Economic pressures

[Danny B]

Cyber crime,,, paper money

Cyber Crime Costs Projected To Reach $2 Trillion by 2019 - Forbes
https://www.forbes.com/.../cyber-cri...llion-by-2019/
5/01 Bitcoin: One cryptocurrency to rule them all – Aier
4/30 Cryptos are the most heavily manipulated market in history – Bob Moriarty
China's Shutdown Of Bitcoin Miners Isn't Just About Electricity - Forbes
Gold has attributes that BTC does not have.

4/30 US stocks jump on dealmaking, earnings – CNBC
5/01 Stocks fall as market awaits Apple earnings – CNBC

Kunstler, "Our financialized economy — like everything else we do — operates at levels of complexity so baffling that even its supposed managers at the central banks are flying blind through fogs of debt, deception, and moral hazard. When that vessel of pretense slams into a mountain top, the effects are likely to be quick and lethal to the economies on the ground below."

"Personally, I expect our collapse to be as sudden and unexpected as the USSR’s, but probably bloodier because there’s simply more stuff just lying around to fight over. Of course, I expect the collapse to express itself first in banking, finance, and markets — being so deeply faith-based and so subject to simple failures of faith. But it will become political and social soon enough, maybe all-at once. And when it happens in the USA, it will spread through the financial systems the whole world round."
That Collapse You Ordered...? - Kunstler
He never was a ray of sunshine. He does bring up the question of just how fast the unwind will be. Since our money has no tangible value, it is just information. How fast can information and contagion travel?
The repeal of the Glass-Steagal act gave our savings to the bankers to gamble with. The bankers are now looking everywhere for money.

US banks in 'arms race' for deposits as rates rise - Financial Times
https://www.ft.com/content/1bd2ca6c-...b-bc4b9f08f381
So, the banks took our money and, now, they need more.
YOUR money was just an unsecured investment in the bank.

A lot of people are getting nervous about their money in the banks. SO,
"Sky News has also found that the proportion of UK banknotes circulating outside the banking system - in people's pockets, stored at home and outside the country - has now hit the highest level since 1979, as a percentage of GDP."
The cure;
UK Demonetisation: Paper 10-Pound Notes Go Out Of Circulation In UK
It's time to offload these £50 notes | Money | The Guardian
Europe to Remove 500-Euro Bill, the 'Bin Laden' Bank Note Criminals ...
Obviously, if the State does not want you to hold paper money,,,, that is just what you should do.

[Danny B]

Inescapaple demographics crash with growing debt

As the developed world becomes more effed up,,, as birth control becomes more widely available, people have decided not to bring children into this mess. Things are so polluted in China spends 15% of it's gdp fighting pollution. China created it's great leap forward to prevent the West from carving it up. The cost of rapid industrialization has been horrible for the flora and fauna. Man is a part of nature and can not simply divorce himself.

"While China has embarked on ambitious plans for economic and military domination over the next several decades, they may end up defeating themselves without a single shot fired - thanks to their longstanding birth restrictions, shrinking fertility rate and exploding elderly population.
"In a worse-case scenario, slowing growth and a labor shortage could leave China unable to care for hundreds of millions of retirees," notes the Wall Street Journal.

China’s clinging to birth restrictions defies a clear demographic trend: Its workforce is shrinking and the population is rapidly ageing. By 2050, there will be 1.3 workers for each retiree, according to official estimates, compared with 2.8 now.
About the same for America,,, in spite of leaving the southern border open. https://www.ssa.gov/history/ratios.html

"While some experts have argued that slower population growth could mitigate pressure on China to create new jobs as technology increases productivity,"
China is a leader in robotics. Technology will increase productivity but, it won't increase jobs.
"will see an average annual decline of nearly 6 million Chinese"
The Japanese show all of us the way forward.
“China will learn what many other countries have learned—that it is much more difficult to get people to have more babies” than to force them to stop having them."
" Moody's cited China's rapidly ageing population as a major factor in their decision to downgrade their sovereign rating,"

Then, there is the whole corporate mentality.
"When Ms. Li, the Qingdao professor, refused to abort her third child, she said, her university employer accused her of selfishly putting at risk her supervisors’ careers, the school’s future and co-workers’ bonuses."

"Singapore, for example, has very liberal immigration policies and offers a "baby bonus" as high as 10,000 Singapore dollars ($7,500) along with grants available for parents which can be used for healthcare and education. "
"President Xi Jinping has acknowledged the need to breed - stating in 2015 that China needs more births"
https://www.zerohedge.com/news/2018-...ions-set-stage
Excellent infographic on population growth, Visualizing Global Population Growth by Continent - The Sounding Line

Nobody wants to live in an Orwellian world NOR bring children into it.
Giant Chinese companies are outfitting millions of employees -- everyone from factory workers to military personnel to pilots and train drivers -- with special uniform hats containing an unspecified neurological sensor package claimed to be capable of detecting "depression, anxiety or rage"
Chinese Factories Employ "Brain Scanners" To Stop Workers' Mistakes Before They Happen
China's "SkyNet" facial recognition tools can compare up to 3 billion faces per second to help the government enforce its new "social credit score" - the Communist Party's latest and most widespread tool of political repression.

" the Chinese government is pushing to double the size of the economy by 2020 (setting this goal in 2010). "
Have the government idiots taken a look at Japan and their falling population?
"Increasing debt without a concurrent economic gain has inevitably led to the economic downfall. Out of 43 countries that experienced an increase of credit-to-GDP of more than 30 percent in five years, 38 of those countries faced a financial disaster. "
Yep, printing money without a corresponding increase in wealth never seems to work out.
" In 2016, 41 banks wrote off 576 billion yuan in bad loans, up considerably from the 117-billion-yuan bad loan write-offs in 2013."
The Global Debt Addiction: China's Out of Control Debt - Gold Telegraph

Bonds pay very little but, as long as they pay a higher percentage than the percentage lost to price inflation, people buy them. Even using artificially depressed GOV figures for inflation, bonds have been losing for years.
https://www.bloomberg.com/news/artic...nded-years-ago
Keep in mind that people who bought bonds with free money aren't particularly concerned about a drop in value.
If you buy high-yield bonds, you get a higher return but, more risk.
https://www.bloomberg.com/news/artic...nk-bond-market

[Danny B]

No babies,,, sliding down

A baby bonus is paid in
1 Australia
2 Canada
3 Czech Republic
4 Italy
5 Lithuania
6 Russia
7 Singapore
Great Britain, "Meanwhile, 100,000 more children live in poverty today than did this time last year. "
“There are 4.1 million children – nearly a third of the entire child population – living in households on less than 60% of the average income.” “..it is not so much that poverty is more severe, but that it has spread. “It’s everybody. Your average family is like that now.” "
“..a million and a half more children will sink below the poverty line by 2021 thanks to benefit changes.”
"In the UK, a 2012 study found that the number of career politicians (that is, politicians with minimal experience outside of politics) had more than quadrupled between 1983 and 2010."
https://www.theautomaticearth.com/20...arles-dickens/
The State has definitely turned anti-human. Socialism destroys the family.
The corporatocracy is focused only on profits which is damaging to all living things. England and France are going to fall very hard. Windrush isn't the only problem.
5/02 UK mistakenly deported thousands of foreign students – Independent Undoubtedly, the darker ones.

Bond shorts have hit record highs. Commercial traders have taken the opposite view betting on inflation. The upper loop has been HUGELY inflated. The stock markets have rolled over. There isn't going to be any high inflation in the future. It will be turtles (deflation) all the way down. FED GOV is sucking money out of markets with insane borrowing. The FED is (reportedly) pulling out many $ billions. Another 1/2% rise in the 10 year rate will bankrupt 20% of U.S. companies. All of this brings deflation.
https://www.themaven.net/mishtalk/ec...EuszWT7n0S6wg/

"long-term thinking of China’s leaders and the government’s massive investments in infrastructure and education. "
"And there is a trade imbalance today because we’ve been investing in our future and you Americans have been eating yours."
All of this is true. The corporatocracy shuns infrastructure and (free) education. Weapons of war come first.

“The private sector yield curve reading stands at zero, or right on the threshold where trouble can be expected to begin,” Gave wrote in a note published on Tuesday. “Should this spread move into negative territory, I would expect a financial accident to occur outside of the U.S., a U.S. recession, or possibly both.”
"Prime rates below the natural rate of corporate credit have allowed banks to generate “artificial” money, kept “zombie” companies alive,"
"If the private sector curve inverts “zombie companies will fail and capital spending will be cut, as firms move to service debt and repay principal. Workers will get laid off and the economy will move into recession.”
https://www.bloomberg.com/news/artic...d-gavekal-says

5/02 Japan kicks the can on fiscal discipline, again – Nikkei
There is just no escape from a falling population. The Japanese GOV has started a nationwide dating site hoping to get more Japanese births. Japanese women are looking for a FARM boy to marry. Evidently, the city culture is just too negative for a family.

5/02 Moving averages getting weaker and weaker; major carnage coming – Mish
Everything got a bit weaker after the 1987 crash. The 2000 crash demanded a lot of stimulus. The '08 crash demanded MUCH more. The stimulus just isn't working like it used to.

5/02 Companies hire 204,000 more workers in April – CNBC
Viewing employment without rose colored glasses – Real Investment Advice
"Consensus expectations from economists are for an unemployment rate (U3) of 4.1% which is nearly unprecedented in the last fifty years." "many economists to warn of tight labor markets" "As shown above, there is only one person filing an initial jobless claim for every thousand people in the workforce."
"Closer inspection of the BLS data reveals that, since 2008, 16 million people were reclassified as “leaving the workforce”
Viewing Employment Without Rose-Colored Glasses | RIA

[Danny B]

China; needing a family friendly GOV system

Since all capital can move electronically, things that happen in China can have an immediate effect around the world. China is experimenting with some kind of State-run capitalism. It's hard to predict the outcome. They have 64 million empty buildings and dozens of empty cities. They have the fastest shrinking workforce in the world. They have HUGE growth plans but, an extremely low birth rate.
Here are a few additional notes.
"Five days of meetings in Beijing with Chinese, U.S. and European government officials and business leaders made it crystal clear to me that what’s going on right now is nothing less than a struggle to redefine the rules governing the economic and power relations of the world’s oldest and newest superpowers — America and China. This is not a trade tiff.
“This is a defining moment for U.S.-China relations,”

“No one can contain China anymore.” You hear that confidence in Beijing a lot today from Chinese: Our one-party system and unified society can take the pain of a trade war far longer than you Americans can. "
China is in the process of getting a lock on mineral and energy deposits worldwide.

"In Act I, U.S.-China relations were all geopolitics, with the U.S. and China against the Soviet Union. That lasted until the late 1970s, when Act II began: China shifted toward capitalism, becoming a huge factory and new market — and 30 years later turned into the world’s second-largest economy.

In large part this was due to the work ethic of the Chinese people, the long-term thinking of China’s leaders and the government’s massive investments in infrastructure and education."
"ACT III opened in October 2015, when China announced its new long-term vision: “Made in China 2025,” a plan to dominate 10 next-generation industries, including robotics, self-driving cars, electric vehicles, artificial intelligence, biotech and aerospace."
"That is why many E.U. countries are now scrambling to pass new laws to prevent China from buying up their most advanced industries. And that is why China is telling E.U. countries, as one E.U. official put it, “Whatever you do, don’t join the U.S. camp” on trade. The last thing Beijing wants is a U.S.-E.U. united front demanding it play fair."

"Trump also has nothing to say about investing in the real source of long-term U.S. strength — infrastructure and education."
"China is a much more open country today than it was 25 years ago — but it’s also much less open than it was five years ago. Xi’s allies argue that his crackdown on corruption; his repeal of term limits, which position him to rule for what could be decades; and his tightening of the control that the Communist Party wields over every institution was urgent because collective rule did not work. China’s society, government and military were being eaten away by corruption from within, those allies say."
https://www.nytimes.com/2018/05/01/o...ump-trade.html

China is an absolutely controlled society. If you jaywalk, an AI program / camera will use facial recognition to automatically fine you. The "brain helmets" that millions must wear can't make life any better. It is highly doubtful that China can reverse it's population slide. China will never escape the trap that Japan is already in.

[Danny B]

401k gone,,, dump the military,,,crashing consumtion

The bankers used regulatory capture to force in their Central bank. They offered LOTS of loans to GOV to create a bond market. GOV just passes on all the cost to the taxpayer. Banker control of the State allowed the banks to take all our retirement money and invest in building up China. There is more profit investing in a low-cost labor market than investing in a high cost labor market. The retirement money is gone. The banks are chipping away on YOUR claims to YOUR money.
"There are tens of thousands of workers who are due lost 401(k) money, but there is no one central depository where you can look for what's rightfully yours. " Forbes

"Even if you still have a good job and a paid up mortgage, chances are your monthly 401(k) statement will remind you that you've lost a good chunk of your savings. Trillions of dollars have evaporated from those accounts " CBS News

The entire pension system is flat busted. Both public and private. Your 401k is gone. The banks are desperate for deposits. Why is that?
"Banks brace for multi-year deposit war | afr.com
404 | afr.com
Aug 5, 2016 - Australia's big banks face a costly battle for household savings to close a $400 billion "funding gap".
So, how big is the "funding gap" in the West?

Armstrong and the mega-corruption in New York.
https://www.armstrongeconomics.com/a...with-russians/
Excellent article on the collapse of Marxist/socialism in America.
https://www.armstrongeconomics.com/i...by-generation/

"Try talking about the Pension Fund Crisis that will hit all the people directly. The Trump deficit will put money back into the economy directly whereas the Obama deficits were never something that actually stimulated the people directly. It was like Quantitative Easing – welfare for the bankers, not the people."
https://www.armstrongeconomics.com/a...llar-deficits/

The total U.S. military budget, including black projects is reckoned at $1 trillion. GOV also reports that $2.3 billion is missing. Later, this is changed to $13 trillion. Dunno what the current figure is. America is in no danger of being invaded by Canada, nor Mexico. The military is mostly an instrument to rampage around the world stealing resources. It is also a very blunt tool used to create a "greater israel" and, protect opium crops in Afghanistan. Did I mention drug distribution all through Europe by way of NATO bases? It is also the enforcement arm of the FED making sure that everybody uses U.S. dollars. What honest and practical uses are there for the U.S. military?
https://russia-insider.com/en/americ...litary/ri23359

This is not to disparage the soldiers, just their mission. And the politicians who create this mission. FED GOV has tons of money for the military but, hates to spend anything on infrastructure or education. The time WILL come when retired people will demand the benefits that they paid into. Congress will patiently explain that the military is FAR more important and, must be fully funded. This will happen at the same time that most pension funds collapse. Many millions of old people will be demanding to get into the FEMA camps to survive.

So, the banks took all of our money using regulatory capture. The economy crashed because the lower loop could no longer support the predation of the upper loop. Fresh money was injected into the upper loop hoping to create a revival in the lower loop. All this money NEVER went into wages so, the lower loop defaulted. More money was pumped into the upper loop again and again. Money couldn't be pumped into the lower loop or, we would all quit our jobs.
The wage-price spiral never happened and, hoped-for price inflation was almost absent. The only thing that brought any price inflation was; feeding the consumer more and more debt.

This has come to an end and the would-be consumer is locked out of the market.
5/03 Ford cutting massive $25.5 billion, confirming end of major automotive cycle – ZH
5/03 Nissan shocks with 28% sales plunge – Bloomberg
Ever-increasing tax demands will keep him out of the consumer-goods market.
5/04 The $21 billion debt most Illinoisans know nothing about – WirePoints

So, we did a wage and wealth transfer from the West to the East. The Chinese are eating better and, can now afford a scooter. The West is saddled with an enormous debt load and, we can barely afford a scooter.

OK, so, the world is sliding down to a global mean wage. The work force is shrinking. Productivity is rising greatly due to automation. What about jobs? What about consumption?
https://www.youtube.com/watch?v=GrGe...ature=youtu.be

Crony capitalism brought us this crash. Armstrong calls it a crash of Marxism/socialism. Naturally, he considers enormous bailout for bankers to just be part of good business. The crash will go on for a long time. The State and corporatocracy are both family unfriendly. The credit system only works with a growing debt load. You can't grow the debt load with a shrinking population,,, shrinking workforce and, rising automation. Japan shows us the way.
Consumption will continue to crash and take the credit bubble with it.

[Danny B]

Crony capitalism,,,desperate banks,,,$400 trillion pension gap

The State, by it's very nature is a parasite that must do constant re-distribution to survive. Out of necessity, society allows the State to have guns and lawbooks. The producers in society wish to have a very limited State to minimise the predations. The non-producers naturally wish for an expansive State. Since the State naturally attracts more and more non-producers, it creates more and more laws to rob the producers. It all eventually blows up. The non-producers lament the inequalities of capitalism and, preach socialism. Our current system is top-down socialism for the rich. Crony-capitalism can break the system just as fast as Marxist socialism.
https://www.themaven.net/mishtalk/ec...EyxzNnoBhZr4Q/

I've written plenty about the rise of automation. Robots don't pay employee taxes that are used to fund public pensions. The bankers stole all the private pension money. The funding gap is growing.
https://www.themaven.net/mishtalk/ec...EePt5W_mIZC5Q/

The banks are desperate for deposits and, desperate to generate fees.
"Ten years ago, Goldman made a killing by betting - alongside some of its best clients such as John Paulson - against subprime Residential Mortgage Backed Securities (and their various synthetic and "squared" derivatives) "
"Now, a decade later, Goldman is once again hoping to profit off America's sub-660 FICO population, only instead of betting against subprime borrowers, it is lending to them.

That's right: Goldman is now a subprime lender itself, because through its retail-facing bank, which both collects deposits and issues loans, subprime borrowers have emerged as one of the most important client bases of the FDIC-backed hedge fund which until just 2 years ago had no conventional, retail-facing banking operations whatsoever."

https://www.zerohedge.com/news/2018-...g-goldman-2018
In the next crash, there will be NO possibility of a bailout. This isn't even a "hail Mary" play by GS. GS is going to walk the metaphorical plank. They have just made the plank a bit longer.

We WILL have price inflation in a few selected areas. But, when astronomical valuations come back to earth, most of what we will see is , deflation.
https://www.themaven.net/mishtalk/ec...Uy-sAkSAlJDNQ/

[Danny B]

Paying for the blob State by squeezing productivity

The blob State is always on the hunt for taxes, fines and fees. There are millions of bureaucrats that have gold-plated pensions and salaries. Keep in mind that money spent for consumption can not be paid back. The money that goes to bureaucrats just goes down a rat hole and, robs capital from the productive economy. The money circulates, after a fashion BUT, it doesn't do anything productive.
"Eurozone commercial banks will have to pay the European Central Bank 12% higher fees this year. The Eurozone banks must pay €474.8 million in fees for the supervisory services of the ECB. The cost of supervising the banks has risen to over €500 million"
"The ECB, on the one hand, claims that Quantitative Easing will stimulate the economy, but it raises its fees and taxes keep going up. "
https://www.armstrongeconomics.com/w...ervising-them/
The blob State prints money to pay itself.

" A closer look at Italy reveals that more than 10% of the balance sheets of Italian banks constitute bad loans. The cost to bailout Italy is put at €189 billion while Spain comes in around €100 billion "
So, the banks are going bust but, they must pay increased fees to the blob State.
"The Eurozone still has inherent significant risks in the balance sheets of European financial institutions. This is primarily because where the USA took the bad loans from the banks and stuffed them into Freddie and Fanny, in Europe, the bad loans are still on the books of the banks."
OK, so the banks will collapse in Europe and, the State will collapse in America.
Armstrong writes deposit insurance will fail in Europe because the banks have so many non-performing loans. Is that any worse than the situation in America where the GOV will fail because it took on the NPLs?
https://www.armstrongeconomics.com/i...ive-in-europe/

"ANSWER: It is amazing that the politicians are so clueless and the heads of the banks are far too often just talking politics. London is bigger than all the financial centers in Europe COMBINED! Because of regulation being consolidated in Britain, it even beats New York City – a fact that is often overlooked. The United States has SEVEN regulatory agencies that compete with each other for power compared to one for Britain. London still wins hands down.Neither Frankfurt nor Paris even has the infrastructure to function as London does."
https://www.armstrongeconomics.com/i...ket-execution/
So, the blob State in America has seven times as many bureaucrats sucking up to the banks as London has. The ECB is charging $1/2 billion to supervise the European banks. As long as it generates salaries, the American and European regulatory agencies don't give a hoot what the banks do. The European banks wouldn't have so many NPLs if the regulatory agencies were actually doing their job.

The creation of the Eurozone was a bureaucratic overlay on States already burdened by high taxes. It reduced their GDP by 20%. Socialism always seems to get carried away with itself. If a little bit of tax & benefits
is good, more of the same is better.
Chart of the Day: Europe Runs on Taxes - The Sounding Line
Once again, you can't print debt-money for consumption.


5/05 The coming massive commodity rally – Daily Reckoning
So, just how long can you drive down the value of a currency before tangibles go way up.
5/04 Input costs are soaring in ISM surveys – Zero Hedge
Consumption has crashed. Manufacturing that depended on high volume must now depend on high margin to maintain profitability. With no alternative, they cut their own throats.
5/04 Dow pops 400 points as Apple leads tech higher – CNBC Buffet is seen as a bellweather investor. The feds slip him a check and, he buys whatever looks weak. Buffet bought Apple and, presto, Apple rises. This is in spite of the fact that Apple reported very weak I-phone sales.
General Electric is VERY weak so, Buffet talks about buying lots of GE. He even said that he could write a check and buy the whole company. How many people jumped into GE stock after that? The feds always bail out Buffet.

Politicians make an art out of lying through their teeth. Reportedly, public pensions are in worse shape than private pensions.
5/05 Blame our politicians for the retirement savings problem – The Hill
http://thehill.com/opinion/finance/3...avings-problem

"The American president, Thomas Jefferson, is accredited with the following comment: “It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.”
What if you WANT wars?
"The expansion of debt in the advanced economies went from $55.1 trillion in 2001 to $119.2 trillion in 2016. And the increase in debt is not limited to advanced economies—over the same period of time, emerging markets economies went from $6.4 trillion in 2001 to $43.9 trillion in 2016."
http://nationalinterest.org/feature/...l-crisis-25683
"While it can be argued that massive stimulus was necessary to avoid another Great Depression,"
THAT point can certainly be argued but, it is false, non the less. The stimulus was created to save the banks, crony capitalism and Marxist socialism.

[Danny B]

Unprecedented employment picture

I'm constantly trying to get my head "around" various trends to figure out how they affect the whole picture.
"Roughly 10,000 Baby Boomers will turn 65 today, and about 10,000 more will cross that threshold every day for the next 19 years.Dec 29, 2010
Automation could eliminate 73 million jobs, a new McKinsey report says
https://www.usatoday.com/story/money....../899878001/
Robot automation will 'take 800 million jobs by 2030' - report - BBC ...
Robot automation will 'take 800 million jobs by 2030' - report - BBC News\
China's working age population will fall 23% by 2050 | World ...
https://www.weforum.org/agenda/2016/...ng-population/

"China’s labor force is expected to lose 1 million workers each year for the foreseeable future" "Before long, though, we’re more likely to treasure robots than to revile them. They may be the one thing that can protect the global economy from the dangers that lie ahead."
https://www.washingtonpost.com/poste...=.68b457b0913e
The article blindly goes on about how robots are going to do all the production. There isn't a single word mentioned about jobs, income and consumption. Not ONE SINGLE WORD about the mental health of people who have no job, nor, center in their lives. No mention of the young who have no job prospect. No mention of the young failing to form a household. No mention of the increasing drug use and suicide rate.
Look at the populations that receive the most welfare money. They have the most social problems.
https://www.washingtontimes.com/news...ug-fueled-dea/

From one point of view, America has 40% unemployment.
Take the working age population. Multiply that number by the possible hours that can be worked per year. The end result is 40% higher than the number of hours actually worked.
David Stockman has a very good article laying it all out
http://davidstockmanscontracorner.co...-aint-awesome/

Keep in mind that our current level of employment is maintained to a great degree by CB printing. Minus QE, the economy would have shrunk by more than 7%.
The work force is shrinking. The experienced people are retiring. There are few niches for new entrants. Jobs are getting more technically demanding. The State was instrumental in failing to educate the next generation.
https://www.cnsnews.com/news/article...not-proficient
The solution, https://www.zerohedge.com/news/2018-...ent-snowflakes

Our current system uses debt-money to support an even-increasing number of retirees and non-producers. The State borrows with no intention of repayment. After the default cascade, there will be no resuscitation of our current system.
https://www.dollarcollapse.com/plung...es-great-news/

[Danny B]

The credit monster will eventually break out of control

Danielle DiMartino Booth spent 10 years advising the FED. She has done some very good writing. I'll excerpt but, you should read the whole article.
"At the outset of the last crisis, following Bear Stearns’ rapid decline, systemic risk mutated in the least expected places. It always does. "
"The banking system was infinitely stronger(now) than it was back in 2007. That’s true but such simplicity is dangerously misleading"
This is completely false. The banks are desperate for deposits.

"A credit crisis that began with untenable global debt of $140 trillion was “resolved” by accumulating another $70 trillion in credit. Got it."
"most of the debt build has occurred in the capital markets, the shadow banking system and critically, on central bank balance sheets. It follows that the next source of systemic risk will originate and spread from one of these conduits. "
The jury is still out as to whether it will be in corporate bonds, OR, credit markets.'
"It is not stock market volatility that will be the primary disruptor, but rather volatility in the credit markets."
"Edwards may be on to something. The divide between the S&P 500 and the combined Smart Money Flows Index and Ed Yardeni’s Fundamental Stock Market Indicator is now at a cycle wide. Google both and thank me later."
But we’ve clearly forgotten that it is economic conflict that precedes geopolitical upsets, not the other way around, hence the red herring of most perma-bulls’ contentions that geopolitics is the only thing that can derail markets.
https://www.linkedin.com/pulse/great...martino-booth/

Everybody has a favorite candidate for which sector of the market is going to blow first. Here is an excellent article about politicians buying votes from public service unions.
How a pension deal went wrong and cost California taxpayers billions - Los Angeles Times
The globalization of poverty, https://www.globalresearch.ca/the-gl...-order/5313987

Kunstler,. "The true message of income inequality is that the nation as a whole is becoming incrementally impoverished and eventually even the massive “wealth” of the one-percenters will prove to be fictitious, as the things it is represented in — stocks, bonds, currencies, Manhattan apartments — hemorrhage their supposed value. The very wealthy will be a lot less wealthy while everybody else is in a life-and-death struggle to remain fed, housed, and warm. "
Stop and Assess - Kunstler

Venezuela and Argentina, https://www.dollarcollapse.com/argen...rrency-crisis/
5/06 When money dies: In Venezuela, a haircut costs 5 bananas and 2 eggs – ZH
Plant a garden !!

[Danny B]

Martion Armstrong,,,, mostly right

Quiet sunday afternoon.
Understanding confidence as related to inflation.
" Hence, Volcker created DELATION as capital then ran away from assets and into bonds to capture the higher interest rates. Then and only then did rates begin to decline between 1981 into 1986 reflecting the high demand for US government bonds, which in turn drove the US dollar to record highs and the British pound to $1.03 in 1985 resulting in the Plaza Accord and the creation of the G5 (now G20).

So many people want to take issue with me over how the stock market will rise with higher interest rates. It is a BELL-CURVE and you better begin to understand this. If not, just hand-over all your assets to the New York bankers now, go on welfare and just end your misery."
"To those who doubt that the stock market can rise with rising interest rates, I really do not know what to say. Keep listening to the talking heads of TV and all the pundits who claim only gold will rise and everything else will fall to dust. Then we have the sublime blind idiots who never look outside the USA and proclaim the dollar will crash and burn, not the rest of the world so buy gold and cryptocurrency you cannot spend and certainly with no power grid."

"PHASE THREE

Is when no level of interest rate will save the day. Capital simply flees the political state for the risk of revolution or civil war means that tangible assets which are immovable will not hold their value such as companies and real estate. This is the period that Goldbugs envision. At that point, the value of everything will even move into the extreme PHASE FOUR where even gold will decline and the only thing to survive is food. There, the political state completely collapses and a new political government comes into being."
I have to argue this point. "a new political government comes into being.". If we reach a point where only food has value, there will be NO Phoenix of GOV rising up out of the hot ashes. Maybe years later when the ashes are quite cold.
https://www.armstrongeconomics.com/m...port-currency/

More Armstrong, talking about how very few people actually understand international capital flows.
"What you fail to grasp here is that there are very few of us with international experience. Local economists do not cut it and it seems that nobody else with hedge fund experience who has actually traded billions of dollars when a billion used to be a lot of money is around for consultation."
I have been called into just about every crisis since the mid-1970s.

The markets are bigger than me, and bigger than the Bank of England and ALL the central banks combined. Remember the Louvre Accord? That is when the central banks came out and tried to stop the decline in the dollar going into 1987. NEWS FLASH!!!! They failed! So, what happened? They called me again since I was the one warning them in 1985 they would unleash volatility."
"You cannot manipulate any market beyond the normal channel of daily noise. You cannot make gold rise or fall if it is out of sync with the rest of the world."
This is false because it has already been done with the London Gold Pool. It DOES work in the short term
"The nonsense how banks “manipulated” libor was a classic example. They could not change the trend of interest rates,"
The banks were found guilty and prosecuted. Once again, it DID work for a few years.

"Those who claim it is proven gold is manipulated to prevent a rally are delusional. You cannot do that without manipulating everything else in the world. So they manipulated the stock market up to keep gold down when the majority of analysts were bearish on the stock market since 2009?"
What a bonehead. The commodities markets were manipulated in this case. The CFTC reported on this very clearly
"The total value of gold traded in 2017 was $6.7 trillion compared to $77.6 trillion in equities and the bond market is about 3 times the size of the global equity market. Gold is just a tiny fraction of the world financial markets "
Well, I guess that he is right. Sell your gold to; Serbia, Greece, Ecuador, Mexico, Kazakhstan, Kyrgyzstan, and Tajikistan. But reportedly no one is buying gold at a faster pace than Russia. Turkey has repatriated their gold from the FED. Germany too. China is buying up anything that glitters. The private stash in India is reckoned at 24,000 tons. Turkey is the highest per-capita.
https://www.armstrongeconomics.com/m...ies-as-always/
"We have been in a DEFLATIONARY mode just in case anyone reads about the real world and quantitative easing did not cause hyperinflation."
Again, what a bonehead. The stock market has tripled in the last 10 years ONLY on QE.

[Danny B]

Carry-trade unwind,,, capital flight

I agree with Armstrong that one can NOT possibly do economic forecasting if one does not follow international capital flows. A capital flow is a capital flow regardless of what artificial borders it crosses. Capital was pumped into emerging markets because they offered better returns than developed markets. This was all well and good for a while. But, when emerging markets had gorged on dollar-denominated debt, they were in great danger from a rise in dollar-interest rates. As interest rates rise from a cutoff of QE, the possibility of default in EMs goes up. As fear overcomes greed, capital flows out of EMs. The weaker EMs try to hold on to capital by raising interest rates,,,, to counteract fear with enhanced greed.

"Argentina raises interest rates to 40% Argentina's central bank has raised interest rates for the third time in eight days as the country's currency, the peso, continues to fall sharply. On Friday, the bank hiked rates to 40% from 33.25%, a day after they were raised from 30.25%.3 days ago"

Argentina can't possibly survive paying 40% interest but, that is all they have as an option. Argentina hasn't changed. Only confidence in their ability to repay has changed. The hot-money knows when a State is weak. They know when to pull out. Argentina isn't the only State with this problem.
"Looking at the growing outflows in the Emerging Markets hard dollar bond funds universe and with the Mexican Peso and Turkish currency taking a correlated pounding"
Turkey is in deep do-do and, Erdogan wants to start a war to deflect attention. He brought turkey's gold home so that it doesn't go missing if he pisses off Pox Americana.

"investors naturally move from an area of low solvency concentration (High Default Perceived Potential), through capital flows, to an area of high solvency concentration (Low Default Perceived Potential). The movement of the investor is driven to reduce the pressure from negative interest rates on returns by pouring capital on high yielding assets courtesy of low rates volatility and putting on significant carry trades, generating osmotic pressure and "positive asset correlations" in the process. Applying an external pressure to reverse the natural flow of capital with US rates moving back into positive real interest rates territory"
VERY good article comparing capital flows to osmosis.
https://seekingalpha.com/article/4170394-wilson-cycle

Japan, et al paid high interest rates. Investors borrowed cheaply in Yen and, loaned to higher interest rate markets. Free money just for shuffling pixels. This is called a "carry trade" As fear rises, the carry trade goes into reverse. The money is flowing OUT of EMs. The Europeans and Emerging Markets have been begging the FED NOT to raise interest rates. The ECB is on it's death bed and, this makes it worse,,, from the point of view of capital flight.

Here is an article about the global credit impulse. Keep in mind that every CB that prints sends liquidity all over the world. At one point, China was printing more that the ECB, FED and BOJ put together.
https://www.zerohedge.com/news/2018-...-chinas-credit
America is reportedly tightening (the FED). I doubt that the ESF and PPT are just sitting on their hands. The "value" of the stock market has tripled in just a few years. I doubt that the PTB are going to cut it loose now. That is why they are channelling money through Buffett.

China created a mega bubble in credit and spent it on STUFF. EVERY single credit bubble must go into mal-investment. China is packed full of stuff that nobody is using. Most of this done to maintain employment. It remains to be seen just how good or bad this model really is.
Chart of the Day: Chinese Fixed Capital Investment is Nearly 90% of GDP - The Sounding Line
China made TOO MUCH of everything,,, just to keep people employed.
https://www.zerohedge.com/news/2018-...ike-graveyards
China moved more than 300 million people from the farm to the city. As society gets more automated , there are fewer job niches. If the industrial society does not have a job niche for you, you must revert to the agrarian lifestyle. At the same time, their labor force is shrinking by 1 million a year. I have no idea how this will eventually work out.

[Danny B]

Draining overseas $liquidity (blood)

Once again, when "money" is just information,,,, it can move at the same speed as information. Things that would have previously played out in weeks or months now play out in hours.
"The recent collapse of the Argentine Peso and other emerging currencies is more than a warning sign.

It could be the arrival of a “sudden stop”. As I explain in Escape from the Central Bank Trap (BEP, 2017), a sudden stop happens when the extraordinary and excessive flow of cheap US dollars into emerging markets suddenly reverses and funds return to the U.S. looking for safer assets. The central bank “carry trade” of low interest rates and abundant liquidity was used to buy “growth” and “inflation-linked” assets in emerging markets. As the evidence of a global slowdown adds to the rising rates in the U.S. and the Fed’s QT (quantitative tightening), emerging markets lose the tsunami of inflows and face massive outflows,"

"Argentina even issued a one-hundred-year bond at a spectacularly low rate (8.25%) with a very high demand, more than 3.5 times bid-to-cover. That $ 2.5 billion issuance seemed crazy. A one-hundred-year bond from a nation that has defaulted at least six times in the previous hundred years"
Behold The Sudden Stop. Risk of Emerging Markets Collapse | dlacalle.com

"The implication? Owning 7% bonds has allowed an unknown number of pension funds to pretend that they’re capable of earning the 7.5% annual return that their political bosses demand. And now the possible default on those bonds has stripped those same pension funds of even the pretense of meeting their obligations. The already real pension crisis just got more real.

As for the hedge funds that bought these bonds with leverage – we’re about to see even more reports of formerly solid funds underperforming, closing down and returning what’s left of their clients’ capital.

This is how a crisis at the periphery spreads to the core."
https://www.dollarcollapse.com/every...ntina-implode/

Greece spent 1/2 of their modern history in default. Investors lent to them anyway. If they are that stupid and short-sighted, NOBODY should have bailed them out.
Same is true for Argentina. There is always some fool that looks a yield and NOTHING else.
So, what does all this mean?
"The interest rate currently sits at 40%. That means the Central Bank pays 40% per year on peso-denominated debt, which can imply that they expect the value of the peso to fall somewhere in the ballpark of 40% over a one year period."
https://wolfstreet.com/2018/05/06/wh...rgentina-peso/

5/07 Warren Buffett calls bitcoin ‘rat poison’ – Independent
https://www.zerohedge.com/news/2018-...-where-go-here
5/07 Tesla admits it may need new capital – Zero Hedge
5/07 Jim Chanos and other Tesla short-sellers are smelling blood in the water – CNBC
Vids from Dollar Collapse, https://www.dollarcollapse.com/top-ten-videos/
Quantitative Tightening means that there are fewer dollar to service offshore dollar denominated debt. Rising interest rates means that the cost of service is rising. A reversal in carry-trades means that dollars are draining out of offshore markets.
Armstrong lays out the immediate and, eventual effects of the "triumph" of fear over greed. The dollar rises and destroys all other markets and currencies.
https://www.armstrongeconomics.com/m...ead-after-all/
Everybody who is anybody in high-power finance reads Armstrong. He has warned that U.S. Sovereign debt will collapse. Apparently, investors are heeding what he says. This currency flight is not flowing into U.S. sovereign debt.
Armstrong warns that you can not be emotional in your investing. You must be strictly logical.
Armstrong was financially ruined and thrown into prison for many years because of crooked NYC banks and crooked NYC courts. He was beat up and put in a coma,,, nearly died. I'm absolutely sure that he wouldn't let this cloud his judgement,,,, he would never bring down the GOV and banks out of revenge. NOPE, never.

Germany has a trade surplus. The rest of the EU has a trade deficit. How long did you think the EU would leave Germany alone. They want them to cough up €12 billion more annually. That will be just the start.
https://www.armstrongeconomics.com/i...up-for-brexit/

[Danny B]

Rising dollar, counterparty risks,,, Nomi Prins

Italy is the tenth largest economy but, the THIRD largest bond market. This all sounds good until there is a problem and debt service becomes impossible. What about England? Specifically, London? In every credit transaction, there is counter-party risk. What about all the possible margin calls in stock markets. What about failures in money markets?
Friday we looked into Britain’s role in financial markets. It turns out we’re by far the world’s largest international lender. At $5.1 trillion owed to us, we’re well ahead of Japan in second place and almost double the US in third.
It’s a bit misleading. The UK is not some sort of magical capital exporter. Especially with our poor savings rate.
Our key industry is an intermediary. It passes on wealth. British rule of law and finance friendly policy makes it a great place to park or invest your money from.
The trouble is, intermediaries bear risk too. Even small crises in peripheral countries trigger unease in our economy.
And that’s happening now.
Remember that U.S. markets are sucking in liquidity from all over the world. That includes London.
But there was hope that the new reform government would do a little better than this. Funny how people never lose faith in politics itself.
And when they do, they buy gold.

It’s especially funny to think that Australia and Canada can have a housing bubble in the first place. They have very low population density, so supply should just keep up with demand to keep prices reasonably steady.
What a bonehead. Cross border capital flows. Chinese hot money fleeing questionable jurisdictions.
The Australian dollar has dropped fast, putting pressure on the banks which use plenty of offshore funding. Uhh, about that off-shore funding.
In parts of Canada, the crash is well underway. Business Insider reports on Toronto, where home sales plunged 39.5% in March compared to a year ago, while prices fell more than 30%.
https://www.capitalandconflict.com/g...s-are-busting/
German banks had tons of exposure to WEAK Greek debt,,,, and then, it blew up. London banks have tons of exposure to weak debt worldwide.

The American banks shuffled off their bad debt to the State and, the State shoved it into the GSEs, Freddie and Fanny and Sally.
Offloading this bad debt makes the American banks look stronger. This is attracting capital from weak European banks. The dollar rises and makes offshore dollar loans that much harder to service. This is a feedback process that continually strengthens the dollar. At some point it wipes out non-dollar markets and non-dollar currencies.
https://www.zerohedge.com/news/2018-...banking-crisis

5/08 Dollar surge bringing emerging market rate cut cycle to a halt – Reuters
5/08 “Creating wealth” through debt: the West’s finance- capitalist road – Counterpunch


Nomi Prins, "A decade after I left my final Wall Street post — as a managing director at Goldman Sachs"
"The collusion (or coordination) that the U.S. central bank (the Federal Reserve) forged with other major central banks to fabricate money in the wake of the 2008 financial crisis.

That money went to support the U.S. financial system at first, and it later spread to markets worldwide.

Computers bring GREAT efficiency at tracking every penny. The parasitism of the financial system became ever-more obvious. Money was printed to save every investor on the planet.
The book dives into how central banks rigged markets and ultimately created more inequality and instability as a result.

They did all of this in order to subsidize private banks at the expense of everyday people everywhere
After I’d written the book It Takes a Pillage about the 2008 financial crisis, I was exhausted. Not from writing, but from the sheer ignorance that the global elite had, and still have, of the banking, economic and financial conditions that led to disaster.

In 2004, my book Other People’s Money warned exactly how the 2008 financial crisis would unfold. Sadly, I was right. In the wake of the chaos, I needed a break.
By returning to the glitz and drama of the 1920s, it hit me. The same banks that had perpetuated the crash of 1929 had perpetuated the crash of 2008!

The same families and their confidantes over decades had consistently set the stage for expansion and crisis — always to their benefit.

By researching the Big Six banks and their leaders that protected their interests at the expense of the rest of the population, I constructed the foundation of my nonfiction book, All the Presidents’ Bankers.
https://dailyreckoning.com/collusion...-rigged-world/
Best read the whole article.

We will see a crash at some point because, despite the cheap money, entire sectors of the economy just can’t make enough money to service very cheap debt.

It will start with debt defaults. Credit will begin to seize up and the lack of confidence will spread throughout the economy. When the cracks begin to form, they will rapidly expand and that’s when we’ll have a crash.
To start, I recommend you extract cash from the system because when a financial crisis happens, banks close their doors to depositors. I recommend you take some of that cash and put it into hard assets like silver and gold. Just make sure you keep it out of the banking system.

[Danny B]

Jim Willie and gold

Jim Willie has his own perspective and, his own informants. Here are some snippets.

April 24th: topics covered include Iran abandoning the USDollar in trade & commerce & banking with full participation in the Eurasian Trade Zone, with Iran engaged with Chinese barter but also with Russian oil sales for funding liquidity, the OPEC situation of moribund status,
the ARAMCO deal with hidden angles with respect to China, the Shanghai Gold-Oil-RMB contract as the death knell for the Petro-Dollar (the most significant financial market event in a generation), the Saudi oil purchases to China in RMB terms as the dagger in the Petro-Dollar heart,
the imminent next subprime bond crisis but much broader in scope of damage (Systemic Lehman Event) as it reaches sovereign bonds and entire national banking systems, the expectation being that Italy to be the site of global breakdown with lit fuse, pressure points to watch in USGovt debt, German relations with Russia, Saudi-China connection, Iran expanding links to Eurasian Trade Zone, and Gold market divided global prices

https://youtu.be/WNZ51ygyjm0

May 5th: topics covered include the crack in the French Govt stability which nears an internal revolt against the cabal prince Macron, the intrigue and failure of the Chinese trade war waged by the inept USGovt which must endure the backlash, the Shanghai Gold-Oil-RMB contracts which sound the death knell for the Petro-Dollar,
the drama behind the Chinese urge that Saudi sell oil in RMB terms (dagger in Petro-$ heart), the Turkish role in the BRICS Gold Trading platform which could give birth to the Gold Trade Note, the Iranian role in the Eurasian Trade Zone formation, the role of Exxon with Tillerson no longer at USDept State as they defy the Russian sanctions in Arctic production sites,
the Syrian War angles that include the tip-off of the Russians by the French Military and the curious chemical plant destroyed inside Syria by the USMilitary, the Saudi Prince MbSalman on a tour of the United States with likely high jinx coercion afoot, the Russian Rosneft Oil Consortium in its development to replace the vacant OPEC in universal non-USD oil sales by courting numerous OPEC nations

https://ochelli.com/import-tariffs-impact-war-trades/

The USDollar is to lose its global currency reserve status. It will lose its monopoly in global trade payments. Major bank structure changes are coming. Trade imbalances must be reduced by directive.
Currency devaluation will be a regular adjustment device. An end to Unipolar geopolitics has already begun. The Gold Standard is arriving in slow gradual unstoppable steps. Gold reserves must be demonstrated by nations. The Dual Universe is becoming an obvious feature in global finance. The development of infra-structure will become a key emphasis. The end of the era of sanctions is near, fast losing their impact, even resulting in increased US isolation. The USGovt has used deeply criminal methods to keep allies in line. Multiple gold prices will soon be posted, the new normal.

Global RESET Challenge: Ultimate Twist

The rest of the world sees that the rising dollar and resulting capital flight will break the system. It has long been know that the breaking of the Bretton Woods agreement would bring hyperinflation of the upper loop. The Western powers planned for the SDR to be the new standard for reserves. The R.O.W. can easily see that an SDR created by the IMF would just be more monetary enslavement by the West. Bretton Woods created the dollar as a proxy for gold. All of that depended on the honesty of politicians. NO MORE PROXIES.
Churchill made it clear that kinetic war against Germany was the answer to the fact that England was losing the economic battle. Bretton Woods was supposed to end currency wars that beget kinetic wars. It failed after just 20 years.
Gold brings stability and discipline. That is why bankers and statists hate it.
Greenspan, "This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
He didn't mention the bankers but, the hatred is just the same.

[aljhoa]

The rest of the world sees that the rising dollar and resulting capital flight will break the system. It has long been know that the breaking of the Bretton Woods agreement would bring hyperinflation of the upper loop. The Western powers planned for the SDR to be the new standard for reserves. The R.O.W. can easily see that an SDR created by the IMF would just be more monetary enslavement by the West. Bretton Woods created the dollar as a proxy for gold. All of that depended on the honesty of politicians. NO MORE PROXIES.
Churchill made it clear that kinetic war against Germany was the answer to the fact that England was losing the economic battle. Bretton Woods was supposed to end currency wars that beget kinetic wars. It failed after just 20 years.
Gold brings stability and discipline. That is why bankers and statists hate it.
Greenspan, "This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
He didn't mention the bankers but, the hatred is just the same.

https://www.memri.org/reports/egypti...-during-exodus

Al