Economic pressures

[Danny B]

3 break it again

"And the Bank of England writes:

Just as taking out a new loan creates money, the repayment of bank loans destroys money. For example .... if the consumer were then to pay their credit card bill in full at the end of the month, its bank would reduce the amount of deposits in the consumer’s account by the value of the credit card bill, thus destroying all of the newly created money.

[Danny B]

4 break it AGAIN

Odd, right?

How's about this:
Greenspan Was Worried that the U.S. Would Pay Off It’s Debt, Causing the Fed to “Lose Control of Monetary Policy” … So He Suggested Tax Cuts for the Wealthy to INCREASE the Debt"
"Avoiding facing the facts that political economy operates inside human ecology enables people to continue to propose and promote bogus "solutions" which fail to admit and address the roles of the murder systems that backed up the money systems. Moreover, that failure then enables the ways that natural selection pressures drove artificial selection systems to become most socially successful by becoming as dishonest as possible"

[Danny B]

5 again

Socialism demands that GOV increasingly pull money from the future to finance consumption TODAY. Automation has much the same effect. The honest, displaced worker has the same needs as the worthless sluggard who has never worked a day in her life. There really is no formula from differentiating between the two. We continue to pull-ever-more money from the future.

[Danny B]

Financialism, Not Capitalism

It probably seems like I'm trying to crash my way to 2,000 posts. THAT doesn't concern me in the slightest. Some stuff just won't post.
"It wasn’t just the Founding Fathers who called private property the “bedrock of capitalism”,
"As private property defines capitalism and freedom, it offends collectivism and socialism."
"To all sides, banking has been a subject of so much consternation because it is a basic offense to all these perhaps intrinsic ideals. To the socialists and collectivists, banks are a primary source of inequality and oppression"
"...Great Depression. Banking had become a vital, central instrument of trade and general commerce, and therefore pure emotions of the people who had by their rights as property owners deprived banks of necessary funds with which to maintain trade and the nation’s economic welfare. "

"Monetary policy is supposed to reduce instability through its various methods of currency elasticity, which is itself another form of socialism in money; "

"It is perfectly obvious that repo fails had been rising almost steadily since 2011, marked by short but intense bursts of illiquidity in the middle of 2013 and again in the middle of 2014. That all changed the week of August 12, 2015, a week we should all know very well by what happened with the Chinese yuan; not because it happened with CNY and the global importance of China, rather due to how the Chinese relate their system to the “dollar” system. Since repo fails are a highly observable form of unstable money becoming more unstable, the financial and economic results of the past year and a half are wholly unsurprising.

Since the last week in August 2016, repo fails have not been less than $200 billion (both “to receive” and “to deliver”) in any week. Of those fifteen weeks (thru the week of December 7), they have been greater than $300 billion eight times, including each of the past four weeks going back to the week after the election (which does not propose the election as the cause). Fails have been above the $500 billion level three times, and each of those weeks corresponding with a whole lot of Chinese money market instability (which does propose more than the contours of causation within a global monetary system)."

So, socialist GOV can print and print. Printing debt money for consumption just doesn't work when it comes time for repayment. Eventually, the defaults mount up. Since the debt can NEVER be repaid, it is debt-free in a manner of speaking. There is speculation that Trump will eventually be forced to by pass the FED. That should be exciting.

[Danny B]

Still sliding downhill

"Long USD Will Be the Biggest Spoof Ever: And once the world has loaded up on dollars, there will be nothing left to go to when the Fed aggressively debases our currency to increase inflation and decrease our debt burden."
How will they load up on dollars if Congress won't raise the debt ceiling?
The article is about politics driving the markets and NOT the economy.
While the World Binges on USD, Gold Awaits the Purge | Zero Hedge

Excellent Videos on Money Systems Marijuana Party ? Parti Marijuana | Excellent Videos on Money Systems

For these articles, just take a look at the first couple of lines.
https://markstcyr.com/2017/03/14/is-...off-the-rails/
Just so you know: Total U.S. debt and other obligations now total $69 trillion
A Mountain of Debt: Is China's Economy Going To Crash? | The National Interest
http://www.zerohedge.com/news/2017-0...er-137-billion
https://www.sovereignman.com/trends/...0t-debt-21185/
http://www.zerohedge.com/news/2017-0...sh-most-record
http://energyandgold.com/2017/03/12/...ion-of-wealth/
http://www.goldcore.com/ie/gold-blog...ial-elections/

Chart of the debt ceiling vs the price of gold; https://www.goldbroker.com/media/ima...t-16.40.00.png
Most of the article is BS, https://www.goldbroker.com/news/the-...ilver-669-1095

[Danny B]

The money-pumping machine has been crammed into reverse

So many cross-currents,,,, so much deception.
Just don't lose sight of the fact that bankers like to loan money to people who can't actually pay it back. The money loaned didn't actually come from the bank,,,, it was created by the signature of the debtor. There was no exchange of anything of value. The banker hopes for a default and seizure of the tangible property. This is especially true in the case of seizure of cash-generating assets.

"the way professor Hudson does. If someone owes you a substantial amount of money, the last thing you want to do is make sure they cannot pay it back. You want such a person to have a -good- job, a source of income, that pays enough so that they can pay you back. Unless you have your eyes on their home, their car, their daughters, their assets."
"when Greece fails, that’s a success for the foreign investors that want to buy the Greek railroads. They want to take over the ports. They want to take over the land. They want the tourist sites."
None of the bailout money went to Greece. It went to German and French banks. The debt climbed from 160 B to over 600 billion. ALL according to plan.
VERY good article.
https://www.theautomaticearth.com/20...and-then-some/

Here is a link to a previous post about States going bankrupt. Is that the plan for all of us? It would demand a police state to hold down the revolutions.
http://www.energeticforum.com/298810-post1953.html

“The first and most important thing to understand about politics is this: forget Right, Left, Center, socialism, fascism, or democracy. Every government that exists — or ever existed, or ever will exist — is a kleptocracy, meaning ‘rule by thieves."
"After police secured a search warrant, the safe was opened and found to contain $201,000 and a bill of sale for a home in Pennsylvania.

Neither the Leonards nor Kane were found to be in possession of illegal drugs. However, the state initiated civil forfeiture proceedings against the $201,100 on the ground that it was substantially connected to criminal activity because Highway 59 is reputed to be a drug corridor."
https://www.rutherford.org/publicati...an_kleptocracy

David Stockman is a former budget director for Reagan. He really know his stuff in relation to the FED budget and cash flow.
"During the run-up to the election, the deep state bureaucrats at the Treasury built up what I described Friday as Hillary’s debt ceiling “war chest,” sending the cash balance to $425 billion shortly before election day.

By contrast, shortly after the election the Treasury stopped selling new debt, and began to actually pay down maturing bills and notes. The Treasury has burned over $338 billion of cash since then. That depleted Hillary’s war chest since she wouldn’t be around to benefit from it.
Or rather, it pumped a veritable tsunami of cash into the canyons of Wall Street."
"In a word, the Treasury took its boot off the neck of the bond dealers, thereby enabling the 15% frolic higher in the stock market that has become known as the Trump Reflation Trade."
"Needless to say, those myths begin to die March 15 and the screaming aberration of the past four months — that is, a broke Uncle Sam paying down his debt — goes into reverse.

In a word, the canyons of Wall Street will get hit with a double whammy of cash withdrawal as the Fed finally launches on a long-overdue tightening campaign while the U.S. Treasury gets back into the market doing what it does best — sucking up cash hand-over-fist."
"Eccles Building consists overwhelmingly of Keynesians. They are under the mistaken impression that they have reflated the main street economy back to solid health and the nirvana of full employment,"

"the Fed has pumped so much cash into the financial system since the crisis that there is still $2.1 trillion of excess reserves.

This huge liquidity overhang means that the Fed cannot simply “announce” that it wants to peg the money market rate 25 basis points higher at its meetings; it must actually tilt the money market supply and demand balance by draining a considerable amount of cash out of the system.

Indeed, as the money price controllers at the Fed embark on a path of steadily ratcheting up the federal funds rate there will be a substantial and consistent cash drain from the canyons of Wall Street.
And that’s whammy #1 to the stock market."
"the U.S. Treasury should have been maximizing its borrowings prior to the expiration of the debt ceiling holiday on March 15 — even if it meant pushing the public debt over the $20 trillion threshold. That way it would have had a $400-$500 billion cash war chest with which to fight the coming debt ceiling battle on Capitol Hill.

Instead, at the going rate it is now going to run out of cash before even the bloody battle over Obamacare Lite now underway in the House has been completed. That means that there will not be even a glimmer of hope for the Trump tax cut stimulus and economic rebound on the horizon when the GOP backbenchers will be called upon to raise the debt ceiling by trillions."

"But here’s the newsflash that will come as a shocker to both the Wall Street casino and the Savings and Loan Guy running the Treasury Department. These gimmicks only work because the public debt ceiling includes about $5 trillion of trust fund “investments” that represent nothing more than intergovernmental accounting confetti.

Needless to say, borrowing from the public means draining cash from the government bond dealers who must bid for Uncle Sam’s newly issued securities. And there’s your #2 whammy to the stock market."
"The first is that both the Fed and the Treasury will be draining hundreds of billions from Wall Street on a recurring basis for the first time in 20 years."
https://dailyreckoning.com/countdown-to-crisis/

[Danny B]

maintaining the power structure has gotten very costly

The FED has just one "product", and that is DEBT. Too many people are maxed-out on credit and can't spend any more. NO PROBLEM. "They" will just erase the bad stuff on their credit report so that they can afford to spend LOTS more. Video; The Elite Are Prepped And Ready For The Economic Crisis | Zero Hedge

" The fragmentation of political consensus (i.e. the consent of the citizenry) is presented by the Powers That Be and their media servants as being a disaster. The implicit fear is real enough: how can we rule the entire nation-empire if it fragments?

As I noted the other day, fragmentation terrifies the Establishment of racketeers and insiders, for when the centrally-enforced rentier skims and scams collapse, those who own and control the rentier skims, scams and rackets will lose the source of their wealth and power. "

" In a top-down, centralized hierarchy of political power (i.e. the central state), the pharmaceutical company only needs to lobby a few authorities in the central state to impose its rentier skim/scam on the entire nation.

Lobbying/bribing a relative handful of federal officials and elected representatives is remarkably inexpensive: a financier or corporation only needs to focus on these few key players, and smoothing the PR pathway via a highly concentrated corporate media.

A mere $5 million spent in the right places guarantees $100 million in future profits-- profits earned not from open competition in a transparent market, but profits plundered as rentier skims"
"If we look at the source of the 2008 Global Financial Meltdown, we find that the centralization of capital and power were the primary enablers of the meltdown. If the financial system were composed of 1,200 local banks, each of which had to comply with local and state regulations instead of five behemoth banks that had the capital and klout to buy Washington D.C.'s approval of their leverage and shady dealings"

" If we want a resilient, flexible, low-cost system, we must replace the centralized system of enforced consent and artificial consensus with a fragmented, transparent one of smaller scaled, competing organizations of governance, capital and enterprise.

The intrinsic limits of a corrupt, inefficient and rigged-to-serve-the-few-at -the-expense- of-the-many centralized pyramid of power and wealth is why centralization is the problem rather than the solution:"
Good article, Of Two Minds - Why Fragmentation Is the Solution, Not the Problem

https://www.amazon.com/Localism-Phil...qid=&sr=%C2%A0

[Danny B]

It's really hard to tell if the monetary mavens are incredibly stupid or incredibly blind.
"The implication from the market's reaction is that at current levels, financial conditions are poised to make a substantial positive contribution to growth in 2017, from a starting point of essentially full employment, inflation close to the target"
The money supply has been growing at about 9% per year and price inflation is about 10% per year. Unemployment is at about 23%.
"This Is Not The Reaction The Fed Wanted": Goldman Warns Yellen Has Lost Control Of The Market | Zero Hedge
"In other words, whether on purpose or otherwise, according to Goldman, the Fed, which now wants to tighten financial conditions (i.e., see asset prices lower) not only achieved the opposite, but has now lost control of the market."
In the battle to save the rentier class, there is no lie too big or too obvious.

In the battle to save the State, there is no tax too big and no benefit cut too big. The most important factor is to save the bureaucratic herd.
" In 2014 a new Federal law made it possible for pension funds to cut benefits for their recipients.
[I]n October of [2015] the canary in the coal mine fell over and died when Illinois announced that the State was posting pension payments because it ran out of money.
Fast forward a few more months and things have been taken to the next level. The Central State pension fund in Kansas became the first such fund to take advantage of the 2014 law as 400,000 Americans who depend on their monthly pension income to pay for such things as their mortgage, groceries and medical expenses saw an average of $1,400 per month sliced of their monthly benefits."
"But take a look South Carolina’s government pension plan, which covers roughly 550,000 people — one out of nine state residents — but is a staggering $24.1 billion in the red"
"California’s Calpers public retiree system is notoriously underfunded and doomed to implode. Chicago, Detroit and other urban wastelands are sagging under abysmal debt. Dallas, Texas pensions went insolvent. Puerto Rico is nothing but a propped up holding corp(se)."
Are Collapsing Pensions "About To Bring Hell To America"? | Zero Hedge

Post WW II, America became a high-wage, high-cost State. We are painfully transitioning to a low-wage, low cost State. The low wages come first and later the low costs will arrive. There will be an explosion of defaults and bankruptcies before that happens. We have 10% price inflation with continual wage deflation. The whole economy is shrinking in spite of all the money printing. The printing was directed at the top loop only. The younger cohort of the lower loop is sliding down the fastest because they can't move into employment.
https://sputniknews.com/europe/20170...truggle-bills/
We also see in Japan that the younger cohort refuse to form families so there are fewer and fewer people in the consuming class. Japan has the highest number of robots per capita and the Japanese salaryman has to work 16 hours a day to keep his place. NO confidence = no children.

The bond market pulls the future earnings of the (growing) working class to the present day. What happens to the solvency of the bond market when the working class is suffering wage deflation and high unemployment? The finance industry may delude itself into believing that it produces wealth. It produces parasitic drain, nothing else.
There have been proposals for a financial-transaction tax (Tobin Tax) to pull a bit of money from the finance industry but, they block it. Historically, it has been ANATHEMA to tax a man's labor. Currently, it is fine to tax a man's labor. Currently it is NOT fine to tax the profits of the speculator who produces NOTHING.
Labor and wages are falling way behind. What does this eventually imply for the bond market?
Get Ready for a “Credit Implosion� | Casey Research

The finance industry is going to (delude) itself right off a cliff.

[Danny B]

Report from the gold-bugs and pessimists

Repost Get Ready for a “Credit Implosion� | Casey Research
" If 2.60% is broken on the upside—if yields move higher than 2.60%—a secular bear bond market has begun. Watch the 2.6% level. Much more important than Dow 20,000. Much more important than $60-a-barrel oil. Much more important that [sic] the Dollar/Euro parity at 1.00.

Since Gross issued this warning, I’ve been watching 10-year Treasurys like a hawk.
On Monday, it finally happened. The 10-year hit 2.62%.
"Our highly levered financial system is like a truckload of nitro glycerin on a bumpy road"

The gold-bugs do us a favor by pointing out things that aren't generally known.
"But Bernanke did not “strictly limit” the supply of U.S. dollars. He engaged in the Bernanke Helicopter Drop, the most-reckless dilution of a major currency in history. In four years, he quintupled the supply of U.S. dollars – quintupling a supply accumulated over the previous 80 years, combined. "
Hey, it's very costly to save all the banks and gamblers.
http://www.24hgold.com/24hpmdata/art...-03-13-001.png

"What is meant by that is that we have previously had episodes of extreme unemployment and/or poverty. But we have never had permanent levels of unemployment and poverty at the levels they are at today. Historically unprecedented."
"This is because real wages have been in a downward spiral for more than 40 years. Ever since the bankers removed their own Golden Handcuffs by assassinating the last vestige of our gold standard, they have been diluting our currencies at an historically unprecedented rate (except for Germany).

Real wages have fallen by more than 50% . A two-wage family of today does slightly less well than a single-wage household of 45 – 50 years ago. This translates into a drop of more than 50% in our standard of living. "
"An imbalance between rich and poor is the oldest and most fatal ailment of all Republics.
- Plutarch, Greek philosopher (46 – 120 CE)

For more than 40 years, wages have spiralled lower. For more than 40 years, our economies have gotten sicker and sicker and sicker. Coincidence? "
Our wages haven't gotten nominally lower. They just haven't grown as fast as the FED created price inflation.
"Regular readers now understand the inflation/GDP charade . If you lie about inflation, then for every percentage point you understate the rate of inflation you overstate GDP, since all GDP calculations must be fully deflated by the current inflation rate. Our governments grossly understate the real rate of inflation. This means they grossly exaggerate real GDP. Our crippled economies are not growing, they are shrinking. "
Shadowstats says that we are shrinking by about 7%.
http://www.24hgold.com/english/news-...r=Sprott+Money

Sr. Price; "I would like to take this chance to share a few of my thoughts on this. To me it is pretty clear that the American gold is encumbered. Not because of the usual reasons found on the web but because America defaulted on its gold under the Nixon administration. There are still, many foreign claims on that gold. If America starts to use that gold officially, the gold vultures, like the bond vulture funds, will be out en masse and with force. So it is in America’s best interest to ignore that gold – and gold in general. "
England tried to pick up 3400 tons of gold 3 days before Nixon closed the gold window.
" If I were in the position of the globalists, I would aim for the Roman model. Split the money concept. Currency for spending and settling debts but use gold and silver as a final debt extinguisher. This would function to prevent the kind of mess the EU countries are now in. The debts of the south are the assets of the North. This is a recipe for disaster. "
Jim Willie has long written about all trade settlement being done in gold.
http://www.24hgold.com/english/news-...ott+Money&mk=1

And now, the good news,,,, from Armstrong;
"As a result, there is nobody in Washington, Republican or Democrat, who would prefer to prevent a crisis when they will never receive a vote or any credit. It is always better to allow the crisis and then emerge as your champion. Therefore, the sad realization is that we simply must CRASH & BURN, for only then will anyone pay attention.

Keep in mind that this CRASH & BURN is government – not the private sector. Therefore, the danger lies in government assets"
"Consequently, I simply gave up. I have worked behind the curtain for 40 years even testifying before Congress and answering questions in the middle of a panic. There is absolutely NOTHING anyone can possibly do to change the trend – IMPOSSIBLE."
https://www.armstrongeconomics.com/w...he-crash-burn/

"ANSWER: Nobody can manipulate the currency market forcing it to change trend. Trump will fail because he cannot manipulate the dollar down when the FX market’s $5.3 trillion per day in trading volume dwarfs the equities and futures markets. Yes, the Treasury has less than $150 billion in its Exchange Stabilization Fund to try to manipulate the currency. Good luck. That amounts to a drop of rain in the ocean."
"We are looking at a crisis in European banking as their reserves are made of of Euro members. The ECB hold 40% of member states bonds. A breakup of the Eurozone holds far more chaos than anything you have read about Europe – AND THAT IS AN UNDERSTATEMENT. Then we have the Sovereign Debt Crisis that will hit Europe, Japan, China, and the United States. There is no escape."
Interesting article on capital flows; https://www.armstrongeconomics.com/w...-he-will-fail/

"The Democrats led by Chuck Schumer and Nancy Pelosi are fighting tooth & nail to save socialism." "The Democrats are tearing the country apart and in their quest to stop Trump at all costs, will indeed change the United States as we have known it. They are going way too far this time."
"The Republicans are hopelessly lost. They cannot fix the system. The only way to do this is to the scrap the entire mess. Anyone who could not obtain insurance should simply be put on Medicare/Medicaid. Nancy Pelosi is just a worthless politician hell bent of maintaining a corrupt system that is doomed. She said: “The Republican bill is one of the largest transfers of wealth from working families to the richest people in our country — Robin Hood in reverse.” (Pelosi lives at a far higher standard or living than I ever did! She is by no means middle class.)"

"Then you have the Democrats and the left, allegedly funded now by Soros, deliberately creating civil unrest to keep the socialist system intact. However, we have crossed that point of no return. The silent majority who voted for Trump have been pushed as far as they can go. Remove Trump, and we will descend into civil war. There will be no other democratic process to save the future "
"The left is never satisfied with allowing people to make their own decisions. I have been in discussions and the undertone is always the same. They hate anyone who makes more than they do and they covet whatever anyone else has and feel wronged that they are being cheated out of the same thing, but never wish to work for the same goals. The bottom line has always been that whatever society earns, belongs to the state and the state decides how much they are allowed to keep."
"This is the GREED of insurance companies who are perhaps far worse than the bankers ever were. They own the Democrats and the press pretends this is a transfer of wealth from the poor to the rich when it is the exploitation of the youth and no money goes to the “rich”. It is going to the Insurance companies who have paid the Democrats to impose Obamacare on the nation."

"If the Democrats force Trump out or tie the government in knots so nothing gets done, I may have no choice but to leave, "
https://www.armstrongeconomics.com/i...-to-civil-war/
Obummer ran the national cash register down close to zero. Trump should have reflated it immediately. BUT, Trump has a talent for getting his opponents to fight each other. He can't submit a budget until the debt ceiling is raised. He can post his budget and wait for congress to raise the limits. They will fight endlessly. BUT, time grows short. He can play innocent and let congress take the heat. The more heat, the more they will be paralysed.

Armstrong writes that the crash and burn will be limited to GOV debt. How can he write that? States, counties, cities and banks hold huge amounts of GOV debt. No amount of stability,,,, no amount of change will bring back the lost jobs. Even with 22 million working in GOV jobs, unemployment is at 23%. Wiping out GOV employment will drive down consumption that much more. The stock markets are NOT going to do well when the consumer can't consume.

[Danny B]

Latest from Jim Willie

I wrote this to Jim Willie;
Long ago, you wrote about the scheiss dollar.
Martin Armstrong recently wrote about a new american currency
Long ago,You wrote about gold trade settlement
Hugo Salinas Price recently wrote about gold trade settlement
Congratulations
His reply;
next is Germany flipping East
next is Saudi Kingdom collapsing
Germany is guarantor for TONS of European bonds. Germany is rich and fat right now but, a lot of their "assets" are foreign debt. Jim thinks that they will pivot to Russia. It would make good sense.

Saudi is run by inbred wahabbi idiots. They foolishly got into war with Yemen and they aren't doing very well. They are obliquely attacking Iran. Iran is rich and NOT run by Arabs,,, it's run by Persians. Saudi recently offered up for sale their national oil company,,, ARAMCO. The tenders seem to be only 10% of what was expected. It has long been speculated that they are running out of oil. Many of their wells have been damaged from pumping in too much salt water. Some wells output 30% seawater.
Idiots shouldn't gamble.

Trump did NOT block muslims from Saudi even though it was all Saudis who attacked the WTC towers.
Rense; Qataris Own More Of London Than The Queen
As Saudi disintegrates, their money will flow into American banks.
Even the Chinese are sending money here because they trust the American banks more than they trust the Chinese government.

[Danny B]

Consensus is not spelled F*** Y**

We're all going to hear about endless fighting over the debt ceiling and budget. I won't rehash all of it but, here are a few observations.

"U.S. Treasury has less cash on hand than Apple or Google,
The Trump administration is pushing hard to get the debt ceiling raised, and this is a complete reversal from how Donald Trump felt about the debt ceiling back in 2013. The following comes from the L.A. Times…

Trump sided with hard-liners in 2013, publicly opposing an increase. “I cannot believe the Republicans are extending the debt ceiling — I am a Republican & I am embarrassed!” he tweeted then.
As things get tighter and tighter, the Trump administration will become increasingly desperate to get the debt ceiling raised. No mention of congress getting desperate?
You would think that since Republicans control the House that this should be easy, but the truth is that there are a lot of conservative Republicans that are not inclined to agree to a debt ceiling increase without substantial accompanying budget cuts.
The Dems indicate that they will raise the debt ceiling if there are no stipulations.

"If they raise the debt ceiling and continue adding more than a trillion dollars a year to the national debt, they will lose all credibility with conservative voters on fiscal issues.

But if they try to force the federal government to start living within its means that is going to severely harm the economy in the short-term." and long term
"Donald Trump is going to have to try to figure out a way to navigate this crisis. He has already promised that he will not touch Social Security and Medicare, and those are the two biggest drivers of our budget deficits. In fact, it is being projected that entitlement spending and interest on the debt will eat up every single penny that the federal government takes in within 20 years."
"In addition, many of the conservatives in Congress absolutely hate the new Republican health care plan, and they hope to use this debt ceiling crisis as leverage to change the bill.

If Trump can’t work out something with conservatives, perhaps he could turn to the Democrats. But most Democrats are extremely resistant to work with him on anything after all that has been said and done, and so for Trump to get a deal with them he would have to make extreme concessions."
It's called, "gridlock"
The Debt Ceiling Deadline Has Passed, And Now The Biggest Test Of Donald Trump?s Presidency Begins?

[Danny B]

Regulatory capture and crony-capitalism will bring our final destruction

"Yellen may not believe the Fed is “pushing down on the accelerator,” yet the truck is racing down the mountain.
March 14 – Bloomberg (Claire Boston): “Companies are issuing bonds in the U.S. at the fastest pace ever"
Credit Bubble Bulletin : Weekly Commentary: Another Missed Opportunity
" It was an article I recently stumbled upon in Bloomberg. In it, the author explained how U.S. companies are issuing debt at breakneck speed. You see, U.S. companies have already issued more than $360 billion worth of investment-grade bonds just this year."
" In short, the bond market is unraveling. This isn’t some conspiracy theory. It’s a fact.
And yet, investors are buying bonds by the fistful.
These people don’t understand how much danger they’re in. Hell, they don’t even know what they’re buying anymore."
Gross leverage ratio for US companies http://d1w116sruyx1mf.cloudfront.net...is-soaring.png

Cash to debt ratio; http://d1w116sruyx1mf.cloudfront.net...ash-levels.png
A Corporate Debt Crisis Is Underway… And Nobody Cares | Casey Research

" A week ago, bullish sentiment among investment advisors soared to the highest level in 30 years" "My impression is that the S&P 500 is likely to surrender its entire gain since 2014 merely as the opening loss of the coming cyclical decline. "
Credit Bubble Bulletin : Weekly Commentary: Another Missed Opportunity

"Rewarding failure encourages more failure. There were over 8,000 banks in the US and it was only 10 or 20 who almost destroyed the world. They should have paid the price for their criminality and recklessness. Their executives should have gone to jail. Not one did."
"Eisman, the man of the people, said nothing about how real median household income is lower today than it was at the height of the crisis, while Wall Street bonus pools are at record highs. He said nothing about senior citizens who used to count on 5% money market returns to scrape by now getting .25% because the Fed used ZIRP to save the Wall Street banks."

(He) "completely ignores the fact the Fed bought $3.6 trillion of their toxic debt at one hundred cents on the dollar, and the Obama administration took on $10 trillion of national debt to give the economy the appearance of recovery " "Even though stock valuations are at highs only seen in 1929, 2000, and 2007, Eisman sees no stock market bubble."
https://www.theburningplatform.com/2...w-one-of-them/

Short and to the point; https://www.peakprosperity.com/blog/107415/banks-evil

[Danny B]

Private equity,,,, The end of a very long road

I won't mention the D*** C****** but, Kunstler has a good view on health care.
"As if being trapped in a political minefield isn’t bad enough, the remaining safe patch Trump is stranded on turns out to be the LaBrea Tar Pit of health care reform. At this point, the crusade is doing worse than going nowhere — it’s getting sucked into the primordial bitumen where the mastodons and camelops sleep."
A Bad Week and Getting Badder Bigly Fast - KUNSTLER

Michael Hudson on how you got where you are; How Bankers Became the Top Exploiters of the Economy
Armstrong always has a good historical perspective.
"Meanwhile in Greece, people are not taking property that is left to them because they cannot pay the inheritance taxes to accept the property. This was one of the final stages in the collapse of Rome. People just walked away from their property because of taxes."
"The Left is fighting so hard to keep dominating everyone else, that it is hard not to see how society in starting to implode in the West. In Norway, the hunt for taxes has been so bad, they have now even been raising property taxes to include a dog house in the back yard."
https://www.armstrongeconomics.com/w...y-going-crazy/


PRIVATE EQUITY
There are hundreds of trillions of currency units (mostly disguised as debt) that are sloshing around the economy looking to, NOT get vaporized. The productive economy shrinks and the "money" has no where to go to get a return. Return was mostly killed off by ZIRP and now, investors are just looking for a safe haven. Corporations are hard at work trying to make safe havens,,,, unsafe.
" It also said it had carved out what analysts estimate are about $500 million worth of assets into a separate subsidiary, out of bondholders' reach, diluting lender collateral.

Meanwhile, there were reports that competitor Hudson's Bay Co. wants to buy the company, but leave the debt behind. "
"Retailers backed by private equity dominate the list of most-distressed U.S. store operators. "
"Take J. Crew, which finagled a way to insulate valuable intellectual property (think: trademarks, web domains, etc.) from creditors by transferring the assets into a separate subsidiary. "
"Citigroup analyst Jenna Giannelli pointed out PE firms haven't taken a lot of money out of these retailers yet and are doing everything they can to stave off bankruptcy in order to protect their equity. She said bond investors should be concerned about weak bond covenants giving the companies "flexibility to move assets out, to the detriment of the creditors."
https://www.bloombergquint.com/marke...equals-carnage

Venture capital and private equity are pulling out of the Silicon Valley too.
Signs That The Silicon Valley Tech Bubble Is About To Burst | Zero Hedge
San Francisco RE, http://my.paragon-re.com/Docs/Genera...ercentages.jpg
http://www.paragon-re.com/3_Recessio...les_and_a_Baby

Back to Armstrong. He only mentions gold when prodded. As an investor, he has no use for an asset that just sits there and does nothing. I believe that he has a blindness towards gold.
"There are times when the private sector cannot stand and everyone runs to bonds/cash. Likewise, there are times when government can no longer stand and the only thing that survives is private assets." No mention of gold.
"People get burned on real estate, they then move to stocks. The get burned in stocks, then run to bonds/cash. Then they run to commodities. The key remains when there is a great alignment, which we are headed into. That warns the big Crash & Burn lies in government not private for this one."
https://www.armstrongeconomics.com/a...c-not-private/

Armstrong is a Princeton professor and has an unequalled command of historical fact. He understands all the intricacies of economic action. He mentions the demographic crash but, makes no specific projections. He is aware of birth control but, makes no projections. He seems to be very weak on the capabilities of cyberwar.
Economica makes very good cause to believe that the FED funds rate is locked into the population of the consumer class. Armstrong claims that the crash will be in public debt and not private. FED GOV is spending about 24% of the GDP. How can a crash in GOV debt leave private debt unscathed?
How can the debt-money system survive shrinking population and shrinking consumption?

If the industrial economy has no niche for you, you have to revert to an agrarian economy or a hunter-gatherer economy. What if the agrarian economy has n o niche for you? https://www.youtube.com/watch?v=N7Q9ITJAcOE
A currency war is concentrated on preserving domestic productivity and JOBS.
There is no possibility that our current system of debt-money can survive widespread unemployment, falling birthrate and crashing consumption. Armstrong is hallucinating if he thinks that private enterprise will come through OK while public debt crashes and employment disappears.
Our systems are FAR to complex and integrated to survive a collapse of credit.

The bankers refuse to see that the system is no longer workable. The PTB and deep State refuse to see that the working man has been superseded. Nobody is willing to relinquish power and advantage to see general society survive.

[Danny B]

wilfull blindness on all fronts

The investment "community" seems to embrace a wilful blindness. They don't read Shadowstats because it doesn't paint a rosy picture.
Shadow Government Statistics - Home Page The sub-prime crash was predictable with classical economics but, NOT with neoclassical economics. I see TONS of BS garbage in print at supposedly reputable sites.
"The official jobless rate fell to 4.7 percent, from 4.8 percent in January,"
"the official jobless rate is near what the central bank considers full employment — a threshold where, in theory at least, everyone who wants a job at the going rate can find one.”
"Fed chairman Janet Yellen sees the uptick in new hires as a vindication of her steady-as-she-goes 8-year zero rate monetary policy that has shifted trillions to the investor class while working people have seen their incomes and wages stagnate, their prospects for retirement dwindle, and their living standards fall."

"At present, inflation hasn’t even reached the Fed’s 2 percent target while, according to Reuters, workers wages have gone up by a pathetic 6 cents per hour." How much is that in purchasing power when price inflation is running at 10%?
"Keep in mind, that when stocks double or triple in value providing mountains of cash for the parasite class for whom Yellen works– it’s a sign of boundless optimism and confidence in the illusory recovery, but when wages make even the slightest movement upwards, the shift is greeted with howls of “runaway inflation” followed by a series of excruciating rate hikes that boost unemployment, reduce activity and weaken growth. "
Stronger Economic Growth? Over My Dead Body, Says Janet Yellen - The Unz Review

"I know that lots of investors keep talking about interest rates not mattering in the property sector because rents will go up with a stronger economy. Rents will need to go up a whole lot to keep pace with cap rates going from 4 to 6. "
https://capitalistexploits.at/2017/0...coming-crisis/

That was the good news.
"the Empire in engaged in some bizarre slow motion version of seppuku and the only mystery left is who, or what, will serve as the Empire’s kaishakunin (assuming there will be one).
A kaishakunin (Japanese: 介錯人) is an appointed second whose duty is to behead one who has committed seppuku, Japanese ritual suicide, at the moment of agony.
"I would even argue that the Empire is pursuing a full-spectrum policy of self-destruction on several distinct levels, with each level contributing the overall sum total suicide."
"Political suicide: the Neocons’ refusal to accept the election of Donald Trump has resulted in a massive campaign to de-legitimize him. What the Neocons clearly fail to see, or don’t care about, is that by de-legitimizing Trump they are also de-legitimizing the entire political process which brought Trump to power and upon which the United States is built as a society. "

" the ultimate unmasking of the viciously evil true face of that 1% must be credited to Hillary with her truly historical confession in which she openly declared that those who oppose her were a “basket of deplorables”. We already knew, thanks to Victoria Nuland, what the AngloZionist leaders thought of the people of Europe, now we know what they think of the people of the USA: exactly the same thing."
"The Neocons want a war with Russia which the Trump people don’t. The Trump people, however, want, well maybe not a war, although that option is very much on the table, but at least a very serious confrontation with China, North Korea or Iran, and about half of them would also like some kind of confrontation with Russia. "

"There is absolutely nobody, at least at the top, who would dare to suggest that a confrontation or, even worse, a war with China, Iran, North Korea or Russia would be a disaster, a calamity for the USA. In fact, serious people with impressive credentials and a lot of gravitas are discussing these possibilities as if they were real, as it the US could in some sense prevail. "
"Eventually, something crazy inevitably happens. Like in Syria were the State Department had one policy, the Pentagon another and the CIA yet another one"
"How did a country which produced the UH-1 Huey or the F-16 suddenly start producing Apaches and F-35s?! The explanation is painfully simple: corruption.

Not only did the US military industrial complex bloat beyond any reasonable size, it also cloaked itself in so many layers of secrecy that massive corruption became inevitable. And when I speak of “massive corruption” I am not talking about millions but billions or even trillions. How? Simple – the Pentagon claimed did not have the accounting tools needed to properly account for the missing money and that the money was therefore not really “missing”
Well, some of the money went to build our space fleet but, that won't help the economy when the default comes. The US NAVY & NASA have a fully operational 'Space Fleet' » The Event Chronicle

"I could list many more types of suicides including an economic suicide, a social suicide, an educational suicide, a cultural suicide and, of course, a moral suicide. But others have already done that elsewhere, and much better than I could ever do myself. So all I will add here is one form of suicide which I believe the AngloZionist Empire has in common with the EU: a “Suicide by reality denial”: this is the mother and father of all the other forms of suicide – the stubborn refusal to look at reality and accept the fact that “the party is over”

"Alexander Solzhenitsyn used to say that all states can be placed on a continuum which ranges from states whose authority is based on their power to states whose power is based on their authority. "
"Should the AngloZionists succeed in triggering a war between Iran and the Empire, then Iran will end up being the Empire’s kaishakunin. "
The Empire should be placed on suicide watch - The Unz Review

[Danny B]

Somebody, sometime is going to have to cut entitlements

Pretty quiet out there. The various power brokers are slowly coming to the realization that the budget and debt ceiling fight will have NO winners,,, only losers. Much of the budget is on autopilot.
Autopilot Spending Devours Budget - Federal Budget in Pictures
With $ 212 trillion of unfunded liabilities, there are going to be a LOT of losers.
"CBO’s Long-Term Budget Outlook includes the following projections, trends and analysis:
By 2040, federal debt will climb to over 100 percent of GDP under current law, and could reach 175 percent of GDP under less optimistic assumptions."

"Mick Mulvaney, the nominee for budget director, told senators Tuesday that he’d recommend significant changes to entitlement programs—even if they contradict the president’s campaign pledges."

"Last year, the cost to taxpayers for the three largest entitlement programs (Social Security, Medicare, and Medicaid) was $1.9 trillion. Total discretionary spending, which includes the Pentagon’s budget, was about 1.2 trillion. Just under half of that figure is defense spending, which the President Trump says he wants to increase. So even if the administration succeeded in eliminating all non-defense discretionary spending (about $600 billion), it wouldn’t be nearly enough. Then there’s Trump’s undefined intention to boost infrastructure spending, which Vice President Mike Pence recently told the U.S. Conference of Mayors is “going to be big.” And while President Trump still says he wants to repeal Obamacare, he now says he wants to offer “insurance for everybody,” under the new plan. How much will that cost?

"President Donald Trump’s pick for budget director, Mick Mulvaney, said Tuesday the nearly $20 trillion national debt needs to be “addressed sooner rather than later” and that he would push Trump to break his campaign promises and cut Social Security and Medicare."
"But, Mulvaney said, he does support prioritizing payments should the nation need to do so." SO, who is going to get the shaft?
"The opinions and views of Mr. Mulvaney are way out of touch of what the American people want,” Sanders said. "

It's going to get very ugly. So much of the budget projections are predicated on having a good economy. less optimistic assumptions
Jeff Nielson, part one; https://www.sprottmoney.com/Blog/whe...f-nielson.html

Part two; https://www.sprottmoney.com/Blog/whe...f-nielson.html
The standard of living is; the GDP divided (unequally) by the population. Wages in the West have been falling for decades and people have consciously cut back on reproduction. Many States in Africa have done the opposite and are already having problems with the population outgrowing the economy.
The Global Famine Begins: UN Announces That The Worst Food Crisis Since World War II Is Happening Right Now
"Poverty has risen in Nigeria, with almost 100 million people living on less than a $1 (£0.63) a day"
The economic reset that Nielson writes about will hit them very hard.

A virus with no file body,,, what a clever idea; Russian ATMs Spit Out Cash After Malware Attack | Zero Hedge
Years ago, Canada invaded America and nearly burned down the White House. Time for payback; http://www.zerohedge.com/news/2017-0...-invade-canada