Economic pressures

[Danny B]

Speculation about a U.S. default

M N Gordon; "Somehow, through all of this, our representatives are oblivious to what’s really going on; that the U.S. government is just months away from a possible default."
" the Bank of Amsterdam. The bank’s history is deeply intertwined with the Dutch march toward default in 1814. When the bank was originally founded, it was rightly considered the soundest bank in Europe – it was 100% reserved and for a long time its notes were indeed “as good as gold” and were accepted in payment all over Europe. Holland’s downfall was closely tied to the decision to abuse the bank’s hard-won reputation by surreptitiously forcing it to adopt fractional reserve banking in order the fund the government (in particular, in order to fund its wars)."

"Like the Dutch several hundred years ago, everyone believes it’s impossible for the U.S. government to default on its debt obligations. U.S. Treasuries are considered the safest investment in the world.

Nonetheless, a series of events are coming down the turnpike in such rapid succession that Washington will be incapable of dealing with them. Before Congress can say knife, irreparable damage will be done to the government’s financial standing.

No doubt, the great story of our time, that few seem to appreciate, is the increasing likelihood the U.S. government will default on its debt before the year is over."
"Most likely Congress will wait until the 11th hour to take action. They have in the past. But this time, given its complete dysfunction, Congress may not get it done.

Yesterday, the Obamacare repeal and replace vote was postponed so the Republicans could circle the wagon. Today they’ll try it again. Regardless of the outcome, this highlights why Congress will be unable to raise the debt ceiling. There’s just plain too much animosity to get it done."
March to Default |

Tesla Motors depends on a constant supply of fresh money to keep it going. Here are their earnings; https://dj0s31cxqi9ot.cloudfront.net...NEW.png?x65756
We still need lots of carbon energy, https://srsroccoreport.com/wind-sola...he-u-s-empire/

Everything is quiet while waiting on the dogs of war.

[Danny B]

SCREW the poor,,, they can't afford lawyers

On another thread, I reported, "In Ferguson, Missouri, where a Justice Department investigation showed that more than three-quarters of the population had outstanding warrants, real-time face searches could give police immense power to essentially arrest individuals at will."
https://dollarcollapse.com/creeping-...lice-body-cam/
The numbers just didn't sound right. There had to be more to the story.

"LFOs earned national attention in the aftermath of the 2014 unrest in Ferguson, Missouri. While the weeks of protests and riots were most directly connected to the police shooting of Michael Brown, an investigation by the U.S. Department of Justice (DOJ) identified the collection of court fines and fees to be a major source of contention between the community and the criminal justice system. For the 2014–15 fiscal year, the Ferguson municipal government anticipated collecting $3 million — 15 percent of its revenue — from “fines and public safety”; that’s $354 from every household in a city where nearly a quarter of the population lives in poverty. "

"In this climate, the local police force functions as a collection agency, not only freely distributing as many charges as possible, but acting as muscle in cases of non-payment."
"Poor residents, once charged, are taken in over and over again, squeezed for what little they can pay, as their debts continue to mount unabated. Regularly monitored, dragged into court, and threatened with imprisonment, defendants struggling with LFOs live in open-air debtors prisons." 12% interest.
https://psmag.com/legal-financial-ob...n-5e9c4f0fab83

"California has suspended 4.8 million licenses of drivers who didn’t pay traffic fines or failed to appear in court in the last decade.

Most of these suspensions are not due to drivers being unable to pay for the ticket, but rather their inability to pay the additional 300 percent in “penalty assessment fees” that are tacked onto violations."
That's right, phuk over the poor.
"ticket in Orange County with a $35 base fine for driving one to 15 mph over the speed limit ends up costing $238 when the penalty assessment fees are added on"
I can assure you that losing your license in Ca. will screw you well. California has a policy called " BANANA ". Build absolutely nothing anywhere near anything. You have to drive to get anywhere.
"Cal Drivers Owe $10.2 Billion in Traffic Debt due to ‘Penalty Assessments"
Cal Traffic Ticket Costs Quadruple on “Penalty Assessments”

PAY UP , and then we'll talk. https://wclp.org/wp-content/uploads/...California.pdf

[Danny B]

Reflation from China

"The fate of global economic growth rests solely upon China's shoulders."
"In the absence of Chinese growth, there essentially is no growth."
"The chart below shows total Chinese core population peaking, energy consumption stalling, and debt skyrocketing."
"This shrinking base of consumption will destroy the meme that a surging Chinese middle class will drive domestic and global consumption"
"China of '15-'30 will not grow, will not drive the global economy and absent Chinese growth...the world economy is set to begin an indefinite period of secular contraction "
" Unfortunately, neither quasi-democracies nor quasi-communist states have any politically acceptable solutions to this problem of structural decelerating growth and eventual outright contraction" NOPE
Global Economic Growth Is All About China... Nothing But China | Zero Hedge

About that skyrocket, "China’s economy slowed further last year to expand at its weakest pace for quarter of a century, with warnings that it risks losing further momentum in 2017 "
https://www.theguardian.com/business...t-for-26-years
"Activity in China’s manufacturing sector contracted at its fastest pace in almost three-and-a-half years in January, missing market expectations, an official survey showed on Monday. "
https://www.theguardian.com/business...y-figures-show

China won't let domestic wages grow enough to stimulate domestic consumption,,,, for fear of losing market share. They live and die with exports.
China exports shrink 20%, deepening worries over slowing growth - Mar. 8, 2016

They claim 6.5% growth. The Chinese have recently escaped from a strict communist rule. They have just gone too wild with their new (relative) prosperity. They have gone head-over-heels into wildcat banking.
Even though commerce is shrinking, the debt bubble MUST grow. That is the only way to service previous debt. And, growing, it is.
China Just Flooded Its Economy With A Record Amount Of New Debt | Zero Hedge

Debt as % underlying GDP
138%
165%
244%
385%
513% This is the projected debt for the year 2020
https://surplusenergyeconomics.files...-2-19-3171.pdf

China needs to pull off a miracle that has never been accomplished before; http://www.valuewalk.com/2017/04/chi...rvicing-costs/
The West is in economic contraction. Chinese liquidity is reflating the world banking system,,, for the moment.
Somebody, somewhere is going to go out in a blaze of glory.

[Danny B]

Hyperinflation,,, who knows?

Sorry, I looked at dozens of articles. I don't see any worth quoting or explaining. Here is one article with a good graph of debt growth.
https://www.peakprosperity.com/blog/...0%99t-work-out
Many debt bubbles have come and gone. This one is of a different nature. Here are some previous examples of hyperinflation.
"Inflation at its peak reached a staggering figure of 13.6 quadrillion % per month! That’s 13, 600, 000, 000, 000, 000%. The largest denomination bill was a 100 Quintillion note. "
Hyperinflation ? 10 Worst Cases | Zero Hedge

All of these hyperinflation "events" appear to involve paper currency, not digital. The FED sends a mega-ton of pixels to the BLICs and the BLICs buy a ton of treasury debt. They also involved higher and higher denomination notes. A paper note is a bearer bond of zero maturity.
If you hold a paper note, nobody can dispute it's existence or ownership.
This makes a paper note far superior to a bank deposit that is only an unsecured loan to the bank. Stocks are shares in a company that might never show a profit,,, or may even go bankrupt. Corporate bonds aren't much better than stocks.

I haven't seen prior examples of hyperinflation in digital currencies. I'm still working out how it could occur. The FED / Treasury could make huge amounts of pixelated "money" and ship it all over the world.
Forget the BLICs. The FED is buying stocks, bonds and everything else that looks to be endangered. They're holding back MASSIVE deflation. The deflation would / will hit the credit system.
The lower loop of the economy is currently deflating. The upper loop is inflating like mad to compensate. The money supply includes credit. A collapse of credit would be hugely deflationary.

When GOV over-prints paper money, confidence in said money is lost. Is this also true if GOV "overprints" digital money? Digital money and credit depend to a certain degree on trust and confidence.
Debt creation is now growing faster than hyperbolic. At what point is confidence lost? We might find out when the debt ceiling is reached.

The FED claims to have about $ 4.1 trillion on their balance sheet. It's a bald faced lie because they are buying up everything. They want to reduce their balance sheet by selling off the treasury debt they hold. BUT, if nobody wanted to buy it directly from the Treasury in the first place, why would they want to buy it from the FED?

Because the dollar is the reserve currency, all States had to sell us stuff to get dollars as a reserve. If nobody is buying U.S. Treasury debt, they have to buy gold or some instrument for a store of value.
We run about $ 1.5 billion a day of trade deficit. How are we paying for it, if not with Treasury notes?
Who knows, maybe the FED can avoid hyperinflation.
Advancing Time: When Will Inflation Strike?

David Stockman, https://www.youtube.com/watch?v=-NhQCHpaPFg&t=377s
Martin Armstrong, https://www.youtube.com/watch?v=0FXyiPJ6xwE&t=289s
Gerald Celente, https://www.youtube.com/watch?v=XnQtYd8tSuA
James Wesley, https://www.youtube.com/watch?v=795B1V7wYEI
Armstrong is a ray of sunshine, https://www.youtube.com/watch?v=DcuYmUZrOqo
Dunno

[Danny B]

Smith.. leftist fascism

The world is full of people who have a special talent in one niche area. All of us benefit from this when they pass along their invention or idea. Charles Hugh Smith has a phenomenal angle of perception. He only asks for one dollar a month if you found value to his offerings / writing.
His latest article highlights a problem with language / vocabulary. Language evolves over the centuries. Reportedly, English has 47,156 obsolete words.
The definition of fascism has historically involved a marriage between BIG GOV and BIG business. For lack of a more precise word, Smith is forced to use fascism for the current "situation".

" History often surprises us with unexpected ironies. For the past century, the slide to fascism could be found on the Right (conservative, populist, nationalist political parties).

But now it's the Left that's descending into fascism, and few seem to even notice this remarkable development. By Left I mean socialist-leaning, progressive, internationalist/globalist political parties. "
"The Left is now the political wing of the corporatocracy."
" But these are simply excuses for the abject surrender of the Left to self-enrichment and power. Since the Left has always claimed the high moral ground--and continues to do so--see my essay Virtue-Signaling the Decline of the Empire (February 28, 2017)-- the Left must mask its own corruption and role in the Corporatocracy structure.

The Left accomplishes this by imposing a virtue-signaling conformity on corporate media, social media, and the state institutions under its control-- higher education, government agencies, etc. "

" The principle of substitution reveals the underlying truth. If a Rightist state imposed a virtue-signaling conformity on corporate media, social media, and the state institutions under its control, the Left would be very quick indeed to identify this as fascist.

It's still fascist if the Left does the same thing.

While the Left attempts to deflect a wider understanding of its descent into fascism with obsessive accusations of fake news and incessant demands for virtue-signaling conformity, the developed-world economies are circling the drain."
" This is the harsh reality: wages are no longer an adequate means of distributing the dwindling surpluses of advanced economies:"
The proof: http://www.oftwominds.com/photos2017/GDP-wages8-15a.png

"The Left's single "solution" to this profound structural trend is for central states to "fight austerity" by borrowing and blowing trillions of dollars, yen, yuan, euros, etc.--with no end in sight. But as even the most economic illiterate Leftist understands somewhere in their muddled soul, borrowing trillions from future generations is morally and fiscally bankrupt, and the very opposite of a "progressive" policy. "
We have reached a weird dichotomy. Everyone who receives State money for doing "jobs" of no value, knows deep, down inside that their livelihood is at risk. So, they will willingly vote for a criminal if he/she promises to keep their sinecure intact. This isn't limited to the "free $hit" army. It also includes all the speculators who are well aware that they add nothing to the productive economy. Both the free $hit army and the corporatocracy need unrestricted State money to continue. The left NO LONGER wants to see an audit of the FED.
The left must turn a blind eye to the fact that debt is growing faster than parabolic.

"The magical thinking of the Left is that decades of slowing growth will be reversed and the clock of history magically reset to 1946 if the central state borrows even more trillions from future generations."
"The Left is morally and fiscally bankrupt, devoid of coherent solutions, and corrupted by its embrace of the Corporatocracy. Its descent to fascism has too much momentum to be stopped. Isn't it obvious that the only way forward is to jettison both the Left and Right flavors of state-cartel Corporatocracy and pave a third way?"
That "pavement" is going to cover over a lot of dead bodies.
Of Two Minds - The Left's Descent to Fascism

Canada (home of the loonie) is drinking the Koolaide far more than America.
http://d1w116sruyx1mf.cloudfront.net...come-ratio.png
The reset is going to be dramatic. Why Canada’s Housing Bubble Could Soon Become Your Problem | Casey Research

It is difficult to assign a valuation to tech stocks. This is a good article about tech stocks falling back to earth, Absurd Valuations on Unprofitable Tech Stocks

Armstrong calls for a crash of sovereign bonds. The Left / corporatocracy (through the actions of the FED) is pumping in $trillions. We have a $45 billion a month trade deficit. How is it being satisfied, if not with treasury bonds? If the entire sovereign bond market is being levitated by the FED, how can it crash? If we can continue to run a trade deficit, how can we be affected by external problems?
How long can we continue to pay for everything with our pixelated printing press? If ZIRP continues, this parabolic rise in debt carried no interest burden. So, how high can it rise. What would be the limiting factor?

[aljhoa]

Canada (home of the loonie)

Fidel Castro isn’t Trudeau’s real father?



Al

[Danny B]

Cuban reality

Fidel Castro was an educated lawyer. Ernesto Guervara was an educated doctor. Most everything that you read about Castro is a lie. Just as I went to israel to see the situation up close, I also went to Cuba to get a close look. I talked to lots of people including people from the government. I read, write and speak Spanish but, look typically American so, everybody pretty much opened up.
Castro was the yin for a totally corrupt yang. ,,, Bautista.
Granma is their news outlet, Granma - Official voice of the PCC

[Danny B]

Tax burden hot potato

America was allowed / forced to run a trade deficit because of the reserve currency status. The dollar was "good as gold". That time is coming to a close. The R.O.W. does not want any State to have an unlimited credit card. Trade will be done in currency and imbalances will be settled in gold.
Russia's Largest Bank to Facilitate Direct Gold Trade Between Russia and India
Previously, it was impractical to try to track the value of individual currencies. Now, it is easy.

There is a good argument to be made that the purchase price of gold does not matter.
"They’re focused on one factor that we seldom think about… We’re so fixated on price of gold… what they’re focused on… what the super wealthy are focused on… what the billionaires are focused on… is the fact that gold plays that hedge in your portfolio… that’s it’s the insurance in the portfolio…

It may not necessarily be as critical to think whether it’s $1200 an ounce or $1300… we fixate so much on the price… and we forget that irrespective of what it’s trading at on any given day it’s meant to be an insurance policy… it’s meant to be protection of wealth and preservation of wealth…"
"The reason for why these high net worth individuals are rapidly moving into gold related assets, notes Adnani, is that they are not necessarily all that concerned with the current price and how high it may go in the future, but rather, because precious metals are backed with thousands of years of evidence that they are the asset of last resort during crisis:"
"Moreover, even governments like China and Russia are preparing, having gone so far as to create their own exchange mechanism to trade directly with gold in the event of a global currency crisis or financial meltdown."

"Adnani explains that several super wealthy individuals with whom he works very closely, including mainland China’s biggest billionaire investor and the richest man in all of Asia, Li Ka-shing, have a renewed and urgent interest in diversifying their assets into both, gold mining firms and the physical asset itself:" Why couldn't his name be Li Ka-Ching ?
The Richest Man In All Of Asia Is Aggressively Preparing For Collapse: "Direct Exposure To Gold As Super Wealthy Focus On Wealth Preservation"

The rich believe that the tax burden should be on the poor. Historically, your labor was never taxed. The payroll tax is now 15.5 %. God only demands 10%. We are burdened by heavy sales tax when we want to consume. Heaven forbid that investors should have to pay a minuscule Tobin Tax on their speculation. A Value-added tax would leave our income intact and only tax consumption. That is another big NO because it would come out
of the margin of retailers.
"Every other country in the world has a value added tax."

The land value tax, "Land value tax has been referred to as "the perfect tax" and the economic efficiency of a land value tax has been known since the eighteenth century.[1][2][3] Many economists since Adam Smith and David Ricardo advocated this tax, but it is most famously associated with Henry George, who argues that because the supply of land is fixed and its location value is created by communities and public works, the economic rent of land is the most logical source of public revenue.[4]"
https://en.wikipedia.org/wiki/Land_value_tax
Nope, can't have that.

Stockman, "The host then pressed the former Reagan insider over what gets done between now and Thanksgiving on the debt limit and tax reform. Stockman said pointed and simply, “Nothing gets done. I am not trying to be a cynic. They will have battle after battle. The debt ceiling will get raised but there will be short term increases.”

“There will be shutdowns. There will be midnight confrontations and showdowns. It is going to happen over and over. Not just once, but multiple times. The order going into the next two years is government shutdown. "
"“The Trump reflation fantasy is over. It is all downhill from here. The market it heading down 20 to 30% down, the 1600 on the S&P. We’re going to have negative shock after negative shock. It is about time they sober up. On April 28th the U.S government is going to shut down. That will be spring training on the continuing resolution until we get to MOAD in the summer.”

That’s what the former Reagan Budget Director has identified as the “Mother of All Debt” crises. He goes on to note, “We’re out of cash soon. The debt ceiling is frozen. There is no possible majority in Congress to raise, by trillions of dollars, the debt ceiling. That’s what is coming down the road”
https://dailyreckoning.com/stockman-...omic-disaster/

Our post WW II economic heaven is coming to an end. NOBODY wants to be the one who suffers a fall in living standards. They WILL fight to the death.

4/18 Chinese stocks unnerving investors as losses steepen – Bloomberg Get used to it.
4/18 Americans swamped by $1 trillion credit card debt – NY Post It's a big swamp. There is way over a $ trillion in auto loans. There is way over a $trillion in student debt. And several $trillion in RE debt.
4/18 After 250% stock returns corporate pensions still underfunded – Zero Hedge Count on it. Retires will get the shaft.
4/18 Angst in America, part 4: disappearing pensions – Mauldin Economics Get used to it.

[Danny B]

Banker with a gun

I just had to post this;

[Danny B]

Cryptocurrency to usher in socialism

There are so many competing pressures that it is difficult to read the tea leaves. So much mis-information,,, so much hidden. There is a huge push to go to a cashless society. Bitcoin is the development platform. It will most likely be discarded when sovereign crypto-currencies are rolled out. Many States are working on them. The upcoming crash will make a convenient lead-in. There will be no time to introduce a replacement currency.
HERE !, take this US GOV debit card. The banks are closed indefinitely so, you might as well use it. What is my limit? Well, that all depends.
A "fiat" debit card would be just as "legal" as a fiat currency. It would not be a bearer bond or a store-of-value though. Paper currency is only a tiny fraction of the money supply. It will go into hiding in a crash. During the "reboot" you will have just as much wealth as the State says you have.

"If the cash is eliminated and we can only use digital currency the banks would have the ability to turn off an individuals access to funds. If bitcoin, or any other cryptocurrency, is allowed to operate this would not work. The banks would not be able to enslave the people. The slave trade would collapse."
The writer speculates as to whether or not China and Russia are on board. I do not believe that they are.
4/19 China sees higher risk of mass unemployment, pledges more support – Reuters
I seriously doubt that China is willing to let a couple hundred million Chinese die to fulfil some demonic socialist plan of the West. Russia wants nothing to do with socialism. If Russia and China are not on-board, they will not export to us except for payment in gold.
Central Banking Warfare Model Readies The Next Step - The Daily Coin

"The political economist Benjamin Friedman once compared modern Western society to a stable bicycle whose wheels are kept spinning by economic growth. Should that forward-propelling motion slow or cease, the pillars that define our society – democracy, individual liberties, social tolerance and more – would begin to teeter. Our world would become an increasingly ugly place,"
"It should come as no surprise that humanity is currently on an unsustainable and uncertain path – but just how close are we to reaching the point of no return?"

"According to findings that Motesharrei and his colleagues published in 2014, there are two factors that matter: ecological strain and economic stratification. "
"That economic stratification may lead to collapse on its own, on the other hand, came as more of a surprise to Motesharrei and his colleagues. Under this scenario, elites push society toward instability and eventual collapse by hoarding huge quantities of wealth and resources, and leaving little or none for commoners who vastly outnumber them yet support them with labour. Eventually, the working population crashes because the portion of wealth allocated to them is not enough,"
BBC - Future - How Western civilisation could collapse
Despair and suicide are rising dramatically as young people see their future prospects dissolve into impossibility.
https://www.bloomberg.com/news/featu...sis-of-despair

[Danny B]

Just how long WILL the FED carry the whole economy

Behind all the BS, the FED is supporting all of the economy. They can never sell their treasury holdings on the secondary market. Will they continue to provide ever-bigger mountains of money to keep it all going?

Here is a chart of the silver content on the Roman Denarius;
http://kingworldnews.com/wp-content/...-4162017-1.jpg
The purchasing power of the US dollar, http://3.bp.blogspot.com/-mAg6FMpNGp...ng%2BPower.jpg

Former White House Official Larry Lindsey On Frank Zappa’s Terrifying Warning | King World News

"Or they have extended credit and printed money without any economic accomplishment in return. If you make a loan or print money without a compensating delivery of a service or goods, that money is by definition worthless. And this is exactly what governments are doing whenever they are under pressure. In the last few decades, more than two quadrillions of dollars of debt, unfunded liabilities and derivatives have been created out of thin air. Before this bubble period is over, those quadrillions of debts and liabilities will vanish in the air. And so will all the assets that were backed by this debt. "

Why are most Americans poor? Because we don't produce arms. http://kingworldnews.com/wp-content/...-I-4162017.jpg
http://kingworldnews.com/wp-content/...II-4162017.jpg
This chart is; real assets vs financial assets. http://kingworldnews.com/wp-content/...-V-4162017.jpg
A reversal would imply great price inflation for real assets.
http://kingworldnews.com/the-world-i...-world-war-ii/

[Danny B]

It's turtles (deflation) all the way down

The final break with the gold standard in 1971 allowed the banks and speculators to create huge inflation of instruments. Previous to 1971, you (your labor) or your money had to be put to some kind ofproductive use to show any growth in wealth. After 1971, your money could be put to work without necessarily creating any new wealth. Speculation drove almost everything higher and higher. For most people, purchasing power had to be created the old fashioned way, WORK. BUT, their savings from productive work were available to the speculators. Every dollar that you saved was available as an inflation weapon to cut your purchasing power.

Labor has lost ground to speculation for decades.
Speculative money could be pulled out of thin air. It was fenced off from most of the working class,,,, to keep them working. Labor steadily lost purchasing power for decades because it was always behind the curve. Currency inflation always outpaced wage inflation.
The invention of containerized shipping pushed labor down even more. The West was a high-wage & high-price economy. The low-wage & low-price economies could easily undercut the West.

The IMF-dollar racket went into overdrive with the inception of the reserve-currency status.
For instance; Japan needed dollars as reserves / savings. They sent us Hondas. We sent them dollars. Rather than letting those dollars just sit around, they shipped them back to America to buy Treasury bonds. FED GOV got the money back that we paid for the Honda.
Everybody that needed official reserves had to sell stuff to us.

The worldwide supply of dollars has grown enormously. This would have resulted in very high monetary inflation BUT, the world was absorbing the excess supply. Just the same, there were enough domestic dollars to cause continual price inflation. We can no longer buy a "basket of groceries for $5".
Previously, monetary inflation had resulted in "acceptable" levels of wage inflation from trickle-down. With the advent of global-wage-arbitration, this was no longer true. As the trickle shrunk, the upper loop lengthened our credit terms to make up for our diminishing purchasing power.

We have had decades of wage deflation. In 2007, our deflated wage base had crashed into the reality of rising house prices. Liar-loans masked this for a time but, eventually, the defaults caught up with economic reality. We had a crashing "episode" of deflation.
Post 1971, the bankers had created continual monetary inflation. This resulted in continual price inflation. They set a course of continual inflation of the upper loop and continuing deflation in the lower loop. This deflation of purchasing power came to a crescendo in the 2008 crash. Some $ 13 trillion of notional value in RE was evaporated.
Deflation hits the big ticket items first. Houses and children are the big ticket items that are first deemed unaffordable.

As wage deflation bites ever harder, we cut back on medium-ticket items.
List of stores closing - Business Insider
Even grocery stores are closing. High-price stores are closing.
4/20 Neiman Marcus borrowing to make interest payments on debt – MarketWatch

The CB is pumping money into every nook and cranny of the economy. The FED is desperately trying to keep the long-running deflation of the lower loop from bringing down the upper loop. They print $ trillions trying to get the previous paradigm of trickle down back into action. All they get for their efforts is; price inflation that drags down consumption even further.
The FED has been fighting a continuous war on deflation. It's fighting the war in the upper loop with strategies that no longer work. The lower loop just slips further into relative deflation. The FED has no tools to fight this because it can't affect global wages.

Armstrong writes about this but, I think that he has spent too much time in the upper loop to get a good grasp. He writes about the FED ending QE but, does that mean that he believes the official story about the BLICs buying Treasury debt?
"Now comes the moment of truth. Has QE undermined the bond market to such an extent that only a blind fool will buy government debt in an atmosphere of rising rates? How can bonds survive and the system of perpetually borrowing year after year without ever paying-off the debt continue indefinitely? Such theories cannot ever see that the economy is a cycle and that just because they could sell their bonds today does not guarantee they will be able to do so tomorrow." They can't.

"Furthermore, of the $13.5 trillion on the balance sheets in the Fed, ECB & BOJ, they are now trapped and cannot sell that debt back to the marketplace. This means they are themselves screwed and they have to wait for that debt to mature in order to reduce their balance sheets. They have no way out." He is way low on this one at $13.5 trillion.
"The ECB is the most vulnerable because it owns 40% of European government debt of member states. As the economic conditions tear the union apart, the ECB balance sheet is the most vulnerable of all and prone to default."
Side note, Doug Casey Says the EU’s Collapse Is Now “Imminent” | International Man

"Here comes the problem. The governments continue to borrow. With the central banks no longer buyers, then interest rates can rise faster than anyone expects because they will have to entice fresh buyers. If that fails to materialize, then we come to the Sovereign Debt Default crisis."
The FED has no army.
Besides, if interest rates rise, most corporations go belly-up in 2 days. Choose your poison.

"The Treasury will be forced to find ways to absorb the additional supply if the Fed wants it’s cash back so the Treasury must find a lot more private buyers. " The BLICs, of course.
https://www.armstrongeconomics.com/w...-inflationary/

About those ECB bonds, "The Nightmare Scenario" And Everything Else: The Full French Election Matrix | Zero Hedge
In the final analysis, housing prices must be commensurate with the wages in the same area.
“Housing prices will start to fall by as much as 40% over several years… unemployment will surge… many state and municipal governments will be forced into default…and the federal deficit will balloon to as high as $1.5 to $2 trillion,” warns Dent."
"We are approaching what he terms “The Greater Depression”, and the coming months look bleak: “The recession is NOT over yet. $100 trillion of the $225 trillion in loans, bonds and stocks across the world…will simply disappear.”

And this will happen on a worldwide scale, unleashing a tidal wave of destruction across the globe. "
Critical Warning from Rogue Economist Harry Dent: ?This is Just the Beginning of a Nightmare Scenario as Dow Crashes to 6,000? | Economy and Markets

If you don't like the predictions of Dent, you can always go with the reports from The Telegraph, "The US government, for instance, should use the current economic growth spurt as a chance to get its finances under control.
“In the United States, where the economy is close to full employment, "
The FED is in a fight to the death with deflation. It will lose because there is no wealth creation,,, no wage inflation.
In the 2008 crash, LIBOR went up astronomically because no bank trusted any other bank. Currently, banks only have 50% of the reserves that they need. When a bank gets into trouble, no other bank will trust it or loan to it (in the overnight market)
Banks have limits on CASH withdrawals. When panic sets in, there will be huge electronic withdrawals. Decades of inflation will be remedied with a couple of years of deflation.

[Danny B]

Kunstler

Kunstler is the perennial pessimist but, he has some info. The French election (round 1) is coming sunday. Round 2 is in May.
Also coming up soon, is a "rules change" at the IMF.
"China and Russia every reason to discipline this country by undermining the international standing of the dollar. They’ve been preparing for this very deliberately for years: constructing an alternative to the US-sponsored SWIFT international payment system, stockpiling thousands of tons of gold, building trade partnerships to circumvent US dominated syndicates. Before the month of April is out, they’ll “pull the trigger” on new voting arrangements in the International Monetary Fund that will reduce the financial power of the US and the Eurozone, especially in the oil trade."

"Around the same moment, America will wake up to the awful reality of the debt ceiling. This petard has been ticking the whole time that the political bureaucracy of Washington has wasted its mojo on the quixotic crusade to blame Russia for the 2016 election outcome. Congress will return from the Easter recess to discover that they have a few mere days to debate and resolve the debt ceiling problem "
"The Democrats would like nothing better than to let this drag on for a while in order to humiliate, and perhaps finish off, their arch-nemesis, the Golden Golem of Greatness. "

"The IMF voting re-set and the debt ceiling quagmire have the power to disrupt many of the arrangements that allow the banks and markets to continue pretending that their stuff has value. When that consensus trance snaps, President Trump may find himself in the unhappy position of having to declare a bank holiday. Unlike the usual holidays in America, there will no Easter Bunny, no Jack-o-lanterns, no Santa Claus. Just empty supermarket shelves and pissed-off people marshaling in the WalMart parking lots with flaming brands and espontoons."
"espontoon or as a half-pike, is a type of European polearm that came into being alongside the pike."

" The second, finance, used to be a minor branch — only about five percent — of all the doing in the days of America’s putative bigliest greatitude." "These days, finance is closer to 40 percent of all the doing in America"
Buy the Dip? - KUNSTLER
The dragging-on and infighting and prevaricating may very well set off the collapse of Treasury debt.

[Danny B]

Flying a plane with no landing gear

David Stockman has his answer. And it’s of the combustible variety:
The sweeping Trump tax cuts and fiscal stimulus are dead as far as the eye can see… So now comes the fiscal bloodbath and the day of monetary and fiscal reckoning.
One sign that something has to give — and probably soon — is the widening chasm between stocks and bonds.
Bond yields are at historical lows. Yet stock prices are at historical highs.
Caused by historic "pumping"
"Scott Minerd, global chief investment officer at Guggenheim, now projects that the 10-year yield could plummet to a dour 1.50% by summer.

Meanwhile, stocks bounce right along, merry as a wedding bell.
The Dow weighs in at 20,578 today, up another 174 points. The S&P’s also up 18 today, and the Nasdaq a cheery 54.
Thus, we have two seemingly incompatible market narratives locked in a bitter combat."
Pumping into the bond market lowers the cost of servicing GOV debt. Pumping into the stock market raises the capital gains tax base to ensure more contributions to the tax base.

"Meanwhile, commercial and industrial (C&I) credit growth has slowed to 5.4%… down from 10.3% a year ago.
That’s a rate of decline not seen since December 2008, according to The Telegraph’s Ambrose Evans-Pritchard — the onset of the Lehman Bros. crisis.
The credit airplane crashes without air over it's wings.
"He says that’s “hard to square with the exuberant view of investors that the world is on the cusp of an accelerating economic boom.” This is the result of accelerated drinking of Koolaide.
"Rather disturbing for a global financial system more leveraged than at any time in history." Yep, and only more credit creation will hold it aloft.

"Since 1950, private-sector net worth (real estate and financial assets) has averaged 377% of GDP. Currently, private-sector net worth is 492% of GDP, which is 2.8 standard deviations above the mean." Bubble, bubble, toil and trouble.
https://dailyreckoning.com/imminent-...rket-collapse/

" About 30 percent of the jump in the S&P 500 between the third quarter of 2009 and the end of last year was fuelled by buybacks," Free money to the rescue.
"That measure - the value of the S&P relative to the size of the economy - should be “terrifying” to a central banker" What about the politician standing behind the CBer with a gun to her head?
Paul Tudor Jones Has A Message For Janet Yellen: "Be Terrified" | Zero Hedge

"The fact is the Fed has been tightening monetary policy since December of 2013, when it began to taper the asset purchase program known as Quantitative Easing. " deflating.
"What this amounts to is a reverse QE program or Quantitative Tightening; where the Fed not only reduces the monetary base but also causes MBS and longer-dated Treasury yields to rise.

However, this tightening is occurring in the context of anemic and slowing growth. No longer is the economy slumping along with the sub-par growth of 2% experienced since 2010. GDP growth expanded by just 1.6% during all of 2016 and is growing at a 0.5% annualized rate in Q1, according to the Atlanta Fed Model."
"Once the Fed inverts the curve a brutal recession will be at the door. But our government will not have nearly as much ammunition to fight the economic contraction as it did during the Great Recession circa 2008. This is because the Fed's balance sheet has increased by $3.7 trillion and the National Debt has doubled to $20 trillion. Hence, our government and central bank are already overleveraged.

Our debt-disabled economy with a record $63 trillion in outstanding obligations (340% of GDP), which was fundamental in blowing up the triumvirate of asset bubbles that are extant in stocks, bonds, and real estate, cannot handle increasing debt service payments. Hence, this next recession will be a very remarkable one indeed. "
http://www.24hgold.com/english/news-...ael+Pento&mk=1

Investors read this kind of stuff and believe it. The CBs have created about $ 225 trillion of "money". Asset prices are going to the moon. The FED may very well claim that it is cutting off QE but, all the evidence says otherwise. Besides the FED, there is the exchange stabilization fund and the president's working group on markets. (PPT) Besides these 2 groups, there is a huge flow of liquidity from other CBs. There is a $trillion a year flowing out of China and, about the same out of the Eurozone.
Armstrong made it very clear, "no investor can be successful if he doesn't watch global liquidity flows.
http://www.24hgold.com/english/news-...ael+Pento&mk=1

"According the National Institute on Retirement Security, the median household retirement account balance is a $3,000. For “near-retirement” households, that number only goes up to $12,000! This creates an overall retirement savings deficit of between $6.8 and $14 trillion in the United States!"
"A study conducted by Financial Finesse found that women age 45 face a median $522,000 shortfall for retirement by age 65, whereas men face a shortfall of $267,000. " Both are screwed.
The Retirement Crisis and Women - This is off-the-charts severe...

Clinton was responsible with the repeal of Glass-Steagal, WITH the help of Greenspan.
"The financial crisis of 2008 cost the U.S. economy a staggering $22 trillion."
The banks chaffed under the regulations that limited their predations and gambling. The financial sector has grown from 5% of the economy to 40%. Dumping Glass-Stegal was a way for them to keep growing. The upper loop is continually trying to fight of the contraction that afflicts the lower loop.
Now, they need to get rid of Dodd-Frank.
http://baltimorepostexaminer.com/tru....yC3zOdte.dpbs

The credit airplane constantly needs air over the wings. The only way to supply that is to constantly inflate the credit supply. The finance sector has no choice other than to consume the productive sector to keep the credit plane aloft.

The post 1971 inflation of debt-currencies means that almost ALL assets are somebody else’s debts. Tangible assets that don't carry a finance burden are clear of this. BUT, many tangible assets carry a tax burden.
The FED, ESF and PPT must constantly pump in $trillions to maintain the continuing perception that all these assets have maintained their value,,, except gold. If the assets appear to lose value, the debt attached to them loses apparent value. If that happens, everybody tries to run for the exits.
ZIRP brings deflation in the value interest-earning assets. But, this is all done for a noble cause; it reduces the debt-service cost of the State.
The State is willing to crash the whole system just to preserve the apparent value of it's debt. Sovereign bonds are bought by the CB rather than by investors. How long can the State deflate the interest markets at the same time that it inflates stocks and bonds?
The yield curve gets more crazy. P/E keeps going down. The finance sector needs ever-more liquidity. The parasite is consuming the host. The parasite is running the show.
Once the credit airplane took off in 1971, the whole system was doomed. The plane has NO landing gear.

[Danny B]

Liquidity Supernova, infighting, Trump optimism

The 16th amendment was NOT ratified by enough States. The GOV just announced that it was ratified. The same is true for bond purchases. The FED just needs to announce that somebody, somewhere bought the bonds. The CB and the Treasury can just announce any outcome that they want. For all we know, the money is coming from some undefined, mysterious place.
https://www.youtube.com/watch?v=E0_tfoTTGOQ
The Treasury can just announce that it has X amount of dollars. But, with all the infighting, that isn't likely to happen.

"The already-complicated effort to avert a government shutdown on April 29 is taking on another layer of complexity, with the White House demanding that any spending measure that funds the federal government for the rest of fiscal 2017 contain money to pay for the first stages of President Trump’s proposed wall along the Mexican border.

As things stand right now, the current continuing resolution that gives the executive branch the authority to spend money on things like employee paychecks, contractors’ invoices and other day-to-day expenses that keep the government running will expire at the end of next week"
"Mulvaney called the effort to fund the government “the first real test of whether or not the Democrats — specifically in the Senate — are interested in negotiating, interested in compromising.”
"Everything had been moving smoothly until the administration moved in with a heavy hand,"
Trump Pushes Congress to the Wall to Avoid a Government Shutdown

"Trump says 'we'll get both' a vote on healthcare vote and keeping government open
Trump says 'we'll get both' a vote on healthcare vote and keeping government open"

Congress may have to choose next week between keeping the government open and voting to repeal Obamacare — but President Donald Trump thinks it can do both.

"We have a good chance of getting (health-care legislation passed) soon. I'd like to say next week, but I believe we will get it and whether it's next week or shortly thereafter," Trump said during a Thursday joint news conference with Italian Prime Minister Paolo Gentiloni. "As far as keeping the government open, I think we want to keep the government open, don't you agree? So, yeah, I think we'll get both."
"There is not yet legislative text for the revised health-care proposal, and no vote is scheduled for next week"
"A Republican congressional representative who spoke to CNBC expects Congress to avoid a government shutdown next week. CNBC previously reported that Republicans, who hold majorities in both chambers of Congress, would be willing to adopt a temporary measure keeping the government running for about another week"
Trump news: 'I think we'll get both' health care and funding votes next week

"(ECB & BoJ) have bought $1 trillion of financial assets just in the first four months of 2017, which amounts to $3.6 trillion annualized," It doesn't really matter if the FED has purportedly ended QE. The liquidity flows from other CBs. If the ECB and BOJ bought $250 BILLION a month, just imagine the deflation that would have resulted if they had not. The rubber band just keeps getting wound tighter and tighter.

The balance sheet of the CBs is now equal to 40% of the GDP. And that is just what they report. GDP is just a measure of how much "money" is in the system. It has nothing much to do with productivity.
Why "Nothing Matters": Central Banks Have Bought A Record $1 Trillion In Assets In 2017 | Zero Hedge

The stock market is very similar to a carnival, What can we learn by looking at a carnival, a casino, and the stock market as simple-closed systems? | Zero Hedge

4/21 Britain must pay EU divorce bill in euros – Yahoo!
4/21 UK would be welcomed back if voters overturn Brexit – Guardian
Britain says that they don't owe anything. The ECB is just months from a meltdown. I doubt that they want back in.
4/21 Fed intensifies balance-sheet discussions with market players – Bloomberg NOBODY wants to buy the garbage on their balance sheet.

" Let me print the money and I care not who makes the laws"
What if somebody makes laws that you don't like? The French election may just answer that question.