Economic pressures

[Danny B]

Debt as far as the eye can see,,, killed by ZIRP

As communication speeds up, changes in confidence speed up.
Michael Pento, " The bond bubble continues to build and become a dagger over the worldwide economy and markets.
The amount of publicly traded debt in the U.S. has soared to 58% of GDP. This is up from 29% in 2007 when the U.S. 10-year Note was yielding 5%. The Fed is now selling $50b of bonds each month, with an extra $7.8T in publicly traded debt that it doesn’t own; and that equates to nearly 2x the amount of debt compared to GDP than what existed just prior to the Great Recession."
"This debt must now be absorbed by the private market and at a fair market price, instead of just purchased mindlessly by the Fed…and yet yields are still falling. This means investors are piling into sovereign debt for safety ahead of the global economic crisis even though they understand that debt is, for the most part, insolvent."
At one time, They" claimed that the BLICS were buying the debt,,, even though Belgium didn't have any dollar reserves at all. Later, They claimed that American households were buying up all the treasury debt.

"Meanwhile, the nucleus of the next credit crisis (the leveraged loan and junk bond markets) implode; as corporations need to roll over more than $800 billion of debt at much higher interest rates this year."
"My Inflation/Deflation and Economic Cycle Model has 20 components. 19 out of 20 indicators are indicating we are about to enter into a recession. Only initial unemployment claims remain at a positive level."
"sovereign debt skyrockets at an even faster pace than the breakneck speed witnessed since the Great Recession. In this same vein, in the U.S. the federal budget deficit surged to a record for the month of November to reach a negative $204.9 billion" ,,,,, ?X 12?
"This massive increase of $70 trillion in debt since 2007, which adds up to $250 trillion globally, must now rely on the support of investors instead of the mindless and price insensitive purchases of central banks. "
Yeah, right.
"The total value of the market could drop by 25% and still be at a valuation level that is equal to 100% of GDP. And that assumes GDP doesn’t drop. But at 100% of GDP the market would still be, historically speaking, about twice as overvalued as it was from 1974-1990. Hence, I predict the worst of the stock market is still very much in front of us."

"And finally, 2019 will be marked by a conflagration in our government. The year will be marred by budget showdowns and shutdowns, debt ceiling brinksmanship and indictments from Special Prosecutor Robert Mueller. Those hoping for cooperation between Democrats and Republicans on things such as a massive debt-funding infrastructure spending package to save the economy will be greatly disappointed"
"Household net worth (think real estate and equity portfolios) as a percent of GDP reached over 525% at the start of Q3 last year. According to Forbes, the average for that figure is 380% going back to 1951."
https://www.dollarcollapse.com/pento...cks-free-fall/

ZIRP is never done because it is so destructive. ZIRP allowed the banks to collect $400 billion a year in interest differential between what you pay and, their free money.
ZIRP allowed Obummer to really run up the debt. So, both the banks and the State benefited. BUT, it destroyed the pension funds, et al who depend on interest income. There will be no recovery for them.
https://www.zerohedge.com/news/2019-...pension-system

"This is the year that mounting hammer blows to the Western alliance system and the edifice of global governance threaten to bring the old order tumbling down."
Trump is swinging the hammer.
"urasia says President Donald Trump should take a large share of the blame for the state the world finds itself in. CREDIT:AP"
"Pax Americana is unravelling. The transatlantic concord underpinning the West since the Fifties is dying. Nato, the G7, the G20, the WTO and the EU are all in varying degrees of crisis."
"transatlantic concord" was a euphemism for endless war to benefit our masters.
"Anti-liberal strongmen are tugging away at the edges in Turkey, Brazil and Hungary. Some in the twilight zones of the democratic world are drifting -towards the Putin-Xi camp."
Anti-liberal, my arse. Anti war and anti cultural destruction.
"The West is shutting out Chinese manufacturers of 5G high-speed equipment. Digital globalism is in retreat."
About that 5G, https://www.youtube.com/watch?v=1Qt5B39LB7c

"Donald Trump is - in Eurasia's view - the central catalyst and accelerant for much of what is going wrong in the world. It starts at home in Washington.

"Damage is being done to the legitimacy of democratic institutions in the world's largest economy," it said."
Legitimacy of mass murderers.
"Europe is in no fit state to step into the leadership vacuum as America turns its back on the liberal alliance system and nexus of shared values."
Our shared values are with the European people, NOT the European leaders.
"Yet the drift of events is clear. The Western liberal order we took for granted at the end of the Cold War is under existential threat."
https://www.zerohedge.com/news/2019-...ld-falls-apart

Just tell the middle class that they are the upper, rich class. Then, you can justify increasing the snot out of their taxes.
https://www.armstrongeconomics.com/w...-are-the-rich/

"This is one of the issues I have pointed out in discussions in Washington and it has gone back to the Federal Reserve and is one of the reasons why the Fed has been raising rates. They MUST get them back to normal levels in interest rates or debt is really dead. Insurance and pension funds along with some banks have gone into the property markets and emerging market debt to compensate for the low interest rates.

I have been warning that the European and Japanese central banks have DESTROYED their bond markets. There is NO BID and capital has rushed off into other areas."
"The last Documentary film I did was on this very crisis of destroying the bonds markets. The central banks were buying the government debt BECAUSE nobody else would at such low levels! "
https://www.armstrongeconomics.com/m...ate-crash-why/
So, let all the sovereign bond markets crash. That will stop the welfare-warfare State model.

En Mexico, es dicho, "un trabajo sin oportunidad robar no es un buen trabajo."
"A job without opportunity to steal is not a good job."
The State run oil company in Mexico suffered $3billion in losses from theft of fuel. 80% of it was stolen by employees.
https://sputniknews.com/latam/201901...soline-crisis/

Here is a good article on Macron. He is on a mission to destroy France, https://www.gatestoneinstitute.org/1...e-in-free-fall
1/08 Sears plans to shutter after 126 years in business – CNBC
Destroyed by corporate raiders.

[Danny B]

Public debt,,, more speedbumps

I'm back to playing the devil's advocate for the FED.
"Federal Reserve regulations are rules put in place by the Federal Reserve Board to regulate the practices of banking and lending institutions, usually in response to laws enacted by the legislature. "
"I: Issue and Cancellation of Capital Stock of Federal Reserve Banks"
They created liquidity for emergency loans that was subsequently destroyed,,, no monetary inflation.
"O: Loans to Executive Officers, Directors and Principal Shareholders of Member Banks"
That was their only mandate when formed.
"V: Loan Guarantees for Defense Production Facilitates the extension of credit for national defense production"

No bid,,, no problem. No limit on money for defense.
Investopedia
"in response to laws enacted by the legislature. "
It wasn't the FED that came up with the idea of buying war bonds and other government debt.

"Currently, MB is declining and m is countervailing to a slight degree, but the drop in the base and the increased Federal funds rate has resulted in sharp slowdown in M2 growth from a peak of 8% per annum to slightly less than 3.9% per annum now. Slower M2 growth resulted in a sharp slowdown in nominal GDP in the third quarter of 2018."
"Tangible signs of this include: a sharp slowdown in M2 growth in Japan, the Eurocurrency zone and China, a drop in world stock and commodity prices as well as synchronized deceleration in major foreign economies. Chinese money growth recently fell to the lowest in four decades, " they can thank Trump.
"One other point: Excess reserves have declined far more sharply than the monetary base, serving to severely restrict the US depository institutions. Excess reserves have dropped from a peak of $2.7 trillion to $1.6 trillion. Quantitative tightening cut excess reserves about approximately $400 billion while the first eight hikes in Federal funds rate reduced excess reserves about $700 billion."
People wonder why there is a liquidity crisis.
"M2 growth from a peak of 8% per annum" Gee, I wonder why we have so much price inflation.


"In the fourth quarter of 2017 the combined asset purchases of the Fed, European Central Bank (ECB) and Bank of Japan (BOJ) were $100 billion per month. The total dropped to zero in late 2018 and this quarter will turn negative, to withdrawals of roughly $20 billion per month." Deflation that will work it's way down to every level.
Corporate debt has reached new highs. $800 billion needs to be rolled over at even higher rates.
https://realinvestmentadvice.com/kass-follow-the-money/

From the World Bank;
“At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year "
It was running on free money, nothing else.
"Hard-won central bank independence and transparency could erode in the face of pressures to finance government. "
That horse left the barn many decades ago.
https://www.zerohedge.com/news/2019-...utlook-darkens

Consumer credit is humming along nicely.
https://www.zerohedge.com/news/2019-...and-auto-loans
"November, the surge consumer credit continued, rising by $22.1 billion, above the $17.5 billion expected, after October's whopping $25 billion increase as non-revolving credit surged by the most since December 2017. The surge in borrowing in November brought the total to $3.979 trillion"
"American consumers have clearly returned to doing what they do best - spending money they don't have - with revolving credit jumping by $4.8 billion, one month after it surged by $9.3 billion. The latest monthly increase brought the total credit card debt to a new all time high of $1.042 trillion."

"But the big reason behind the November surge in consumer credit was nonrevolving credit, i.e. student and auto loans, which soared by $17.4 billion, the highest monthly total since 2017, and bringing the nonrevolving total to a new all time high of $2.937 trillion."
"$1.564 trillion in student loans outstanding, an impressive increase of $33 billion in the quarter, while auto debt also hit a new all time high of $1.141 trillion, an increase of $16 billion in the quarter."
Fitch may downgrade Uncle Sam.
https://www.rt.com/business/448394-u...wngrade-fitch/

"The U.S. debt-to-GDP ratio is now 106%, the highest since the end of the Second World War. The Chinese debt-to-GDP ratio is a more reasonable 48%, but that figure is misleading because it does not include the debts and guarantees of provinces, state-owned enterprises, banks, wealth management products and numerous other entities that the government in Beijing is directly or indirectly obligated to support.

When that additional debt is taken into account, the real debt-to-GDP ratio is over 250%, about the same as Japan’s."
What about U.S. $3 trillion owed SS? What about $ 212 trillion in unfunded liabilities?
"Debt-to-GDP ratios below 60% are considered sustainable; ratios between 60% and 90% are considered unsustainable and need to be reversed; and ratios in excess of 90% are in the red zone and will produce negative growth along with default through nonpayment, inflation or other forms of debt repudiation. The world’s three largest economies — the U.S., China and Japan — are all now deep in the red zone."
"What is striking is the speed with which synchronized global growth has turned to synchronized slowing. Indications are that this slowing is far from over."
Powell broke ranks with the other CBs.
"Analysts estimate that reducing the balance sheet by $600 billion per year (the current tempo) is equivalent to increasing the fed funds target rate by 1% per year. This implied rate hike comes on top of the 0.25% rate hikes the Fed has been announcing every quarter. QT and actual rate hikes taken together are increasing rates by 2% per year from a 2.5% base, an extreme form of monetary tightening." DEFLATION
https://dailyreckoning.com/2019-head...ting-stronger/

Armstrong says that stocks are going WAY up,,,, dunno.
"ANSWER: That was a minor signal at year end. It served to put us on notice that the slingshot to the upside will be extended. That is very good news for I was concerned that such a move would have peaked by 2020/2021. It appears we have been granted a huge reprieve in that regard and we will be looking at profound events unfolding ahead"
https://www.armstrongeconomics.com/a...g-the-markets/
"REPLY: Unfortunately, this is exactly what the computer is forecasting. We are in a rising cycle of civil unrest. The political divide is growing everywhere even in the United States. This will ONLY lead to outright violence and in many cases civil war. The left is ALWAYS the most violent. They are not tolerant of opposition"
"In the USA, the rising tide against Trump is stunning. But people have no idea what is coming. I have warned that analysing Trump in terms of a market, he represents a reactionary bounce only – not a change in political trend. What I mean by that is we are headed to a clash of titans as you are there in Germany. NEITHER side will be willing to accept a loss. What comes after Trump will be massive civil unrest as well."
https://www.armstrongeconomics.com/i...rest-globally/

1/09 Germany heads for a technical recession – Wolf Street
1/09 China’s stability is at risk – National Interest
1/09 Gundlach says “get out” of junk bonds – Seeking Alpha
1/09 Ohio police and fire pension fund slashes retirees’ insurance – Fox

1/09 Weakest Treasuries demand since 2008 sends bond-market warning – Bloomberg
Wait, the public debt increased by $205 billion in November. Who is buying?
1/09 China car sales fall for the first time in 20 years – BBC
Yep, they have definitely had a turnaround.
1/09 ECB rate hike now unlikely before mid-2020, money markets bet – Reuters
Zombies don't do rate hikes.
1/09 France moves to ban all protests as PM announces major crackdown – ZH
Macron's popularity has fallen to 18% . It will go lower.

1/08 Hypersonic weapons pose “significant challenge to world peace” – Zero Hedge
Now that Russia and China have weapons that will reach the politicians,,, the politicians are getting nervous.

1/08 Global warming of oceans equivalent to an atomic bomb per second – Guardian
How Centuries-Old Seawater Is Cooling The Deep Pacific Ocean
https://www.forbes.com

[Danny B]

The revolution cycle

Germany is the POWERHOUSE of Europe. Germany is in recession.
https://www.armstrongeconomics.com/i...fidence-model/
If the strongest can't make it, what about the rest?
Yellow Vests Advocate Taking Money Out of Banks in France to Topple Macron


Here is an excellent article on China. They are TOAST.
https://www.theautomaticearth.com/20...e-taking-over/
Brazil, like many other States have been over run with violent gangs.
"To that end, Bolsonaro last week said over Twitter that he would issue a decree to ease gun laws, making it much easier for adults over 25 to obtain firearms, as long as they have no criminal record. Bolsonaro says that allowing "good" people to own guns will discourage criminals, as well as reduce Brazil's homicide rate after nearly 64,000 murders last year. "
https://www.zerohedge.com/news/2019-...naro-crackdown
Armstrong's model is showing a "slingshot" rise in equities. Everybody else is showing a huge fall. Armstrong's accuracy record is amazing. How could American equities rise so far?
One has to entertain the idea that; there will be so much revolution in the world that capital will flee to American markets to survive complete vaporization.

[Danny B]

Corporatocracy + the State + unfettered predators

The State has embedded itself so deeply into Society that we are led to believe that they are one and the same. Since the State is a non-producer, it must be a parasite on society. But, since the State is nominally our protector, we suffer the parasitism in silence. The State ,putatively attempts to organize society for the protection of society. But, just having this power leads the State to concentrate on protecting itself.

"aces the same quandary as billions of people who are subjugated by governments: they need protection from their protection rackets. The protector has dropped all pretence of protection and has become a predator.
When the Soviet Union conducted its first successful atomic bomb test on August 29, 1949, it undercut the protection-racket rationale for governments. No one realized it at the time, but how can you run a protection racket if you can’t protect those you’re purportedly protecting from annihilation?
when the Soviets detonated their first hydrogen bomb, it was clear that all either the Soviet or American government could offer its people was assured destruction of the other side, and most likely their own, in the event of an attack.

Of course neither governments’ rhetoric changed from the historical protection-racket justification. They said that escalating budgets for defense and intelligence, foreign intervention, and skullduggery were necessary to protect their people from the other side.
However, that fear has a rational basis, it can never be vanquished. Instead, it provides the political impetus and cover for governments to do what they do best: predation.

If such predation wasn’t immediately obvious to the general populace, it was to the predators. Commentators have noted that government attracts sociopaths and psychopaths. Is that just hyperbole? Government in the age of predatory theft is a gun trained on the subjugated. Why wouldn’t it attract predatory people? A desire to be on the business end of the gun qualifies that person for a diagnosis as a sociopath, at the least.
It’s been obscured by the predatory mechanisms of debt and central banking, designed to enrich elite predators while maintaining a mirage of prosperity. The global economy is in extremis, kept alive by a drip feed of ever-expanding debt whose source feed is government’s unbacked fiat debt and central bank monetization. Now, not even those shell games can keep the patient alive.
The writing is on the wall for governments’ predatory rackets: nonstop wars, bloated military and intelligence complexes, crony socialism, central banking, medical care, education, regulatory extortion, vote-buying via redistributive theft, unfunded pension and medical promises, and the rest of the criminal activity that has rendered the world insolvent.

"Instead, it’s their realization that notwithstanding the fake money and debt mirage, they are growing poorer, opportunities are shrinking, and eventually they’ll be destitute and then dead.
" What scares the hell out of not just the French establishment, but establishments around the world, is that Yellow Vest rage is directed at Government, not just France’s, but the European Union as well."
When you’re broke, you’ve got nothing to lose. If poverty or its prospect, and perceived injustice, prime insurrections, then we ain’t seen nothing yet. The global house-of-cards economy is collapsing in on itself.
Which is why the predatory class is obsessed with firearms control and prohibition. Torches and pitchforks are one thing, pistols, rifles, and more powerful armaments available on the black market, another. Predators prey on the weak and defenseless; they’re cowards. Fear that they could find themselves on the wrong end of the barrel motivates their ceaseless efforts against private possession of firearms―but not governments’.
"Alarmingly, it means that the sheep have identified their predators and abandoned their passivity. Governments, the most well-armed and dangerous institutions on the planet, moving against firearms are the wolves taking the sheep’s shovels and stakes."
https://straightlinelogic.com/2019/0...y-robert-gore/

The Predator State, " The title refers to how in US society, as Galbraith sees it, public institutions have been subverted to serve private profit: the "predators" being corporate elites. He argues that these corporate interests run the state "not for any ideological project—but simply in a way that would bring to them, individually and as a group, the most money.”[1]
For him, the Katrina disaster was a defining failure of the political system, since a political hostility to the public sector had inspired the degradation (or selling off) of publicly owned emergency services. Writing a preface for the paperback edition, which came out after the 2008 crash, Galbraith blamed the ongoing crisis on deregulation which, in the name of free markets, had left the financial predators to police themselves.[3]
https://en.wikipedia.org/wiki/The_Predator_State

Keep in mind that your social security money was taken to foment wars-for-profit all over the world

"This graph is a very typical display of the predator/prey relationship. It comes from a study on rabbits and coyotes, but the relationship is the same for all predator/prey tandems, from tiny parasites and their hosts to lions and antelopes. The predators always overfeed until the prey can no longer sustain them, then most of them die and the rest wait for the prey to replenish themselves."
"Humans are intelligent beings, so the predators must use mental strategies more than physical strategies. The effective rule of humans must focus on their minds more than their bodies; unsupported physical domination is too difficult and expensive. This is why legitimacy matters so much in human governance.

The interesting thing about our current situation is that the rulers of the West retain their overwhelming power, but their legitimacy rests on a number of fragile structures. When one or two of them fail, the others may go down with them. And if this happens, the current system of rulership will not be rebuilt as it is now. What comes next may be better or may be worse, but it will not be the same."
Rulership is an exercise in skimming. Think of your own interactions with your government – the primary exchange is that they take some of your production.
https://www.lewrockwell.com/2013/08/...is-a-predator/

"Today, the signature of modern American capitalism is neither benign competition, nor class struggle, nor an inclusive middle-class utopia. Instead, predation has become the dominant feature—a system wherein the rich have come to feast on decaying systems built for the middle class. The predatory class is not the whole of the wealthy; it may be opposed by many others of similar wealth. But it is the defining feature, the leading force. And its agents are in full control of the government under which we live."
They include the misanthropes who led the campaign to abolish the estate tax; Charles Schwab, who suggested the dividend tax cut of 2003; the “Benedict Arnold” companies who move their taxable income offshore; and the financial institutions behind last year’s bankruptcy bill. Everywhere you look, public decisions yield gains to specific private entities.

For in a predatory regime, nothing is done for public reasons. Indeed, the men in charge do not recognize that “public purposes” exist. They have friends, and enemies, and as for the rest—we’re the prey. Hurricane Katrina illustrated this perfectly, as Halliburton scooped up contracts and Bush hamstrung Kathleen Blanco, the Democratic governor of Louisiana.
In a predatory economy, the rules imagined by the law and economics crowd don’t apply. There’s no market discipline. Predators compete not by following the rules but by breaking them. They take the business-school view of law: Rules are not designed to guide behavior but laid down to define the limits of unpunished conduct.
A predatory economy is criminogenic: It fosters and rewards criminal behavior.

But, as with Enron, Tyco, and WorldCom, at every major S&L control fraud was protected by clean audits from top accountants: You hire the top firm to get the clean opinion. Moral hazard theory shifts the blame for financial collapse to the incentives implicit in insurance, but Black shows that the large frauds were nearly all committed in institutions taken over for that purpose by criminal networks, often by big players like Charles Keating, Michael Milken, and Don Dixon. And there’s another thing about predatory institutions. They invariably fail in the end. They fail because they are meant to fail. Predators suck the life from the businesses they command, concealing the fact for as long as possible behind fraudulent accounting and hugely complex transactions; that’s the looter’s point.
That a government run by people rooted in this culture should also be predatory isn’t surprising—and the link between George H.W. Bush, who led the deregulation of the S&Ls, his son Neil, who ran a corrupt S&L, and Neil’s brother George, for whom Ken Lay sent thugs to Florida in 2000 on the Enron plane, could hardly be any closer.

But if the government is a predator, then it will fail: not merely politically, but in every substantial way. Government will not cope with global warming, or Hurricane Katrina, or Iraq—not because it is incompetent but because it is willfully indifferent to the problem of competence. The questions are, in what ways will the failure hit the population? And what mechanisms survive for calling the predators to account?
https://www.motherjones.com/politics...redator-state/

Armstrong, "Nobody cares about the people. This is just politics and in the process, this demonstrates that Congress cannot govern anymore. Once we cross January 2020, this will grow in undermining the confidence in the government that will ultimately be reflected in the willingness to buy government debt. This Mexican Standoff has a more far-reaching impact for equities and commodities post-2020 than most people contemplate."

[Danny B]

The predators greatly outnumber the prey

This is the graph for the predator / prey population relationship between coyotes and rabbits. The coyotes can't survive by eating grass.
https://www.freemansperspective.com/...-breakdown.jpg
What happens when the rabbits stop reproducing? You can see this in Japan and most of the rest of the developed world. Here is a graph of the U.S. population growth.
http://2.bp.blogspot.com/-E9X0j_QCS4...rowth+Rate.png
Dropping fast.
Here is a chart of real wages vs productivity. We have been increasingly more productive but, for the same money.
https://www.singularityweblog.com/wp...real-wages.jpg
Wages flatlined in 1975.
Here is a chart of consumer price inflation. It really took off in 1975
http://static.cdn-seekingalpha.com/u...Ivan-Kitov.png
OK, it's simple. The lower our wages, the fewer children we have. Our wages have been flat since 1975. This reduced the pass-through of our money to the banks. In 1999, congress passed the Graham-Leachy-Bliley act to give our money to the banks so that they could front-run everything we bought. It wasn't bad enough that our wages were stagnant. The banks used our money to create price inflation.

By 2008, we had run out of money to keep up with housing inflation. The banks love to inflate anything that is a store of value. The banks blew up when we defaulted. The State ponied up an initial $700 billion to replace the money that our lower wages did not pass through the banks. The State was continually creating "money" to make up for the money that we didn't earn and pass through. This money was added to our future tax burden. We still didn't have the money to carry the burden. More taxes were / are needed. The State just redifined who was rich to raise the tax burden.
https://www.armstrongeconomics.com/w...-are-the-rich/

Crony capitalism, the corporatocracy or neo-feudalism,,, call it what you want but, our wages have been stolen. The self appointed "elites" can buy politicians all day, every day. Politicians have to eat too. A billionaire politician is an exception.

Every time that the power-mongers destroy capitalism and democracy, the sheep look towards socialism.
ZH Nearly Half Of US Workers Earn Less Than $30,000
For young people, socialism is now more popular than capitalism
Over Half of Millennials Identify as Socialist
Forty-Four Percent of Millennials Prefer Socialism. Do They Know ...

So, the rich manipulate the economy to get even richer. There is a big problem though. "Rich" in their terms means having lots of tangibles and monetary instruments. I suppose that's enough for most of them. All those monetary instruments have no intrinsic value. They are ALL related to consumption. The factories will shut down when nobody can buy it's products. Since they took our wages (buying power), they are only kept solvent by economic activity financed by the State. The State is fast running out of funds and creditability. Nobody is buying State debt but, it is spending up to $6.5 billion a day.
The money that the bankers hold is stagnant. There is no demand for it in the lower loop.
Trump is trying to diminish demand in the upper loop.
https://www.newsweek.com/2019/01/18/...n-1285918.html

The banks intend to continue to run the show but, I believe that they will lose control.
http://wallstreetonparade.com/2019/0...re-of-america/
Nearly Half Of US Workers Earn Less Than $30,000
Half of all jobs will be obsolete in 15 years, warns China’s leading AI expert

1/11 600 environmental groups just backed Ocasio-Cortez’s Green New Deal – Gizmodo
It's definitely desperation time if they think the new green deal will fly.
The public debt goes up astronomically trying to make up for the money lacking in the lower loop. This just moves the risk of crash further up the line. Beginning of 2020 is crunch time for FED GOV.
The corporatocracy brought it on themselves. They bought politicians because they could,,, and because it increased their profits. They destroyed collective bargaining because they could and, because it brought more profit to hand out as dividends.
State employees have unions but, NO,, the private sector can't allow them. 50% of the cost of an item is for upstream or downstream finance. There is plenty of room for higher wages in America if finance would just let go of our money supply.
Just like Japan, too many coyotes and too few rabbits.

[Danny B]

Tax raids

Repost, "Armstrong's model is showing a "slingshot" rise in equities. Everybody else is showing a huge fall. Armstrong's accuracy record is amazing. How could American equities rise so far?
One has to entertain the idea that; there will be so much revolution in the world that capital will flee to American markets to survive complete vaporization. "
It didn't take long.
China's Uber Wealthy Are Preparing For $24 Trillion Tax Raid
https://www.zerohedge.com/news/2019-...round-tax-cuts

Armstrong, "ANSWER: There will be a cancellation of the €500. That is the rumor behind the curtain. I would convert them as soon as possible to small bills and/or US dollars. There remains a distinct possibility that we will see Europe try to cancel its currency and take up the IMF’ proposal to move toward a cryptocurrency. They are desperate for taxes and they will raise taxes even further. As far as cash is concerned, as we move into 2020, it is time to make changes.

Keep in mind that the United States has never cancelled its currency. That is a common occurrence outside of the USA. More than 40% of the physical paper dollars circulate outside the USA. It will be a political difficulty to cancel the dollar. It will take a major economic crisis. The USA will be the last to do such a thing."

Maybe, America equities will do a slingshot move if Europe and China get bad enough.

[Danny B]

Tax raids

Repost, "Armstrong's model is showing a "slingshot" rise in equities. Everybody else is showing a huge fall. Armstrong's accuracy record is amazing. How could American equities rise so far?
One has to entertain the idea that; there will be so much revolution in the world that capital will flee to American markets to survive complete vaporization. "
It didn't take long.
China's Uber Wealthy Are Preparing For $24 Trillion Tax Raid
https://www.zerohedge.com/news/2019-...round-tax-cuts

Armstrong, "ANSWER: There will be a cancellation of the €500. That is the rumor behind the curtain. I would convert them as soon as possible to small bills and/or US dollars. There remains a distinct possibility that we will see Europe try to cancel its currency and take up the IMF’ proposal to move toward a cryptocurrency. They are desperate for taxes and they will raise taxes even further. As far as cash is concerned, as we move into 2020, it is time to make changes.

Keep in mind that the United States has never cancelled its currency. That is a common occurrence outside of the USA. More than 40% of the physical paper dollars circulate outside the USA. It will be a political difficulty to cancel the dollar. It will take a major economic crisis. The USA will be the last to do such a thing."

Maybe, America equities will do a slingshot move if Europe and China get bad enough.

[Danny B]

Reserve early for your seat at the banquet of consequences

I saw a crash coming in 2005. I started writing in early 2007. When "they" didn't let the banks fail in 2008 + , I knew that the eventual dissolution would be that much worse. While writing, I had to do a LOT of reading to filter out mountains of BS. EVERYBODY wants to rent out their money. To keep the rentals going when actual productivity was falling took ever-greater amounts "money". Reportedly, total global debt is $250 trillion,,, a fairly meaningless number. It recently became obvious that wild money printing aka,,, debt creation was a losing game. The CBs cut way back. The pundits now admit that there is no escaping a final crash,,,, as prophesied by Ludwig von Mises.
As we get that much closer, I need to do less and less reading and digging to follow the likely, true outcome. More and more writers are focused on things that I saw back in 2005+
So, what happens to all the money renters and their money?
Charles Hugh Smith has a good article about the banquet of consequences.
oftwominds-Charles Hugh Smith: Where Will You Be Seated at the Banquet of Consequences?

GNS Economics has a great report that lays out 3 possible scenarios.
https://gnseconomics.com/en_US/2019/...-the-collapse/
While reading this report, you MUST keep in mind the lessons learned from reading,
According to Tainter's Collapse of Complex Societies, societies become more complex as they try to solve problems.
When a society confronts a "problem," such as a shortage of energy, or difficulty in gaining access to it, it tends to create new layers of bureaucracy, infrastructure, or social class to address the challenge. Tainter, who first (ch. 1) identifies seventeen examples of rapid collapse of societies

https://en.wikipedia.org/wiki/Joseph_Tainter
As collapse becomes more obvious, the State gets more frenetic and crazy.
https://www.dollarcollapse.com/verbal-civil-war/

[Danny B]

Of course the State is wicked,,, China, Ukraine

Thomas Paine, "Society is produced by our wants, and government by our wickedness"
What happens when government is the source of wickedness? The State works hard to convince us that the State and society are inseparable. Like any other entity, the State needs physical support. Out of sheer benevolence, the State took over the task of creating our money supply. This worked very well in the days of Benjamin Franklin, the father of paper money. But, regulatory capture has ensured that the State is looking out for the needs of the bankers, NOT the needs of society.
The State is both a parasite and a predator, AND the issuer of our money. It is no surprise that the State puts the State's interests ahead of ours. Since the State is a non-producer, it constantly battles against the use of any commodity money. The State justifies theft in the form of taxes by claiming that it spends the money for our benefit.
https://www.zerohedge.com/news/2019-...cts-its-future

Here is a complex report that it easy to understand.
"this is the beginning of a structural adjustment after a decade of liquidity abundance and market manipulation,
A stuporous state of durable, un-volatile over-valuation, arrested activity, unconsciousness produced by the influence of artificial money flows.’
unstable equilibrium of the market state was indicated a year ago by the ‘early warning signals’ ('EWS') provided for by the application of Complexity Science to financial markets
In the past two months, the more traditional indicators of conventional market analysis have confirmed what complexity indicators ('EWS') had indicated all along:
Expectations to see market weakness fading should a major Central Bank decide to get back behind the wheel, through another round of liquidity would likely fail, this time around,
fter a long period of system degradation and over-extension due to self-amplifying positive feedback loops. A system in transition, after hitting capacity constraints in synchronicity,
We ran out of money and, stopped buying. The capacity constraints are ONLY in consumption, not production.

"he one historical analogue to fear is not so much 1987, where automated trading exacerbated a market downfall, but rather the Quant Quake in August 2007: at that time, renowned quant funds, including the famed Goldman Sachs QIS fund, lost 30% in short order, without any apparent reason.
Still, to date, nobody knows with certainty what the trigger was
Inflammable Market Structure. The list of catalysts starts with a non-catalyst. No trigger needed. The market structure itself remains top of the pile of concerns to us.
These self-reinforcing loops make for an inflammable market environment, which may implode on its own devices, under its own weight, at some tipping point in close proximity.
Buy more popcorn.
The article has great graphs and covers a huge amount of risk data.
Outlook 11012019

China has tried a lot of government and economic and social experiments. Mao was a spectacular failure.
Deng Xiaoping is the one who really worked to transform China into a market economy. Keeping in mind the continuous failures of socialism and communism, Deng tried to close off both systems. Xi is now slipping back into the communist mindset. While the belt & road initiative is a good idea, it was forced TOO FAST. Trump has set off serious problems in China.
https://www.politico.eu/article/opin...-jinping-nuts/

As China is learning, the periphery falls first.
"Receiving a transitory liquidity boost courtesy of the faltering “Periphery,” speculative Bubbles at “Core” U.S. securities markets succumbed to blow-off excess. Crisis Dynamics finally engulfed a vulnerable “Core” during 2018’s tumultuous fourth quarter.
" In short, China’s historic Bubble is increasingly susceptible to a disorderly collapse.

Hong Kong’s Hang Seng China H-Financial Index dropped 18% in 2018, although China’s banks outperformed the 28% fall in Japan’s TOPIX Bank Index. I would tend to see Asian finance as especially vulnerable to the unfolding global Bubble collapse"
No mention of the fall in population. Falling population equals falling consumption and falling markets. The Belt & Road initiative was suppose to bring more Eastern consumers into the consumption fold to prop up markets that had suffered a loss after American consumers went broke. China is trying to metaphorically poach consumers in other regions. It isn't working out that way and China is shrinking economically.

"Fragile Asian finance has company. Italian banks sank 30% in 2018, slightly outperforming the 28% drop in European bank shares (STOXX 600).
"Bubbles are mechanism of wealth redistribution and destruction. This reality has been at the foundation of my ongoing deep worries for the consequences of history’s greatest global Bubble. We’ve witnessed the social angst, a deeply divided country and waning confidence in U.S. institutions following the collapse of the mortgage finance Bubble. I fear that the Bubble over the past decade has greatly increased the likelihood of geopolitical tensions and conflict. "
https://www.getyarn.io/yarn-clip/def...4-55c1f10aea75

There is a lot of info in the article but, it takes a lot of reading.
https://creditbubblebulletin.blogspo...sues-2019.html

"Today, China’s CPI was reported to have fallen below 2% again in December 2018. This despite a relatively high (for recent times) rate of food inflation. In the West, consumer prices overall are pushed around by oil. In the East, by food"
Here is a graph of Chinese price (in)stability, https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=wbEmPVnz
The article is about the Eurodollar influences on China but, it makes a good point about price instability.
https://www.zerohedge.com/news/2019-...dollars-stupid
1/12 China using twitter history to arrest, interrogate dissidents – Zero Hedge

Ukraine, " And despite widespread public anger at the nation’s corruption problem, which has provoked two revolutions in a decade, no one appears able or willing to do anything about it."
"Hunger games: Ukrainians spend half of their income on food, highest in Europe "
Ukraine – a world-beating grain producer - Adama
Ukraine suffered great Famine in the Holdomar.
"The Holodomor was a man-made famine in Soviet Ukraine in 1932 and 1933 that killed millions of Ukrainians. It is also known as the Terror-Famine and Famine-Genocide in Ukraine, and sometimes referred to as the Great Famine or The Ukrainian Genocide of 1932–33"
Wiki, "This is a list of famines in China. Between 108 BC and 1911 AD, there were no fewer than 1828 recorded famines in China,"
China, Ukraine and many others can not allow the people to starve. No telling how this will work out.

1/12 Democrat voters are becoming more pro-war than Republicans – Intercept
NATURALLY, we need to have war to get the economy moving. NO WAY should we spend on domestic infrastructure. That would benefit everybody, NOT just the arms merchants

[Danny B]

I spent 90 minutes on a post and, it just got eaten.
Bummer, I'll just do headlines.
Brooksley Born was head of the CFTC and warned that the derivatives were going to crash in 1999. She was silenced by Greenspan, et al;.
http://www.washingtonpost.com/wp-dyn...052502108.html
The risk is all piling up again, There was no moral, legal or financial hazard and the gamblers are at it again.
https://northmantrader.com/2019/01/1...e-crime-scene/
1/15 Collapse in global M1 signals worldwide recession has arrived – Zero Hedge

China is going down fast and, their investments in Europe and America have fallen 70%.
1/14 China trade data is nail in the coffin of global economy – Mish

[Danny B]

The real economy no longer held in abeyance by money printing

The finance sector has long worked to NOT reflect what was happening in the real economy where production & consumption happen,,,, or don't.
"There are real economic processes underneath. The more fundamental the market, the closer it is actual economic transactions. These are influenced by the movement of real things, this real economy, not just the transposition of numbers on some detached Wall Street computer screens. Living in the financial services realm can make it seem like none of this is real."
"imports into China, a primary measure of downstream economic strength in the world economy, fell by more than 7% "
China’s export growth turned negative, too. In December, total exports were down 4.4%"
they were dragged down starting in the real global economy where it was already taking place.
https://www.alhambrapartners.com/201...sour-not-soar/

I already mentioned that Bangladesh needed to create many millions of jobs.
" "The Indian Railway System Announced 63,000 Job Openings... 19 Million People Applied."
" The same economist notes that India has about 104 million "surplus" workers."
https://www.zerohedge.com/news/2019-...s-took-streets
Pakistan needs 1.3 million additional jobs every year: UNDP - Daily ...
Pakistan Can Create 2 Million Jobs Yearly With 7-8% GDP Growth ...
NOT a good area to live in.
1/16 New numbers: global slowdown is far more advanced than we thought – ECB
REALLY?
1/16 Fed’s biggest hawk folds, says “may be a good time to pause rate hikes” – ZH
Reducing their balance sheet has almost as much effct as the rate hikes.
1/15 China signals more stimulus as economic slowdown deepens – Reuters
Ah yes!. All that productivity with an equal amount of consumption. At the same time, they can't allow unemployment to rise.
1/15 Global economy fears grow as China and eurozone slump – Guardian
For a very good reason.

China contagion WILL affect America.
https://www.mauldineconomics.com/fro...this-way-comes

[Danny B]

Taxes in France,,, struggling China,,,Fracking bust

The rich are hard to pin down and tax. The State prefers to tax the middle class. The French are taxed 46.2%. This tax falls heaviest on the poor and middle income. Macron ended the wealth tax.
https://www.wsj.com/articles/all-the...nce-1544226179
The fuel tax was the final straw.

If you read Armstrong, you get a different story.
"Nonetheless, our sources there say that she will probably survive as the Conservatives who rejected her plan are not likely to vote for a no-confidence motion realizing that a Corbyn victory would more or less signal it is time to leave Britain on the next flight. Corbyn’s socialist policies would only put Britain in a heated competition in Europe with France as to who could go bankrupt first. Macron realizes that socialism has destroyed the French economy,"
Socialism of the masses is always contending with neo-feudalism of the "elites". The elites never caught on to the idea that; All the paper debt and stocks & bonds are worthless if there is no economy
https://www.armstrongeconomics.com/i...own-in-defeat/

Remember that Mother Nature bats last. The volcanoes in Germany blew up 13,000 years ago. Currently, the magma chambers are refilling with lava.
https://www.express.co.uk/news/world...canic-eruption
Merkel is trying to hold onto powewr no matter how much it costs the Germans.
Merkel Offering to Pay One-Year’s Living Expenses if Refugees Leave Europe

1/16 Immediate fossil fuel phaseout could arrest climate change – study – Guardian
Probably true.
That's not all that it would do, https://www.youtube.com/watch?v=RdCozBOa5LE
1/16 Italian banks face 2019 funding crunch without ECB help – Reuters
5 Star and Salvini knew that all along. Let's see who blinks first. The Italians would prefer to default.
1/16 China unleashes tax cuts in bid to halt economic slowdown – Guardian
1/15 China signals more stimulus as economic slowdown deepens – Reuters
1/16 China central bank’s $83 billion injection heightens worries over economy – Reuters
It won't work They are losing market share and, there are 1 million fewer Chinese workers every year. They are trying to make up for falling consumption by printing more money.

1/16 President Trump can’t stop U.S. coal plants from retiring – Reuters
1/16 Solar power company strikes deal to power 10 million people – ESI
America has done whatever it could to block a pipeline that would allow Canada to sell their oil on the world market. We get it cheaper that way.
https://www.youtube.com/watch?v=IohP9ak5ykc
All they really have to do is to build the pipeline. They don't need to actually pump oil. We'll just have to pay more.

The original claim was that; frackers had over-estimated their oil productivity by 10%. Turns out, they over-estimated by 50%. Finance is running away after losing $250---$280 billion dollars. The default cascade will shut off carbon energy deliveries for a while.
"WSJ finally ran the numbers and discovered that shale wells are not producing nearly as much oil as the operators had claimed they were going to produce:
"The main conclusion of this analysis is that US shale producers have overstated their well output by 10% collectively. And as much as 50% for certain individual companies.

These numbers are easy to collect and analyse. While it’s a great thing to finally have the WSJ show up here, many years later than the independent analysts cited above, they still didn't get close to the actual truth.

In actuality, the shale plays are going to produce roughly half of what is currently claimed by shale operators. Instead of a -10% collective hit to production, we should be ready for something closer to -50%."
s poor as the economics are for the shale drillers, which have collectively spent some $260 billion more than they have taken in from their operations, things are even worse than commonly understood. As the public is on the hook for billions of dollars worth of road and bridge damage caused by fracking trucks.

In Texas, the road damage might be as much as twice the amount brought in by taxing the oil operation revenues.
https://www.peakprosperity.com/blog/...nation-decline
Could Fracking Industry Debt Trigger a Financial Crisis?
knowledge.wharton.upenn.edu/.../will-fracking-industry-debts-set-off-financial-tremo...

Sep 21, 2018 - The U.S. fracking industry could implode when investors begin to demand “real returns”

[Danny B]

Chinese defaults taking center stage

The Wicked Witch of the West (no, not Hillary) was famous for saying,,, I'm melting !! Dorothy did her in.
Well, China is melting and Trump is the one who gave the tightrope a good whack. They were sort-of balanced,,, sort-of surviving. Not any more.
At one time, China was injecting more liquidity than the FED, BOE, BOJ and ECB all put together. Last week, they injected $1.1 trillion.
https://www.zerohedge.com/news/2019-...liquidity-week
This reeks of desperation. The wealthy Chinese are fearing a $45 trillion tax haircut. Most Chinese corporations are not profitable.
1/17 China’s corporate default storm continues to rage – SCMP
The State supports them to maintain employment. This is going to get very ugly.
The Baltic Dry Index of shipping costs has crashed because China has cut way back on imports. Oz is going to get hit hard.
https://www.zerohedge.com/news/2019-...rates-collapse

The Federal Reserve now claims that it caused all of the recessions.
https://www.zerohedge.com/news/2019-...all-recessions
In related news, the Wall Street banks made $ 100 billion,,, wonder if there is a connection?
https://www.zerohedge.com/news/2019-...billion-profit

Armstrong, "To eliminate cash, the ECB has a secret project to provide instantaneous transfers for each transaction. Therefore, the central bank was simply a state-owned bank whereas a clearing bank was one where all banks must clear transactions."
https://www.armstrongeconomics.com/h...ks-v-clearing/

"Measures for sentiment among high school graduates and those 65 and older both fell to the lowest since July. The measure also fell across most income levels as well as for Democrats and independents; but confidence increased among Republicans, renters, and for workers earning more than $50,000."
https://www.zerohedge.com/news/2019-...-has-collapsed

1/17 China is turning into Its own worst economic enemy – Bloomberg
1/17 German carmakers warn hard Brexit would be ‘fatal’ – Reuter
1/17 Illinois governor dodges pension issue in inaugural speech – Chicago Business
1/17 Government debt bomb much higher than Americans realize – SRSrocco Report
Don't worry, they'll find out eventually.
1/17 Art Berman: exposing the false promise of shale oil – Peak Prosperity
Let's hope that Wall Street doesn't find out.

[Danny B]

Eventual debt blowout and, cancelling the currency

Great Britain is talking about postponement of brexit until the summer. Things will be MUCH clearer by summer.
https://www.zerohedge.com/news/2019-...so-too-will-eu
El Chapo has used the israeli model of business.
https://www.independent.co.uk/news/w...-a8729726.html
The U.S. Navy wants to build LOTS of expensive targets.
https://sputniknews.com/us/201901161...unmanned-ship/
1/18 War *****s scramble to say Syria attack means troops must remain – Medium

1/18 Burnout is making doctors want to kill themselves – NY Post
That's what you get when finance takes over medicine. Overworked doctors and treatment unaffordability. But, the profit margins are GREAT
1/16 Trump again threatens to leave NATO (that’s a good thing) – Mish.
I wish him all the luck in the world.
1/18 LA teachers strike: 73k is not enough – liberty nation – Liberty Nation
1/18 California’s housing crisis looms over problems with teachers – CNBC

1/18 Response to US global bullying: Iran, India ditch dollar – RT
Jim Willie said that America is going to get a new currency.
Martin Armstrong said that America has never cancelled it's currency. He points out that U.S. currency overseas could not be cancelled. If America can get foreigners to stop using dollars, it would make it easier to cancel them domestically.

Central banks have started to pump in a bit more liquidity to soften the crash,,, a controlled demolition.
https://www.zerohedge.com/news/2019-...t-make-it-2017
1/18 Some NYC restaurants cutting staff hours as minimum wage hits $15 – CNS
Robby the robot continues to undercut wages.

FED GOV can spend $2 billion for the obamacare website but, it can't spend $5 billion for the wall. All the while ignoring that social security is unfunded by $50 trillion.
Congress has turned a blind eye to the big problems while fighting over the little ones.
https://www.sovereignman.com/interna...er-wall-24430/

[Danny B]

Opting out of the techno society before AI destroys it

I've made a lot of notes and, this idea is going to take a lot of reading.

The Brynjolfsson report
And the jobs least likely to be shredded by AI/machine learning:

Massage therapists
Animal scientists
Archaeologists
Public address system and other announcers
Plasterers and stucco masons
Uhh, What about the rest?

A new report predicts that by 2030, as many as 800 million jobs could be lost worldwide to automation.Nov 30, 2017

ARTIFICIALLY intelligent robots could trigger a “fourth industrial revolution” and displace more than half of the human workforce by 2025, a Swiss think-tank has warned.
“By 2025 more than half of all current workplace tasks will be reformed by machines as opposed to 29 percent today.”

Care work, entertainment, and other tasks requiring empathy, previously thought safe from automation, have also begun to be performed by robots.[7][8][9][10]
An AI with the abilities of a competent artificial intelligence researcher, would be able to modify its own source code and increase its own intelligence. If its self-reprogramming leads to its getting even better at being able to reprogram itself, the result could be a recursive intelligence explosion where it would rapidly leave human intelligence far behind.

Artificial Intelligence: Tool for the Future, or Man's Last Invention? - CyberNole.net

Artificial Intelligence: Tool for the Future, or Man's Last Invention?

Bering also examines the role of von Economo neurons (VENs), spindle-shaped cells that contribute to empathy, self-awareness, and other advanced social functions. One study by the neuropsychiatrist Martin Brüne found “significantly greater densities of VENs in the brains of the suicide victims compared to those in the control group.”

Moreover, during a chapter in which Bering explores the recent phenomenon of live-streaming one’s suicide, he doesn’t pause to wonder why Marcus Jannes, a college student who broadcasted his own hanging on a Swedish Web site called Flashback, chose to do so by lassoing computer-network cables around his neck and rigging them up to a doorframe. The symbolism seems wholly lost on him.

“Capitalist Realism”: “The pandemic of mental anguish that afflicts our time cannot be properly understood, or healed, if viewed as a private problem suffered by damaged individuals.”

Without the plotline of the Christian gospel, with its messianic view of history, the purpose of life and our place in the world became woefully uncertain.

Op-Ed in the Times, by the behavioral scientist Clay Routledge, which presented new data showing how the surge in suicides could be attributed to a “crisis of meaninglessness.”
we are nevertheless embracing an ideology that supplies a certain framework of meaning. Recognizing the spiritual function of these ideologies might help us understand their role in staving off suicide,
At one point, Bering notes that churchgoers—who place a high premium on communal fallibility—are four times less likely to commit suicide than their secular counterparts.
https://www.newyorker.com/books/unde...ces-of-suicide