Economic pressures

[Danny B]

Credit Ice Age.. hot seat for Illinois.. paper money and virtue

Everybody knows that the majority of Americans have no savings. Limitless monetary expansion gave them endless credit so they didn't have to worry about a distant future when they wouldn't be working. The (seemingly) limitless expansion allowed them to believe that the State would always be there to support them.
"Under “natural money” like gold Hulsmann explains, prices tend to fall over time.

So natural money encourages the virtues of saving… thrift… deferred gratification. It sets the mind to the future:
In a free economy with a natural monetary system, there is a strong incentive to save money… Investments in savings accounts or other relatively safe investments also play a certain role, but cash hoarding is paramount."
“The trouble with gold is that it turns its back on world improvers, empire builders and do-gooders,”
"Only a debt-backed system of paper money could finance the great wars, the social improvements and the fevered dreams of the 20th century.

But the same debt-based money also seeped its way into the cultural marrows… got into the bloodstream… and went to work…

The slow grind of saving yielded to lure of the fast buck. Hulsmann says it all encouraged a short-term perspective.
“Fiat-money systems tend to make people insatiable in their quest for ever higher monetary returns on their investments,” Hulsmann notes."
“By contrast,” Hulsmann adds,”in a fiat money society you are more likely to increase your returns by remaining in debt and continuing to chase monetary revenue indefinitely by leveraging more and more funds.”
Debt-Based Money Corrodes Society | Zero Hedge

America had 5 times the retail space per person that France had. We had LOTS of money (credit) and we were going to SPEND it. Plastic included. It is now expected that 25% of the malls will be closing in the next 5 years. The State gooses the upper loop of the economy but, this does little for the lower loop. Consumption accounts for about 70% of the GDP. Consumption is falling and taking out commerce with it.
Record "Wealth" In America? 72% Of US Businesses Are Not Profitable | Zero Hedge

"As UBS' analyst Arend Kapteyn wrote then, the "global credit impulse (covering 77% of global GDP) has suddenly collapsed"
" As a result: whereas back in Jan '16 the global credit impulse was positive to the tune of 3.8% of global GDP (of which China comprised 3.5% of global GDP) it has now fallen back to -0.1% of global GDP (China's contribution is -0.3% of global GDP)."
UBS Has Some Very Bad News For The Global Economy | Zero Hedge
SO, credit growth is DEAD in the water. How are we going to roll-over the existing debt if there is no new credit?
" in the US the correlation between activity and the impulse is very strong, and the lack of credit growth could constrain an acceleration in GDP from weak Q1 levels (the credit impulse suggests domestic demand growth should be close to 1% rather than the 2+% which consensus is currently tracking). "
Keep in mind that the U.S. GOV spends 24% of the GDP. Any cutbacks in GOV spending translate to negative GDP.

The markets crashed in early 2016. It took a LOT of liquidity to drag them back from the abyss. It's happening again.
"Also, if it became clear to them that their recovery was going to fail, they wouldn’t want their globalist friend, Obama, to take the blame — being globalists themselves — and certainly wouldn’t want themselves to take the blame for a recovery that failed the moment they pulled the stimulator’s plug out of the wall. They’d need a scapegoat, and they would love for it to look like the crash was entirely the fault of anti-globalists. So, their private motto, should Trump win, would be “Trump for Chump” if they knew everything was hopeless (as I’ve been saying it is for a long time because their recovery plan was always a horrible solution)."
Is the Central Bank?s Rigged Stock Market Ready to Crash on Schedule? | Zero Hedge

Congress will take an August recess. That will leave little time to work out a debt ceiling.
"The Sooner We Do It, The Better": Congress Should Raise Debt Ceiling Before August Recess, Mnuchin Says | Zero Hedge

Illinois has until July 1 to cough up $billions of payments. Chances are, they will be downgraded and their bond market will crash.
http://www.zerohedge.com/news/2017-0...batch-bad-news

[aljhoa]

You're asking a question that has a long answer. The owners and controllers of the FED are/have been almost entirely jewish.

Herzyl's dream has turned into a nightmare. Israel is just a garrison surrounded with very high walls.

The terror gangs went house to house killing mostly women and children because the men were NOT present. This action and many others like it set the pattern for subsequent genocide.

The jews are starting to catch on that judaism has been hijacked by zionism,

The current claim is that Ashkenazi jews are responsible for all the excesses of warring and power-mongering. I haven't read deeply into this.

The jews have been kicked out of MANY places. What about the Amish, the Menonites, The Jains, the Buddhists? Hopefully, the jews will throw off the yoke of zionism and be forego the dream of world conquest.
I've gone way off-topic but, it is background for our economic situation.

There is a BIGGER, WIDER PICTURE here...and the POWERS THAT CONTROL SUCH AGENDA ARE INTERNATIONAL, GLOBAL.

It is all about a few families WORLDWIDE which control MAJORITY OF THE WEALTH GLOBALLY.

These Families do not operate under any "PARTY NAME" of either Left nor Right, nor Blue nor Red.

They only follow MONEY AND POWER.

Yes a few families control much money and THEIR right and left
arms are the RIGHT and LEFT political system, THEY all do what
THEY are told.

The world has been operating in commerce for 6000 years. Judges, bankers, and lawyers are in the Bible. They have mastered and passed on their secrets for 6000 years (2). Knowledge of how your brain works have been hidden for centuries. These people accomplished control over your thoughts before you were five years old by "legal" drugs (3), the media [television (4) (5) / music (6)] Controlled by a few corporations (7). Then by schooling (8). You have been programmed not to think (9). This was done incrementally over time so you did not notice (10).


What are TPTB?


Al

[Danny B]

Searching for the greater fool

For every irresponsible borrower there has to be an irresponsible lender.
The Ponzi chain;
"The ‘Greater Fools’ Amongst Us
1. When you put zero down on the ‘purchase’ of your house and re-finance it each and every time it goes up in value your leverage is literally infinite and you are playing a Ponzi game hoping a ‘greater fool’ than you will be there to buy your house when the time came for you to buy yet another house that you can not afford.

2. When the bank sells you a mortgage for zero down with interest only for a while, with negative amortization, and an initial teaser rate, the bank is playing a Ponzi game. They are hoping that you will stay employed; that you will be able to afford the eventual increased mortgage payment; that you will be able to sell the house for more than its original value; that you will always honor the terms of the mortgage. They are even ‘greater fools’ than you are.

3. When private equity firms engage in leveraged buy-outs with excessive debt-to-earnings ratios they are Ponzi firms playing Ponzi games – all “greater fools” hoping that future earnings will just grow and grow in future years with no likelihood of declining.

4. When our government issues trillions of dollars of new debt to pay for a severe recession and to socialize private losses it becomes a Ponzi government hoping that the Chinese and other foreign purchases of their debt will continue doing so regardless of the value of the U.S. dollar vis-ŕ-vis their respective currencies and the level of interest paid. How foolish to expect foreign governments to be ‘greater fools’ than ours.

5. When our country spends more than it raises in taxes and thus runs an endless string of current account deficits and becomes the largest net foreign debtor in the world it becomes a Ponzi country hoping that foreigners will be even ‘greater fools’ and continue to finance their conspicuous consumption.

6. When consumers consumed more than their income year after year (i.e. a household with negative savings; a government with a budget deficit; a firm or financial institution with persistent losses; a country with a current account deficit) they are playing the ultimate Ponzi game hoping that some ‘greater fool’ will come along and bail them out.

These households, firms and banks and the government itself can be characterized as ‘Ponzi borrowers’ who need to borrow more to repay both principal and interest on their previous debt and, such being the case, need ever-increasing prices of the assets they have invested in to keep on refinancing their debt obligations. What fools they all are to expect that some ‘greater fool’ knight in shining armor will come along and wave a magic sword and make it all go away. Instead, they all must recognize that they will be forever poorer but, hopefully, more fiscally responsible in the future."
Who Are the 'Greater Fools" Now? - munKNEE dot.com

[Danny B]

Ingrained myopia

Martin Armstrong is a real smart guy. He constantly harps on the idea that you must be completely dispassionate about investing. Somehow, he is completely missing an important facet.
Armstrong; "Well Mr. Gates, I needed 240 employees in the 1980s and 1990s to maintain databases and collect everything around the world. I can do that at the push of a button today. So perhaps we should tax the entire internet and the computers you make along with your software because I can do myself with an assistant what it took 240 people to do 30 years ago."
AND;
"First of all, robots are killing jobs because taxes and demand for benefits are going crazy. Healthcare costs are consuming the net disposable income and government taxes, and the combination is conspiring to lower annual economic growth rates dramatically."
He admits that he has eliminated 239 jobs. He fails to see that those 239 people need State help to survive. He acts like there is an unlimited pool of employment available.

The corporatists are hard at work to do trade agreements and lower wages across the board. They piss and moan about GOV taxes. The French GOV spends 57% of the GDP. Italy,, 50%. What do they think would happen if this support was withdrawn?
The upper loop is all in agreement that non-working people will go back to work if State support is withdrawn.
Armstrong is part of the group that is solely focused on finance and productivity. They seem to believe that consumption will take care of itself.
Armstrong blames the State for extracting too much tax from the finance sector. The State is the entity that pumped in the money in the first place. He sees the finance sector as being distanced from the consumer.

[Danny B]

Financialization... labor vs automation

If the FED raises rates today, this will be somewhat of an indicator of whether or not they intend to crash the economy. Reportedly the FED believes;
"Since then, the unemployment rate has fallen to a 16-year low of 4.3% and economic growth appears to have reaccelerated"
Federal Reserve'''s Interest Rate Announcement Wednesday | Fortune.com

Bill Gross, “New Normal” high debt, aging demographics, and deglobalization along with technological displacement of labor"
"Excessive debt/aging populations/trade-restrictive government policies and the increasing use of machines (robots) instead of people, create a counterforce to creative capitalism in the real economy,"
"So instead of making money by investing in the real economy, savers/investors increasingly are steered toward making money in the financial economy – making money with money"
"The real economy has been usurped by the financial economy."

"But asset prices and their growth rates are ultimately dependent on the real economy and, the real economy’s growth rate is stunted by secular forces which monetary and even future fiscal policies seem unable to reverse."
"Faulty finance-based capitalism supported by the increasingly destructive monetary policy begins to erode, not support the real economy."
"My point in all of this is that making money with money is an inherently acceptable ingredient in historical capitalistic models, but ultimately it must then be channeled into the real economy to keep the cycle going."
https://en-us.janushenderson.com/advisor/make-money/
Why is it that he can't come out and say that; the upper loop can NOT survive if wages are inadequate in the lower loop.

India
2012, "Govt sets target to skill 500 million people by 2022"
2017 "Govt abandons goal of training 500 mn people by 2022"
There is too little recognition that globalism and automation have permanently wiped out labor demand. The Indians don't even know what to train people for.
The upper loop doesn't produce anything so it must depend of bleeding off the wages of the lower loop where all the production happens. There is less and less to bleed off so, the upper loop does more and more printing to survive.
The upper loop is losing a lot of jobs to automation also.
The top levels of the upper loop get even more income (temporarily) as labor's share of the GDP is reduced.
The money that flows to the very top flows AWAY from purchasing power of the middle class. The more that the economy is "financialized", the more that consumption and commerce fall. The corporatists want to reduce wages even further to compensate for the drop in profits from trade and consumption.

India is a very poor country with very low labor rates. If India can't figure out where the job markets of the future will be, what is the West going to do?

Kunstler brings some grim humor; Moby Trump - Kunstler
"Six months from now, nobody will trust anyone or anything, and we may easily see a great deal of kinetic lashing out against each other in the ringing, raging confusion of the political vortex we’ve gleefully ventured into."

[Danny B]

Failing economy... rising rates

6/14 Oil at 7-month low of $44.73 on spike in US gasoline stockpiles – CNBC The consumer is busted.
6/14 Q2 GDP in trouble as business inventories tumble – Zero Hedge
6/14 Drop in retail sales signals uneven consumer spending – Bloomberg 'Uneven", my culo !
6/14 Fed hikes rates despite low inflation, promises balance sheet reduction – CNBC
As the FED hikes, more and more companies and States will find it harder to service their debt. You can bet that the higher prime rate will NOT be passed on to savers.
At this point in time, 72% of businesses are not profitable, Record "Wealth" In America? 72% Of US Businesses Are Not Profitable | Zero Hedge
Here is a graph of FED "tightening" http://www.zerohedge.com/sites/defau.../GPC614172.jpg
The FED will set off a bomb somewhere in the markets, When the Fed Tightens, It Leads to Financial "Events" | Zero Hedge
The Quants and Algos are doing 90% of the stock trades. How will they react when the defaults happen? Just 10% of trading is regular stock picking, JPMorgan estimates

6/14 Are public pensions a thing of the past? – PA Home Page FED GOV has $212 trillion in unfunded liabilities. Throw in another $7 trillion for State and local GOV. Illinois will show us the roadmap.
6/14 Government public pension liabilities are understated by trillions – Value Walk
6/14 Consumer prices unexpectedly fall – Reuters Unexpectedly? Our income has been falling for decades.

ALL of the CBs are printing in unison so that no State's currency will be seen as a safe haven. If a State's currency goes up, it loses export market share. If you look at the U.S. dollar compared to a basket of currencies, the value had been fairly steady.
For all of history, you could buy one ounce of gold with another ounce of gold. The price was static, varying only depending on world turmoil. Here is a graph of the price of the dollar. The chart is labelled, "the price of gold".
http://www.zerohedge.com/sites/defau...nuary-1980.png

The finance loop must constantly inflate the money supply for the non-producers to have an income. ALL of their financial support is passed on to the eventual consumer. They pay the inflation tax also but, all of their income is sourced from inflation to begin with. Labor's share of the GDP has been falling for decades. The finance sector has grown by leaps and bounds, they only survive on freshly-printed money.
A currency note is a claim on goods and services. The CB pulled consumption forward by lowering rates. The banks have pulled consumption forward by creating liar-loans. The banks are now pushing sub-prime RE loans again.
Every debt-note creation without a corresponding creation of new wealth just pumps a bit more air into the credit bubble.
Everyone believes that they hold a great deal of wealth.

GOV must pump in liquidity to maintain confidence. GOV is buying up all the stock and bonds that come up for sale. GOV must keep investors from cashing-out.
The FED managed to keep everything moving during the obummer administration. It looks like they are going to pull out the rug for the current admin. At some point, the great collateral grab is going to take out almost everyone.

[wayne.ct]

The truth in a sea of lies

Much of what you say is, of course, true. And, the bone I pick is not with YOUR word, but the word of others. That bone is the fake facts repeated whenever new GDP numbers are announced, not to mention the idea that the FED has somehow miraculously raised interest rates by the sleight of hand known as the discount rate. Now, to my point about the GDP. The GDP is a BIG LIE. You know this, of course, but it seems you are in the 0.0001 percent. About 300 people out of the roughly 300,000,000 in the US actually know that GDP is not the gross domestic product as the initials indicate. What is included in the GDP? Such things, of course, as the business transacted by banks and "government". What business is that? It is not truly business. If is positively not production or product. It has no business being included in the GDP since it is not really a product. GDP is not a measure of "product" as if, somehow, a service is a product. I can hire a plumber or fix my own toilet or let my toilet leak. It is my decision and I can contribute to the decline of the fake GDP any day of the week by procrastination. At the same time, the pundits and PTB can increase the phony GDP at will by various means using phony paper or electronic means but the biggest fraud is making people imagine the GDP is the gross domestic product when it is not. Perhaps someone can extract the true productivity data from the official tabulation but if they did would I believe it? I don't know I would be able to recognize the true figures if they were available. I am doing what I can and what I believe is best for me and I'm feeling pretty good right now. I can only hope I feel the same a few weeks from now.

[Danny B]

The galloping printing press

The GDP is essentially a count of how much money is in the system. When GOV prints money, GOV counts it as part of the GDP. When GOV spends this money it counts it a second time as part of the GDP. U.S GOV spends about 24% of the GDP. But, it spends debt-money that purportedly must be paid back to banks and investors. The more that it spends today, the more inflation it gets. BUT, as this debt is repaid (extracted from the producing economy), the more deflation we get at some future point.
This future deflation can only be held at bay by pumping ever-more money into the system. There is always a risk that these bonds might not be rolled over. That would bring the dreaded deflation. The solution is for GOV to sell 50 year and 100 year bonds.

There are 102 million working-age people who are not employed. Somehow, the economy is still growing. The take-away from all this is; don't give a moment's notice to ANY GDP figures.

[Danny B]

The unfolding collapse of another empire

Charles Hugh Smith brings great clarity and historical interpretation to present day events. Strauss and Howe wrote very clearly about generational turnings, https://en.wikipedia.org/wiki/Straus...ational_theory
Joseph Tainter wrote very clearly about the collapse of complex societies, https://en.wikipedia.org/wiki/Joseph_Tainter
https://www.youtube.com/watch?v=G0R09YzyuCI
These are not works of speculation or projection. They are the history of the human race. Modern man (whoever that may be) seems to believe that we are on a permanent high plateau of "wealthy society".

Smith,
"Sir John Glubb listed a few others in his seminal essay on the end of empires The Fate of Empires, what might be called the dynamics of decadence:"
" Historian Peter Turchin, whom I have often excerpted here, listed three disintegrative forces that gnaw away the fibers of an Imperial economy and social order:
1. Stagnating real wages due to oversupply of labor Automation
2. overproduction of parasitic Elites
3. Deterioration of central state finances
War and Peace and War: The Rise and Fall of Empires"
"2. The belief in the permanence of the status quo has reached quasi-religious levels of faith. The possibility that the entire financialized, politicized circus of extremes might actually be nothing more than a sand castle that's dissolving in the rising tides of history is not just heresy--it doesn't enter the minds of those reveling in refinement or those demanding more Bread and Circuses (Universal Basic Income, etc.)"

"We can be quite confident that these powerful elites reckoned the Empire was permanent and its power to secure their wealth and power was effectively unlimited. But alas, their fantastic wealth vanished along with the rest of the centralized, over-extended, complex and costly Imperial structures."
"But the complete collapse of the financial system and centralized power is not a war or financial crisis--these are storm waters which the Elites have the wherewithal to survive. But when a tsunami disintegrates the entire structure and carries it out to a nameless sea as flotsam and jetsam, there is no transfer of wealth from the Old to the New."
oftwominds-Charles Hugh Smith: The Dead Giveaways of Imperial Decline

As we decline, the State demands ever-more money to support ever-more State sycophants.
"Jerry Brown is so worried about the environment, but not the people. California is the highest taxed state and they still want to tax people fully upon retirement. California is a complete black hole. The people do not even realize that government has been so corrupt, that every person in California owes $93,000 at the end of 2016 to cover state employee pensions."
https://www.armstrongeconomics.com/w...rthrow-of-usa/

There is more than one way for the State to squeeze out money. "Policing for profit" works very well for squeezing the poor who have no money for a lawyer. http://www.valuesandcapitalism.com/p...ebtors-prison/

There isn't a prayer that pension funds can squeeze out the taxpayer funds to keep going.
http://www.zerohedge.com/news/2017-0...pension-crisis
The environmentalists want to do a big population reduction, https://www.armstrongeconomics.com/w...ve-the-planet/

In their comprehensive annual financial report, The California university system reports that they have over $90 billion stashed away. Walter Burien shows the CAFR reports of some 27,000 GOV entities.
http://cafr1.com/
Collectively, they hold over $ 100 trillion in assets. He proposes that there is NO need for taxes. WE are collectively squeezed by the State. WE have cut back on our birth rate. Is all of this squeezing done in the name of population reduction? It certainly looks that way.
Is the coming crash specifically structured to kill a lot of people, especially the poor? A crash of the pension system will definitely take out the elderly. A crash in the sovereign bond market will definitely destroy the safety net.
Decide for yourself.

[Danny B]

Deceleration and disintegration

"The White House and Congress are running out of time to reach a consensus. Mulvaney and Mnuchin have said the government will only be able to pay its bills into sometime in September if Congress doesn’t act because there is a legal cap on government borrowing, and Congress is planning to take a lengthy recess in the month of August."
https://www.washingtonpost.com/news/...=.38ffc53cab18
You're going to hear a LOT more about this in the coming months.

The bankers blow a financial bubble when current consumption just isn't enough for them. They pull consumption out of the future.
"A failure to understand this relationship underlies a disturbing global tendency in recent decades, in which the appropriation of future wealth and resources for current consumption is increasingly disadvantaging future generations. "
"In a 2010 research paper, entitled “Ask Not Whether Governments Will Default, But How,” Arnaud Mares of Morgan Stanley analyzed national solvency, or the difference between actual and potential government revenue, on one hand, and existing debt levels and future commitments on the other. The study found that by this measure the net worth of the U.S. was negative 800 percent of its GDP; that is, its future tax revenue was less than committed obligations by an amount equivalent to eight times the value of all goods and services America produces in a year."

" The net worth of European countries ranged from about negative 250 percent (Italy) to negative 1,800 percent (Greece). For Germany, France and the U.K., the approximate figures were negative 500 percent, negative 600 percent and negative 1,000 percent of GDP. "
https://www.bloomberg.com/view/artic...ting-the-young

Venezuela is getting worse by the week, Venezuela Defaults On Russia; Is Goldman Sachs Next? | RealClearMarkets

"The U.S. central bank isn’t sure why inflation is staying so low—but it’s raising rates anyway, risking a recession. "
"Rosenberg, who’s more bearish than most economists, points out that recessions occurred 10 of the last 13 times the Fed raised interest rates. "

"In my article 'The Trump Collapse Scapegoat Narrative Has Now Been Launched', I discussed the ongoing and highly obvious plan by globalists and international financiers to pull the plug on their fiat support for stock markets and portions of the general economy while blaming the Trump Administration (and the conservative ideal) for the subsequent crash."
"My position according to Trump's behavior and cabinet selection is that he is aware of this agenda and is playing along. "
" I remember many people asserting that that the economy's progress was unstoppable, that another crash like 1929 was impossible, that the real estate market was an invincible engine. They were all wrong, yet, they were so confident. "

"102 million working age Americans do not currently have a job. This includes the 95 million Americans not counted by the Bureau of Labor because they assume these people have been unemployed so long they “do not want to work”. Note to Janet.

Peak Economic Delusion Signals Coming Crisis

The current and long-running mantra is FREE MARKETS. But, if the FED must constantly increase the money supply by 2% every year, there is no real price discovery. The CB must pump in all that liquidity to support legions of non-producers. The resulting inflation tax is paid for by all the producers.
Free markets and crony-capitalism just can't co-exist.

"population growth began decelerating and the Fed wasn't willing to accept the decelerating consumer growth the "market" was capable of providing. The basis for the expanding pie began decelerating (and is now set to cease entirely)...but the Fed didn't want to live with smaller slices. The Federal Reserve chose to extend growth rates beyond what was otherwise fundamentally possible or sustainable. The Fed wanted the same rate of growth regardless the implications."

"And if we broaden out to the annual growth of the much larger 15-64yr/old US population...its growth has decelerated to perhaps the slowest in the last century. And against the lack of growth, household net worth as a % of disposable income hits a new record high. The Fed is using its policy "tools" to falsely engineer financially what is not there fundamentally."

"Yes, as of 2018 the global 0-64yr/old population with all the income, savings, and access to credit begins declining. This is why central bankers have gone wild and about to go far wilder...pushing asset valuations even further into the (fundamentally unsupported) stratosphere. The Fed and central bankers have feared and subverted the slowing "free market" for decades and now are rightly freaked out by what would ensue if a "free market" were allowed to set prices."
This article has EXCELLENT graphs, https://econimica.blogspot.com/2017/...f-century.html

[Danny B]

Stocks are going to blow so, jump into the market

Madness of crowds. Asset valuations, http://nrimg.ksmobile.net/cmnews/201...40_600_316.jpg
OK, so markets are up to the stratosphere. Now would be a good time to get out. Lots of big-time investors are warning that the markets are going to crash. In a market downturn, it is often difficult to find a "bigger fool" to take bad paper off your hands. The FED and PPT are now playing the "bigger fool" and buying all the overpriced garbage.
Apparently, the mob is afraid of missing out on the profits.
"look no further than the latest BofA "flow show" in which Michael Hartnett reports that capital markets just saw their biggest week of equity inflows since the US election ($24.6bn), another chunky inflow to bonds ($9.0bn), which combines to "the second largest week of inflows to Wall Street ever (largest was $35.5bn in Dec'2014)."
The Blow-Off Top Is Here: Second Largest Weekly Inflows To Wall Street In History | Zero Hedge

Dodgy debt is starting to default in big numbers so,
"Another winner according to BofA: "yield": investors are still piling into "high-yielding" fixed income product with inflows to IG, HY, EM debt = $35bn past 4 weeks, fastest pace since Feb'15 (Chart 2)"
Don't call them "junk Bonds",,,, call them high-yield. China is close to blowing so, gamblers pile in to emerging market debt.
6/16 Kyle Bass still short yuan, says China credit bubble ‘metastasizing’ – Reuters
6/16 China lies again — FX outflows accelerating – Zero Hedge The money is leaving faster and faster.
6/16 Xi risks China’s Lehman moment – Bloomberg

"The world is currently as far from a harmonious equilibrium as it has ever been in history. The masses are ultimately responsible for $2.5 quadrillion of debts derivatives and unfunded liabilities."
"Since the $2.5 quadrillion liabilities can never be repaid or run down in an orderly fashion, we will in the next few years experience a debt implosion which will be totally devastating. Not only will debt implode but also all the assets that have been fuelled by the debt bubble."

"The coming six month period and especially the autumn, is likely contain a lot of shocks. The investment community is totally oblivious of the risks they are taking by having most of their money in assets that have reached stratospheric values whether it is the stock market at a 30 p/e or property prices at bubble values worldwide or bonds at zero percent. All these asset markets only have one way to go and that is massively down. "
https://goldswitzerland.com/will-gol...r-just-150000/

"We naturally cling to the euphoria and glory of a boom; they generate such hope and positive emotions. The bust is no fun at all, a slow cascade of layoffs, insolvencies, moves to cheaper and far less exciting locales, busted dreams and all the mourning that accompanies the shattering of dreams and hopes."
Can We See A Bubble If We're Inside The Bubble? | Zero Hedge

"France is going nuts. They are stopping trains that pass through France and searching people’s bags for cash."
https://www.armstrongeconomics.com/w...ake-them-down/
John Law and the Mississippi Bubble: 1718-1720. John law destroyed the finances of France by over-printing paper money. If you were leaving France, you could not get fresh horses for your carriage until it had been searched for gold.

The banks want ALL forms of money/payment under their control. After Great Depression One, the Glass Stegal act took depositors/savers money away from the investment bankers/gamblers. A few bucks (and maybe a few underage kids) and slick Willie fixed it all for the bankers. Rubin had a big part in it also. He is the one who started the major transfer of gold out of the U.S.
So, all the depositors money went to the gamblers. To add insult to injury, the savers no longer even earn interest. The debt bubble is growing astronomically and underlying wealth is NOT.
The banks definitely do not want tradable wealth like gold to even exist. They have hold down the price of gold fairly well. THEN along comes bitcoin and crypto-currencies. These definitely exclude the bankers. They have a solution,

"Then Congress started expanding those requirements to include other businesses and industries that might come into contact with cash.

Stock brokers. Casinos. Currency exchanges. Precious metals dealers. Pawnbrokers. The Post Office.

According to the law (section 5312 of US Code Title 31), those industries are also required to spy on their customers for the government.

But under this new bill, they want to forcibly recruit even more unpaid spies, including any business which issues or redeems ANYTHING that’s prepaid.

Prepaid credit cards. Prepaid phones. Prepaid retail gift cards. Prepaid coupons.

So, Amazon.com, which issues and redeems prepaid gift cards, will be required under this bill to file reports to the government.

For that matter, TGI Fridays and Chuckee Cheese will also become unpaid government spies since they both issue and redeem prepaid vouchers.

Truly these Senators have figured out how to strike at the heart of ISIS.

Further, their bill wants to pull any business which “issues” cryptocurrency under the anti-money laundering regulatory umbrella."
http://www.zerohedge.com/news/2017-0...sh-and-bitcoin
It had to happen. They just do not want any competing stores of wealth.
"require the Secretary of Homeland Security and the Commissioner of U.S. Customs and Border Protection to devise a “border protection strategy to interdict and detect prepaid access devices, digital currencies, or other similar instruments, at border crossings and other ports of entry for the United States, including an assessment of infrastructure needed [emphasis added] to carry out the strategy.”

[Danny B]

Atlantic claptrap, GM in trouble,,defaults & liar loans.. Illinois

We all know that the one percenters are screwing all the rest of us. Now The Atlantic claims that the top 20% of earners are screwing the other 80%.
"The one percent have well and truly trounced the 99 percent, but the 20 percent have done their part to immiserate the 80 percent, as well"
"the Century Foundation has proposed, say, or baby bonds to help eliminate the black-white wealth gap fostered by decades of racist and exclusionary government policy, as Darrick Hamilton has suggested. (So often, the upper-middle class insulating and enriching itself at the expense of the working class has meant white families doing so at the expense of black families"

"They dominate the country’s top colleges, sequester themselves in wealthy neighborhoods with excellent public schools and public services, and enjoy healthy bodies and long lives. “It would be an exaggeration to say that the upper-middle class is full of gluten-avoiding, normal-BMI joggers who are only marginally more likely to smoke a cigarette than to hit their children,”
https://www.theatlantic.com/business...-dream/530481/
Just socialist claptrap that is gaining a LOT more traction recently. If you are UP, it must be because you pushed somebody else DOWN.

" As a result, GM’s inventory spiked 43.5% at end of May compared with the prior year. It has nearly 1 million vehicles sitting on dealer lots, WardsAuto.com estimates, representing 101 days’ worth of supply, or 23.4% of total industry stock."
Auto liar loans, "The 2015 vintage that Fitch rates is now experiencing cumulative net losses projected to reach 15%, exceeding the peak loss rates during the Financial Crisis."
"Negative equity hits all-time record. The average negative equity in vehicles that were traded in for new vehicles during Q1 2017 has reached $5,195 per trade, the highest ever, according to Edmunds data, cited by AutoWeek. The percentage of trade-ins with negative equity has surged to 32.8%, also the highest ever! "
Your ride is NEVER worth as much as you owe. How could they have so MANY defaults?
And at least one of them, Santander Consumer USA, the top subprime auto lender in the US, verified income on only 8% of the loans, according to Moody’s. So here we go again. Read… Liar Loans Dog Subprime Auto-Loan-Backed Securities
GM Extends Plant Shutdowns As Toxic Trifecta For Auto Loans Fuels Carmageddon | Zero Hedge

London is a huge banking center so, of course, Merkel wants to move it out of London due to Brexit. https://www.armstrongeconomics.com/i...ndon-to-paris/
She also wants total control of the Net, https://www.armstrongeconomics.com/w...n-of-internet/

The State of Illinois is on death watch
https://dollarcollapse.com/debt/welc...s-death-watch/
6/16 The $31 billion hole in GE’s balance sheet that keeps growing – Bloomberg
6/16 UK student loan debt soars to more than Ł100bn – Guardian no mention that it is about $ 1.2 trillion here,,, with a default rate of between 18---45%.... everybody is lying.
The FED had no clue in Great depression one and it has no clue for Great Depression two, https://dailyreckoning.com/fed-repeating-mistake-1937/

"in an ironic twist, in order to challenge the "unofficial" digital currencies that have propagated in recent years, central banks have also been called on to create distinct official digital currencies, and allow citizens to bypass private sector lenders. As Weidmann explained, this will only make the next crisis worse:"
"Essentially, Weidmann warned that digital currencies - whose flow can not be blocked by conventional means - make an instant bank run far more likely, and in creating the conditions for a run on bank deposits lenders would be short of liquidity and struggle to make loans. "
http://www.zerohedge.com/news/2017-0...t-crisis-worse

[Danny B]

C. H. Smith and the anatomy of the debt supernova

C. H. Smith, "As I noted yesterday in Will the Crazy Global Debt Bubble Ever End?, I've used the Supernova analogy for years, but didn't properly explain why it illuminates the dynamics of financial bubbles imploding. "
" A key feature of a pre-supernova super-massive star is its rapid expansion. As the star consumes its available fuel via nuclear fusion, the star's outer layer expands. Once there is no longer enough fuel/fusion to resist the force of gravity, the star implodes as gravity takes over.

This collapse ejects much of the outer layers of the star in an event of unprecedented violence. "
" In other words, debt is limited by earnings. If earnings decline, or fall far behind the expansion of debt, eventually borrowers can no longer borrow more, or refuse to borrow more. "
Stock earnings are dead. Bonds are ZIRP or NIRP. Wages are falling.
"In a deflationary supernova, defaults--and the avoidance of additional debt--are the gravity that overwhelms the forces of expanding debt. Once the losses and risk are visible to all participants, the herd psychology changes, and participants no longer believe that central banks "are now the ultimate power in the Universe."
Herd psychology is just amazing at this point. The muppets actually believe the total BS numbers from GOV. How fast will this turnaround when something pricks their confidence?

"Central banks can create currency and credit, but they can't create earnings or productive real-world wealth. These are the limiting dynamics of any debt-dependent system. "
"The financial implosion triggers social and political upheavals. Recall that one person's debt is another entity's asset. When debt is blown off in either a deflationary or inflationary implosion, all the "wealth" represented by debt is also blown off. "
"And how much did expanding debt boost productivity? Oops! Rapidly expanding financialized (i.e. unproductive) debt is Kryptonite to productivity. "
"when the Empire collapses, the debt-assets of the super-wealthy are blown off in the supernova along with all the other artificial constructs of our corrupt, corrupting, rapacious, exploitive system."
Of Two Minds - How Debt-Asset Bubbles Implode: The Supernova Model of Financial Collapse
Keep in mind that the super rich own GREAT riches. They will lose the most.

[Danny B]

Candidates for the prick

How fast will this turnaround when something pricks their confidence?
So, where will the prick come from and what will it look like?
China;
"12,836 creditor committees by the end of last year, to help manage credit of 14.85 trillion yuan." I'm sure that they are all honest, competent people.
NPL, "Bass said he believes non-performing loans at Chinese financial institutions are running at a 20 percent rate, not the 1.7 percent rate that has been widely reported."
"Growth has enough momentum to get the economy to its 6.5% CY target, with 6% probable in the second half. That ought to be enough to stop too many dead bodies floating to the surface."
This "growth" includes the money that China pumps into the economy. Actual productivity is falling and negative.
"Thus, if I were him I’d be using the Australian dollar as a Chinese proxy short, given the reform scenario sees both Australia’s commodity and housing markets simultaneously adjusted.
There will be no save for the Aussie dollar."

I've already posted the dreadful numbers for credit growth in China. It is definitely a candidate for the big prick.

David Stockman has his own ideas;
"I refer to the Donald, of course, and the fact that he is truly the Great Disrupter.

He is not only impetuous, mercurial, undisciplined and unpredictable. But for reasons I will elaborate below, totally clueless about how to manage his presidency or cope with the circling long knives of the Deep State which are hell bent on removing him from office.

Accordingly, the single most important thing to know about the present risk environment is that it is extreme and unprecedented. In essence, the ruling elites and their mainstream media megaphones have arrogantly decided that the 2016 election was a correctable error."
"So it is no understatement to suggest that the S&P 500 at 2440 is about as fragile as the “market” has ever been. Any pinprick could send it to a bubbly grave. It’s the mighty Orange Swan that will break the casino like never before."
"At the kind of bubble inflection points of which Kass speaks, the punters become not only stupidly complacent, but thoroughly delirious."

"In that sense, it is a generational high. The casino is infested not only with new-age snowflakes who have never seen a dip of more than 7%. But also complacent veterans of the entire era of bubble finance who have generated untold financial wealth by riding the bull from one bubble to the next, and now remain fearless with a vengeance."

Now, we get to the important part;
"In that context, here is what will take the Donald down, and it’s not some new smoking gun about RussiaGate. Instead, it’s actually the growing possibility that he will do the right thing when the Treasury runs out of cash around Labor Day, and there is no capacity to assemble a majority in both houses to raise the debt ceiling by trillions."

"I’m referring to the dreaded “A” word. That is, use of the President’s constitutional authority to “allocate” the incoming revenue flows — which are running about $700 billion per year lower than outlays — to what he determines are the government’s highest priority purposes.

Undoubtedly, among these would be paying interest on the debt, sending-out the Social Security and veterans checks, paying military contractors and payrolls and the like.

Needless to say, resort to “allocation” would be the ultimate sin in the eyes of the bipartisan establishment. They would instantly start bellowing from every corner of the Swamp about an unconstitutional power grab by the White House.

And the mainstream media would go to DEFCON 1 about the alleged unlawful and dictatorial actions of a President who should never have been in the Oval Office in the first place."
"When asked what those backup plans would be, Mnuchin referred to them as “Treasury secretary’s “super powers.”

I say, more power to him — even if it is the 50,000 pound pin that punctures the Great Bubble now at hand." Now that is a BIG prick.
"On the other hand, I’m quite confident there is only one other alternative — a prolonged government shutdown and a thundering breakdown of governance and all government function."

Congress must somehow remove Trump in the next few weeks OR, they will go into complete gridlock and shutdown to block him. There are alternatives.
Melania has moved into the White House because secret-service could no longer protect her in any other abode. "They" are determined to remove Trump,,, or worse.
The deep State is so frantic to preserve their wealth, status and position that they blindly work to destroy Trump. They have NO conception or consideration for the guaranteed blowback.

Keep in mind that all the presidents celebrated on Mt. Rushmore were war presidents. The hildebeest had visions of joining them after her successful trouncing of Russia. Trump will never be on Mt. Rushmore but, he may very well be the president who ends the cycle of war.

Venezuela was a moderately homogeneous society. They were formerly very rich and now, are very poor. They had good wages and social programs and, now they don't.
"The body says some 60 people were recorded as killed in lynchings in the first five months of this year alone.
Last year there were 126 such killings "
"Their aim is to kill the person before the police arrive," says Marco Ponce, coordinator of the Venezuelan Social Conflict Observatory (OVCS)."
https://www.yahoo.com/news/venezuela...094329281.html

America is turning quite violent and is far less homogeneous racially than Venezuela. The removal of GOV programs under a shutdown can be expected to make things much worse.
Summer of Hate: The Arrival of the Crisis and The Second Civil War? - Stock Board Asset

6/17 The politics of ending Europe’s stimulus – Bloomberg sure, end the stimulus and,,, Italy crashes within 3 hours.
6/17 Petrodollar system in trouble – SRSrocco Report
6/17 Forget coal, solar will soon be cheaper than natural gas power – Think Progress
6/15 Wind, solar surpass 10 percent of power production – Chron

Don't even mention nuke power. The rise of solar will absolutely trash the financials that are heavily invested in carbon. If even natural gas can't compete, what chance do the others have?

It is well known that Hitler's Germany had to be trounced because he bypassed the international bankers. Evidently, the same was true of Japan many decades ago. They just produced the money that was needed for the producing economy, NOT for speculation.
Start watching at 3:45, https://www.youtube.com/watch?v=mH9VG0iUmug
Japan has HUGE debt at the moment. In the Vid, it is mentioned that Japan owes the debt to themselves and have re-created the system that previously worked so well for them.
China has a huge debt and it is starting to look like they will just carry the debt and print what they need,,, independent of the international bankers.

The Anglo-American curse that originated in London and transferred to other European capitals centuries ago is winding down. There is no question that the debt bubble will blow. The Central Banks will try to maintain their monopoly. If Japan and China use debt-free money, the rest of Asia will follow. The FED can no longer use gun-boat diplomacy to hold down all the other economies.
It LOOKS like a war is to be started up against Iran. BUT, isreal is the hostage, "Israel anticipates 230,000 incoming missiles during next war "
The sabres will rattle,,, the deep state will block Trump,,,The markets will go up in smoke.
Make no misteake , Central banks have just one purpose. Remember, war is the most profitable enterprise for them.
"Early central banks were commonly set up to provide
finance to help fund wartime governments." Page 3
"The gold standard was overwhelmed by the financing needs of governments during World War I." page 4
This is a very informative paper authored by Weber, Trichet, et al.
http://group30.org/images/uploads/pu...ralBanking.pdf
The very educated authors are very convincing that we MUST have constant monetary inflation for the system to "work"
It is all so logical and convincing.

[Danny B]

Hugo Salinas Price

Where Are We Today?
Hugo Salinas Price

The US has been regarded as the West's leader since WW II. The US led with the objective of international cooperation to achieve orderly growth and prosperity for the countries led by the US.

Now suppose you have a football team, and the quarterback comes out and says, "Quarterback is First!" and scolds members of his team, and insults one of his team-mates and sends him to the bench in disgrace. How long is that team going to hold together? Not very long, I would say.

The deeper fact is that the status of the US as the world's leader, since the end of WW II, has ended and is finished. Mr. Trump's own plan to "Make America Great Again" is sending, by his own admission, a silent message: "America is no longer great."

If the US does actually clamp down on imports, as Mr. Trump envisions, and begins to hide behind economic protectionism through taxes on imports in true "developing world" fashion, then the US will be blocking the spring from which the rest of the world has been getting its dollars; there will be a scarcity of dollars in the rest of the world and that will mean world deflation with all its consequences: a rash of bankruptcies around the world for lack of dollars to service debt.

The US simply cannot have it both ways: it cannot issue the world's money, and indulge in economic protectionism. If the US goes for economic protectionism, then US dollar will, sooner or later, cease to be the world's money as steps are taken to replace the dollar.

In human affairs, when one leader is gone, it is not long before another leader takes over.

As the US passes from the scene as the world's leading country, who will inherit the throne of world leadership?

With the defeat of Napoleon Bonaparte's combined French and Spanish fleets at Trafalgar in 1805, Britain obtained mastery of the world's oceans and of world trade for the next century and more. Later, with the defeat of Napoleon at Waterloo in 1815, world leadership settled on Great Britain.

With the 1945 defeat of the Axis armies in WW II by the combined forces of Great Britain and the US, world leadership passed from Great Britain to the US.

As 72 years of world leadership on the part of the US fade into history, who will take over world leadership? I suggest it will be Eurasia: Europe, Russia and China in economic cooperation.

Will the transfer of leadership take place peacefully, or will it require a WW III?

I do not think that anyone in the US wants a nuclear war with Russia and China. However, a great economic interest group in the US - the Military/Industrial/ Congressional Complex (as President Eisenhower initially identified this political machine) - lives on a gigantic yearly flow of funds from the US Government budget, and this flow depends on the perceived threat of an enemy for its existence. "No enemy" would mean no hundreds of billions of dollars a year for the coffers of this vast interest group.

This is why Mr. Trump's initial proposal to establish better relations with Russia has been scrapped: the Military/Industrial/Congressional Complex has a vested interest in having Russia as an enemy.

The great danger for the US is that while no single American or group of Americans may actually want a nuclear war with Russia and China, some small accident may rapidly scale into outright world war.

In the past, Russia suffered the loss of tens of millions of its population because it patiently waited for its enemy to attack. Russia learned a very painful lesson by being patient. If war appears to be the definite plan on the part of the US, it is possible that Russia may strike the US first.

This is where we are today."


"Bonds Will Not Turn Into a Noah's Flood of Cash
Hugo Salinas Price

I enjoyed talking with Greg Hunter, of Real News from Greg Hunter’s USAWatchdog: Economic News and Breaking News Reports over a Skype Interview - one of the marvels of our time, where we can see and talk with friends who are thousands of miles away from us.

Unfortunately, Greg caught me off balance at the beginning of our interview, with a question for which I was quite unprepared - I had been expecting to talk about silver and its possible monetization in Mexico.

The question which put me in a momentary fix was, in general and not word-for-word: "What about that enormous black debt cloud that you have said is hanging over the world? What happens when the debt cloud begins to rain debt on the world?"

Well, when clouds release their moisture, it rains. But when a debt cloud is "saturated" so to speak, it does not rain cash, contrary to what I said in the spur of the moment: "We shall have a Noah's flood of cash." My bad!

No, when at some point the total of world debt hanging over humanity has reached a point where the owners of that debt - which consists mainly of bonds - are going to want to sell their bonds, there will be more sellers of bonds than purchasers, and their prices will begin to fall.

At some point, the initial fall in the values of bonds will cause fear that the fall in price may continue, and more sellers will show up.

In short order - fear is very contagious! - sellers will far outnumber purchasers of bonds and their price will collapse - many of the bonds will become worthless, others will lose a large percentage of their value.

The bond rout will wipe out multi-trillions of dollars of what the bond holders thought was wealth.

That is what I think will have to happen, at some point. Bonds will not turn into cash, they will turn into dust.

We won't have a "Noah's flood" of cash. We'll be stuck in the middle of a Sahara Desert of worthless bonds."