Economic pressures

[Danny B]

More predictions

There is a lot going on and, Powell is at the center of it.
Alan Greenspan, " I never said that the FED is independent"
Well, the politicians just couldn't help themselves. They frequently ordered the FED to take domestic actions that would look good in the runup to an election. Paul Volker claimed that he was shocked by this. Over the years. this action pumped up the markets by quite a bit.

"As the financial crisis reached a fevered pitch in 2008, the Federal Reserve took to flooding the financial market with dollars by buying up bonds. Simultaneously, interest rates fell dramatically, as bond yields move in the opposite direction of bond prices. Barnier sees the Fed as responsible for over 93% of the market from the start of QE until today. "
https://finance.yahoo.com/news/the-f...194426366.html
OK, so just how much of this will unwind as Powell tightens the screws?

Here is another guy who made a lot of timely accurate predictions.
"To be fair, I initially proclaimed the Epocalypse would begin then. Though the downturn did not turn out as bad as I thought it would, the timing was precise to the day for each gyration in the market, and the January jolt did turn out to be the largest January point-decline in Dow history, so it was no little thing."
"As the Fed itself acknowledged, the Fed has been “front-running the market” (their term) with their “forward guidance” that promised huge hits of new money “in order to create a wealth effect.” (That, too, is something I stated about the Fed’s intention long before they admitted it"
"o, each time the Fed pulls one more major support out from under its fake recovery, the recovery takes another jog down. Now the Fed is slowly pulling out all remaining support (in fact, reversing all of it), so the market is going to go down, down, DOWN."

"Economic reality here is that we are still in the Great Recession and simply don’t know it because the belly of the Great Recession was propped up artificially by the Fed. As the last of the props are being removed, we’ll go back into the recession we created, and discover a depth far worse than our first plunge. "
"Stock market annihilation

The stock market’s inability to handle the present moves by the Fed and the expansion of government debt spending can particularly be seen in the ineffectiveness now of stock buybacks. I predicted last year that the repatriated money under the Trump Tax Plan would flood into buybacks far more than into capital investments. In complete proof of that, buybacks have now soared to levels even greater than seen in all the rest of the recovery period."
https://news.wealth365.com/death-of-...-the-stockade/
The guy does have a good track record of predictions.

The CBs are buying gold. Must be a good idea.
https://www.rt.com/business/442410-g...and-up-dollar/
Student loans are the highest debt after mortgages,,, and they are blowing.
https://www.zerohedge.com/news/2018-...bble-about-pop
"Today, we live in a country where most workers do not earn enough to support a middle class family, "
"About 40% of the American middle class face poverty in retirement

1 in 3 Americans have hardly any retirement savings

Those over 65 have been filing for bankruptcy in droves

Health spending per capita in the U.S. increased nearly 29 fold in the past 40 years,"
"one of my contacts just emailed me with some deeply troubling information. He has a customer that is a Bank of America board member, and that board member told him that they expect things to really start falling apart by late March “at the latest”.
https://www.zerohedge.com/news/2018-...ent-dependents

Globalization and rural America.
https://www.zerohedge.com/news/2018-...-rural-america
This vid starts out slow but, has very interesting info about our bankruptcy.
https://www.youtube.com/watch?v=VvpCBLPhyHE

[Danny B]

Panic in Germany

3 articles on Germany.
https://www.armstrongeconomics.com/i...significantly/
https://www.armstrongeconomics.com/i...of-revolution/
"What our model is showing is the craziest period in American politics begins here in 2018. We have NOTHING but Directional Changes and Panic Cycles in politics from here into 2021."
"https://www.armstrongeconomics.com/markets-by-sector/foreign-exchange/euro/merkel-to-step-down-as-leader-of-cdu/

"This is incredibly important because undermining the Euro is what our computer is warning about and that can drive the dollar to all-time record highs breaking the back of the entire world monetary system. Curiously enough, December has been shaping up as a major turning point on the Arrays. We may have just got the explanation why."

Investors were buying German Bunds (bonds) in the belief that; after a collapse, they would get Deutsche Marks. The German Political system is blowing up and, this will cause capital flight. Merkel will still try to hang on to power. this will cause more instability.
Powell will continue to raise rates. This will attract more capital. China is trying to block capital flight. At the same time that China is trying to internationalize the Yuan.
Net capital outflow from Russia reaches $21 billion in four months
China's Capital Outflows to Widen to US$37B in Q2 2018 |

[Danny B]

Stocks and Powell

10/29 Stocks plunge on new tariff threats – CNBC
10/29 FANGs free-fall into bear market as buy-the-dip fails – Zero Hedge
"buy the dip" only works when the money spigot at the FED is turned on.
10/29 French FinMin: Euro Zone unprepared to face a new crisis – Zero Hedge
European banks hold $ trillions in sovereign debt. It will never be paid back. This is a process, not an event.
"Jun 27, 2018 - Shares in Europe's largest banks have shed almost a fifth of their value"
"Bank Stocks Fall As Dollar Proves More Almighty Than God In Turkey"
"Bank Stocks Are On Their Longest Losing Streak Ever - Bloomberg june 26, 2018"
"Europe's banking problems are the elephant in the room | Financial ..."

Since all the banks are connected, the contagion will spread everywhere.
https://www.youtube.com/watch?v=pJ0FqrzrDAs
"Feb 14, 2018 - For European banks, it's a headache that just won't go away: the 944 billion euros ($1.17 trillion) of non-performing loans"

The Fed caused 93% of the entire stock market's move since 2008: Analysis
The FED giveth and, the FED taketh away.
Evidently, the head of Gallup has been a bad boy.
https://kingworldnews.com/gallup-ceo...yment-numbers/
So, Powell will destroy the economy. This will gave Trump a reason to get rid of the FED.
https://www.zerohedge.com/news/2018-...ed-big-problem
Since almost all wealth is debt-money, everything is held up by confidence. Confidence seems to be slipping away.
https://www.oftwominds.com/blogoct18...ning10-18.html

[Danny B]

Energy crash

Nothing earthshaking today.
Th Value Line Geometric Composite is a good indicator of stock market health. It currently shows how mega-tons of free money can drive everything up.
Dana Lyons' Tumblr — The Mother Of All Support Levels?

"in sum, without low-interest Federal Reserve policies the fracking boom might never have been possible. For the world as a whole, a steady decline in energy resource quality has been hidden by massive borrowing. Indeed, since the GFC, overall global debt has grown at over twice the rate of GDP growth. "
"Given the speed at which sweet spots were becoming crowded with wells, it appeared to us that the time window during which shale gas and tight oil could provide such high rates of fuel production would be relatively brief, and that an overall decline in US oil and gas production would likely resume with a vengeance in the decade starting in 2020. These conclusions flew in the face of official forecasts showing high rates of production through 2050. However, our confidence in our methodology was bolstered as individual shale gas and tight oil producing regions began, one by one, to tip over into decline."
https://www.resilience.org/stories/2...-bonus-decade/

10/30 Italian economy unexpectedly stalls in setback for populists – Bloomberg
There was nothing unexpected about it.
10/30 Treasury sees 2018 borrowing needs surging to $1.34 trillion – Bloomberg
This isn't going to end well.
10/30 “Algo-induced panics” leave traders screaming “I don’t care, just get me out” – ZH
The algos should be good for a lot of entertainment in the future.
10/30 China’s currency just hit its lowest level in a decade. What’s next? – CNN
Capital flight and market forces.

Kunstler is in fine form.
The Monster Mash - Kunstler

Jim Willie, "the imminent Second Plaza Accord to bring down the USDollar in coordinated manner (last gasp to avoid broad meltdown), the global USTreasury. the upcoming USTreasury debt restructure, and the climax harbinger signal of USGovt debt servicing costs currently exceeding the entire USGovt tax income (as in the big OOPS) for highly reliable debt failure signal"
First comes default, then comes restructuring.

"The fascist state has commandeered the monetary function and the financial sector. It has also turned the military function into a predatory machine. Despite their grip, Gold acts as the perfect antidote, administered from the Eastern hands. In fact, Gold will restore order and honesty within the global financial system. Many examples are given for the United States in its decayed state, being a champion of fascism in a grand obscenity of a sprawling fascist state.
The list of examples is only partial. The Axis of Fascism can be depicted as the United States, the United Kingdom, and Israel. The TPX triumvirate is in charge of the Global Financial RESET process. Herein we have Trump Putin and Xi to assure that the Gold Standard is installed without global war. The Gold Standard will be rolled out in a long organized tactical efficient schedule. The process has begun, and is not stoppable."
GOLDEN JACKASS.COM - The Golden Jackass Knows Gold, Currencies & Bonds"

[Danny B]

Fracking bust and the debt mountain

This is a repost of a previous article / link showing that almost every bit of the fracking business was created and financed by hot money in the junk-bond market.
https://www.resilience.org/stories/2...-bonus-decade/
Great Unwind of Oil-and-Gas Junk Bonds to Defund Fracking
This Federal Policy Enabled the Fracking Industry’s $280 Billion Loss
You get the idea. Investors are fleeing the fracking industry. Meanwhile, Pox Americana is trying to force Iranian oil off the market.
"Some predicted that $100 per barrel oil by the end of the year was imminent, while Tehran maintained a defiant tone, stating that neither Saudi Arabia nor OPEC would be able to pump enough oil to compensate for the loss of Iranian barrels, estimated between 500,000 bpd and 1 million bpd."
https://www.zerohedge.com/news/2018-...re-coming-true

Iran has a work-around for it's oil.
https://sputniknews.com/middleeast/2...ergy-exchange/
It remains to be seen What will happen to oil markets when fracking crashes. Oil is priced in dollars per barrel but, gasoline is sold in price per gallon. If oil is $42 a Bbl, that translates to 1 dollar a gallon.
"For perspective, consider that in 2014 ExxonMobil earned about 4 cents for every gallon of gasoline and other petroleum products we refined, shipped, and sold in the United States."
"The owner of a typical car or truck with a 16-gallon gas tank will pay $41.12 to fill up, based on the current price of $2.57 for a gallon of regular gasoline. Of that, $7.82 will go to taxes, while around 64 cents will go to ExxonMobil’s bottom line "
https://energyfactor.exxonmobil.com/...e-at-the-pump/
People complain about the oil companies doing price gouging. A barrel of oil is sold as much as 47 times by speculators before it is consumed.

China is headed down rapidly,
https://gainspainscapital.com/wp-con...GPC1030182.png
America is headed down slowly,
https://gainspainscapital.com/wp-con...PC10301811.png
https://gainspainscapital.com/2018/10/30/9970/

"A dollar shortage seems implausible in a world where the Fed printed $4.4 trillion. But while the Fed was printing, the world borrowed over $70 trillion (on top of prior loans), so the dollar shortage is real. The math is inescapable."
"The defaults are beginning to pile up. Several large corporations and regional governments have defaulted recently.

China’s leaders have panicked at the slowdown and have started the credit flow again with lower interest rates, higher bank leverage and more debt-financed, government-directed infrastructure spending."
PANIC, what an original idea.
https://www.zerohedge.com/news/2018-...-ready-explode
"the monetary union is looking more and more likely to collapse, urging Italy and others to pull out in an organized fashion to avoid the subsequent economic fallout.
Speaking to The Express on Wednesday, Donato said the “probability that sooner or later there will be an uncontrolled collapse of the eurozone "
"Brussels threatening to fine Italy up to €3.4 billion unless Rome presents a new draft budget compliant with its rules within three weeks.

However, Interior Minister and Deputy PM Matteo Salvini has vowed not to change “even a comma” in the budget,"
https://sputniknews.com/europe/20181...lled-collapse/
People will run to gold when it is too late.
https://www.rt.com/business/357890-d...-gold-germany/
Jacob Rothschild says the Trump is making big changes.
https://www.rt.com/business/435490-r...der-stability/

11/01 Italy’s debt costs rise further at auction – NASDAQ
11/01 Tech drove stocks skyward. It’s a different story on the way down – NYT
11/01 ‘Godfather’ of market analysis: ‘damage done to the market much worse’ – SHTFPlan
11/01 GE locked out of commercial paper market after Moody’s downgrade – Zero Hedge
"Notably, the combined debt of the US, Eurozone, Japan, and China has increased more than ten times as much as their combined GDP [growth] over the past year.

Yes, you read that right. In the last year, the world’s largest economies are generating debt 10X faster than economic growth. Adding debt at that pace, if it continues, will boost the debt-to-GDP ratio at an alarming rate."
http://www.mauldineconomics.com/fron...-alarm-ringing

6 good charts, https://www.bondvigilantes.com/blog/...ght-halloween/

[Danny B]

Total State control will destroy the economy

This post is more political than economic. BUT, policy out of the district of corruption controls most of economics.
"Things greatly accelerated post-9/11 – the mother of all false flags used as a pretext for virtually anything goes at home and abroad.

Police state laws, presidential executive orders, national security and homeland security presidential directives, congressional authorization for endless wars, global war OF terror, not on it,"
"Lawmakers capitalized on a window of hysteria to grant unchecked executive powers, signed into law by GW Bush 45 days after 9/11.

Things continued downhill from there, including establishment of the Homeland Security Department – the national Gestapo along with the FBI, CIA and NSA.

The Patriot Act created the crime of domestic terrorism for the first time. Henceforth, anti-war or global justice demonstrations, environmental or animal rights activism, justifiable civil disobedience, resisting growing tyranny, and dissent of any kind may be called “domestic terrorism.”
https://stephenlendman.org/2018/10/e...ms-in-america/

"Yet another ratcheting up of the calls for the government to clamp down on the citizenry by imposing more costly security measures without any real benefit, more militarized police, more surveillance,"
"When things start to fall apart or implode, ask yourself: who stands to benefit?

In most cases, it’s the government that stands to benefit by amassing greater powers at the citizenry’s expense.

Unfortunately, the government’s answer to civil unrest and societal violence, as always, will lead us further down the road we’ve travelled since 9/11 towards totalitarianism and away from freedom.

With alarming regularity, the nation is being subjected to a spate of violence that not only terrorizes the public but also destabilizes the country’s fragile ecosystem, and gives the government greater justifications to crack down, lock down, and institute even more authoritarian policies for the so-called sake of national security without many objections from the citizenry."
https://www.rutherford.org/publicati...vous_breakdown

Armstrong, "Politicians have totally and completely misunderstood the trends within the global economy and as a result, they are actually creating one of the worst economic debacles in history."
"People spend more when they believe that they have big profits in their home. The recession of 2007-2010 was so bad recording the worst of all declines since the Great Depression all BECAUSE it undermined the real estate values. People then spent less because they viewed their home declined in value. As taxes have been rising and the average home value collapsed, the velocity of money kept declining. "

"The velocity of money began to turn up finally in the USA ONLY when interest rates began to rise. The retired could suddenly begin to make something on the savings for once in a very long time. This is something the ECB still has not figured out in Europe as it has wiped out both the elderly savings along with pension funds."
"politicians have gone nuts imposing all sorts of regulations to outright making it a criminal act for a foreigner to buy property. What they are clueless about is this attack on the real estate market viewing foreign buyers as evil, is undermining real estate as a whole and that is what creates the worst economic decline in history. This undermines the banking system that has used real estate as collateral for mortgages and it undermines consumer spending because people save more when their property declines."
"The politicians are actually creating the worse possible scenario for the economy going forward. Welcome to the new face of stupidity."

Politicians have totally and completely misunderstood the trends within the global economy and as a result, they are actually creating one of the worst economic debacles in history.

The politicians are actually creating the worse possible scenario for the economy going forward. Welcome to the new face of stupidity.
Now add government borrowing which competes against the private sector and it only gets even more stupid. Then we have brain-dead investors who actually think government debt is “quality” issued by idiots who have ZERO intentions of ever paying off their debt at any point in the future. Governments borrow year after year with no understanding what they are doing to the entire economy and how they are causing unemployment to rise with ever more taxes and more borrowing completing with the private sector on every level.

Then society elects people with absolutely ZERO business experience who in turn appoint academics who have wonderful theories that have never proven to have worked even once! And people wonder why I say they will never listen to prevent a crisis so we have no choice but wait for the Crash & Burn."
https://www.armstrongeconomics.com/a...sh-in-history/

So, we have an ongoing lockdown from the police state enabled by advanced technology. We have ever-eroding freedoms. The State has ever-increasing debt. The machinery of State is operated by people who know nothing about operating machinery. Most of the employees are people who couldn't make it in the private sector. They all borrow endless sums of money to keep their jobs and pensions funded.
No wonder the birth rate is falling. The State plans to survive no matter how many people it has to crush.

[Danny B]

Plaza Accord, Jim Willie, Yuan, strong dollar

I write because I have some talent for making sense of the mountain range of economic BS that is presented as TRUTH to a public that can't take the time to wade through and learn for themselves. This article is under "Best of the Web" at Dollar Collapse.
The biggest of big pictures – GoldMoney
"That is the purpose of this article. It can be bewildering when a casual observer tries to follow global events, something made more difficult by editorial policies at news outlets, and the commentary from most analysts, who are, frankly, ill-informed. Accordingly, this article addresses the topic that dominates our future. "

This BIG PICTURE article ignores international capital flows, global mean wages, demographic crash, $247 trillion in debt overhang, the crash of shale oil, pole shift, the financial suicide of China, Eurozone meltdown, the pension crisis,,, and several other small problems.
I'll keep writing. I'm not the only one. Here is an excellent article to be read in it's entirety.
https://www.zerohedge.com/news/2018-...rice-inflation

"(Bloomberg) – New York City faces future health costs for its retired workers of $103.2 billion, an increase of $40 billion over a decade. It has about $5 billion set aside to pay the bill.

The so-called “other post-employment benefits” liability was disclosed in New York’s comprehensive annual financial report released by the city comptroller’s office Wednesday. The city’s $98 billion unfunded liability for retiree health care exceeds the city’s $93 billion of bond debt and $48 billion pension-fund shortfall."
https://www.dollarcollapse.com/new-y...nt-bankruptcy/
Notice how they project the cost of the program out for many years. Notice how they limit the funding picture to just what they have on hand NOW. They act as if there will be no future funding coming into the fund.

Jim Willie, " the imminent Second Plaza Accord to bring down the USDollar in coordinated manner (last gasp to avoid broad meltdown), the global USTreasury dumping initiative motivated by massive USGovt debts & deficits coupled with lower oil price from energy wars under a cloud of horrible USGovt fascist predatory image (also producer of toxic food), the upcoming USTreasury debt restructure, and the climax harbinger signal of USGovt debt servicing costs currently exceeding the entire USGovt tax income (as in the big OOPS) for highly reliable debt failure signal"

Jim refers to the Plaza Accord.
"The Plaza Accord or Plaza Agreement was an agreement between the governments of France, West Germany, Japan, the United States, and the United Kingdom, to depreciate the U.S. dollar in relation to the Japanese yen and German Deutsche Mark by intervening in currency markets."
"....... manipulate exchange rates by depreciating the U.S. dollar relative to the Japanese yen and the German Deutsche mark."
"The Plaza Accord resulted in a 50 percent depreciation of the dollar relative to the yen and the deutschemark."
"In the U.S. today, just as in the early 1980s, fiscal spending is expanding while monetary policy is tightening. Meanwhile, the dollar is strengthening as the yuan depreciates. Thus, structurally speaking, the current trade friction between the U.S. and China is quite similar to the U.S.-Japan trade friction of the 1980s.

All of this has led China to suspect that the Trump administration will soon press for some kind of currency adjustment akin to the 1980s Plaza Accord — Plaza Accord II, if you will."
"However, the Plaza Accord did prove effective in correcting the U.S. trade imbalance. By 1991, the U.S. had erased the deficit in its current account balance"
https://www.japantimes.co.jp/opinion.../#.W9vATY9xiR8

10/31 The number 7 could make China’s currency a trade-war weapon – New York Times
11/01 Chinese yuan tumbles to new cycle low amid signs of capital outflows – ZH
11/01 Trump says he and China’s Xi had ‘long and very good’ trade conversation – CNBC
The rising dollar is going to wipe out just about everything else. I doubt that any kind of "plaza accord" can change this.

the insanely broad major central bank financial market support (extended to stocks, corporate bonds, and crude oil), like the Emerging Market debt bust, with over $9 trillion on the line. But the focus here is on the Big US Bank Stock Index (BKX) breakdown, confirmed by the comedown in the crude oil price. The entire Wall Street banks are highly vulnerable to the oil price due to shale sector exposure. It signals the death of one or two major US banks. It signals the acceleration of the Systemic Lehman Event. The historical event will feature a global financial crisis an order of magnitude larger in scope than in 2008. It will feature sovereign bond defaults and entire national banking system collapses. THE GLOBAL POSTER BOY SUBPRIME BOND IS THE USTREASURY BOND. The safe haven this time around will not be bonds, but rather Gold.

Bank Index Signals Bank Failures

Armstrong has a special report on the coming bond contagion.
https://www.armstrongeconomics.com/a...is-now-online/

Authored by James Rickards via The Daily Reckoning,
When will the strong dollar weaken? Ultimately, the answer is whenever the Treasury wants.
"Both President Trump and Treasury Secretary Mnuchin have publicly expressed dismay at the dollar’s persistent strength in the second half of 2018. A strong dollar has adverse effects relative to Trump’s economic plans.

"It makes imports less expensive, which has a deflationary impact on the U.S. domestic economy. This is at a time when both the Fed and the White House would like to see more inflation."
Trump and Mnuchin will soon weaken the dollar to boost growth.
The biggest offender in the currency wars today is China, which has devalued the yuan 10% in the past six months"

China prints Yuan because it does NOT want to fall off the back of the credit tiger. It is market forces that cause capital flight and a devaluation.
https://www.zerohedge.com/news/2018-...cheaper-dollar
Most of the article in BS from people who think that the State controls the exchange rates.

[Danny B]

Paying for what's important,,, end the FED

" US needs ‘offensive weapons in space’ for self-defense, Mattis claims
Dominance in space is vital for the American way of life "
"The Pentagon is looking at a two-pronged strategy in space, Mattis told an audience at the US Institute of Peace"
“We are going to have to be prepared to use offensive weapons in space should someone decide to militarize it and go on the offensive,”
https://www.rt.com/usa/442697-mattis...nsive-weapons/
Moving on.
"Bolton claimed that the national debt is a big problem and tackling it requires significant cuts to the government’s discretionary spending, while most other economic experts say entitlement spending is the biggest concern."
"Many budget experts say entitlement spending presents a larger long-term threat to the U.S. economy because of both its magnitude and increasing demand from an aging population."
"He also said he expects the United States’ defense spending “to flatten out”
"But right now, you can have significant impact on both the deficit and the national debt by cutting government spending on the discretionary programs.”
ABSOLUTELY ! We can NEVER entertain the idea of cutting military spending.

Dartmouth Prof.: "If We Don't Abolish Capitalism, Capitalism Will Abolish Us"
"We must recognize that the climate crisis and the resurgence of the far right are two of the most acute symptoms of our failure to abolish capitalism," "campus Reform contacted Bray, asking him what his preferred alternative to capitalism would be among other questions, but the professor did not comment in time for press."
https://www.zerohedge.com/news/2018-...ill-abolish-us

"Italy’s economy, Europe’s third largest, has shrunk. In Q2 2018, the latest Eurostat figures for Italy alone, Italian GDP was still 5% below the peak in Q1 2008."
"By all means, end QE. To do it close to or perhaps in full-blown recession would be perfectly fitting for the whole regime. The reasons and justifications won’t matter. That’s because it didn’t, and doesn’t, matter. QE or no QE, the global economy isn’t moved by Central Banks. They are, and have been, irrelevant. That much should be painfully obvious by now."
https://www.alhambrapartners.com/201...-of-recession/
I do not know where people get stupid ideas like this. The upper loop of the economy IS moved by the Central Banks. The CB bailed out the private banks. The private banks bought State debt. The CBs rescued the banks and the bond market. They did NOT bail out the productive loop of the economy. The private banks bought public debt BUT, as things turn bad, ONLY Super Mario Draghi is buying State debt from weak States.

So, what happens when you just bail out the upper loop?
Remember that Germany has a 1 trillion Euro account surplus.
Almost 1 in 5 Germans is ‘at risk of poverty’ despite record employment – study
https://www.rt.com/news/442901-germa...-risk-poverty/
DO NOT WORRY, the military-industrial complex is hard at work.
https://www.rt.com/news/442801-germa...t-operational/
https://www.rt.com/news/413483-germa...ut-of-service/

Ellen Brown, "If the president really wants the Fed to back off on interest rates, it has been argued, he should do it with a nod and a nudge, not a frontal attack on the Fed’s sanity."
"True, but perhaps the president’s goal is not to subtly affect Fed behavior so much as to make it patently obvious who is to blame when the next Great Recession hits."
"According to Elga Bartsch, chief European economist at Morgan Stanley, one more financial cataclysm could be all that it takes for central bank independence to end."
https://markets.businessinsider.com/...dom-1001554790
“Having been overburdened for a long time, many central banks might just be one more economic downturn or financial crisis away from a full-on political backlash,” she wrote in a note to clients in 2017. “Such a political backlash could call into question one of the long-standing tenets of modern monetary policy making—central bank independence.”

And that may be the president’s endgame. When higher rates trigger another recession, Trump can point an accusing finger at the central bank, absolving his own policies of liability "
"Trump has not overtly joined the End the Fed campaign, but he has had the ear of several advocates of that approach. One is John Allison, whom the president evidently considered for both Fed chairman and Treasury secretary. Allison has proposed ending the Fed altogether "
"The Fed’s justification for raising interest rates despite admittedly low inflation is that we are nearing “full employment,” which will drive up prices because labor costs will go up. But wages have not gone up. Why? Because in a globalized world, the availability of cheap labor abroad keeps American wages low, even if most people are working (which is questionable today, despite official statistics)."
Ah yes, the global mean wage.
https://www.truthdig.com/articles/tr...ar-on-the-fed/

11/02 U.S. trade gap widens; deficit with China rises to record high – Reuters
How could that be? The tariffs were supposed to do the opposite?
11/02 Euro’s bid to challenge King Dollar collides with political risk – GATA
In a word, socialism.
11/02 Only 28% of Americans Are “financially healthy” during the largest wealth bubble – RIA
They are closely connected to the free-money spigot.
"Some 44% of people said their expenses exceeded their income in the past year and they used credit to make ends meet. Another 42% said they have no retirement savings at all. "
https://www.marketwatch.com/story/on...thy-2018-11-01

[Danny B]

Powell and, collateral damage

I wouldn't have to write as much if I could find writers who write just what I what to say. I found a great article that explains what the FED is doing and, might do. Keep in mind that we have an economy for the bankers and by the bankers. The upper loop is all jacked up on monetary Viagra/cocaine. They want to keep it going.
https://northmantrader.com/2018/11/0...ing-has-begun/
$8 TRILLION. Poof. Gone. The largest drop since 2008.
Remember this number represents DEFLATION of nominal wealth.

"The paragraph above captures everything that has happened, is happening, and will happen during this Fourth Turning. It was written over two decades ago, but no one can deny its accuracy regarding our present situation. The spark was a financial crash. The response to the financial crash by the financial and governmental entities, along with their Deep State co-conspirators who created the financial collapse due to their greed and malfeasance, led to the incomprehensible election of Donald Trump, as the deplorables in flyover country evoked revenge upon the corrupt establishment."
"The chain reaction of unyielding responses by the left and the right accelerates at a breakneck pace, with absolutely no possibility of compromise. A new emergency or winner take all battle seems to be occurring on a weekly basis, with the mid-term elections as the likely trigger for the next phase of this Fourth Turning."

"If Democrats take control of the House, their agenda will be to impeach Trump, pass legislation designed to make Trump look bad, block everything Trump tries to do, and position themselves to win back the presidency in 2020. The frustration of gridlock will lead to Trump utilizing Executive Orders as his means to accomplish his agenda. Not being able to accomplish his domestic goals will lead a bored Trump into foreign escapades, which could potentially lead to unanticipated military conflict. All previous Fourth Turnings have ended in all out war, with death on a grand scale."
https://www.theburningplatform.com/2...of-the-worlds/

Hedge Funds don't actually produce anything. They just shuffle money around trying to profit by anticipating and/or causing price inflation in some sector that they grab hold of. There is not much chance of causing inflation in a falling economy with a falling population. They live and die on free FED money. The FED has already shrunk the money supply by $ 312 billion. The fallout wiped out $8 trillion and, counting. Volatility is ripping up the funds.
https://www.dollarcollapse.com/hedge...stand-markets/

Shape of things to come;
11/05 Bond traders prepare for week full of risk by dumping Treasuries – Bloomberg
11/05 Asia stocks fall, Hong Kong stocks plunge on trade worries – CNBC
11/05 Morgan Stanley: “The pain was greater than many investors imagined” – Zero Hedge
11/04 World economy risks returning to sync, this time to the downside – Bloomberg
The FED jacked it up and now, the FED is jacking it down.

11/04 Where the heck are share buybacks in this rotten market? – Wolf Street
11/04 The next big market risk: Here comes a sharp slowdown in stock buybacks – ZH
Companies did buybacks to make their earnings look better. Now, they have over $6 trillion in debt that they have to finance,,,,, at rising interest rates.
11/04 Why Brexit is just a sideshow for an EU beset by problems on all sides – Guardian
Italy is going to blow up the whole show.
11/05 American politics is now just civil war by other means – Strategic Culture
Armstrong suggests that things will turn violent after the Dems lose the upcoming election.

[Danny B]

The fall of export driven economies,,, retirement

Jefferson "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 around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.

"Major-General Qiao Liang, the People’s Liberation Army strategist, in a speech to the Chinese Communist Party’s Central Committee (CCPCC) in April 2015 identified a cycle of dollar weakness against other currencies followed by strength, which first inflated debt in foreign countries and then bankrupted them. That then allowed US business interests to acquire assets at rock-bottom prices.
Qiao argued it was a deliberate American policy and would be used against China."
"A strong dollar is being driven by rising interest rates, “harvesting” Turkey, South Africa, and all the other states hooked on cheap dollars. It is also undermining the yuan exchange rate, threatening to harvest China as well."
"In Qiao’s words, “The most important thing in the 20th century was not World War 1, World War 2, or the disintegration of the USSR, but rather the August 15, 1971 disconnection between the US dollar and gold.”
"The Chinese always knew that relying on exports was only a stepping-stone to her own self-sufficiency."
https://www.zerohedge.com/news/2018-...cy-must-change

China clearly sees the writing on the wall,,,, soon.
https://www.zerohedge.com/news/2018-...on-spring-2019

"The prevalence of zombie firms has skyrocketed since the late 1980s, according to BIS. In its research across 14 advanced economies, the bank found that the share of zombie firms had surged, on average, from around 2 percent to 12 percent in 2016."
"Research by Deutsche Bank has attributed the persistence of the walking-dead firms to a decade of super-low interest rates. “Bottom-up data of some 3,000 companies in the FTSE All World index show that the percentage of zombie firms has more than tripled to 2.0 percent of firms in 2016 from 0.6 percent in 1996,” the bank said."
https://www.rt.com/business/443062-z...g-employment/#
They're just trying to keep employment up.

China has an export-driven economy that is crashing because their customers ran out of money. What about Germany,,, another export driven economy.
The greatest risk to Germany is the collapse of the Euro means that the single currency relieved their manufacturers of having to manage currency risk. Suddenly, the currency risk returns, the export model fails, and the lack of a domestic consumer market means that the economic conditions in Germany decline rapidly because of their dependence upon everyone else doing well."
https://www.armstrongeconomics.com/m...c-model-risks/

Here is a good article on Goldman Sachs finally getting dragged into court.
https://www.armstrongeconomics.com/w...arges-at-last/

"Real wages (i.e., nominal $ earned divided by the inflation rate) for the average American worker have hardly budged since the mid-1960s:"
"Yet the cost of living has changed dramatically over the same time period. Note how the rate of increase in the Consumer Price Index (CPI) started accelerating in the late '60s and never looked back:"
"The median retirement account balance among all working US adults is $0. This is true even for the cohort closest to retirement age, those 55-64 years old.
The average (i.e., mean) near-retirement individual has less than 8% of one year's income saved in a retirement account"
“Increasingly, we’re seeing folks who are becoming poor for the first time in old age.”
"As a jumping off point, use the Multiply By 25 Rule. Many financial planners use this as a general rule of thumb: to be able to afford to retire, you should have at least 25x your desired annual income saved up before you hang it up at the office."


$100,000 a year = the median cost of a private room in a nursing home

$85,000 a year = if you don’t mind sharing a room.

$50,000 a year = if you can manage with just daily help from a home health aide. $50,000 pays for one shift a day; the rest of the time you’re on your own
“Suicide is my retirement plan,” Scott, a 60-year-old adjunct professor, said in an interview with Vitae. "
https://www.peakprosperity.com/blog/...scape-velocity

[Danny B]

CBs as an instrument of war,,, regulatory capture

Hundreds of years ago, a king would have to borrow money from private bankers if he wanted to go to war. No longer.
"Central banks were first established in the 17th century, with the primary purpose of providing war finance to governments" G-30 report. Repost
http://group30.org/images/uploads/pu...ralBanking.pdf
With a Central Bank, the State could just sell war bonds and, the taxpayer was forced to pay for the war. The war was never for his benefit but, the State and bankers didn't care.

"The Bank War was the name given to the campaign begun by President Andrew Jackson in 1833 to destroy the Second Bank of the United States, after his reelection convinced him that his opposition to the bank had won national support. The Second Bank had been established in 1816, as a successor to the First Bank of the United States, whose charter had been permitted to expire in 1811."
Curiously, the London bankers got a war started here in 1812.

"In 1832, Jackson had vetoed a bill calling for an early renewal of the Second Bank’s charter, but renewal was still possible when the charter expired in 1836; to prevent that from happening, he set out to reduce the bank’s economic power. Acting against the advice of congressional committees and over the opposition of several cabinet members, and after replacing two resistant secretaries of the treasury with a more amenable appointee (Roger Taney), Jackson announced that, effective October 1, 1833, federal funds would no longer be deposited in the Bank of the United States." " The federal deposits were not returned to the Second Bank, and its charter expired in 1836. President Jackson had won the Bank War."
He had a lot of people against him.
https://www.history.com/topics/19th-century/bank-war

"Proposed by Alexander Hamilton, the Bank of the United States was established in 1791 to serve as a repository for federal funds and as the government’s fiscal agent."
"The Second Bank was formed five years later, bringing renewed controversy despite the U.S. Supreme Court’s support of its power. President Andrew Jackson removed all federal funds from the bank after his reelection in 1832,"
"The Bank of the United States was established in 1791 to serve as a repository for federal funds and as the government’s fiscal agent"
"Others were troubled by the fact that two-thirds of the bank stock was held by British interests."
"succeeded in preventing renewal of the charter in 1811, and the First Bank went out of operation."
"Soon, however, problems associated with the financing of the War of 1812 led to a revival of interest in a central bank, and in 1816, the Second Bank of the United States was established"
"in McCulloch v. Maryland (1819), the Supreme Court held that the Constitution had granted Congress the implied power to create a central bank and that the states could not legitimately constrain that power."
Big surprise.

"Starting in 1833, Jackson removed all federal funds from the Bank. When its charter expired in 1836, the Second Bank ended its operations as a national institution."
https://www.history.com/topics/us-go...-united-states
So, without all that federal money, it couldn't survive.

After the LIBOR scandal,,,, "Brandt drafted a resolution that barred the municipality from working with any firm that had either committed a felony or had recently paid more than $150 million in fines. He presented the homespun and eminently reasonable legislation to city officials and urged them to adopt it.

“The city councilors said they couldn’t do it,” Brandt says. “If they did, they wouldn’t have a bank left to work with. They said there wouldn’t be any bank big enough to take the city’s deposits.” Oakland, it seemed, was hopelessly dependent on ethically dubious and occasionally criminal financial titans. "
"A recent report by the University of California Berkeley’s Haas Institute estimates that cities and other public entities pay upward of $4 billion a year in such fees, an enormous sum that serves only to fatten the purses of multinational banks, legal firms, and others involved in the bond-issuance business. A public bank could help reduce these costs and free up funds by enabling a city to deposit its money in a public entity instead of a profit-centric institution like Wells Fargo or JPMorgan Chase. "

"Here, once again, the Bank of North Dakota offers a model. While overseen by a commission of elected officials, including the state’s governor and attorney general, BND is managed on a day-to-day basis by an independent and highly transparent executive committee of professional financial managers. Its operations are also subject to regular inspection by independent auditors. "
Unlike CALPERS.
https://www.thenation.com/article/wh...f-wall-street/

"More than 84 percent of the sub-prime mortgages in 2006 were issued by private lending. These private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year. Out of the top 25 subprime lenders in 2006, only one was subject to the usual mortgage laws and regulations. The nonbank underwriters made more than 12 million subprime mortgages with a value of nearly $2 trillion. The lenders who made these were exempt from federal regulations."
"The $200 billion was a mere drop in the ocean of derivatives which in 2007 amounted to three times the size of the entire global economy."

"Derivatives had become a uniquely unregulated financial instrument. They are exempt from all oversight, counter-party disclosure, exchange listing requirements, state insurance supervision and, most important, reserve requirements. This allowed AIG to write $3 trillion in derivatives while reserving precisely zero dollars against future claims."

"The SEC loosened capital requirements: In 2004, the Securities and Exchange Commission changed the leverage rules for just five Wall Street banks. This exemption replaced the 1977 net capitalization rule’s 12-to-1 leverage limit. This allowed unlimited leverage for Goldman Sachs [GS], Morgan Stanley, Merrill Lynch (now part of Bank of America [BAC]), Lehman Brothers (now defunct) and Bear Stearns (now part of JPMorganChase--[JPM]). These banks ramped leverage to 20-, 30-, even 40-to-1. Extreme leverage left little room for error. By 2008, only two of the five banks had survived, and those two did so with the help of the bailout."

"The federal government overrode anti-predatory state laws. In 2004, the Office of the Comptroller of the Currency federally preempted state laws regulating mortgage credit and national banks, including anti-predatory lending laws on their books "
"The bonuses are extraordinarily large and they continue--$135 billion in 2010 for the 25 largest institutions and that is after the meltdown."
"It’s not as though Congress woke up one morning and thought to itself, “Let’s abolish the Glass-Steagall Act!” Or the SEC spontaneously happened to have the bright idea of relaxing capital requirements on the investment banks. Or the Office of the Comptroller of the Currency of its own accord abruptly had the idea of preempting state laws protecting borrowers. These agencies of government were being strenuously lobbied to do the very things that would benefit the financial sector and their managers and traders. "

Why didn’t anyone say anything?
"The book is Masters of Nothing: How the Crash Will Happen Again Unless We Understand Human Nature by Matthew Hancock and Nadhim Zahawi (published in 2011 in the UK by Biteback Publishing and available on pre-order in the US).

In 2004, the book explains, the deputy governor of the Bank of England (the UK central bank), Sir Andrew Large, gave a powerful and eloquent warning about the coming crash at the London School of Economics. The speech was published on the bank’s website but it received no notice. There were no seminars called. No research was commissioned. No newspaper referred to the speech. Sir Andrew continued to make similar speeches and argue for another two years that the system was unsustainable. His speeches infuriated the then Chancellor, Gordon Brown, because they warned of the dangers of excessive borrowing.

"In 2005, the chief economist of the International Monetary Fund, Raghuram Rajan, made a speech at Jackson Hole Wyoming in front of the world’s most important bankers and financiers, including Alan Greenspan and Larry Summers. He argued that technical change, institutional moves and deregulation had made the financial system unstable. Incentives to make short-term profits were encouraging the taking of risks, which if they materialized would have catastrophic consequences. The speech did not go down well. Among the first to speak was Larry Summers who said the speech was “largely misguided”.

In 2006, Nouriel Roubini issued a similar warning at an IMF gathering of financiers in New York. The audience reaction? Dismissive. Roubini was “non-rigorous” in his arguments. The central bankers “knew what they were doing.”
https://www.forbes.com/sites/stevede.../#183a2010f92f

[Danny B]

Continued,,, Goodson

Benjamin Franklin, "“There was abundance in the Colonies, and peace was reigning on every border. It was difficult, and even impossible, to find a happier and more prosperous nation on all the surface of the globe. Comfort was prevailing in every home. The people, in general, kept the highest moral standards, and education was widely spread.” - Benjamin Franklin

No doubt, many of the colonies were doing very well, especially Pennsylvania and Massachusetts where the amount of new paper money was controlled."
"He then points out that Pennsylvania’s paper money will be backed by land; that is, it will be issued by the legislature through a loan office,"
He escaped the banker control of the issuance of paper money
"He was asked why the working class in the colonies were so prosperous.

“That is simple. In the Colonies, we issue our own paper money. It is called ‘Colonial Scrip.’ We issue it in proper proportion to make the goods and pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one.” - Benjamin Franklin"
"Soon afterward, the English bankers demanded that the King and Parliament pass a law that prohibited the colonies from using their scrip money."
“The Colonies would gladly have borne the little tax on tea and other matters had it not been the poverty caused by the bad influence of the English bankers on the Parliament,"
"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance. - James Madison

“Banks have done more injury to the religion, morality, tranquility, prosperity, and even wealth of the nation than they can have done or ever will do good.” - John Adams"

Stephen Mitford Goodson was a director of the South African Reserve Bank. Goodson authored a book titled Bonaparte & Hitler Versus the International Bankers where he maintained World War II was provoked by the economic success of Germany, and he has also criticized the political actions of Jewish bankers"
"In June 2017, Goodson was connected to the Public Protector's Report of 19 June 2017 regarding the proposal to reform the South African Reserve Bank, so that it serves the people rather than the interests of the commercial banks.
"Stephen Mitford Goodson (died 4 August 2018) was a South African banker, author and politician who was the leader of South Africa's Abolition of Income Tax and Usury Party."

In response to an article written about Goodson in the South African Jewish Report, which was published on 30 June 2017, Goodson explained that his disbelief of the Holocaust is predicated on the claim that in the 8,263 pages of World War II memoirs written by Winston Churchill, Charles de Gaulle, Dwight D. Eisenhower and Harry S. Truman, there is no mention of millions of Jews in Europe having been annihilated. "
https://en.wikipedia.org/wiki/Stephen_Goodson

"Looking only at US listed companies, about 16% qualify as zombies. "
"That’s a low bar… yet 12% of the public companies they examined couldn’t pass it."
"The $1.271 trillion increase in federal debt was nearly $500 billion or 39% higher than the official annual deficit of only $779 billion, which means that politicians are keeping significant amounts of debt off-balance sheet. I don’t know who they think they’re fooling, but they aren’t going to be able to keep this con game running much longer. Over the past five years, the official deficit was reported as $2.977 trillion whereas the federal deficit grew by $4.777 trillion, meaning that 38% of the actual shortfall was hidden "
" the US government deficit will be (drumroll, please) approximately $1.4 trillion per year for the next five years, which will mean $29 trillion total debt by 2024."
Armstrong said that it will collapse before then.
Economic Brake Lights | Mauldin Economics

11/06 Eurozone ministers line up behind EU in Italy budget dispute – Guardian
11/06 The Italian people must understand that their country is at war – Gefira
11/05 Italy’s bonds drop as leaders defiant before Eurogroup meeting – Bloomberg
Share buy-backs greatly boosted reported earnings,, per share.
11/06 Corporate profits peaking and that’s bad news for the stock market – CNBC
11/06 Corporations flood midterms with money even while running up $1.7 trillion in debt – ML

[Danny B]

Stock market,,, FED poison,,, war waste

That was quite some election,,, Huh!
"Capital must protect itself in every possible way, both by combination and legislation. Debts must be collected, mortgages foreclosed as rapidly as possible. When, through process of law, the common people lose their homes, they will become more docile and more easily governed through the strong arm of the government applied by a central power of wealth under leading financiers. These truths are well known among our principal men, who are now engaged in forming an imperialism to govern the world. By dividing the voters through the political party system, we can get them to expend their energies in fighting for questions of no importance. It is thus, by discrete action, we can secure for ourselves that which has been so well planned and so successfully accomplished." -- Montagu Norman, Governor of The Bank Of England, addressing the United States Bankers' Association, New York, 1924."

Not surprisingly, the State lies about price inflation. They keep moving the goalposts to show price inflation to be lower than the true picture. Here is a graph from Shadowstats showing true inflation.
http://www.shadowstats.com/imgs/char...d&t=1539264635
Alternate Inflation Charts
When it comes to true purchasing power, everybody is losing ground.

How does that affect the stock market?
"What happens if you have record buybacks, record dividends, and record earnings but 89% of assets yield a negative return in US dollar terms?"
"According to $DB: “A whopping 89 percent of assets have handed investors losses in U.S. dollar terms, more than any previous year going back more than a century”.
https://northmantrader.com/2018/11/06/mind-blowing/
I suspect that the graphs are structured to reflect the State version of inflation, NOT the true version.

1971, "everybody had US Dollars, and so the US Dollar was just selected as the international currency. This has been to great benefit of the United States. Every time we create a new dollar and cause inflation, it doesn'tt just dilute the dollars within the United States since more than half of the dollars reside outside the United States. So, when we cause inflation of the currency supply that's outside the United States, it steals purchasing power from other countries and transfers that purchasing power to the United States."

"One of things that I discovered when I was updating my book was the relatively recent financialization of government. I was looking at a chart of the tax revenues for the Federal Government. I went "Oh my God, this looks like a chart of the stock market." I overlaid tax revenues with the Wilshire 5000 total market cap index and loo and behold, they had no correlation before the year 2000, but since the year 2000, when the stock market goes down, so do tax revenues. When the stock market goes up, so do tax revenues. So, the government now is highly dependent on the stock markets doing well. In the stock market crash in 2000, tax revenues fell 18%. In the global financial crisis of 2008, tax revenues fell 28%."
https://www.peakprosperity.com/podca...ey-hell-crisis

"We’re heading for a sovereign debt crisis. That’s not an opinion; it’s based on the numbers. How do we get out of it?"
For elites, there is really only one way out at this point is, and that’s inflation. And they’re right on one point. Tax cuts won’t do it, structural changes to the economy wouldn’t do it. Both would help if done properly, but the problem is simply far too large. Growth would have to greatly exceed current levels, and that’s just not in the cards.
There’s only one solution left, inflation.
Now, the Fed printed about $4 trillion over the past several years and we barely have had any inflation at all.

[Danny B]

had to break it up

"The reason we didn’t have inflation all that time is because most of the new money was given by the Fed to the banks, who turned around and parked it on deposit at the Fed to gain interest. The money never made it out into the economy, where it would produce inflation."
"The Fed can call a board meeting, vote on a new policy, walk outside and announce to the world that effective immediately, the price of gold is $5,000 per ounce.
They could make that new price stick by using the Treasury’s gold in Fort Knox and the major U.S. bank gold dealers to conduct “open market operations” in gold.
They will be a buyer if the price hits $4,950 per ounce or less and a seller if the price hits $5,050 per ounce or higher. They will print money when they buy and reduce the money supply when they sell via the banks.
The Fed would target the gold price rather than interest rates."
"A rise in the price of gold from today’s roughly $1,230 per ounce to $5,000 per ounce is a massive devaluation of the dollar when measured in the quantity of gold that one dollar can buy.

"There it is — massive inflation in 15 minutes: the time it takes to vote on the new policy.
Don’t think this is possible? It’s happened in the U.S. twice in the past 80 years. The first time was in 1933 when President Franklin Roosevelt ordered an increase in the gold price from $20.67 per ounce to $35.00 per ounce, nearly a 75% rise in the dollar price of gold."
https://dailyreckoning.com/the-unite...s-going-broke/
https://dailyreckoning.com/the-unite...s-going-broke/
Don't hold your breath waiting for this to happen.

Good article from David Stockman;
"The 30-year monetary party is over, and the money printers which fueled that global bond bubble of the present era are about to become the bond-dumpers of tomorrow."
"To wit, it is absolutely guaranteed that during the next two years there will be a non-functioning government and that Washington's abject fiscal incontinence will reach the point of downright embarrassment---even down there in the Imperial City."
Keep in mind that the House must originate all spending bills. Sounds like gridlock to me.
"It's as if arsonists were running around a burning building with a can of kerosene screaming that there is a fuel glut. But now for reasons of institutional survival, as we develop below, they have jettisoned the kerosene and manned the water hoses.

Needless to say, you don't remove $21 trillion of supply from the global bond markets without leaving big-time dislocations and distortions in this massively hollowed out financial space-"
"uring the same 15-year period in which central bank balance sheets soared by $21 trillion,"
"It wasn't real, and the next stop on the bubble express is something like the 2007-2009 meltdown shown in the graph above when the global equity market cap plunged by nearly 60% from $60 trillion to $25 trillion.

The equivalent plunge this time would amount to $50 trillion, but a reprise of the V-shaped rebound which occurred after 2009 is now out of the question because the central banks have already shot their wad. The various forms and phases of QT----which were essentially a $21 trillion monetary fraud---- were the work of a one-trick pony.

In fact, the reason the central banks are suddenly pivoting to QT under the leadership of the Fed is to hastily replenish their dry powder. But it's too late. They will destroy the equity bubble long before they get back to "normal" interest rates and balance sheets---even as they fear that after the next crash they will be impotent to reverse the carnage and that the pony will then be taken out back and shot."

"2004) "the $30 trillion of stock market capitalization at the time represented about 68% of global GDP, which was about $44 trillion.

By contrast, the $80 trillion global equity capitalization at the peak of a few months ago represented about 100% of current year worldwide GDP. So even though worldwide income back in 2004 was undoubtedly over-capitalized in the equity markets, it has now become egregiously so after the post-2008 print-a-thons.

Consequently, even if you give the benefit of the doubt to the implicit 2004 cap rate of 68%, global stock markets today would be worth about $55 trillion. You can characterize the $25 trillion excess at the recent bubble top,"
Contra Corner » The Demise Of Bubble Finance And The Folly Of Trump-O-Nomics, Part 2

Goldman Sachs explains gridlock;
https://www.zerohedge.com/news/2018-...sachs-explains
The Ukraine is facing default next year. https://sputniknews.com/europe/20181...t-obligations/

Italy has told the EU and ECB to shove it. The globalist Macron has a plan.
"The comments came a day after French President Emmanuel Macron called for creating a "real European army" in order to protect the residents of EU countries. "
https://sputniknews.com/europe/20181...cron-security/
https://www.youtube.com/watch?v=hI5_pMvLZd8

Here are 2 articles about how German military equipment is junk.
https://www.rt.com/news/413483-germa...ut-of-service/

https://www.rt.com/news/442801-germa...t-operational/
The solution;
https://sputniknews.com/europe/20181...tary-spending/

As long as our money is spent on military hardware, everything will be good.
“Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States.” The analysis is the brainchild of Trump’s adviser for trade and manufacturing policy, Peter Navarro, who happens to also be the key architect of the president’s trade wars."
"The only reason it’s not a national scandal -- complete with Fox News banner headlines about the end of the American way of life as we know it and the coming of creeping socialism -- is because it’s part of the one institution that has always been exempt from the dictates of the “free market”: the Department of Defense."
"The essence of the Pentagon’s scheme for making America safe for a never-ending policy of war preparations (and war) is to organize as much of the economy as possible around the needs of military production."

"and needless to say, this being the Pentagon, one of the biggest desires expressed in the report is a need for -- yes, you guessed it! -- more money. Never mind that the United States already spends more on its military than the next seven nations in the world combined (five of whom are U.S. allies). Never mind that the increasein Pentagon spending over the past two years is largerthan the entire military budget of Russia. Never mind that, despite pulling tens of thousands of troops out of Iraq and Afghanistan, this country’s spending on the Pentagon and related programs (like nuclear warhead work at the Department of Energy) will hit $716 billionin fiscal year 2019, one of the highest levels ever. Face it, say the Pentagon and its allies on Capitol Hill, the U.S. won’t be able to build a reliable, all-weapons-all-the-time economic-industrial base without spending yet more taxpayer dollars. Think of this as a “Pentagon First” strategy."
"Where could alternatives to Pentagon job-creation programs come from? The short answer is: invest in virtually anything but buying more weapons and waging more wars and Americans will be better off. For instance, Pentagon spending creates startlingly fewer jobs per dollar than putting the same taxpayer dollars into infrastructure repair and rebuilding, alternative energy creation, education, or health care. A study conducted by University of Massachusetts economist Heidi Garrett-Peltier for the Costs of War Project at Brown University found that, had the government invested in civilian activities the $230 billion per year wasted on America’s post-9/11 wars, that sum would have created 1.3 million additional jobs. "
"But an analysis by Miriam Pemberton and her colleagues at the Institute for Policy Studies indicates that the United States spends 28 times as much on its military as it does on genuinely job-creating programs"

https://www.zerohedge.com/news/2018-...y-name-defense

[Danny B]

Job markets,,, debt bubbles

I've mentioned over and over that accepted economic theory makes almost no connection to human behavior. I've posted several examples showing that modern economic theory is completely wrong. Here are a couple of articles discussing these ideas.
https://www.theguardian.com/commenti...angerous-place
"In the late 1970s, as the old certainties of Keynesianism collapsed, a new generation of economists moved the discipline on to the terrain of super-abstract equations. Their assumption was that the economy tends towards equilibrium"

"And the stakes are big, too. One of the theories that, even now, eight years after the crash, continues to disorient policymakers is the assumption that actions by central banks are irrelevant. A total of $12tn (£9.1tn) has been printed by central banks to stave off global depression, yet the threat remains real. Stagnation is a threat that keeps central bankers, governments and social theorists awake at night – with the palliative always being looser monetary policy.

Yet orthodox economic theory insists it would have no real effect if the central banks pulled all this support – since the equations tell them there is no correlation between monetary policy and output. Mark Carney or Mario Draghi could double interest rates and slash quantitative easing and the economy should grow at just the same rate, says the theory."
So, all that currency inflation does not cause price inflation which lowers consumption.

More bad theory;
https://publicism.info/economics/fail/3.html

"Trickle-down theory also predicts a positive correlation between inequality and economic growth, the idea being that income disparities strengthen motivation to get ahead. Yet when researchers track the data within individual countries over time, they find a negative correlation."
https://www.nytimes.com/2007/04/12/b...s/12scene.html

There seems to be no consideration of the fact that capital can move instantly but, wage earners are stuck in one place. This means that low-wage workers will get financing and jobs but, nobody else. The destruction of the wage-base brings down consumption,,, brings down profits,,, brings down tax collection,,, brings down the bond markets.

"As former Trump strategist Steve Bannon said in September (and more recently in a debate with David Frum):

"Millennials, please understand one thing. You’re better fed, better educated, in better shape, you’re more culturally aware than 19th-century Russian serfs, but you are nothing but serfs."
""At some point, you can have a bit of an effect of a lost generation," says University of Zurich economist, David Dorn. "If you get to the point where you’re turning 30, you’ve never held a real job and you don’t have a college education, then it is very hard to recover at that point."
""You don’t own anything and you’re not going to own anything," he continued. "You are just going to be on the continual wheel of the gig economy, two paychecks away from financial ruin."
https://www.zerohedge.com/news/2018-...market-decades

Armstrong, "The Euro area (EA19) seasonally-adjusted unemployment rate came in at 8.1% in September 2018, which was down slightly from the year/year perspective of about 8.9%. This above all proves that the entire theory of the Quantity of Money is bogus. It also demonstrates that the Austerity Policy of Europe has caused unbelievable social damage resulting in what is being called the Lost Generation with unemployment among the youth reach 60% in Southern Europe."

"Without a COMPLETE rejection of Austerity and a COMPLETE overhaul of the European Union structure, there is absolutely NO HOPE what so ever of Europe coming out of the death spiral. This will only get worse as politicians, with ZERO experience in trading markets, will debate and refuse to accept responsibility for their actions. Then you opened the doors to refugees when unemployment is at a serious high? And you wonder why there will be civil unrest and backlash against migrants?"
https://www.armstrongeconomics.com/i...ral-of-the-eu/

5 years ago, Armstrong warned Germany about a looming pension crisis. This has finally come out in the open.
https://www.armstrongeconomics.com/w...ension-crisis/

"In the United States, housing prices are now 8% higher than they were at the peak of the property bubble in 2006, according to the property website Zillow. The price-to-earnings (CAPE) ratio, which measures whether stock-market prices are within a reasonable range, is now higher than it was both in 2008 and at the start of the Great Depression in 1929."
https://www.project-syndicate.org/co...an-liu-2018-11
The FED pumped out $27 trillion. Worldwide, the CBs pumped out $237 trillion. This was all done to rescue bankers and the welfare-warfare State. The monetary inflation created price inflation that priced many people out of markets. The debt creation created and interest burden that is in the process of dragging down everything.

The value of an object is directly related to what somebody else will pay you for this object. What happens if there is a big hiccup in a market that is over-supplied?
A Fifth of China’s Homes Are Empty. That’s 50 Million Apartments
https://www.bloomberg.com/news/artic...ion-apartments

The creation of global warming to usher in the NWO.
https://www.armstrongeconomics.com/w...an-government/
Venezuela made the mistake of keeping their gold in England.
https://sputniknews.com/world/201811...nezuelan-gold/

11/09 Asia stocks slide after Fed keeps rates unchanged – CNBC
11/09 A Chinese recession is inevitable – don’t think it won’t affect you – Guardian
11/09 A worldwide debt default is a real possibility – Forbes
11/09 China has more distressed corporate debt than all other EMs – Bloomberg
The CBs did unlimited bond printing to save the banks with little regard for the downside.
Since the State is a parasite, it has a perpetual fear of losing outside support. The police-state crackdown is just there to ensure continued financial support. BUT, monetary inflation = price inflation,,, + low-wage competition = falling consumption resulting in falling wealth creation. The State can't very well steal what isn't there,,,, isn't produced.
Trump reduced taxes to try to stimulate the economy. There is no escaping the global mean wage so, a tax reduction won't be a permanent fix.

11/08 U.S. government’s borrowing binge poses global risks: Kemp – Reuters
11/09 Politicians ignore the looming $121.7 trillion debt crisis – GoldSeek
What other choice do they have?
Italy is on track to blow up the EU. They have been advised that the first-leavers will do the best.
https://moneymaven.io/mishtalk/econo...U-fiOtcTfWJRg/