160 billion.
The 1%, about 32 million Americans have a LOT of money that was squeezed out of the working class. It wasn't earned legitimately, lawfully, yes. Legitimately, NO. Pax Americana serially raped other countries. John Perkins updated his book and reports that the tactics used to loot foreign States are now being use here. Killary is on the job.
https://www.youtube.com/watch?v=ptQkaVQRipo&t=333s
In a general sense, everyone who is against Trump is benefiting from crony capitalism.
"Utility customers in New York State will pay nearly $500 million a year in subsidies aimed at keeping some upstate nuclear power plants operating, "

This isn't capitalism, it is crony capitalism and it gives free-market capitalism a bad name.
The New Hinkley Point nuclear power plant can't sell it's power for a price anywhere close to solar power but, they will build it anyway.
Why does Trump have so many enemies? How many corporations are receiving subsidies?
Boeing: $13,174,075,797. ...
General Motors: $3,494,237,703. ...
Royal Dutch Shell: $2,038,202,298. ...
Dow Chemical: $1,408,228,374. ...
Goldman Sachs: $661,979,222. ...
Google: $632,044,922. ...
Walt Disney: $381,525,727. ...
Wal-Mart Stores: $149,942,595.
https://mic.com/articles/85101/10-co...ers#.Y6oMLNL0T

These subsidies are not handed out as wages. They are passed on to US as taxes. Fascism is redistribution for the rich. Socialism is redistribution for the poor and costs 1/10 of what redistribution to the rich costs. The subsidies are handed out as dividends to the 1% who recycle part of the money as campaign contributions.
Regulatory capture has impoverished the working class to where they can no longer support the dividend structure of the stock market. GOV pumps in money to the stock market to make up the difference.

Where does that take us?
"U.S. commercial paper and corporate bonds have swelled by $3.1 trillion, or 63 percent, since the 2008 financial crisis."
" (EBITDA) is five times today vs. 4.2-times in 2008 for high yield companies. For comparison purposes, investment grade companies’ median debt/EBITDA is 2.6-times today compared to 2.2-times in 2008."
“The cherry on top of the sundae of this credit boom is the shift away from money market funds to cash funds that take ten times the risk to get ten times the yield,”
Global Debt Investors: The Silence of the Lambs - Danielle DiMartino Booth – Money Strong, LLC

Free money to the upper loop is pricing the lower loop out of the markets. Just how long can this (peacefully) go on?
INFLATION ABOUT TO EXPLODE HIGHER – The Burning Platform

"it’s not energy that will bring the economy down; the internal dynamics of finance don’t need any help on their way towards crashing the system. "
https://www.theautomaticearth.com/20...grate-rapidly/

Headlines;
10/23 Why corporate America’s debt is a ‘major risk’ – Bloomberg Cause we're broke
10/23 Sliding corporate profits are a darkening cloud for US workers – Bloomberg I guess that they'll just have to shaft us even worse.
10/23 Shocking Social Security news a huge wake up call – Birch Gold Too Effing late to wake up and do anything.
10/23 Central bankers can’t stop the business cycle – FRA No, but they can certainly ruin EVERYTHING trying.
10/22 Federal Reserve admits it never knew what it was doing – SafeHaven I call BS
10/23 Strong dollar means danger for GE, other industrials – MarketWatch Shoot, give them more subsidies.

10/21 U.S. mall investors set to lose billions as retail gloom deepens – Reuters No kidding? There is already more than a billion sq. ft. of empty retail space. What do they expect? http://theeconomiccollapseblog.com/a...y-retail-space

We lost our purchasing power when price inflation outran wage inflation. The corporatocracy used trade agreements to force wages down and maintain dividends. For some strange reason, their profits continued to fall.
Their answer was ; more trade agreements and lower wages.
We continue to slide down and the dividend structure is in danger of sliding down with us. It has turned negative in spite of all the money pumped in.
TTIP and TTP are last-ditch efforts to drive wages and protective tariffs even farther down. You would think that they would figure out that this is a "doom loop".

[Danny B]

Normalcy bias when normalcy is crashing

"Those businesses, which Good Jobs First defines as the “most successful at obtaining subsidies from all levels of government” are Boeing, Ford Motor, General Electric, "
"General Electric CEO Jeffrey Immelt was charged by the president with a Herculean task: figuring out how to get big American firms to start hiring again."Job Czar
"Chamber Member GE Gets $4.1 Billion Taxpayer-Subsidized Tax Refund"
CNN, "GE to shift up to 500 jobs overseas"
GE gets taxpayer money and says that they will make jobs for Americans. Then, they take the money and hand it out as dividends.

"All told Gulf Cooperation Council investments in Western banks and corporations total over $1 trillion. The bulk of this is invested in long-term US and Japanese government bonds. " https://hendersonlefthook.wordpress....ouse-of-cards/

Armstrong, "The US government says it ran a $US587 billion budget deficit for the fiscal year, which was a 34% increase over last year."
"They see no problem with borrow more each year when they have absolutely no intention of ever paying anything off. "
"The further taxes are raised, the greater the decline in disposable income, and hence it produces deflation even as the quantity of money rises."
"We can see that the Budget itself did a slingshot move first running up into an all-time high in 2000, and then it swung sharply down for 8.6 years bottoming in 2009. However, the Budget has been unable to move back to a surplus and as such it is now poised to to head sharply lower once again. The crash and burn is beginning."
https://www.armstrongeconomics.com/w...h-burn-begins/
So, who's going to get burned?

Armstrong; "The entire structure of government social programs is predicated upon a Ponzi scheme that uses Marxism to justify robbing one generation for the previous one. Stir in Keynesianism, and you have a lethal cocktail we cannot survive."
"Then there is the crisis in pensions mixed with the crisis in demographics. All the pension systems were based upon a Ponzi scheme whereby the assumed population would always increase, so the young would pay for the old. Obamacare was constructed on the same fatal flaw."
10/24 Three in four young Greeks living at home – Ekathimerini
"Pension funds WRONGLY assumed that government debt was safe,"
"Now, they can no longer survive with rates this low, which is why the Fed keeps saying we must “normalize interest rates” for we will see a massive wholesale collapse in pensions"
"Under Reagan, the national debt was $1.029 trillion, and under Obama, as of September 2016, it stands at $19.528 trillion. If interest rates today were 8% as they were under Reagan, the interest expenditures along for the year would be $1.6 trillion."
https://www.armstrongeconomics.com/a...omething-else/

Armstrong; "The European banks are in much worse shape than their US competition. The reason being argued in Europe is that the US government imposed a ban on speculation after the financial crisis. "
"But some Europeans claim that is why US banks survived and want to outlaw short selling on banks stocks in Europe. The problem with this proposal running around behind the curtain is that, Brussels would lead, not to short selling, but wholesale liquidation. " Forget shorting,, just dump everything. " They would have to suspend all trading, period"
https://www.armstrongeconomics.com/i...n-bank-stocks/
10/24 Europe’s banks think they’re incredibly safe – Bloomberg

Mish, "The Bank for International Settlements estimates that 60pc of the world economy is locked into the US currency system, and that debts denominated in dollars outside US jurisdiction have ballooned to $9.8 trillion."
10/24 Dollar breakout sends Chinese yuan to lowest on record – Zero Hedge That's nice. How are they going to pay off $ 9.8 trillion if dollars are super-expensive?
https://mishtalk.com/2016/10/22/anot...der-coming-up/
"The world has never before been so leveraged to dollar borrowing costs. BIS data show that debt ratios in both rich countries and emerging markets are roughly 35 percentage points of GDP higher than they were at the onset of the Lehman crisis."
"The entire world would be much better off had not only Lehman gone under, but the entire banking system gone under.

Instead, bank are bigger than ever, corporate leverage is higher than ever, debt levels are higher than ever, and the global economy is setup for an even bigger collapse."
They postponed the crash to give us preppers time to prep.

"This chart illustrates the status quo's insistence on doing more of what has failed spectacularly"
"Normalcy crumbles into instability, and people and systems accustomed to stable supply chains and political stability struggle to maintain their grip on income streams and resources as abundance slips into scarcity and dependence on central planning becomes a liability of learned helplessness. "
"We are about to start a painful learning process about what is "impossible" and what is inevitable. Once it becomes self-evident that the current mode of production is not sustainable, we'll have no choice but to try more sustainable modes of production that are not just more efficient but that offer greater stability, opportunity and social mobility. "
http://www.oftwominds.com/blogoct16/...ions10-16.html

"Our" entire system of credit was a means to rob future generations. This future generation is living in their parent's basement. It wasn't so much our consumption that did it. It was financialization of the economy. The biggest losers will be the old folks. Anyone who can't get out there and hustle some food is going to get left behind.
The State did their best to destroy the family and make the State your new god. The State promised to take care of you when you got old. NOBODY has money saved to take care of the elderly,,, not the elderly,,, not the GOV.

Our wages shrank but, the financial industry refused to shrink correspondingly. Now, they will shrink spectacularly.

[Danny B]

Killed by the Pill

Keynesian economics and the fractional reserve system and the credit bubble have all been killed by the birth-control pill.
EXCELLENT article; https://www.milesfranklin.com/implod...l-bank-killer/

Keynes demanded endless war to keep the economy stimulated. The Report from Iron Mountain makes it clear that "peace" is something that must be avoided at all costs; http://www.stopthecrime.net/docs/Rep...n_Mountain.pdf
BUT, Trump is talking about breaking the chain of war that is a big part of our Anglo heritage.

A society is a collection of people with many things in common. If they had nothing in common, they wouldn't come together.
A nation is an agglomeration of people glued together because they live in the same locale. The glue that holds them together is generally; mutual benefit and prosperity. The other element that is often present is; fear of a mutual enemy. The PTB find it easier to create a mutual enemy than to create general prosperity and benefit. That is because the PTB are parasites and it gets very expensive to provide for them.

Americans are constantly reminded of all the enemies that we face because they hate us for our freedoms. That part is easy. Just go around the world blowing up everything in sight. Prosperity, well, that is a different story. We definitely have lots of enemies. BUT, it is getting very expensive to hold them at bay.
When the people of a nation fall out of prosperity, they no longer have much tolerance for supporting the parasites.
https://www.theautomaticearth.com/20...governability/

All over the world, there are emerging secession movements. NOBODY wants to support some far-off central government. The Russian professor, Panarin foresees the breakup of America.
As if Things Weren't Bad Enough, Russian Professor Predicts End of U.S. - WSJ
U.S. GOV owes many trillions of dollars that it has no intention of ever paying back. When it shafts all of it's creditors, how will it fund itself and the requisite police State? Bernanke favors perpetual bonds that are never paid back. They just pay interest. BUT, that will never fly because GOV will also over-print whatever currency is in use.

[Danny B]

Fattening up the parasites

Computers manage information VERY well. Bureaucrats handle information very sloppily. Computers ensure their survival and perpetuation by doing an excellent job. Bureaucrats ensure their perpetuation by mucking up EVERYTHING to where it take 10 more bureaucrats to figure out what the solution is to the original (simple) problem.
The European Union is just one monstrous bureaucratic overlay. The latest report says that the states in the EU are shrinking and the States that are NOT in the EU are growing.
"But the fact that poverty levels are rising so fast in what were prosperous countries is shocking. There is no sign of that rise slowing down – indeed, in countries such as Greece and Italy, it is accelerating. What were once dirt-poor countries, such as Bulgaria, or middle income countries like Poland, are fast over-taking what used to be developed Europe."
The eurozone is turning into a poverty machine

While Zimbabwe holds the record for currency debasement, many other States are well on their way.
http://kingworldnews.com/wp-content/...-1023.2016.jpg
"The decline of the US dollar has been a lot faster than most people realize. In 1971 the $100 bill note (above) would have bought the 100 gram (ca. 3oz) bar pictured. Today it buys just a small corner or 3% of the gold bar.

But the US dollar is not the only currency in the race to the bottom. All major currencies compete successfully in this race, including the euro, yen, pound, and all other currencies. "
The Road To Financial Armageddon | King World News

"Two senior Saudi officials have warned that the kingdom could go bankrupt in three years unless serious cuts are implemented to trim the public sector"
"Minister of Civil Service Khaled Al-Araj told a live TV debate that civil servants in the kingdom barely put in one hour a day in the office."
"The kingdom’s public sector, which employs more than 70 percent of the workforce, is extremely unproductive and its employees have a poor work ethics,"
PressTV-​Saudi officials warn bankruptcy looming
Sounds kinda socialist to me. Maybe they should stop financing the wars.

[Danny B]

Jim Rickards,, Jim Willie...sucked in by the D.C. tarpit

Jim Rickards gives a good perspective on our situation and what led up (down) to it.
"They all would’ve failed. They all would’ve been nationalized. Instead, the government intervened and bailed everybody out. Again, for the second time in 10 years. We came hours or days away from closing every market and every bank in the world."
"Here’s the difference. The next time there’s a financial crisis they’ll try to use SDR’s. But they’ll need time to do that. They’re not going to do it in advance and they’re not thinking ahead. They don’t see this coming.

What’s going to come is a crisis, and it’s going to come very quickly. They’re not going to be able to re-liquefy the system"
https://dailyreckoning.com/the-next-...-jim-rickards/
Jim makes a good point. The resolution of LTCM was done by hordes of lawyers in just 3 days with no due diligence. That was a private company with three Nobel laureates running the show. Any resolution of a crash in the Central Banks would have to be done by incompetent politicians.
They can be assumed to be incompetent because they were elected in a popularity contest, NOT a competition of abilities.
Homicide is the leading cause of murder", Rep Sheila Jackson Lee. D-TX 18th

Here is the Central bank system; Broken Central Banks: 4 Quick Pix | Gold Eagle
You can expect the political system to be in total gridlock after the election; The Rise Of The Politics Of Rage | Zero Hedge

The departure from the gold standard brought great profits to the bankers and great growth to the Marxists. BUT, the volatility that it brought has reached the extremes that crash the system.

[Danny B]

Capital temporarily had the upper hand

Here is a VERY well written article talking about the debt and the deficit. http://ggc-mauldin-images.s3.amazona...ct_26_2016.pdf
The graph shows that the debt has gone screaming up when compared to the deficit. The article makes some good points, especially regarding accepted monetary theory;
"Textbooks have historically hypothesized that government expenditures lift economic growth by some multiple of every dollar spent through a positive government expenditure multiplier. As such, deficit spending has long been considered to be a positive for economic expansion. If the expansion lasts long and generates faster actual and expected inflation, bond yields should rise via Irving Fisher’s equation (Theory of Interest, 1930). Impressive scholarly research has demonstrated that the government spending multiplier is in fact
negative, meaning that a dollar of deficit spending slows economic output."

It is reckoned that every additional 1$ of taxes reduces the economy by about $3.
"Just completed scholarly studies strengthen our conviction that deficit spending and elevated government
debt levels are a force for weaker economic activity. Although the statistical evidence against the positive government spending, or Keynesian, multiplier has been overwhelming for a long time,"
This is where the article starts to lose me.
It is a well-researched article that cites some impressive papers. BUT, it is still a rear-view perspective. There are just TOO MANY profound changes to use history as a guide.
Birth-control, automation and the demographic crash make the paper non-applicable. The end of growth make all the pre-conceived notions invalid. It uses an invalid baseline on a short timeline.
A simple breakdown is; global-wage-arbitrage allowed capital to quash down labor. Assets went way up as labor's share of the financial pie went WAY down. The huge productive gains realized by labor should have been reflected in rising wages. They weren't because of the downward pressure on wages from our competitors. This was a temporary situation until we became completely debt-saturated.
Capital is maniacally focused on productivity with little care about consumption. The emerging trade agreements are another step in the downward spiral of wages and consumption.

There was WAY too much return on capital considering it's tiny contribution to prosperity. The rubber band is snapping back and now there is very little return on capital. Capital flees hither and yon looking for a return.
The world population of people who are living way above a simple survival level is crashing. The interest rates crashes with them. Capital refused to share with labor. Labor went broke. Now, capital discovers that it is HEAVILY over-invested in productive but, un-needed industries.

A big part of what capital calls "assets" will be discovered to be worthless because nobody wants to buy or own them.
The news is full of articles describing how foreign Central banks are dumping U.S. sovereign debt. There are many article claiming that America will never make good on Treasury bonds. There is a possibility that many other investors will follow the lead of the CBs who are dumping U.S. debt.
Wait and see.

[Danny B]

Nuke power,, walking dead=bond investors

The carbon and nuke industry paid little attention to wind and solar. BUT, as the price of wind and solar dropped, it put the squeeze on nuke.
The nation’s nuclear reactors need more subsidies to keep running, such as a federal carbon tax that’ll reward them for their zero-emissions power,
Low power prices, fuelled by an abundance of natural gas from shale drilling and weakening demand, have squeezed their profits
The cost of building a nuclear plant may be more than five times that of a gas-fired one based on U.S. government data
In August, state regulators there cleared subsidies worth about $500 million a year as part of a clean energy plan to reduce greenhouse gas emissions.
If the upstate reactors shut down, “emissions reductions will be eviscerated
thousands of jobs lost in parts of the state

AMAZING, that the article can completely ignore wind and solar. Also, I was unaware that thousands of people worked at the nuke plants.

Carbon is a fuel and wind & solar are technologies. Economics is catching up to BS. End of Nuclear in U.S. Seen by Carlyle Group Without Subsidies - Bloomberg
" The Yankee Nuclear Power Station in Rowe, Massachusetts, took 15 years to decommission—or five times longer than was needed to build it. And decommissioning the plant—constructed early in the 1960s for $39 million—cost $608 million." The rising cost of decommissioning a nuclear power plant | Bulletin of the Atomic Scientists

"Investigators recently issued search warrants at the offices of San Onofre majority owner Southern California Edison. State regulators were hunting for records on whether the deal was struck in secret. The pact forces customers to pay 70 percent of the costs to shutter the facility following a 2012 radiation leak without a full investigation by state regulators into who was at fault. That $3.3 billion tab is about one third of the $10.4 billion decades-long bill customers must cover because of the shutdown. That works out to about $1,600 per customer meter, spread out over the next decade or two."

“For only the third time in its existence (it was created January 2013),” observed analyst Peter Tchir late last week, “[the Treasury VIX] has closed below 3.95.”
And?
“Each of the last two times that the Treasury VIX closed below 3.95,” Tchir adds, “10-year Treasury yields headed sharply higher.”
"Since 2009, the long-term government bond market has more than doubled, to about $6 trillion, affirms Bloomberg.
" A Bloomberg Barclays sovereign-debt index says even “a one-percentage point increase in interest rates equates to $2.1 trillion in losses for global investors.”
https://dailyreckoning.com/moving-new-world/

10/27 “China’s enormous debt isn’t worth worrying about – yet” – Business Insider
10/27 Why bond investors are the new ‘walking dead’ – CNBC
10/27 Government stimulus is an oxymoron – SafeHaven It's just that it is a REVERSE stimulus.
10/26 Fed needs to get to inflation goal sooner: Evans – Reuters
10/26 UK inflation expectations surge as Brexit fuels pound drop – Bloomberg Why do they write such drivel?
Indictment of the corporatocracy; Of Two Minds - Our Landfill Economy

[Danny B]

Can't raise rates?,,, print free money

All governments eventually default on their bonds. But, while the party is in full swing, sovereign bonds are considered risk-free. The PTB knew quite a while ago that the current credit cycle would come to an end.
ZIRP and NIRP are poison pills that extend things for a bit longer but, eventually make things worse. The FED instituted ZIRP and the interest rate swaps locked it in. ZIRP is killing EVERYTHING that depends on interest income.
Bloomberg article:"About 530 hedge funds were liquidated in the first half, on pace for the most shutdowns since 2008."
State Pension Funds: As Broke As Ever - Forbes
Forbes Welcome
Forbes
Jan 16, 2016 - 15 by Moody's says that state pension funds are $1.3 trillion underwater,
Labor Bosses Spent Half A Billion Dollars For Obama During 2008 Presidential Election:
Labor Bosses Plan To Spend $400 Million Dollars For Obama During 2012 Presidential Election:
“US Union Pensions Hole Deepens To $369 Billion”:

The FED, et al desperately need to raise rates. Raising rates would detonate the interest rate derivatives... about $ 400 trillion,,,, more or less.
It would also wipe out the corporate bond market. Reportedly, the FED is not able to raise rates.
"Therefore, the Fed is bound to be very sensitive to the dollar’s exchange rate with China’s yuan Furthermore, on two occasions when the Fed had signalled it was going to raise the Fed Funds Rate, it backed off when the Chinese lowered the rate at which it had pegged the yuan to the dollar."
"The bank has been selling US Treasury stock in large quantities, stockpiling commodities and oil with the proceeds, though it has been diversifying into Japanese Government bonds as well. China’s dollars have been welcomed by markets, which are short "
"In effect, the Peoples Bank is in a position to dictate Fed policy by adjusting the rate at which it is prepared to supply dollars into the market. So long as the dollar remains fundamentally strong, it only has to slow the pace of Treasury and dollar sales for the dollar to rise, and therefore the Fed’s planned interest rate rises to be deferred. "

"Anyway, China probably cares less than she ever did about the long-term consequences of her actions on the US economy. China has been selling her US Treasuries and reducing her dollar exposure to add to her stockpiles of raw materials and oil"
" The Fed, for the moment, appears to be powerless to manage economic outcomes and is firmly trapped by China’s currency management, with interest rates stuck at the lower bound."
"China most likely has enough gold to fully compensate for her reserve losses from the destruction of the dollar and the other fiat currencies on her reserve book. She is deliberately selling down her dollar exposure anyway, while she can. "
https://wealth.goldmoney.com/researc...efcode=dollarc
So, the FED is trapped by both Chinese monetary policy AND the derivatives.
They can raise rates but, they will see the domestic economy crater.

So, the CBs printed TONS of money so that there would always be lots of money floating around and some of it would always go to bonds. There is AMPLE evidence that much of that money is dumb money looking for a return in all the wrong places.
A Bubble in Dumb Money | Zero Hedge

If GOV can no longer borrow money, it will just print it. That is why we hear so much about helicopter money and fiscal stimulus. Fiscal stimulus is the solution du jour; Gundlach Predicts Rampant Deficits, Rising Inflation
Buncha graphs,,, buncha bad news; These Are the Charts That Scare Wall Street - Bloomberg

[Ruphus]

Pmi

I have posted about PMI (private mortgage insurance) in the past. In the US GOV backed loans are handed out with only 3% of the loan amount as a down payment. The "penalty" for such a low down payment is an added charge to your mortgage. This additional money you had to pay every month went directly to the principal of the loan until your loan to home value ratio improved. Usually this was there until you have paid an additional 17% down on the principal. Once the ratio was better then the PMI was removed and your monthly payment decreased. It normally took about five years.

But now things have changed to where the PMI stays on for the life of the loan. So I asked myself why would GOV make this change? If the FED actually does start to raise rates, the price of housing must decrease, unless worker wages increase to offset the interest. So the GOV and FED must not see any major hikes in wages and must see a hike in interest rates. To keep housing from another crash and massive defaults, They mandated that everyone pay down their principal. So in 10 years, Mr. & Mrs. Jones only owes $200000 on their home they indebted $250000 for. When they go to sell it no one will be able to afford the payment on a $250000 loan with 6% interest rate, so they will have to reduce the sale price to closer to what they owe of $200000 in order to sell the home. That $50000 will be lost by Mr. Jones but the bank gets their $50000. When this happened last time no one had paid down much on their home's mortgage. This led to short sales and foreclosures as people were not able to sell for what they still owed, the banks lost the money. The banks will get their money and be safe but Mr. Jones will be screwed. He has been taught that a home is a great investment and is about to be caught in an old school shake down.

[Danny B]

All the money is in the wrong places

It helps to be a small fry; "We have a 5,000 year low in interest rates so there is no place to run in the debt markets. Sure there is gold. But that is really for the individual, not the big money."
"The only thing left in town for the majority of people and big money will be equities. There is simply no other place to hide."
Ah but, equities are already in a bubble AND, they depend on consumption.
"But let us face the facts. There is no way Trump can reverse the economic implosion so we are going down anyway, it is just with Hillary we may plunge into 2020 really hard."
"This is the second election in the Year from Political Hell. We have two more – France and Germany. The markets are creating a base and that is what is essential to create a Phase Transition. You must coil first and then pop. The markets are coiling as everyone holds their breath waiting for the result."
Too late to head to the exits.
https://www.armstrongeconomics.com/i...ng-presidents/

"A special clause was entered into the core contract of the Medici bank “to deal as little as possible with the court of the Duke of Burgundy and of other princes and lords, especially in granting credit "
"Obviously, Raymond de Roover makes it clear that the Medici did not wish to lend to the princes of Europe, for there was no way to collect a debt from a sovereign. "

"Indeed, later generations ignored this command, and once they lent to government, that was the end of the Medici. The Fugger’s were the German bankers wiped out by the default of Spain, which was rather stupid since they had previously defaulted after wiping out the Italian bankers."
https://www.armstrongeconomics.com/w...ver-been-good/
GOV prints because it can. GOV defaults because it can. ALL GOVs default.
What is money when you have taxing authority? Clinton State Dept Spent 5.4 Million Taxpayer Dollars On 'Crystal Stemware', $630k On Facebook 'Likes'

Zero Hedge;
“Since June 2008, Deutsche’s market value of assets has dropped by about 35% from $2.3 trillion to its current level of $1.5 trillion, significantly closer to its current default point of $1.4 trillion. "
"The US Department of Justice (DoJ) recently levied a fine on Deutsche Bank (DB) in the amount of $14 billion. But the bank does not have the money to pay the fine. " https://www.equities.com/news/how-ba...bank-situation

[Danny B]

Euro screw job,,, bonds slipping

At 2:30 Farage says that the EU is costing Britain 30 million a day. He also mentions their gold-plated pensions. https://www.youtube.com/watch?v=G1lRfRi0B5Y
"Renzi pointed out that Italy pays the EU 20 billion euros and gets back only 12 billion." Don't complain. You are making a LOT of bureaucrats in Brussels VERY happy. https://www.armstrongeconomics.com/i...more-refugees/
"Renzi has now threatened that if other EU member states refuse to accept refugees he will veto the EU budget."

Nervous bond market;
10/29 The coming bond market crash – an interview with Eric Hadik – Erico Matias Tavares
10/29 Bond traders suffer worst rout in three years as selloff deepens – Bloomberg
10/28 Asset managers bleed $50 billion as industry crisis deepens – Bloomberg
10/29 ECB will provide stimulus until sustained inflation rebound – EuroNews,,,, Or hell freezes over.

"Bonds worldwide have lost 2.9% in October"
corporate bond issuance has already surpassed $2.0 TN.
Importantly, there’s no imminent reduction in the approximately $2.0 TN annual QE that has been underpinning global securities and asset prices.
Print it and they will buy.
"My view that “QE has failed” has seemed extreme – even outrageous to conventional analysts." "It may have worked brilliantly in theory – it’s just not looking so bright in practice."
Credit Bubble Bulletin: Weekly Commentary: Peak Monetary Stimulus