Economic pressures

[Danny B]

The fall of the rial,,, pension problems,, ZIRP poison

Everyone knows that the dollar has lost much of it's purchasing power. The Iranian Rail has gone from 70 to a dollar in 1979 to 60,000 now.
"The rial has lost a third of its value this year alone."
"Rouhani’s administration declared on April 9 that it had set a single rate for the dollar, at 42,000 rials, and anyone carrying more than 10,000 euros ($12,345) would be arrested.

Tehran police reported that 12 “currency market schemers” had been arrested. Ayatollah Nasser Makarem Shirazi called for the execution of those “disrupting” Iran’s forex market."
https://en.radiofarda.com/a/iran-ban.../29168476.html

ZIRP is never done because it is so disruptive. They did it anyway. BUT, it only helps a few sectors for a period of about 2 years. Then the poison spreads through the whole system. By that time; the problem that called for ZIRP has only gotten worse. In the meantime every weak sector has become completely dependent on the drug/poison. State GOV is closing down everything and laying off everybody to meet pension payments.
https://dollarcollapse.com/pension-f...ension-news-2/
https://www.washingtonpost.com/busin...=.464f2d30ff3e

"Of the past 3,400 years, humans have been entirely at peace for 268 of them, or just 8 percent of recorded history."
https://www.nytimes.com/2003/07/06/b...about-war.html
Russian sanctions will cut off rare earth exports to America. Buy your Neo magnets right away.
Russia Drafts Tit-for-Tat Sanctions on America - Stephen Lendman
North Korea has $15 trillion in rare Earths but, I don't think that we are going to see them.
"Today, 247,977 units — equivalent to more than 11% of all rental apartments in New York City — sit either empty or scarcely occupied, even as many New Yorkers struggle to find an apartment they can afford."
http://www.nydailynews.com/opinion/2...icle-1.3892656

4/16 CBO budget projections worsen at alarming rate – Mish
4/16 Oil prices vulnerable to ‘super spikes’ again as geopolitics heats up – CNBC

[Danny B]

Notes from Armstrong

Treasury secretary Connaly said, "the dollar is our currency but, your problem. The dollar is spread all over the world.
"The Sovereign Debt Crisis is on schedule to be noticed starting here in 2018. We have 13 governments now who are already in default of their debt payments. There are more than 100 nations who are on the verge of a debt crisis. "
China’s debt to GDP is more than TWICE that of the United States. DEBT is our worst enemy and there are no viable solutions coming forward because anything implied by others is tinkering with the current system. There is no solution is valued circles, other than mine, which calls for the complete revision of the debt system."
"I fear that all we can do is protect ourselves. Nobody is willing to listen to me. When they will, it will be too late. Hence – the crash & burn becomes unavoidable. "
https://www.armstrongeconomics.com/w...119-countries/

This may sound like a lot of hubris on the part of Armstrong but, I believe that he AND his program are the ONLY solution. "Nobody will scrap the system before it crashes. It is against human nature."
PLANT A GARDEN !

Years ago, new drivers were taught to use the transmission on a downhill,, to preserve the brakes. Gradually, over the years, brakes became better and, transmissions weaker. New drivers are taught to use the brakes and, not strain the transmission.
Years ago, banks were eager to loan money to the State. The State had endless money because of it's taxing authority. 48% of Americans pay no income tax. 51% of Americans receive a check from GOV. From beggars to defense contractors. <96 million> people of working age are not in the labor force. Corporate taxes have been rolled way back. The FEDs pumped tons of money into the upper loop of the economy.
Part of this is returned in the form of taxes.

Just the same, tax collection is way down. The compounding nature of GOV debt is starting to runaway from the shrinking nature of tax collection.
"I have been warning for years at the World Economic Conferences that interest expenditures will reach the point that they will crowd out everything else. Well at last, as we enter 2019 and the War Cycle heats up, interest expenditures will now EXCEED even military spending. Welcome to the SOVEREIGN DEBT CRISIS. "
"The risk is beginning to become obvious as interest expenditures will crowd out everything other areas of spending. Governments will try to keep the debt revolving by raising taxes and this will only further reduce both the economy and our living standards. We are being walled-in by our own debt with no place to go except default if we do not act NOW!!!!!!!"
https://www.armstrongeconomics.com/w...-our-own-debt/
https://www.armstrongeconomics.com/w...-our-own-debt/
Armstrong is going off to Europe to try to save the world. I do not say this in jest. The EU project has poisoned Europe and they will NOT work together. He has to try.

Armstrong claims that this is a worldwide crash of socialism. The French government spends 57% of the gdp into circulation. Can that be called anything BUT socialism? Remember that they spend all this money for CONSUMPTION. Money borrowed for consumption is LOST. Armstrong is going to try to get them to cut WAY back on State expenditures and extend repayment terms. The alternative is sovereign debt collapse. They won't agree to do this. That means national default.

[Danny B]

Weak dollar,,, more gold,,, less silver

Trump is way out of his area of expertise. He is listening to all the wrong people. Trump said that he wants a weak dollar. Well, he has a weak dollar.
https://www.zerohedge.com/sites/defa...%20%281%29.jpg
A weak dollar helps exports but, it doesn't attract foreign capital. Trump,put sanctions on Russia that crashed markets. Then, he complained that the Russian Rouble was falling.
https://www.zerohedge.com/news/2018-...not-acceptable

“Closing Panama Tax Haven Will Require Fighting the Most Powerful Lobby In the World,” The Real News Network, April 14, 2016.

Economist Michael Hudson says oil and mining industries and the State Department created Panama and Liberia for the express purpose of tax evasion."
Laundering Havens for War Budgets | Michael Hudson

"According to Forbes, the Federal Reserve in 2008 – under the oh! so responsible watch of the Ashkenazi Jew Ben ‘Helicopter’ Bernanke – single-handedly allocated “over $16 Trillion to corporations and banks internationally, purportedly for ‘financial assistance. ”

Other sources put it at close to $30 Trillion, twice the size of America’s GDP. And none of that money has been accounted for. These transactions were only discovered after a “quick audit” that then Congressman Ron Paul miraculously managed to squeeze out of the Fed"
https://bipworldview.wordpress.com/2...ial-cataclysm/

"Now this gets directly to the issue of gold. Watch very carefully when in a week or so the first petro yuan contract comes due on the Shanghai Exchange. You know that countries that sell their oil to China will have to get paid in yuan. If they are a bit shaky on accepting yuan, they can hedge against yuan by taking delivery of gold (not paper delivery but real gold) on the Shanghai Gold Exchange"
Sloppy reporting. If they want to exchange Yuan for gold, the gold must be sourced on the open market. China isn't going to cough up any domestic gold.
https://www.zerohedge.com/news/2018-...C0%2C0%2C0%2C0

The price of gold has being driven down constantly for years. The Chinese have been using U.S. treasury bonds to pay for purchase of gold mines and all other natural resources. If gold were to go up, the Chinese wouldn't be able to buy it and the mines so cheaply. It is in China's best interests to hold down the price of paper-gold because paper gold is used for price discovery of physical gold.
America sends over no-cost dollars to exporters and, gets back lots of good stuff in return. China and Russia print no-cost currency and, get gold in return. They were previously very cautious about not driving up the price. They have bought a LOT more in the last couple of months.

4/16 Global debt bubble hits new high – quadrillion reasons to buy gold – GoldCore
4/17 Global silver scrap supply falls to 26-year low – SRSrocco Report It's in somebody's pocket
4/17 The first domino falls in Illinois… 400 more funds to follow – Zero Hedge
4/17 Extravagant unfunded pensions for state, local bureaucrats – CNS News
4/17 LA schools facing $15 billion debt for retiree health care – Reason
That's just the schools.

[Danny B]

The collapse of CoCos

OK gang, It' reading time again. The banks LOVED loaning money to the State back when it had a huge tax base. The tax base has slipped away at the same time that compound interest is really stacking up. Loaning money to the State is now seen as very risky.
If you pick up a history book and give it a good read, you read about a long chain of events. You RARELY get the idea that all of history is cyclical.
Strauss & Howe wrote Generational Turnings about these cycles. Burning Platform has 2 recent articles about The fourth Turning. It is worth reading both article to get a feel for where we are in these cycles.
Part one, https://www.theburningplatform.com/2...r-is-coming-2/
Part two, https://www.theburningplatform.com/2...ming-part-two/

Current FED head Powell wrote the book on bail-ins where the bondholders and stockholders will be bailed-in to rescue the banks. You can imagine that those 2 groups are nervously eyeing the door.
"According to one recent Bloomberg article, the next crisis will begin in the private bank debt market.

The specific culprit is a kind of debt called “contingent convertible” debt, or “CoCos.” These bonds start out like ordinary debt, but a bank in distress could convert them to equity to improve its capital ratios.

The problem is that bondholders know this and start dumping the bonds before the bank can pull the trigger on the conversion clause. This can cause a run on the bank and trigger cross default clauses in other bonds. Far from adding safety to bank capital structures, CoCos can make banks more unstable by igniting panics."
"The bottom line is that today, systemic risk is more dangerous than ever. Each crisis is bigger than the one before. Too-big-to-fail banks are bigger than ever, have a larger percentage of the total assets of the banking system and have much larger derivatives books."
"These kinds of sudden, unexpected crashes that seem to emerge from nowhere are entirely consistent with the predictions of complexity theory.

In complex dynamic systems such as capital markets, risk is an exponential function of system scale. Increasing market scale correlates with exponentially larger market collapses. "
https://dailyreckoning.com/heres-nex...is-originates/

[Danny B]

The BLOB State,,, kingdom divided,,, public retirement funds

Definition of the deep state, "What is this mysterious “Deep State?” How does it operate? Who is behind it? Well… it depends.

An instructive article in the “Moyers & Co.,” by pundit Mike Lofgren, addressed the question under the heading: “Anatomy of the Deep State?” He wrote: there is “another government concealed behind the one that is visible…a hybrid of public and private institutions ruling the country according to a consistent pattern…The state within a state is hiding mostly in plain sight…In terms of its scope…the American hybrid state, the Deep State, is in a class by itself and relentlessly well entrenched.”

I need a new term and, have settled on the BLOB STATE.
The blob state is not the power-mongers who start wars and ruin economies. The blob state is comprised of the millions of paper shufflers who sit in government offices and make miserable the lives of the average person.
"School administrators' average salaries in New York over the past three years have increased more than four times those of public school teachers in the Empire State. For this school year, wages for administrators jumped to $146,652"
The blob state has a lot of administrative control over things like retirement packages.
"The really scary part is that pension debt keeps increasing despite the fact that taxpayers' contributions to state-level pension plans have doubled as a share of state revenue in the past decade."
America's Sinking Public Pension Plans Are Now $1.4 Trillion Underwater - Hit & Run : Reason.com
The public pensions are $1.4 trillion in the hole. So, how are they going to pay for pensions? Remember that the court system is part of the public administration.
This is a good article. The courts have insisted that pensions can't be diminished,,, Natch! The courts have now ordered / allowed the State controller to GARNISH the tax revenues of the municipality.
https://www.zerohedge.com/news/2018-...e-funds-follow
Only 4 States are adequately funded. Nationwide, we will see public funds raided constantly to fund the retirees of the blob state. I'm not talking about teachers and cops. I'm talking about the huge "overburden" (worthless dirt) of administrators that had to be managers because they had no abilities.
This is the slowly unfolding war between retirees and workers.

In Matthew 12:22-28, Jesus tells the Pharisees: Every kingdom divided against itself is brought to desolation, and every city or house divided against itself will not stand.
"North Korea is watching. And you know what it sees? It sees a house divided. It sees an America that is perhaps as divided against itself as it was prior to the civil war. An America that elects a president and then initiates multiple investigations against him that are kept going seemingly indefinitely. An America where hatred of one’s fellow countrymen and -women has become the norm.

An America that has adopted a Shakespearian theater as its political system, where all norms of civil conversation have long been thrown out the window, where venomous gossip and backstabbing have become accepted social instruments. "
"The attack on Syria is seen as a sign of weakness. Because there was no need for it. "
"What the world sees is bluster emanating from a deeply divided nation (and we haven’t even tackled Britain)"
That’s how all empires end. Complacency and division. That is what North Korea sees when it watches America, what China, and Russia see. And they may even know how Jesus put it. He didn’t just say a kingdom divided would become less powerful or wealthy, he said:
Every kingdom divided against itself is brought to desolation."

It's not just America, https://www.quora.com/Why-do-some-ul...flag-of-Israel

4/17 Optimism of manufacturers “plunged” the most ever: NY Fed – Wolf Street
4/17 How Libor’s surge will help pop the global bubble – Real Investment Advice
The bail-in is like a hyena hiding in the bushes. Nobody knows who it will eat. The banks don't want to lend to each other.
4/17 Macron warns of European ‘civil war’ over growing east-west divide – Yahoo! He finally noticed.

[Danny B]

Banks fading away

Bankers don't actually produce anything. But, it is a lucrative business and everybody wanted to get into the business of renting money. The banks had their depositors money but, everybody else had to use personal money. When money no longer had any intrinsic value, investors could create it willy-nilly. But, when money had no value, all it became was information. This made it very easy to create far more "information" than there were tangible goods represented by this information. In the information age, there is little need for banks.

Banking sector will be ground zero for job losses from AI and robotics
https://theconversation.com/banking-...robotics-83731
Future of Fintech: Will the Banks Disappear?
https://www.smeportal.sg/content/sme...Disappear.html
“I Expect That Within the Next 10 Years, Probably Half of the Banks Will be Gone”
https://promarket.org/expect-within-...nks-will-gone/

Without the recent tax reduction, bank earnings would have been down.
https://dollarcollapse.com/banks/no-...k-left-behind/
Super Mario Draghi is from Goldman Sachs. He was installed to make sure that the ECB rescued all the private banks. Having mush in his head, instead of brains, he never considered that NOBODY could rescue the ECB.
As a typical banker, he is only concerned with creating money. He has no particular concern about creating wealth.
https://www.armstrongeconomics.com/w...diate-horizon/

4/18 Yield curve continues to collapse – Zero Hedge
4/18 Morgan Stanley warns investors that best times are over – Bloomberg
4/18 Fed’s Williams: Inverted yield curve is a powerful recession sign – Bloomberg
4/18 Retail bankruptcies just hit an all-time high — and these 18 are next – MSN

[Danny B]

Storing labor &amp; “coincidence of wants”

Here is an article where Lloyd Blankfein (doing gods work) says that the CBs are buying up all the risky assets.
https://www.zerohedge.com/news/2018-...l-risky-assets

Here is an interesting comment;
"The risky assets are the low hanging fruit. If I create a fiat money with no intrinsic value then what do I care if the paper goes bad? All I care about is how much labor-value can be harvested from the faux asset that I paid nothing for in the first place.

If I had to pay in gold, then and only then will I have a problem with risk. My gold required labor to produce.

It blows me away that people can't wrap their minds around the lack of authenticity of paper. It's obsolete and was so decades ago. You aren't worth a bag of puss on paper !!! "
If you read the annual reports from 38,000 State bodies, they already own very large chunks of all the markets.
CAFR1 Home Page
The State steals our money AND prints free money to buy up real assets. Just how much of the overall economy is owned by the State?

"Many consider Gold to be a barbarous relic of the past. Others say gold offers a poor investment return.
But you know what gold does best? It forces bankers and the government to rob you out in the open where everyone can see.

The current monetary system was designed specifically to hide the theft of your wealth from you."
"Much to the surprise of US citizens even the US Constitution declares that only gold and silver can be used as money in the United States:"
So what makes gold and silver a good store of value?

The problem that the laborer wants to solve is how does he store the value of his labor?
The reason the laborer wants to store the value of his labor is because of a problem called the “coincidence of wants”.

You live in a system where dollars (or other fiat currency) are used as a store of value, but let us imagine a system that does not yet have a store of value, so that we can better understand the problem that dollars are trying to solve.

A carpenter who makes tables and chairs from wood can save up the tables and chairs he makes, store them in a warehouse, and later trade them for food.
When the tables and chairs are in the warehouse they represent a store of the value the carpenter’s labor that he put into making them.
Later he can trade the tables and chairs for other items, such as food.
But what if the farmer does not need tables or chairs and the carpenter is hungry?
The problem of having an item to trade but not being able to find someone who “wants” the item is called the “coincidence of wants” problem.

Since food products tend to spoil relatively quickly the carpenter has to find someone to trade his tables and chairs to when he is hungry.
To solve the problem of trade and trying to find people who want your items exactly when you need some particular item people choose to use an “intermediary” item as a “store of value.”
The carpenter can trade his chairs for gold whenever someone wanting chairs shows up at his door, **and** at any later time the carpenter can, when he is hungry, trade his gold to the farmer for food.

It is the farmer’s willingness to trade food for gold and the carpenter’s willingness to trade tables and chairs for gold, that solves the “coincidence of wants” problem.
It is hard to believe today, but US dollars were originally receipts for gold that you had on deposit at a bank.
Until 1914, US dollars were receipts for gold and silver. They were receipts redeemable on-demand in gold or silver.
Why does that date ring a bell?
https://www.finitespaces.com/2018/04...your-children/

Gold is a store of value for the laborer, especially, the farmer, because his produce deteriorate rapidly. Centuries ago, the banker stored deposits and, matched up people with excess wealth and, people who needed capital for investment.
When man operated draft animals or machinery, he received the excess labor value that resulted. As more and more of the machines are owned by capital, rather than by labor, the excess value created only benefits capital. This creates an ever-increasing mismatch between the consumptive power of the laborer and, the tangible wealth created by capital.
Capital attempts to make up for falling business by reducing it's costs,,, like labor. The State tries to step in and fix things by pumping in more debt money. The State is underwriting capital by buying up shares. At the same time, the State is trying to underwrite labor with a safety net. This is a temporary fix to try to save labor.

[Danny B]

Fiscal gap,,, yield curve,,,smoke and BS

There is definitely a lot going on but, it is difficult to see past the fog of BS. When Trump tries to make America first, he is forcing globalism out of the top spot. The globalists don't like this. They will break and ignore ANY law if it helps to bring down Trump. https://www.armstrongeconomics.com/u...cracy-v-trump/

The British House of Lords is making a big move to rescind Brexit. European socialism is crashing so, the answer is to raise taxes.
https://www.armstrongeconomics.com/w...sm-on-germany/

The person who produces a good or service wants to protect and store the value of his labor. The person who produces nothing of value must steal from the producer. Paper money is the vehicle for this theft. Socialism is an organizational tool to do this most effectively.
The socialists in Venezuela put their cronies in charge of the oil industry,,, ejecting the experts. Unfortunately for the Venezuelans, the price of oil fell badly. The socialists failed to pay the oil workers and, they hyper-inflated the money supply. The results were predictable.
https://www.zerohedge.com/news/2018-...-disaster-zone

"the IMF again recommended that countries raise taxes and lower public spending to decrease annual borrowing and get the burden of debt on a firmly downward path now that there is no need for fiscal stimulus."
"In fact, reading the IMF report between the lines, it is nothing more than advance scapegoating for the inevitable global debt crisis that is coming, and which not even the IMF is hiding any more. What is most comical - if completely expected - is that the IMF is now blaming it all on Trump: not on generations of economists who steered the world to the point where there is more than $3 of debt for every $1 of GDP, and not on central bankers who flooded the world with debt so that the richest 0.01% can be richer than their wildest dream. Nope: it's all Trump's fault."
"The IMF said that the interest burden has doubled in the past ten years to close to 20% of taxes,"
https://www.zerohedge.com/news/2018-...tes-stands-out

The IMF makes no mention of the fact that; the giga-tons of liquidity pumped out by the private banks is what got us to this point. The State did it's share of borrowing megatons of debt to buy votes and make wars.
The private sector was offered credit that it did not merit. They act surprised when the defaults hit.
The Global Economy Is Slowing, Credit Card Defaults Hit 6 Year High…. Saxo: The Word Economies Are Synchronically… Falling! – Investment Watch Blog

The worker wants to store the value of his labor. The parasite uses debt-money to steal it. This only works if the producer pays back the loan. The money-renting business got too crowded and, many debt creators loaned to people who could not repay. The mother of all defaults will be when the State can't repay.

https://www.armstrongeconomics.com/w...e-dogs-of-war/
Armstrong, "Trump is misguided on Trade, as every other politician has been since World War II. That has awakened the sleeping giant of China, whose debt to GDP exceeded 250% going into the end of 2017 compared to 103.7% for the USA going into the end of 2017."
Ben Carson’s claim that the U.S. owes $211 trillion beyond the reported federal debt
The more complicated figure he cites in his ad is the $213 trillion “fiscal gap” Carson claims is in addition to the $18 trillion debt. This figure comes from a Boston University economics professor, Laurence Kotlikoff, who put the number at $210 trillion, $3 trillion less than Carson’s figure.

"Take for example the estimate of the fiscal gap, which increased by one-third from 2015 to 2016.

The fiscal gap is a key snapshot of the government's financial health that estimates the tax increases and spending cuts required to maintain the current ratio of national debt to GDP. That's a more meaningful number than the national debt alone because it also takes into account money coming into the government's coffers, and the implications on future public policy."
"If entitlement obligations were counted, the true national debt figure would actually be around $100 trillion, as opposed to the government's current $20 trillion figure. The more holistic $100 trillion number breaks down to a $308,000 burden for every American taxpayer. These bills are real, and they'll come due one day."
https://www.investors.com/politics/c...obody-noticed/
So, cut out all entitlements and, we'll be good.

Here is a graph of the yield curve. Every time that it collapses, we get a recession.
https://www.zerohedge.com/sites/defa...18_6-53-15.jpg
You can get a feel for where we are now, https://www.zerohedge.com/news/2018-...inues-collapse

The crash is blamed on the failure of capitalism or the failure of democracy.
https://promarket.org/democracy-fail...-brahmin-left/
The pundits wouldn't dream of blaming it on low wages and automation.

4/19 China air force again circles Taiwan in ‘sacred mission’ – Reuters 3 guesses what they have in mind.
4/19 Apple jitters mount on concerns of waning smartphone demand – Bloomberg
No kidding. maybe that is because we are getting ripped off.
https://www.statista.com/statistics/...e-smartphones/
4/19 10-year Treasury yield tops 2.9% on better-than-expected economic data – CNBC
4/19 Store closures set to accelerate this year, warns Bloomberg – Financial Sense

More on global growth. Use ... control +... to make the tiny text larger.
http://gnseconomics.com/en_US/2018/0...ized-recovery/

"improving confidence has pushed leverage back to record levels, investors carry the highest levels of risk assets since the turn of the century, and yield spreads remain near record lows. It certainly seems as “things are as good as they can get.”
"The U.S. economy remains in robust shape, with growth in GDP, industrial production, and investment holding up well. In tandem with strong consumer confidence and employment growth"
"For investors, when things are “as good as they can get,” that is the point where something has historically gone wrong. It is always an unexpected, unanticipated event that causes a revulsion of risk assets across markets."
https://realinvestmentadvice.com/the...global-growth/

"In 1960, Robert Triffin brilliantly argued that ever-accumulating trade deficits, the flaw of hosting the reserve currency and the result of Bretton Woods, may help economic growth in the short run but would kill it in the long run."
"We believe the financial crisis of 2008 was likely an important warning that years of accumulating deficits and debts associated with maintaining the world’s reserve currency may finally be reaching their tipping point. Despite the last nine years of outsized fiscal spending and unprecedented monetary stimulus, economic growth is well below the pace of recoveries of years past. In fact, as shown below, starting in 2009 the cumulative amount of new federal debt surpassed the cumulative amount of GDP growth going back to 1967. Said differently, if it were not for a significant and consistent federal deficit, GDP would have been negative every year since the 2008 financial crisis. "
https://realinvestmentadvice.com/triffin-warned-us/

VERY good article explaining the relationship between the reserve currency, Bretton Woods, gold, and the dollar.

[Danny B]

Late credit cycle,,, liar loans,,, inflation

Where to start,,, What to cover?
For starters, look at this graph, http://realinvestmentadvice.com/wp-c...dFundsRate.png
Just in case that you believe that we are in some kind of linear zone of stability, rather than in a cycle. We're coming to the end of a credit cycle.
Everybody is starting to face this fact.
"warned that the credit cycle is on its last legs, noting that "in our view, a key driver is simply that global liquidity conditions are tightening, and markets are coming to the realisation that the process will be rocky."
"The bank also made a rare timing forecast of when it expects it to crack:

"Morgan Stanley concluded that "evidence is mounting that spreads have hit cycle tights – in other words, that bigger fundamental challenges in credit are 6-12 months away, not 2-3 years down the road."
" Late-cycle returns: asset returns YTD (annualized): commodities 23%, equities 5%, bonds 4%, cash 1%, US dollar -9%...“late-cycle” price action...last time asset performance ranked this way was 2007."
https://www.zerohedge.com/news/2018-...arket-was-2007

"lessons of the 2008 financial crisis“:
“The shareholders got bailed out. The boards of directors got bailed out. Management got bailed out. So from their perspective, there was no crisis.” “No other industry is levered likely the banking industry,” Kashkari said. "
"While I agree with Kashkari that Wall Street is forgetting the lessons of the 2008 financial crisis (and is participating in the development of another dangerous economic bubble), he seems to be absolving the Federal Reserve of its massive responsibility for inflating the mid-2000s U.S. housing and credit bubble as well as the current “Everything Bubble”
It wasn't the FED that made $trillions in liar loans. The Graham-Leachy bill allowed the banks to take all your money and loan it out. No qualified borrowers?? No problem, give them the money anyway.

"This was a reference to a time-honored banker adage, now mostly forgotten after nearly nine years of easy money: Bad deals are made in good times." "Chapter 11 bankruptcies spiked 63% in March from a year ago "
https://wolfstreet.com/2018/04/19/no...ything-bubble/

Armstrong on inflation.
"The assumption that an increase in the money supply is the root of all inflation is simply a theory that does not stack up to history. "
"Therefore, all the research that I have conducted demonstrates that inflation is by no means tied to the increase in the money supply, which is the entire reason nations borrow today. They think borrowing rather than printing is less inflationary. That is not true if the debt can be used as money."
He is on shaky ground here because he compares debt-money to gold -silver money.
"At times, the national debt of just about every major nation today has reached 70% of which is attributed to accumulative interest expenditures. As interest rates rise, the national debts will explode and because of this bogus theory of inflation tied to an increase in money supply, they will then raise taxes to try to reduce deficits. This will further create a Great Depression as deflation surges."
"The ECB has engaged in quantitative easing for nearly 10 years without producing corresponding inflation"
https://www.armstrongeconomics.com/a...pletely-wrong/
The monetary inflation is stuck in the upper loop. Specifically, in the bond market.

"Typically, inflation unfolds when there is CONFIDENCE in the future. Hyperinflation takes place when CONFIDENCE in government collapses. We are dead center. There is no real CONFIDENCE in the future so people are spending less and saving more"
This is sloppy thinking. There are 2 types of (price) inflation.
There are two main types of inflation: demand pull and cost push. Fueled by income and strong consumer demand, demand-pull inflation occurs when the economy demands more goods and services than are available. Cost-push inflation happens when the demand for goods increases because production costs rise to the point where fewer goods can be produced.
People are NOT saving more. They have maxed out their credit cards.

"What government refuses to look at is the bottom line. The more they raise taxes, the less disposable income the individual has in every class. "
https://www.armstrongeconomics.com/a...-unemployment/

[Danny B]

FED, god of the bankers,,,Shrinking GDP

Keep in mind that the FED is an instrument of the bankers. It will always intercede for the best interests of the bankers.
"larmed commentators warn that global debt levels have reached $233 trillion, more than three times global GDP, and that much of that debt is at variable rates pegged either to the Fed’s interbank lending rate or to LIBOR. Raising rates further could push governments, businesses and homeowners over the edge. In its Global Financial Stability report in April 2017, the International Monetary Fund warned that projected interest rises could throw 22 percent of U.S. corporations into default."

"Fed has announced it will be dumping its government bonds acquired through quantitative easing at the rate of $600 billion annually. It will sell $2.7 trillion in federal securities at the rate of $50 billion monthly beginning in October. Along with a government budget deficit of $1.2 trillion, that’s nearly $2 trillion in new government debt that will need financing annually.

If the Fed follows through with its plans, projections are that by 2027, U.S. taxpayers will owe $1 trillion annually just in interest on the federal debt."
"Where will this money come from? Even crippling taxes, wholesale privatization of public assets and elimination of social services will not cover the bill."
"the monetarist dictum that “inflation is always and everywhere a monetary phenomenon”: Inflation is always caused by “too much money chasing too few goods.”
There are no "goods" in the bond market.
"the Fed has been using this excuse since 2012, citing one “transitory factor” after another, from temporary movements in oil prices to declining import prices and dollar strength, to falling energy prices, to changes in wireless plans and prescription drugs. The excuse is wearing thin."
" Over the last two years, leading up to and continuing through the Fed’s tightening cycle, nominal GDP growth averaged just over 3 percent, "

Side note https://s3.amazonaws.com/agorafinanc...2_04192018.png
FED GOV spends 24% of the gdp with borrowed money. What do you suppose will happen if they stop?
"“Surging LIBOR, Once a Red Flag, Is Now a Cash Machine for Banks.” He wrote:

The largest U.S. lenders could each make at least $1 billion in additional pretax profit in 2018 from a jump in the London interbank offered rate for dollars,"
" They are funding much of their operations through deposits, and the average rate paid by the largest U.S. banks on their deposits climbed only about 0.1 percent last year, despite a 0.75 percent rise in the Fed funds rate."
" JPMorgan Chase & Co., the biggest U.S. bank, said in its 2017 annual report that $122 billion of wholesale loans were at variable rates. Assuming those were all indexed to Libor, the 1.19 percentage-point increase in the rate in the past year would mean $1.45 billion in additional income.

Raising the Fed funds rate can be the same sort of cash cow for U.S. banks. According to a December 2016 Wall Street Journal article titled “Banks’ Interest-Rate Dreams Coming True”:
Yep, pay nothing on deposits regardless how high the FED interest rate goes.
"major banks have also been publishing regular updates on how well they would do if interest rates suddenly surged upward. … Bank of America … says a 1-percentage-point rise in short-term rates would add $3.29 billion. "
"All 12 Federal Reserve Banks are corporations, the stock of which is 100 percent owned by the banks in their districts; and New York is the district of Wall Street"
So, ARMs are going to go crazy.
https://www.truthdig.com/articles/fo...es-are-rising/

"actual GDP has declined an average 7.45% each year since 2007?
And if that artificial stimulus is removed?:"
The economy requires constant injections of debt to sustain the appearance of growth.

But if that debt only burdens the economy without producing any authentic bang…
Is it not better to stop now, before the tiger grows larger — and hungrier?
Maybe the time has finally come to let the tiger go.
Our only advice is this:
Be prepared to run… and pray…
https://dailyreckoning.com/americas-...hocking-truth/
So, what happens if the whole country runs out of money?
http://www.energeticforum.com/309678-post6572.html

Central Bank bubbles, https://www.kiplinger.com/article/in...-it-burst.html
Good article on declining liquidity, https://dailyreckoning.com/dont-wait-long-leave-party/

During the good times, the State promised good public pensions. People figured that they no longer needed to save for retirement. After all, the GOV was taking their money and investing it for their future retirement. Well, the good times ended when America lost it's post-war lock on manufacturing. The pensions are still there but, the funds are gone. The income from new workers is too small. The blob State has some real gold-plated pensions and there just isn't enough money to pay for them.
http://charleshughsmith.blogspot.com...oners-and.html

Cut pensions and, you get a riot, https://www.reuters.com/article/us-n...-idUSKBN1HR02A
"employees will now have to contribute 7 percent of their salary to social security, up from a current 6.25 percent.
Employers will have to contribute 22.5 percent of salaries from a current 19 percent.
Pensioners will also have 5 percent of their pension taken out to be used for medical expenses. "
Every extra dollar taken in taxes reduces the productive economy.

[Danny B]

Survival and the debt of nations

Man has a "million" years of experience trying to survive. We almost didn't make it.
https://www.livescience.com/38613-ge...uncovered.html
All other offshoots died out, most recently, Neanderthal.
Survival is in our blood so, so is competition. We compete to pass on our genetic lineage. We focus on the family, tribe and clan. A nation is an artificial construct / agglomeration.
"The concept of the nation state came about with the Treaty of Westphalia in 1648, something that everybody only vaguely remembers from a college history class."
"Why was it so important? It redirected the concept of “loyalty” away from an individual—a prince or a king—to the State itself. A geographical area now wasn’t so much the possession of a ruler, as a possession of a State. This really got the concept of nationalism going; nationalism is just tribalism writ large.

That’s how the concept was born. But the idea of a nation state is coming to an end. Now almost anybody can go almost anywhere thanks to jet travel; you’re no longer married to one place, like a medieval serf. "
"So, first, people realized that it’s completely ridiculous and dysfunctional to be loyal to some thug who, through an accident of birth or through military competence, set himself up as a prince. Now they’re discovering that it’s equally stupid to be loyal to a government that’s running a country."
"The nation state is now an anachronism, and going out of business. It’s dysfunctional, destructive, and serves less and less of a useful purpose. All it does is tax, regulate, persecute, and conduct wars. People got a bit of a scare a couple weeks ago when it looked like the US might start a nuclear war with the North Koreans, or the Russians. Perhaps they’ll threaten China next. That’s all State-on-State action."
"But a lot of people conflate the increase in standards of living with the growth of governments. Governments have grown not because they created new wealth, but because they’ve confiscated wealth and used it against their subjects.

But now most of them are bankrupt—even though they’ve taken taxes from trivial levels to monstrous levels. Even with the huge additional amounts they’ve stolen by inflating their currencies, they’re still bankrupt. I suspect we’re reaching the end game"
"Central banks and commercial banks are essentially Ponzi schemes, and engines of inflation. It’s a major reason the rich are getting richer—which is OK, except that today it’s at the expense of the middle class.

This is all going to blow up. And the next crisis will be one for the record books. It will start as a monetary crisis, but will turn into an economic, political, social, and military crisis. You can be sure the US Government will be involved in everything, dragging its subjects with it, like it or not."
"Well, the declining U.S. Empire will likely confront the rising Chinese Empire. The US still has a very powerful military. The chances are it will use it while it’s still on top. Or a small war could break out anywhere in the world, and escalate. Things could get out of control very quickly. Remember, Black Swans aren’t things you don’t expect. They’re things that you don’t know even exist."
https://www.caseyresearch.com/doug-c...nation-states/

Socialism is the firewall between the non-producers AND, Darwinian pressures. All gov is socialist because it does redistribution.
Armstrong, "What it appears to be is the destruction of the West’s economy. This seems to be connected largely to the collapse of socialism and government promises. "
" It even appears that many governments are deliberately trying to instigate a war that they can use as an excuse to suspend debt payments which would allow them to deny their fiscal mismanagement for decades."
"Anyone with half a brain can see something is seriously wrong that the national debts just keep growing and we borrow money endlessly with no intention of paying anything back. You have to be a full moron to have created such a system that never ends. Even without war, we are headed into a Sovereign Debt Crisis which is inevitable."

"As interest rates rise, we are on schedule for a real explosion in debt. The higher the debt to GDP rises, the greater the risk that the debt will force higher taxes resulting in lower economic growth. "
https://www.armstrongeconomics.com/w...ny-place-safe/

Not having the reserve currency credit card, the Union of Soviet Socialist Republics collapsed financially. The USSA motored on a bit longer. FED GOV writes 80 million checks a month. The debt is rising as much as $1.7 billion a day. The banks want to drive up interest rates to get more spread on deposits. Rising interest rates will bankrupt more than 50% of businesses,,, depending on how high they go. The banks have to be painfully shorted-sighted to push up rates.

[Danny B]

Locking down the banking system

Turkey is just one of many States that wants it's gold back on home ground.
https://www.zerohedge.com/news/2018-...t-ditch-dollar

"Once physical cash is gone, your liberty is gone because government can easily monitor and freeze all digital payments. The only recourse for the Chinese people once their cash is gone will be physical gold and silver.
This brings me to what I’ve warned about for years…
It’s what I call “ice-nine.” This refers to government’s ability to lock down the financial system in the next global crisis. And it won’t be just China."
"Money printing won’t be an option, because central banks have printed too much already. Any more money printing would trigger a complete loss of confidence in fiat money and a mad scramble for hard assets."
Very short-sighted. Creating pixilated debt money (credit) is NOT the same as printing bills.

"Instead of money printing, central banks and governments plan to lock down the system and not let investors get their money out.
This will begin with money market funds and then spread quickly to bank accounts, ATMs and stock exchanges until the entire system is frozen.
Then an international monetary conference will be convened to create a new global monetary standard, probably based on special drawing rights (SDRs), which will be printed by the trillions and handed out to governments to gradually reliquify the system."
He just can't get the stupid SDR out of his head. NOBODY wants anything to do with the STUPID SDR from the IMF.

"A few years ago, the SEC changed the rules so that U.S. money market funds can suspend redemptions. Recently, China announced that it would follow suit and allow its money market funds to also suspend redemptions.

Those laws say the bank owns your deposited money, not you. Wait...what ... Your deposit is actually an unsecured loan to the bank with all the problems of counterparty risk! Instead"
You get the idea. when the black swan goes SPLAT, the banks won't even open. The money-markets will go dark. YOU will hit the road.
If you have cash at home, you will have 2-3 days to get to a rural area.

Here are a few vids, https://dollarcollapse.com/videos/top-ten-videos/
Just so you don't worry, "More than 47,000 millionaires collected Social Security benefits in 2010, a year when 7.2% of those collecting Social Security reported income above $100,000."
https://www.cheatsheet.com/money-car...=YF&yptr=yahoo

Armstrong, " He suggested that to prevent a collapse, the government would mandate that retirement accounts hold a certain percentage in government bonds. It will be a way to tax or force a purchase of debt"
"The huge crisis is in Europe. Many nations already mandate the majority of pensions must invest in government bonds. Even the US Social Security system is 100% in government bonds. The problem is that interest rates are at historic lows. Pensions need 7% to 8% on to remain solvent. Forcing 100% of all pensions into government bonds will not prevent the crisis coming. The pensions will still collapse."
" Despite the fact that the currencies of China and Russia during the communist period were not free markets, communism still collapsed. You cannot prevent the economy from ignoring the economics of reality. Regulation will always fail."
https://www.armstrongeconomics.com/w...-free-markets/

[Danny B]

The price of war,,,, and everything else

Historically, all prices were set in the marketplace. You had to actually have something of value to trade for what you wanted. This includes the price of credit. Here is a graph of historic interest rates for the last 5,000 years. No can do. The url is about 500 lines.
Rates have come way down over the centuries. When money had intrinsic value, people loaned it very carefully. Bankers who loan thin-air money don't have any skin in the game and, don't fear losses. Distorting the price of money distorts all other prices. There is a constant need for currency inflation because there is a constant need for free money to support the non-producing class. The creation of a Central Bank was a way to institutionalize sure and steady currency inflation. They were originally created to provide the State with war financing.

The average person just wants to survive and, enjoy life. The average State has the mentality of a parasite and, wants to control everything in sight. It wants to steal from everyone in sight. The priorities of the State are far removed from the priorities of the average person. Look at the Amish community to get an idea of what the basic requirements are for the average human. Look at Monaco to get an idea of what the basic requirements are for the very rich.
These 2 groups buy the necessities & luxuries of life. They have no interest in bombs, rockets and missiles.
The demands of the state are completely at odds with the necessities of society. Yet, the State promotes the idea that the State and society are completely inter-dependent.

The State uses the CB to distort the price of money and therefore, EVERYTHING else. ALL of this is done in an effort to control it's serfs and wage war. Prices are set in the marketplace. There is little to NO demand for war. It is only a small segment of the controllers who are buyers for war. We are held in thrall to pay for something for which we have no need, nor desire.
A good article on prices, https://www.goldmoney.com/research/g...efcode=dollarc

[Danny B]

ZIRP accelerates the pension crisis

"The net interest payments will exceed the spending on defense in 2023 and it will exceed all non-defense spending by 2025. "
https://upfina.com/u-s-debt-problem-gets-worse/
"Economically, you need free markets to further society. It is human ingenuity that creates progress allowing individuals to have ideas and act on them "
"Socialism is collapsing because the system was never designed properly and politicians will always pursue their own self-interest. As pensions collapse so will socialism."
https://www.armstrongeconomics.com/i...oned-the-well/

4/22 Visualizing the pension time bomb: $400 trillion by 2050 – Zero Hedge
Demographics is destiny. Too many people are retiring for the system to survive.
4/22 ‘Silver tsunami’ hits as pension costs devour CA school budgets – SFChronicle
Cyber crime seems to pay well, https://www.independent.co.uk/life-s...-a8313801.html
The "impossible trinity" precludes have an international currency AND capital controls. The Petro-Yuan is therefore deeply flawed, https://www.themaven.net/mishtalk/ec...06VLnT90iTfYA/

North Korea has quieted down and now, Tehran is ready to rock.
https://sputniknews.com/middleeast/2...hands-trigger/

Looting the Pension Funds: How Wall Street Robs Public Workers ...
https://www.rollingstone.com/politic...funds-20130926
Millions face PENSION CRISIS: Britons are warned YOU are NOT saving enough to live
Huge pension fund deficits are a global crisis in waiting
https://theconversation.com/huge-pen...-waiting-88420

[Danny B]

Blocking price discovery for as long as possible

In the dot-com bubble, people threw money at anything and everything. When confidence was lost, price discovery set in. In the 2007 crash houses became too bubbly. The cost of a house must be relative to the wages in the same area. When everything threatened to bottom out, the State, in the form of Freddie and Fannie, bought up (guaranteed) everything to create price support until private investors could be enticed to buy the orphaned houses. The liar -loans blew up. Naturally, the banks couldn't be expected to take the hit.
"The bad loans in the states were really dumped into Freddie Mac, is a public government-sponsored enterprise created in 1970 to expand the secondary market for mortgages. The main difference between Fannie and Freddie boils down to who they buy mortgages from. Fannie Mae primarily purchases mortgage loans from commercial banks, while Freddie Mac primarily buys mortgages from smaller banks that are often called “thrift” banks.
The bad real estate loans were stuffed into Fannie and Freddie so the bad debt was not in the banks."

The banks "earn" the fees and, shuffle off the loan to either the State or, shmuck investors. It never occurred to the banks that the State might go broke from all that bad paper. ALL States eventually go broke.

The high-wage structure left the country but, the bankers didn't want the price structure to go away. They could not allow the markets to do honest price discovery. History shows that true price discovery eventually returns.

"The Draghis of the world will continue to believe they are in control until they are not. At first, some people will start taking out their money while it’s still there, and then after that the rest will trample over each other in a bloody stampede on the way to the exits trying to save what’s left. After the first $100 trillion is gone, we’ll be able to survey the terrain, but by then we won’t, because we’ll be too busy trying to save ourselves.

And I know you’ve heard this before, and I know central banks bought us 10 years of respite. But it was all fake. They had to pile on insane amounts of debt on your heads, kill off your pension systems and make markets a meaningless term, to achieve that respite. "
https://www.theautomaticearth.com/20...-not-a-market/
"The resulting malinvestment is piling up like underbrush in a forest where fires have been suppressed for too long. And when a fire does break out it will be one for the history books. "
4/23 10-year Treasury yield nears 3%, a level that could shock the markets – CNBC Give it a few more tenths of a point,,, maybe 3.4

Here is an article talking about how Germany has brought ALL of it's gold back to home soil. Look at the picture and tell me if the bars all look clearly to be copper.
https://www.thelocal.de/20180422/fin...d-goes-on-show
4/23 Venezuela will be out of gold in one year – Zero Hedge YES, but, they have 297 billion barrels of oil.
4/23 Japan needs ‘strong accommodative’ monetary policy ‘for some time’ – CNBC https://www.ancient-symbols.com/imag...y/infinity.jpg

"According to a Citibank report from 2016, the 20 largest OECD countries alone have a US$78 trillion shortfall in funding pay-as-you-go and defined benefit public pensions’ obligations. This shortfall is far from trivial. It is equivalent to about 1.8 times the value of these countries’ collective national debt. "
https://theconversation.com/huge-pen...-waiting-88420
You Canadians get honorable mention for increasingly using your house for an ATM, https://betterdwelling.com/congrats-...their-homes/#_ Canadian household debt hits $1.8 trillion as global watchdog warns ..
Federal “Market Debt” First Exceeded $1 Trillion Six Years Ago Under ... Ottawa

"The bad real estate loans were stuffed into Fannie and Freddie so the bad debt was not in the banks. In Europe, the bad loans are still on the books of the banks. Hence, the European banking crisis was not been addressed and this is the primary difference between American v Europe."
https://www.armstrongeconomics.com/w...ope-v-america/

"This is the CIVIL UNREST that will rise up around the West as socialism continues to collapse. The taxes must rise and the benefits must decline and even that will not keep the social systems in place for more than two years. We will have to face a complete revision of the monetary system. How that is approached will determine if we have violent confrontations with government and the rich are dragged from their homes and hanged as has so often taken place in the past."
https://www.armstrongeconomics.com/w...cial-security/

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up ... them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered"
For The First Time Ever, Millennials With Student Debt Have Negative Net Wealth
For the first time, young adults age 25 to 34 with college degrees and student loans have a median net wealth of negative $1,900, said the advocacy group.

The report states that this lost generation had a positive net wealth of $9,000 in 2013,
https://www.zerohedge.com/news/2018-...ive-net-wealth
The debt MUST grow for the financial sector to survive. As households cut back, the State jumped in, http://thesoundingline.com/wp-conten...e-1024x678.jpg
The World Bank wants more bucks to pass around. U.S. and Russia said NO.
http://tass.com/economy/1001156
Finland is going to give up on basic Income. https://www.sciencealert.com/finland...ing-april-2018
An interesting article by PCR, on race and, erasing history.
https://www.paulcraigroberts.org/201...craig-roberts/