Economic pressures

[Danny B]

Armstrong,,, 4th turning,,,pain of MMT,,,bigger speed-bumps

I accidentally zapped my post. The short version
Europe has price inflation. IF you chart prices compared to U.S. dollars or gold, Europe has deflation.
https://www.armstrongeconomics.com/i...-or-inflation/
Armstrong, The rise of MMT and, the fall of classical economics. Armstrong claims that there will be one high interest rate for private debt and, a different low rate for public debt. There is no possibility of this. Public debt is compounding at an annualized rate of 6%. Why would anybody buy into this at <2.5%> ?
https://www.armstrongeconomics.com/m...nterest-rates/

Armstrong, "
I am overseas as a crisis is brewing which many might rename the “Lehman Moment” to something more up to date. Clearly, the stakes are far higher to the world economy than anyone may truly appreciate. We are cascading toward a perfect financial storm. "
He doesn't want to come out directly and say that Deutsche bank is in complete meltdown.
"All the Quantitative Easing by Draghi at the European Central Bank (ECB) has completely failed and in the process created a systemic risk to the entire world economy – not just the EU."
Draghi did NOT fail. The banks are still open.
https://www.armstrongeconomics.com/p...-responded-to/

Manufacturing is the prime value-added industry. With the latest advances in 3D printing, we are getting that much closer to the Star Trek economy.
Alibaba has created a "city brain" to control everything.
ET City Brain: Empower Cities to Think with Data-Driven Governance ...
https://www.alibabacloud.com/et/city
WAIT, what about bribes?

" The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability "
" With global debt now exceeding $250 trillion, up 60% since the Crisis began"
"The specific details of each crisis change, but economic catalysts have initiated all previous Fourth Turnings and led ultimately to bloody conflict. There is nothing in the current dynamic of this Fourth Turning which argues against a similar outcome. The immense debt, stock and real estate bubbles, created by feckless central bankers, corrupt politicians, and spineless government apparatchiks, have set the stage for the greatest financial calamity in world history.

Rather than taking the bitter medicine of purging the system of bad debt and allowing zombie banks and corporations to die, the ruling class has chosen to ramp up the debt orgy and reward themselves and their cronies with ill-gotten riches, while impoverishing the masses"
https://www.theburningplatform.com/2...ing-economics/

This is from a site that focuses solely on interest rates;
"Modern monetary theory is not so theoretical anymore. In all but name, it’s the description of Republican fiscal policy in this living moment. “Federal Borrowing Soars as Deficit Fear Fades,”
"The second big idea in MMT concerns the nature of the public debt. There’s nothing to fear from it, said Lerner - at least, not if a government can borrow indefinitely in its own currency."
You're going to see a LOT of this. The government does NOT need to borrow. This is a good article and, a good reference if you are ever having a discussion about debt-free money.
https://www.zerohedge.com/news/2019-...onetary-theory
Manufacturing has been wiped out by automation. Information handling has been wiped out by AI. The bankers are going to fight tooth & nail to keep the debt-money system. Only after the world has gone up in flames will debt-free money make an emergence.
https://www.zerohedge.com/news/2019-...onetary-theory

Keep in mind that foreign capital inflows are lifting American stock markets. How much can they be lifted?
"We keep hitting the same wall. January 2018 nearly 150% market cap to GDP and stocks got punished with a 10% correction.
Last September/October we hit a slightly lower high around 147% and stocks got hit with a 20% correction.
Now in July we hit 145%, another slightly lower high, and stocks have begun selling off again.
Is that it? Is that the valuation wall? How far and for how long can stock markets stay this far disconnected from the underlying size of the economy? All of history says: Not for very long."

"Each time market capitalizations cross the 110% mark things get iffy don’t they? Added plot twist: The world can lead in the realignment to reality process. Note the global valuation scheme peaked in 1999. US markets famously puked some more highs out into March of 2000. Well, this time around the world peaked in 2018 and since then it’s the US again squeezing out marginal new highs in 2019. Not Europe, not Asia, no, it’s the US on its own."
"There is no history, none, that supports stock market capitalizations above 145% of GDP for an extended period of time. None."
https://northmantrader.com/2019/08/04/hitting-the-wall/

8/05 Bond market screams for more rate cuts: Trump policies ensure they come – Mish
8/05 Expect Fed baby step cuts followed by shock and awe panic – Mish
You will see whatever it takes to ensure that China and Europe melt down first.
"10. Meanwhile, working stiffs will be taxed at twice the marginal rate of those who live on dividends. By 2049, says the CBO, labor income will be taxed at a marginal rate of 32%, compared to just 16% for capital income. Good to know, isn’t it?"
https://www.marketwatch.com/story/10...you-2019-08-01
8/05 Workers from Amazon to United Airlines demand more pay after profits soared – CNBC
NOPE, only dividends will go up.

8/05 Hong Kong shares drop nearly 3% as city braces for general strike – CNBC
8/05 Currency war begins: Chinese yuan crashes past 7 to new record low – Zero Hedge
8/05 China balance of payments deficit risks currency and asset crash – Epoch Times
7 was the big psychological number. Trump will continue to thrash China.
8/04 Venezuela inflation at 10 million percent. It’s time for shock therapy – CNBC
Yes, send in the U.S. military to administer this therapy.
8/05 Boris Johnson snubs Nigel Farage after refusing to make Brexit party pact – BW
He's going to regret that.
8/05 California wants to teach your kids that capitalism is racist – ZH
8/04 Celebrities, royals and politicians brace themselves for the Epstein files – Telegraph
8/04 Mexico’s murder rate soars to highest in history as narco shootouts plague capital – ZH
How can that be? Mexico doesn't allow private citizens to have guns.

[Danny B]

Yuan devaluation and bigger speedbumps

Trump tweeted that he was going to put big tariffs on more Chinese goods.
"Global dollar debt outside America has risen to US$12 trillion today from US$9 trillion in 2013, "
Trump threw a spanner in the machine. As the dollar goes up and, other currencies go down, they need ever-more dollars for debt service. This puts an ever-greater load on foreign companies. The Yuan fell below 7 which is a very big deal psychologically.
Stocks Fall Sharply as Yuan Reels and Trump Jabs at China - WSJ
US stocks are cratering after China made a change to its currency that
Rense, Dow Falls 766 Points as Yuan Reel And Trump Jabs at China
Snyder - China Is Extremely Angry, And Now Considers The United States To Be Enemy #1

“We know now that government run by organized money is the same as government run by the organized mob.” — Franklin D. Roosevelt (1882-1945), 32nd American President, 1933-1945, (in a speech at Madison Square Garden, Oct. 31, 1936)"
https://www.globalresearch.ca/financ...ubbles/5685137

The European states printed up bonds. Investors bought them just so that they could sell them higher to Draghi. Draghi is out and Lagarde is in. She is as bad as the German central bankers. They have NO understanding of hyperinflation.
Dijsselbloem and Schäuble have absolutely no understanding of economics. They torched Greece and think that they brought fiscal discipline. The German inflation phobia poisons all their minds. They plan to bring crashing austerity to Europe like they did to Greece. If Draghi isn't buying bonds for the investors to front-run, they will quit buying.

Armstrong is making an emergency trip to Europe. The feces-for-brains Central Bankers are helpless. If Armstrong is physically there, they can blame him when it blows. NOPE, no telephone instructions.

PRIVATE BLOG – US Share Market Crash & China’s Devaluation
Posted Aug 5, 2019 by Martin Armstrong
The major Asian stock markets had a negative day today:

Shanghai decreased 46.34 points or -1.62% to 2,821.50
Kospi decreased 51.15 points or -2.56% to 1,946.98
ASX 200 decreased 128.30 points or -1.90% to 6,640.30
NIKKEI 225 decreased 366.87 points or -1.74% to 20,720.29
Hang Seng decreased 767.26 points or -2.85% to 26,151.32
SENSEX decreased 418.38 points or -1.13% to 36,699.84

"They call that period The Great Bond Massacre. But it seemed like every few years, another great massacre would unfold in one thing or another. So he assumed that this is how the world worked. Of course, he wasn’t alone. Global central bankers also recognized this to be the case. So they strived to avoid new massacres. But their tools only worked when the mechanic applied greater leverage with each use.

Massacre after massacre, they cranked away. By 2019, they had produced the longest economic expansion and equity bull market in American history."
“Anyhow, after 20yrs of zero rates and printing over 100% of GDP, Japan’s stock market is roughly where it peaked in 2000, and 47% below its 1989 high,”"
“Europe thought QE worked so it copied Japan, and its stocks remain 38% below their 2000 peak."
https://www.zerohedge.com/news/2019-...red-staggering
Nobody made any effort to save the lower loop. Saving the upper loop was / is expensive and useless.

8/06 Recession watch: panic Fed rate cuts coming up – Mish Powell swears NO.
8/06 Share buyback juggernaut to roll on, oiled by bond yield collapse – Reuters
So, what happens when $12 trillion in corporate bonds go up in smoke?
8/06 China fires biggest shot yet in trade war and now it’s up to Trump – CNBC

8/05 Elitists roll out “stop rebelling and support Biden, you insolent little sh!ts” campaign – ZH

"Strauss and Howe, when writing The Fourth Turning in 1997, did not know the exact circumstances and events which would propel the next Turning. But their study of economic and demographic trends along with the attitudes of generations and historical precedents in prior Fourth Turnings, led them to conclude the driving factors of this Crisis would be debt, global disorder and civic decay.

As I watch what is currently happening in this country and around the world, it is evident to me they nailed it"
"Economic distress, with public debt in default, entitlement trust funds in bankruptcy, mounting poverty and unemployment, trade wars, collapsing financial markets, and hyperinflation (or deflation)
Social distress, with violence fueled by class, race, nativism, or religion and abetted by armed gangs, underground militias, and mercenaries hired by walled communities
Political distress, with institutional collapse, open tax revolts, one-party hegemony, major constitutional change, secessionism, authoritarianism, and altered national borders"

"The United States, along with virtually every “developed” country, are effectively bankrupt. The $200 trillion of unfunded Federal liabilities can never be paid. States have accumulated over $6 trillion of unfunded pension liabilities and billions more in health care related liabilities. "|
https://www.theburningplatform.com/2...mics-part-two/

[Danny B]

Awareness slowly sinking in

China has been roundly accused of manipulating their currency. It just doesn't work that way.
Armstrong, "
We are clearly cascading toward the Monetary Crisis Cycle as the USA wrong accuses China of manipulating its currency for trade advantages. All one needs do is look at the trend of the dollar against other major world currencies and you will quickly see that the trend of the dollar against the yuan is in line with the global trend. This is the problem we face when politicians simply follow the academic view of currencies "
"China has been doing the exact opposite of what the US is accusing it. They have been supporting their currency and if they stopped and allowed it to float freely, then the US would witness probable new record highs in the dollar which will bring about the crisis we see coming by 2021."
"The yuan has been under pressure also because the yuan is too expensive within Asia and manufacture has been migrating to South East Asia"
https://www.armstrongeconomics.com/i...een-usa-china/

Armstrong,, reply, "about your recent post ‘The Sum of All our Economic Fears’… i understand you will give some advices to investors how to trade difficult times that lie ahead in 2020 and beyond. What i wonder is what we, non investors but just ordinary people who does have only house or the apartment they live in and day job, what we should do and what we can expect regarding crisis that’s coming our way. "
"ANSWER: The basic level of Socrates is designed for the non-investor who needs a broader outlook rather than short-term buy and sell strategies. I fully intend to make sure that information is available for the general public. The NY bankers have always wanted to shut down our forecasting, for they want people to only listen to their forecasts which are always self-serving."

Ah yes,,, self-serving.
"As Bloomberg writes, today's jarring escalation of the U.S.-China trade war which sent the Dow Jones down as much as 900 points intraday, is also hammering retail investors: the reason - last week a whopping $4.4 billion flowed into two ETFs that have been favored by "moms and pops", just in time for one of the fastest drawdowns of the decade"
"This is a vivid reminder of what happens when buying the dip... fails. While BTFD may have been seemed appealing to some long-term investors after the worst week for stocks’ since the start of the year, with equities dumping more than 3% on Monday after China effectively devalued the Yuan, Bloomberg notes that "the professionals are earning their reputation as the “smart money” for sitting this one out""
https://www.zerohedge.com/news/2019-...ushed-etf-rout

"Whether they discuss this predicament in varnished conference rooms over dessert trays or not, the ones who do get it understand there isn’t any way out without massive pain, either through debt-deflation (like the Great Depression), or currency destruction via hyperinflation (like Venezuela)."
"The only strategy – if there is one – would be a large, controlled inflation (i.e. confiscation), where every dollar loses at least half it’s purchasing power over the next 10 years.

It’s how they reset the system in the 1970s, and 1930s.

That’s our best-case scenario to avoid a total collapse. The pain is spread evenly across enough who are unprepared if and only if the maestros can dance gracefully on the head of a pin."
https://thebaddaddy.com/the-fatal-fl...w-we-organize/

8/06 Recession watch: panic Fed rate cuts coming up – Mish
AT WHAT PAIN LEVEL ?

[Danny B]

Yuan elevator goes down only,,,China=no faith,,,nothing matters

Ditch the Dollar, Buy Gold and Other Currencies Says JP Morgan
Why would ANYBODY sell dollars and buy other currencies?
Sure, buy the British Pound.
'No Deal Brexit is Now Completely Inevitable'
Various currencies are going down in relation to gold.
https://www.kitco.com/news/2019-08-0...urrencies.html
8/06 Negative rates at Swiss banks seem to invite customers to move cash into gold – GATA
NO, NO,,, keep your money in the banks.
8/06 China fires biggest shot yet in trade war and now it’s up to Trump – CNBC
They shot themselves in the foot.

8/06 Kyle Bass: China’s currency would drop 30% to 40% without support – CNBC
" “What’s happening in China is they have to have dollars to sell to buy their own currency to hold it up. If they were to ever free float their currency, I think it would drop 30% or 40%,” Bass told CNBC’s “Closing Bell.”

“And the reason is they claim to be 15% of global GDP in dollar terms, but less than 1% of global transactions settled in their own currency,” Bass added. “And so, they prop their currency up...everyone calling them a currency manipulator – they are trying to hold this whole thing together.”
“Every deal that the Chinese have signed up with us since their inception into the WTO since 2001, China never lives up to their promises,” he said on July 25. “At some point in time, one of our administrative officials is going to hold their feet to the fire and this is kind of a battle of cultures because the Communist Party doesn’t want to submit themselves to anything measurable or enforceable.”
https://www.cnbc.com/2019/08/05/kyle...t-support.html
So, China desperately needs dollars. Powell has lots of them. China could sell gold-for-dollars to get dollars for debt service and currency support.

8/06 Yuan’s slide is watershed moment for China – GATA
8/06 BRICs bank seeks move away from funding in dollars – GATA
There are more $100 bills in circulation than $1 bills. The people want dollars and the GOV wants the opposite.
8/06 China confirms it is suspending US agricultural product purchases – CNBC
Trump has to send a lot more subsidies to farmers.

The number one job of every parent is to make your children feel wanted and important. They come in to the world totally helpless. If they don't feel wanted and important, they are crushed by insecurities. This often leads to over-compensation in accumulating STUFF. The bankers wanted ever-more productivity so that they could siphon off ever-more riches. They managed to drag women out of the household and, into the workforce.
This went a long way towards the destruction of the nuclear family. The crushing insecurity of the populace plays out in many ways.
'You're Not Losing Your Mind... Everyone Else Is'
22% Of Millennials Say They Have No Friends

We are in a paradigm shift brought on by globalism and automation. There is no easy way out because every other system conflicts with human nature.
https://libertyblitzkrieg.com/2019/0...gs-fall-apart/
Kunstler goes much deeper.
https://kunstler.com/cluster****-nat...s-and-candles/

[Danny B]

Trade war,,, what is money

Every time that the Yuan has devalued, the stock markets have had a coronary attack of some kind. The Chinese pulled back on their support of the Yuan and, it dropped. The short-term reaction has been bad and, it will get worse in the near future.
https://www.marketwatch.com/story/br...ry_top_stories

" China confirmed reports that it was pulling out of U.S. agriculture as a weapon in the ongoing trade war.
A spokesperson for the Chinese Ministry of Commerce said Chinese companies have stopped purchasing U.S. agricultural products in response to President Trump’s new 10% tariffs on $300 billion of Chinese goods.
This is essentially a trade war equivalent of a nuclear bomb."
This is a direct attack on Trump in an effort to get rural people to reject him.
"In 2017, the Chinese bought 19.5 billion dollars worth of U.S. agricultural products, "
"Now that number is going to zero, and according to Farm Bureau Federation President Zippy Duvall this latest move by China is going to be “a body blow to thousands of farmers and ranchers who are already struggling to get by.”
https://www.zerohedge.com/news/2019-...rning-back-now

Armstrong, "ANSWER: I understand the theory, but where it is seriously flawed is the idea that people will borrow simply because you lower rates. More than 10 years of Quantitative Easing, which has failed, answers that question. "
Ah yes,, people are less inclined to borrow money if they don't have the wages to repay it. The deadbeats will borrow and, just default.
"The way the Fed was originally designed allowed it to stimulate the economy by purchasing corporate paper directly, which placed it in a better management position. Buying only government paper from banks who in turn hoard the money fails."
Yep, the FED credited the private banks with a few $trillion in excess reserves. The banks left those trillions of pixels on deposit with the FED to earn interest. NOBODY was creating new businesses so, nobody needed the money.
"The Fed lowered rates during every recession to no avail just as the ECB has moved to negative rates without success. The central banks are trapped and they are quietly asking for help from the politicians which will never happen."
WAIT A MINUTE. Hundreds of trillions of new liquidity was pumped in worldwide. "Asking for help" Just what do they have in mind? The $247 trillion of new liquidity is pure debt and, added debt won't stimulate anything.

It all has to do with the nature of money.
"The Invention of Money
In three centuries, the heresies of two bankers became the basis of our modern economy."

Side note, Even though paper money was invented 1,000 years ago, Benjamin Franklin is regarded as the father of paper money. The government issued money in accordance with then needs of the PRODUCING economy, NOT, the speculative sector.
"The present moment in financial invention therefore has some similarities with the period when money in the form we currently understand it—a paper currency backed by state guarantees—was first created. The hero of that origin story is the nation-state. In all good stories, the hero wants something but faces an obstacle. In the case of the nation-state, what it wants to do is wage war, and the obstacle it faces is how to pay for it."
War is destructive and, MOST producers want nothing to do with it. ONLY the war profiteers want war.
Paying for war?
"King William’s administration came up with a novel answer: borrow a huge sum of money, and use taxes to pay back the interest over time. In 1694, the English government borrowed 1.2 million pounds at a rate of eight per cent, paid for by taxes on ships’ cargoes, beer, and spirits. In return, the lenders were allowed to incorporate themselves as a new company, the Bank of England."
"John Law thought that the important thing about money wasn’t its inherent value; he didn’t believe it had any. “Money is not the value for which goods are exchanged, but the value by which they are exchanged,” he wrote. That is, money is the means by which you swap one set of stuff for another set of stuff. The crucial thing, Law thought, was to get money moving around the economy and to use it to stimulate trade and business. "

“Money must be turned to the service of trade, and lie at the discretion of the prince or parliament to vary according to the needs of trade.
" The French economy, based on all those rents and annuities and wages, was swept away and replaced by what Law called his “new System of Finance.” The use of gold and silver was banned. Paper money was now “fiat” currency, underpinned by the authority of the bank and nothing else. At its peak, the company was priced at twice the entire productive capacity of France. As Buchan points out, that is the highest valuation any company has ever achieved anywhere in the world."
"Today, we live in a version of John Law’s system. Every state in the developed world has a central bank that issues paper money, manipulates the supply of credit in the interest of commerce, " Nope, speculation.

"All of these were brought to France, pretty much simultaneously, by John Law. His great and probably unavoidable mistake was to underestimate the volatility that his inventions introduced, especially the risks created by runaway credit."
NOPE, he overestimated morality.
"“John Law had dreamed of a well-nourished working population and magazines of home and foreign goods,” Buchan notes."
Nope, it went to the speculators.
" James Grant says in his lively new biography of the Victorian banker-journalist Walter Bagehot, “in finance and economics, we keep stepping on the same rakes.”
Yep, greed and corruption.

"What is money? Where does it derive its value? Who finally guarantees the value of debts and credits?

Bagehot had answers to all those questions. He thought that money, real money, was gold, and gold alone. All the other forms of currency in the system were merely different kinds of credit. "
"Credit was indispensable to a functioning economy, and helped make everybody rich"
Therein lies the problem. Allowing the parasite class to control the creation of credit.
This is a very good, instruction article but, I think that the author was getting paid per word.
https://www.newyorker.com/magazine/2...ntion-of-money

8/07 Quarter of world’s population facing extreme water stress – AFP
8/07 Negative yield debt hits record $15 trillion, up $1 trillion in 2 days – Mish
8/07 ‘Lehman-like’ market collapse could be next: Nomura – Kitco
8/07 US-China fight puts world economy on the brink – NY Times
WAIT, we're not supposed to crash until January.
8/07 “The biggest problem is the debt problem” – Prince Michael of Liechtenstein – CG No kidding?
8/06 U.S., China slide into policy vortex with no easy escape – Bloomberg
China has never honored any agreements.

[Danny B]

Armstrong, phase transition &amp; collapse

Here is a long article from a guy who lists his many previous predictions that came to pass. He was / is at odds with the market players predictions because they are all snorting hopium.
And That's How it All Came Down - The Great Recession Blog
He has some interesting projections for the near future.

"With so much of the rest of the world beginning to succumb to the arriving global recession, capital is fleeing towards the relative safety and positive returns offered by America’s financial markets. As a result, Armstrong sees the US stock market continuing to power higher from here, with the Dow Jones Industrial Average potentially tagging 35,000 by 2021:"
"If you just look at France and Germany’s stock markets, where were the peaks? Back in 2000. They still have not exceeded their 2000 Dotcom bubble highs. "
https://www.peakprosperity.com/marti...35000-by-2021/

Armstrong, 'The key to everything going into the turning point on the Economic Confidence Model is a correlation. True, these people have been pitching gold because the dollar was supposed to crash to zero or Bitcoin was to become the next RESERVE CURRENCY. That was a good one. Anyone who thinks governments will just fade into the light graciously is insane. Christine Lagarde takes the helm of the ECB in October. She has been preaching that the only way to control the economy is to eliminate all paper money and move electronically.

Trust me. There will be no hyperinflation in the USA. These forecasts are so old school that they are laughable. Welcome to the 21st century. If you are surprised about gold rising with the dollar, it’s about time you wake up and look at the world through unbiased glasses."
https://www.armstrongeconomics.com/m...sing-together/

Armstrong, "A lot of e-mails have been coming in saying they can now tell who follows us and who does not. The followers are selling bonds into the high and others who do not follow are buying. That is probably a fair statement"
https://www.armstrongeconomics.com/q...ition-the-dow/
I believe that it is a good idea to pay attention when Armstrong writes about the "phase transition"

"My greatest fear is the collapse of SOCIALISM, meaning pensions and political promises that rest upon class warfare that run the risk of a major crash and burn. The end result would be closer to the Russian Communist Revolution, and will end in a lot of bloodshed "
https://www.armstrongeconomics.com/a...or-the-future/
Once again, Armstrong calls ALL government support, "socialism". GOV Subsidies for the rich are "investment".
Armstrong, " We stand on the threshold of when the money-class (institutional) are beginning to realize that the central banks are trapped and that they lack the power to manipulate the economy. That is the readership here. As they begin to move, that impacts other aspects of the economy and the average person will then respond out of their self-interest.

What comes first is the collapse of confidence in the money-class. As that shifts, then we see the markets respond and it will be the free markets that apply the pressure for the political changes ahead."
https://www.armstrongeconomics.com/a...st-to-respond/
Sorry, this is just too short-sighted and narrow of focus. We are entering a system that needs very few people actively working. The labor participation rate is falling. Wages are effectively falling. The birth rate is falling. A debt-money system requires continuous expansion. It needs a continuous growth in consumption. Runaway automation can cause a huge growth in production but, it can NOT do the same for consumption.

[Danny B]

CBs,,, bonds,,, contagion

America lost it's lock on manufacturing. The Central Banks were tasked with keeping everything running without deflation of prices regardless of deflation of wages and consumption.
Gold blasts through $1500: message? Central banks out of control, not inflation – Mish
8/08 Asset managers with $74 trillion at risk – Bloomberg
Of course it is at risk. It is funny money with littler connection to anything except confidence.
8/08 Italy on the brink: bonds tumble as Salvini issues ultimatum – Zero Hedge
There is a general realization that everything is going to blow. Italy wants to get out with as much stuff intact as it can manage.
8/08 German banks: cutting off nose to spite face – Knowledge Leaders
It's a German thing.

8/08 Global bond market sounds shrillest alarm yet over the economy – Bloomberg
8/08 Ferocious market moves undo Fed easing, putting Powell on the back foot – Bloomberg
Everybody reads Armstrong and, they will never buy sovereign debt. BUT, corporate debt is completely rotten too.
/08 MMT may be Democrats’ economic cure, but only Trump got the memo – Kitco
The moneyed class doesn't want anything to do with debt-free money. They stole their's the old fashioned way.
8/08 Japan facing unprecedented population meltdown – Yahoo

"Japan sets disposable income below $14,424 as the poverty level. In 2013, there was 12 percent of the national population under the poverty level. ... More importantly, while constant prices increased 1.2 percent from 2015 to 2016, its average wage only increased 0.7 percent.May 11, 2018"
"There are many variations of Japanese robotics. Some different types of robots are: Humanoid Entertainment Robots, Androids, Animal Robots, Social Robots, Guard Robots, and many more. There are also a variety of characteristics for these robots. Japan employs over a quarter of a million industrial robot workers"
Coming to a country near you.
https://www.youtube.com/watch?v=Gfw6vIl8ILk

8/08 Canadian yield curve inversion reaches its deepest since 2000 – Yahoo! Ehhh
8/07 Blain: there is a panic in junk bonds as spreads blow out – Zero Hedge
The tyrannosaurus in the coal mine.
8/07 Trump: Fed must cut rates ‘bigger and faster,’ China isn’t the problem – CNBC
Call him Donald Draghi,, it won't fix anything.
8/08 Central banks change their policy on gold but not their madness – GATA
Bernanke testified that CBs buy gold because of tradition.
Bernanke Tells Congress: I Don't Really Understand Gold - Forbes

8/07 Gold surges over $1,500/oz as investors seek shelter from gathering storm – GC
This is very important to consider. Armstrong, et al have said that the relative scarcity of gold means that it just isn't attractive to big investors. There just isn't enough of it. FOFOA has long said that gold would reach a price level equivalent to $55,000 of purchasing power. For now, only small fry buy gold. Armstrong has said that bonds are going to blow up and, you should move to equities. We WILL go into a period of price inflation. The collapse of bonds will cause a fall in consumption. If money pours into equities, there will be no earnings due to a fall in consumption. Price inflation will eat up the attraction of equities.

Various central banks are melting down.
https://www.zerohedge.com/news/2019-...verge-collapse

[Danny B]

value investing,,,, 51.6 years downhill

Armstrong's model is all about confidence. He has a note here about the change in the mindset of investors where they are only worried about preservation of capital,,, not so much about earnings.
"QUESTION: Warren Buffet has been a value investor and has only been interested in profits. You have explained that the trends shift and profits will yield to capital preservation. Would you say that Buffett is just wrong on his views?"
"The peak in the PE Ratio on the S&P 500 took place at the bottom in 2009, reflecting the shift from corporate profits to capital preservation. The classic question that arises is always fixed on the profit perspective rather than capital preservation."

"There are people calling for a major crash because they argue that profits are detached from the reality of the overall economy, which has been propelling stock prices higher which has introduced a dynamic that is presenting a huge danger to the market. This is predicated on the presumption that the normal ebb and flow of markets demand a correction to realign equity values back to their traditional share of GDP. This thinking fails to understand that at times capital is NOT LOOKING to make a profit, but just to park money for preservation.'
"That said, the answer to your question is Buffett wrong? The answer is YES!!!!! His little nitch was good from the ’80s for the market was UNDERVALUED and as such being a “value investor” was appropriate for that time period. The markets have shifted to capital preservation, which has also inspired the corporate buy-backs. Value Investing is now fading. Capital is shifting because of currency, risk in other countries, and none of this has to do with simplistic earnings."
https://www.armstrongeconomics.com/m...tt-just-wrong/
That's all well & good but, equity markets have always had a "ceiling" that they have never overcome. Right about 145% of book value.
Asides from that, wealth-to-GDP has also had a ceiling that it has NEVER broken in 150 years. It is true that the world has never had such an enormous amount of debt / wealth.
It is true that globalism has allowed this wealth to concentrate more intensely in certain countries. In the background, there is the often mentioned that "it's different this time".

Armstrong, "ANSWER: There were about eight civilizations that all collapsed with the exception of Egypt post-1250 BC. It was caused by a major shift in climate that led to droughts which resulted in the widespread famine which inspired migrations/invasions. "
How Civilization Collapses
1) Collapse in centralized government
"The birth rate has been collapsing and the because of taxation like Chicago, Philadelphia, New York City, etc. Keep in mind the collapse will unfold over the course of probably 51.6 years before you reach rock bottom. It all depends upon the climate looking forward."
https://www.armstrongeconomics.com/f...y-system-wide/

We are in a trend of global cooling. BUT, even more importantly, the pole flip will cause long-term violent weather. Cosmic rays will cause increasing rainfall.
https://www.armstrongeconomics.com/w...not-supported/
This will continue to cause increasing crop destruction and financial ruin for farmers.
"final stage will be abandoning cities"

Globalization just isn't a good idea.
https://www.theguardian.com/commenti...ew-world-order

[Danny B]

payout on derivatives

2010, "Big Risk: $1.2 Quadrillion Derivatives Market Dwarfs World GDP - AOL ..."
"According to the most recent data from the Bank for International Settlements (BIS), the total notional amounts outstanding for contracts in the derivatives market is an estimated $542.4 trillion. But the gross market value of all contracts to be significantly less: approximately $12.7 trillion.Jun 6, 2018"
There has been considerable effort to reduce outstanding derivatives.
Here is a pic of the total notional value of those drivatives vs real? value.
https://ei.marketwatch.com/Multimedi...d-9c8e992d421e

Here are all the banks holding the other side of those derivatives.
https://www.ft.com/__origami/service...rce=Alphaville

Another chart;
https://www.ft.com/__origami/service...rce=Alphaville
Armstrong is over there undoubtedly trying to save something or other.

If I go to the bank and ask for a loan of $100k to buy a semi-truck and trailer, they have me sigh a paper. My signature creates that $100k out of thin air. I use the truck in a value-added industry and, generate profits to pay back the interest.
If the bank creates $100k out of thin air to buy a financial instrument, there is no value added. They buy / create an instrument that is just a bet, nothing more. Where does the liquidity come from if there is no value added,,, no profit?
They create new instruments to cover the old ones. This works for a while. As more bets go bad, the bank runs out of capital to cover bad bets. Remember that there is someone on the other side of every bet. If enough bets go bad, nobody can pay OR collect. The banks then demand $600 billion from the taxpayer to make all the bets good.

Various articles by Armstrong on 2020.
https://www.armstrongeconomics.com/tag/2020/
R.E. https://www.armstrongeconomics.com/m...ate-crash-why/

[Danny B]

panic in the markets

Rupert Sheldrake did the seminal work with his book, ;"The hundredth monkey" This investigation was carried further by Brian Josephson of Cambridge who got a Nobel prize for proving quantum tunnelling. Later, Princeton created the global consciousness project. It does indicate that we are all in communication at some level.
GCP: The EGG Story
All of this contributes to the left going completely insane.
https://www.zerohedge.com/news/2019-...t-going-insane
https://www.zerohedge.com/news/2019-...edia-civil-war

This also carries over to finance.
"Watching CNN often feels like the inept product of a university committee that sought to create a program of sensitivity training for adult sufferers of acute ADHD. After just five minutes you know what it’s like to be trapped in a brain that’s distracted part way through every thought pattern and cannot maintain enough attention to form a coherent sequitur.
However, if we set these entirely useless distractions aside it’s quite apparent that something big is going on. And it’s not positive.
It’s a complex story with lots of moving pieces and it takes a bit of effort to puzzle it all out, but more and more people are arriving at the same conclusion; something is going to break."

"The age of unrestricted growth is over. It was a good run. But now we’ve got to live within certain ecological and resource budgets which means we’ve also got to live within some fiscal and economic budgets."
great article with excellent charts.
https://www.peakprosperity.com/the-hard-truth/

'It is breathtaking, just breathtaking. Never before, ever, in the history of the world, going back over 2,000 years, has there ever been negative yielding debt before. For millennia, the debtor paid the lender interest to receive money. "Different this Time," does not begin to cover the reality of what is taking place. "
"We are now in a situation where the lender is paying the debtor for the privilege of lending him money. Sub-Zero debt is now at $15.1 trillion, up over $1 trillion in just two business days. Negative yielding debt is now 27% , which is a record, of all developed country sovereign debt. Negative yielding debt is now 44% of all developed country minus U.S. sovereign debt. More than that, approximately $30.2 trillion of bonds offer yields below zero, after accounting for inflation. The amount has surged from $25 trillion less than a month ago. "

"so I will explain it to you."
"What these countries have done is to have their central banks create "Money from Nothing" and then they have taken the money, and bought sovereign debt, corporate bonds, and in the case of Switzerland and Japan, even ETF's and equities."
"since these countries now can borrow at less than nothing, they are able to expand their budgets, and social programs, without any corporation or individual paying anything. You see, the same central banks that made the money from nothing but a computer keystroke, then turn around and take the money and buy the national debt. It is a stroke of genius, I suppose, for the national borrowers, but it is also a stroke of tragedy for investors."
looks like euthanasia for the rentier.
https://seekingalpha.com/article/428...ust-incredible
Smells like MMT to me.

" A weaker-than-expected fix coupled with the lack of PBOC intervention (as the renminbi blew through the key 7.0 level) rattled already skittish global markets. "
If the PBOC doesn't buy Yuan with dollars, the Yuan falls.
"10-year yields traded as much as 32 bps below three-month T-bills, “the most extreme yield-curve inversion” since 2007"
WHY do they keep bringing up 2007/
'A Monday Bloomberg headline: “China Retaliation ‘11’ on Scale of 1-10, Wall Street Warns.” Global markets were shocked "
"The collapse of Italian bond yields has been one of the more dramatic global market moves. After trading to almost 3.60% last October, Italian 10-year yields ended Wednesday trading at 1.42%. For a country so hopelessly over-indebted ($3 TN plus), Italian bond prices are arguably one of the more distorted assets in a world of distorted asset markets. "

"August 9 – Bloomberg (Sophie Caronello): “Britain’s pound ended the week at its lowest closing level versus the greenback since Margaret Thatcher was ensconced in No. 10 Downing Street. "
"Italy, the U.K., China, India, Brazil and many others… Global central bank-induced liquidity excess has kept numerous remarkably leaky boats afloat in recent years. There will be systemic hell to pay when the dam finally breaks."
"Reserves of central banks in developing Asian nations, which have risen to almost $5 trillion this year, will now be put to the test as currencies slide. '
Trump will put the torch to ALL of them.
http://creditbubblebulletin.blogspot...ney-watch.html

[Danny B]

crooked FED head Strong,,, notes on gold,,,, 1930s Déjà vu

Gold deserves mention again.
1913, we got blessed with the Federal Reserve. It's only mandate was to support member banks with overnight liquidity for good collateral only.
'the 1929-1933 Great Contraction and the 1933-1941 Great Depression. They were preceded by the inflationary monetary regime under the domineering leadership of Benjamin Strong, Governor of the Federal Reserve Bank of New York, between 1922 and 1928."
'high-minded "stable price level policy," it was an unlawful regime continuously violating the law. Strong introduced illegal "open market operations" for the first time. He established the Open Market Investment Committee of the New York Federal Reserve Bank in 1922 under his own chairmanship. It conducted buying and selling, mostly buying, of Treasury bonds for the account of the Federal Reserve Bank of New York as well as some other Federal Reserve banks. The bonds purchased in the open market were paid for in the form of Federal Reserve notes and deposits created out of nothing for this specific purpose. The advent of open market operations of central banks has changed the landscape of world finance beyond recognition. It made official manipulation of bond and stock prices possible. It turned traditional virtues and vices upside down: thrift into vice, sharp trade practices into virtue.'

9 years after we got the FED, Strong began conducting ILLEGAL bond sales.
'paid for in the form of Federal Reserve notes and deposits created out of nothing '
That S.O.B Strong just couldn't resist the temptation of having a printing press.
'The monetization of Treasury debt was illegal according to the Federal Reserve Act of 1913. It was not authorized. As a matter of fact, the use of government bonds for the purpose of backing Federal Reserve notes and deposits was explicitly ruled out."
FRNs could not be backed by GOV.
"Strong himself was instrumental in preventing the gold standard from becoming operational again by sterilizing gold that had come to the United States from European belligerents in payment for war supplies. It would be closer to the truth to say that central bankers have tasted the elixir of power, and liked it. They have become addicted to it."
https://www.kitco.com/ind/Fekete/pri...ul262006p.html
This is a very good article with a lot of information. Strong should have been prosecuted but, bankers rarely are. He was instrumental in creating the roaring 20s that led to the crashing 30s.
Since bankers are unproductive parasites, they always hate the discipline of gold.
" As the German monetary economist Heinrich Rittershausen said, it was not the gold standard that failed but the people to whose care it had been entrusted."

Fast-forward to the early 60s and, once again, American politicians are responsible for maintaining the Bretton Woods agreement on the stability of the gold price. The welfare-warfare State just couldn't pass up on the temptation. Like Benjamin Strong, they ran the presses in hyperdrive.

"Then the 1929 crash in stocks occurred, and everything changed overnight. Americans, optimistic by nature, believed it was just a normal correction and that the economy would recover quickly. The ensuing Depression did not end until twelve years later, when the U.S. entered the Second World War. All of the efforts of the U.S. government and the Federal Reserve to revive the economy before then failed, such as:

Import Tariffs – The Smoot-Hawley Tariff Act of 1930 raised import duties to protect American businesses and farmers from cheaper foreign imports and promote domestic growth. Exporters to the U.S. responded in kind by raising tariffs on imports of U.S. goods. A global trade war had begun.

QE – In 1933, the Federal Reserve was authorized to buy toxic mortgages from the banks in order to provide much-needed capital and promote growth through new bank loans to businesses and consumers. But the banks preferred to keep the new money as excess reserves given the awful business climate. The Fed also began buying U.S. government bonds to finance the spiraling deficits and debt, as tax receipts collapsed and spending on new relief programs and bailouts soared.

MMT – The Fed, under the new Emergency Banking Act of 1933, also provided new money directly to consumers by buying government debt issued to finance massive infrastructure spending and other “shovel-ready” projects.

Devaluation of the Dollar – FDR aggressively pursued a policy of dollar devaluation, in order to promote domestic growth by making imports more expensive and exports cheaper, and to increase inflation, thereby encouraging consumer spending. Foreign nations responded by weakening their currencies also. A global currency war was under way. After confiscating much of the Gold in the United States at the price of $20 per ounce, in February 1934, the dollar was devalued by 60% to $35 per ounce. "
https://www.sprottmoney.com/Blog/his...vid-brady.html

It is very important to the bankers to keep the focus off gold.
"gold has lately moved up sharply topping $1,500 this week. The gold price has continued to rise despite the continuing practice of dumping large volumes of naked contracts in the futures market. The gold price is driven down but quickly recovers and moves on up. I haven’t an explanation at this time for the new force that is more powerful than the short-selling that has been used to control the price of gold.'
FEAR
"Various central banks have been converting their dollar reserves into gold, which reduces the demand for dollars and increases the demand for gold. Existing stocks of gold available to fill orders are being drawn down, and new mining output is not keeping pace"
"One problem remained. The dollar was depreciating relative to gold. Rigging the currency market was necessary but not sufficient to stabilize the dollar’s value. The gold market also had to be rigged. To stop the dollar’s depreciation, naked short selling has been used to artificially increase the supply of paper gold in order to suppress the price. Unlike equities, gold shorts don’t have to be covered. "

"This turns the price-setting gold futures market into a paper market where contracts are settled primarily in cash and not by taking delivery of gold. Therefore, participants can increase the supply of the paper gold traded in the futures market by printing new contracts. When large numbers of contracts are suddenly dumped in the market, the sudden increase in paper gold supply drives down the price. This has worked until now.'
https://www.zerohedge.com/news/2019-...rol-gold-price

8/11 JPMorgan: The Fed will need to restart QE soon – Zero Hedge
8/11 Global central banks move to keep the party rolling onward – Technical Traders
ONLY for the speculators.
8/10 This rebound is a ‘bump in the road on the way to Lehman-like drop’ – CNBC

[Danny B]

CBs cutting their throats with a dull knife,,, Germany

Armstrong brings such clarity that I quote him a lot. After all, I write to bring clarity to a purposely murky subject.
"The latest in the IMF papers argue that tools are available to allow central banks to create deep negative rates whenever needed to reverse recessions. They claim that maintaining the power of monetary policy in the future to end recessions within a short time will require deep negative interest rates."

"The latest in the IMF papers argue that tools are available to allow central banks to create deep negative rates whenever needed to reverse recessions. They claim that maintaining the power of monetary policy in the future to end recessions within a short time will require deep negative interest rates.

It is really quite astonishing how these people with NO REAL-WORLD EXPERIENCE keep trying to maintain the Marxist-Keynesian theory when more than 10 years of negative interest rates have failed. "
"These idiots fail to comprehend that negative interest rates have wiped out pensions. The instruction manual for life was to save for your retirement to be able to live off the interest of your savings. The problem was, those days were based on 8% interest rates. Moving negative will not force people to spend, it merely bankrupts the people."
https://www.armstrongeconomics.com/a...the-next-tool/

"Hi Martin, What tools do the US have to TRY and manipulate their dollar lower (other than cutting interest rates) and in your opinion would they be successful? "
"ANSWER: They lack any power to prevent a dollar rally. However, all previous attempts at manipulating currencies have ended in disaster. Yes, the U.S. could put capital controls to block capital coming in, but they would destroy the world economy if they even attempted such a hair-brain idea."
https://www.armstrongeconomics.com/w...-dollar-lower/

A little bit of printing was deemed to be GOOD.
"Hormegeddon: How Too Much Of A Good Thing Leads To Disaster ...
https://www.amazon."
At one time, the notional value of derivatives was about $1.4 quadrillion. There has been a lot of mutual cancellations going on for years. The remaining cache of derivatives is so stinky that nobody wants them. Deutsche bank is a cesspit.
China just rescued 3 banks. Turkey was flat broke and, got a $1 billion rescue from China. BREXIT is crashing the pound. Is it any wonder that the dollar is rising? As it rises, it lays waste to other currencies.

Germany is backing Nordstream and doing a lot of trading with Russia. Pox Americana has threatened Germany because they are doing what is best for Germany. Germany is heavily garrisoned by Pox Americana. America has threatened to pull out U.S. armed forces if Germany doesn't straighten up. The response.
"If you go home, take your nukes with you!’ Top German MP taunts US threat of troop withdrawal "
https://www.rt.com/news/466228-germa...ell-blackmail/
There is zero justification for maintaining troops in Europe to repulse an invasion from Russia.
The farmers are doing worse and worse.
https://www.zerohedge.com/news/2019-...incomes-plunge

[Danny B]

Macron proving his stupidity,,, the speedbumps are getting much taller

The CBs have printed up an extra $247 trillion to recapitalize the upper loop. This didn't fix anything so, they are getting more serious about recapitalizing the lower loop.
"I thought in this age of insanity that we are living in, nothing would surprise me anymore.
But sure enough, there was a headline in the Financial Times the other day, “Central banks should consider giving people money.”
"It seems almost impossible that someone could believe in something so ridiculous. And yet this is the world we are living in. The path to prosperity is now based on unelected central bankers conjuring millions of dollars out of thin air."
He makes no mention of the $trillions given to the bankers to ensure their prosperity.

"Bankrupt governments are issuing bonds with negative yields, meaning they are being paid to go deeper into debt. And there are more than $15 trillion of these negative yielding bonds in the world."
https://www.zerohedge.com/news/2019-...ise-me-anymore
He makes NO mention of what the alternative is; starvation and revolution.

Here is an excellent article from Zero Hedge that has a ton of graphs. some of the headings;
Crushing European Banks to a critical support level...
All the major US equities broke back below key technical levels...
Eerily echoing 1998's performance...
Argentina was a bloodbath after Macri's dismal showing in the primaries...
The peso crashed 25%...
With bund yields hitting new lows, gold will be pressured higher as having more yield than over $15 trillion of global bonds...
"For all the excitement and jubilation as one high followed another, courtesy of stock buybacks for the most part, the reality is that the S&P 500 isn’t even 1% above where it was on January 26th, 2018. More than a year-and-a-half of nothing

“German industry is in the deepest slump since the global financial crisis, and threatens to push Europe’s powerhouse economy into full-blown recession. The darkening outlook is forcing the European Central Bank to contemplate ever more perilous measures.

“The influential Ifo Institute in Munich said its business climate indicator for manufacturing went into “free fall” in July, as the delayed damage from global trade conflict takes its toll and confidence wilts. It goes far beyond the woes of the car industry. More than 80pc of Germany’s factories are in outright contraction.”
China and Germany did real good for a while by taking manufacturing from many others. This had to come to an end because of lost wages in their client base.

"the AfD leader, tore into Chancellor Merkel for her, and Brussel’s, botched handling of Brexit (for which “she, Merkel bears some responsibility”). Weidel pointed out that “the UK is the second biggest economy in Europe – as big as the 19 smallest EU members combined”. “From an economic perspective, the EU is shrinking from 27 member-states to 9. In the face of such an enormous event, the EU reaction verges on a pathological denial of reality"
"Weidel’s last point is key: She is implying that Macron is positioning himself to eclipse Merkel as the EU leader on the waning of the Chancellor’s influence and credibility. Macron intends to impose instead, the “failed” French industrial model,"
The French GOV spends 57% of the gdp and, is out of compliance for debt rules in the EU.

'Weidel also warns the German Parliament that that the biggest consequence for Germany from Brexit is not just its exports, but rather, without the UK as a EU member, Germany will lose its ability to assemble a blocking majority (35%) in Council: And, absent this ability to block, Germany may not be able “to stop the crisis-ridden, Club-Med States and France, from reaching into community funds”.'
Ah yes, Germany has a $1 trillion account surplus. The rest have a cumulative $1 trillion deficit. Versailles part deux is on the horizon.

"ermany deliberately painted the EU into an automatic system of austerity ‘discipline’– enforced through a German surveilled, Central Bank (the ECB). The whole was ‘locked-fast’ in automaticity (i.e. in Europe’s ‘automatic stabilising mechanisms’). This was conceded by other European states (the core accord), since it seemed the only way (it was said), that Germany would agree to put its revered ‘Ark’ of the then stable Deutsche Mark, into the common ‘pot’ of the ECM system."
"First, the new central bank – the ECB – would be made an autonomous institution, as free as possible from political influence. Second, it would be given a clear, very narrow mandate: price stability, period – no responsibility at all for squishy things like employment or growth.'
Evidently, super Mario Draghi didn't get the memo about a "very narrow mandate". When it come to rescuing banks, the sky is the limit.

'And Macron has just exploded that original Franco-German compact through putting a French woman (Lagarde) in charge of the ECB; a self-declared Federalist (“I want a United States of Europe”) as EU Commission President, and a Brexit hawk as President of the EU Council. Macron’s triumph over Merkel is intended to de-throne Germany."
Damn sneaky frogs,,, always chipping away at Germany.
"All such initiatives are prohibited in the locked-down treaty system"
'The reality is that the European ‘lock-down’ derives from a system that has willfully removed power from parliaments and governments, and enshrined the automaticity of that system into treaties that can only be revised by extraordinary procedures."
Draghi bought up bonds by the trillion. Lagarde wants austerity. Lagarde and Macron assure a total crash.
https://www.strategic-culture.org/ne...urope-craters/

Zero Hedge;
Overstock CEO Turned Over Docs To DOJ "In Greatest Political Scandal In US History" “This is going to become the greatest political scandal in US history,” he said.
“If we survive it, and if Rule of Law returns to America, it will be due to one man: Bill Barr.”
https://www.zerohedge.com/news/2019-...dal-us-history

Morgan Stanley: The Bear Market Started In January 2018 And Is About To Get Worse
"the rolling bear is still alive and kicking, leaving the average index and stock still well below its highs from last year.

Clinton Treasury Secretary Larry Summers Rode On Epstein's 'Lolita Express'

Illinois' Shrinking Tax Base: Residents Are Leaving & Taking Their Incomes With Them

More Bad News Out Of Beijing: China's Credit Engine Breaks Down

When Should You Panic About The Yuan? Here Is The Simple Answer

A move above 7.30 would likely lead to panic mode in the financial markets...


Macri Massacre Cuts Stocks In Half Today As Argentina Slides Into The Abyss

US Surpasses Entire 2018 Budget Deficit With Two More Months To Go In 2019

Why The Fed Has To Cut 100bps, But Will Only Do So After A Market Crash

Hedge Funds "All-In" On Gold As Fiat 'Race To The Bottom' Accelerates

“The history of government loans is really a history of government defaults.”
–MAX WINKLER, author of “Foreign Bonds: An Autopsy”

“Financial disaster is quickly forgotten. There can be few fields of human endeavor in which history counts for so little as in the world of finance.”
–JOHN KENNETH GALBRAITH

Global Times Shows Dramatic Video Of Chinese Army Preparing For Hong Kong Invasion

US Futures, European Stocks Tumble As Hong Kong Protests Boil Over

Trader: Everything Looks Rosy In Stocks "Until The Short-Covering Runs Out Of Steam"

Good article with lots fo info;
"During this stealth MMT era, many investors have been lulled into thinking that staying concentrated in an S&P index fund is surest way to generate high returns."
https://www.zerohedge.com/news/2019-...ice-wonderland



There are now $15 trillion of negative yielding bonds around the world, up by a cool $9 trillion over the last year.

Multiple junk bond issuers in Europe are getting paid to borrow money.

43% of bonds outside of the US are negative yielding (borrower paid to borrow) and in Germany government bond yields are subzero out to 30 years.

There are $14 trillion in global quantitative easing (QE) funded assets sitting on central bank balance sheets (i.e., bonds and stocks bought by these entities, entirely with pseudo-money).

After nearly destroying the world 10 years ago, sub-prime zero-down mortgages are performing an encore.

Ditto the first part of the above: The equally evil twin of collateralized debt obligations (CDOs), collateralized loan obligations (CLOs), are all the rage.

Sub-prime auto loans have gone postal.

75% of commercial real estate mortgage are interest only, the highest since 2006 (and you know what happened in 2008!)

The size of the US corporate bond market rated just above junk has never been higher.

The interest cost on US federal debt is almost certain to soon eclipse military spending, despite a surge in the latter and still miniscule interest rates.

Japan and Europe are on the edge of recessions, if not over it, notwithstanding all-in monetary policies that give their central banks almost no room to ease.

The world is in the midst of a trade war the likes of which hasn’t been seen since the 1930s and one that almost no one saw coming.

Modern Monetary Theory (aka, government spending sans any restraint) is being widely discussed as a serious remedy to “secular stagnation” (i.e., a persistent inability to achieve former economic growth rates).

Overall US corporate earnings have essentially flat-lined (according to the government’s Bureau of Economic Analysis) since 2011 but the S&P 500 has roughly tripled since then.

[Danny B]

Armstrong and boatloads of denial

Armstrong puts such great perspective on everything.
"QUESTION: Marty: If I have this correctly, you’ve said the Great Depression of the 1930s was a Global Capital Flow problem set in motion largely by sovereign debt issues that led to a massive capital flight into the dollar which created a tidal wave of deflation. Are we seeing this scenario today?"
This leaves out the illegal, inflationary actions of the FED head, Strong.
"ANSWER: Yes. It is the economic crisis outside the USA that is compelling the dollar to move higher. This is what caused deflation and ultimately forced Roosevelt to devalue the dollar. You can see the dramatic spike and rally in the dollar as Europe defaulted on its debts but the US held."

"There is a very Dark Cloud hovering over the world economy and at the center of this cloud lies not just Europe, but Germany – the strongest economy holding up all of Europe. The German manufacturing sector is in freefall. Trump will be blamed calling this the result of his Trade War. It is probably too late to get him to even understand that his advisers are old-school and completely wrong with respect to trade."
I don't believe that it is safe to second-guess Trump's advisors.
"Manufacturing indicators have deteriorated globally, yet in a very disproportionate manner. Trump will be blamed for this and his badgering the Fed to lower interest rates is also a fool’s game. Nobody looks at the elderly who were told to save for retirement and you will live off the interest. Their house values were undermined in the 2007-2009 New York Banker’s Mortgage-Backed scam that blew up the world economy from which we have been unable to fully recover."

'The insanity of those in power knows no boundary when it comes to stupidity around the world. All they have is interest rates and after more than 10 years of excessively low to negative interest rates failing to stimulate the economy in Europe, what do they do? They argue that all physical money must be eliminated because people are hoarding cash and thus defeat their lower interest rates policy. The IMF recommends confiscating all cash and then driving interest rates deeply negative to force recovery. They remain ignorant that they have destroyed the retirement of the elderly now, as well as the those who have yet retired because they command pension funds must invest in government bonds to various percentages ensuring that pensions will collapse as well."
Armstrong makes no mention of outsourcing, job loss, nor automation.

"Manufacturing has been contracting compared to the service sector even on a global basis. The financial markets have appeared to be disconnected from the underlying economic trends because capital smells a very big rat. Capital has been shifting toward preservation rather than how much profit can it make today."
That very big RAT is a crash in consumption worldwide.
"This particular cycle is exceptional. The central banks outside the USA have single-handedly destroyed their bond markets with Quantitative Easing. They are trapped and cannot allow interest rates to now rise to normal levels as they have kept the various governments on life-support.'
No mention of stealth MMT in America.
'While central banks have tried to “stimulate” the economy, federal, state, and local governments are in dire need of money and have been raising taxes and increasing enforcement. Government pensions are wiping out budgets in Europe, America, and Japan. The forces of the central banks have been directly opposed by the political fiscal side of government.'
ah yes, government pensions.

'We are facing a very Dark Financial Storm from which there is no escape. There is no advice being given to so many governments to avoid this crisis and waking up next year to this error will be too late. There will be nothing that can be done to put it all back together and live happily ever after. Welcome to the reality we face. At least this will make for a very interesting WEC. Make no mistake about it. They will lay all the blame on Trump and attribute this to trade rather than finance.'
OBVIOUSLY, finance is completely innocent here.
https://www.armstrongeconomics.com/f...-bad-advisers/

This article from Armstrong shows an amazing web of crooked finance at the elite level. It is a very good read if you can keep track of all the names,,,,, and all the murders.
https://www.armstrongeconomics.com/i...-manipulators/
So, the banks took all the money and broke the system. The State crashes interest rates to try to save the economy. There is a LOT of collateral damage,,, like savers and pension funds. The CBs pump in liquidity but, they direct it through the money renters. Save the money renters above all others. Now, the CBs propose to save the lower loop with cash-to-the-people.
Behind ALL of this, we see the specter of population reduction.

This is a list of the symptoms of our disease.
Repost, https://www.zerohedge.com/news/2019-...ice-wonderland

Here is an academic paper that is relevant to everything, especially Keynes idea of "euthanasia of the rentier".
'Our proposed method shows that the real burden of debt is much higher than its nominal quantity (which is already alarming enough). And what would this show? It would shine a spotlight on the simple fact that Keynes’ drive to kill the investor by driving interest rates to zero / driving asset prices to infinity is not adding to the national balance sheet. It’s doing the opposite."
http://www.24hgold.com/english/news-...th+Weiner&mk=1

"Our researchers have created this research post to highlight a big price move based on super-cycle research and patterns that should begin on or near August 19, 2019. Back in April/May 2019, we started warning of a critical top formation we believed was aligned for July 2019. In May/June, we altered this date to align more closely with our super-cycle research and determined the August 19, 2019 date.

It is our belief that this date will initiate a breakdown price move that may align with external news related or economic related data. Our research continues to point to the potential for a large global breakdown in equity prices related to some type of near-crisis event. It could be related to something within the US or outside the US – but either way, we slice it, August 19 looks to be the date we need to focus on."
https://www.thetechnicaltraders.com/...few-days-away/

8/12 China’s sovereign digital currency is ‘almost ready’: PBOC official – Reuters
$1.1B in cryptocurrency was stolen this year, and it was easy to do
https://www.cnbc.

[vidbid]

Martin Arthur Armstrong

Ash and I have been corresponding for quite some time. I sent him info on the economy. He has been after me to start a website,, won't happen. He wanted me to post here so, I asked him to start a thread that I would contribute to.
I've waited a couple of months but, it hasn't happened yet.

That brings us to the present. I've been in the groups for about 7 years. I've built this and that. I have great mechanical understanding but not much aptitude for electrical stuff. Like everybody else, I have lots of magnets and wheels and wire. It's just not my area of expertise.

The economy I understand better.
I saw the crash coming in summer of '05 while living in a log house in Bend, Oregon. I left Oregon to return to L.A. and get some money together. i didn't want to be pushing a shopping cart and eating dog food. I didn't start writing about the coming crash until '07. I started a thread at Burning Man.
ePlaya &bull; View topic - The Long Cold Winter

I'll try to write on a regular basis. It is EXTREMELY difficult to explain and encompass the entire economy. There is a person who has made a very good attempt at just that.
Martin Armstrong is the best. He is a Princeton professor, same as Bernanke. The difference is that he got away from academia and knows what the real world is like. He and his undergraduates created a program that runs 23,000 variables. It also contains the economic history for much of the world for the last 2000---3000 years.

He had a very successful business around the world. U.S. GOV demanded his program and he told them to shove-it. GOV put him in prison for 7 years for contempt. After the 7 years, they convicted him of securities fraud. They convicted without the formalities of a trial. After a couple more years, they released him. They took everything. He is VERY bitter.

He never surrendered his program. It is now running with AI in real time.
He has an ENORMOUS command of history. He can tell you where any famous person was at any point in history ,,, within reason. Here is a link to get you started.
Manipulating the World Economy | Armstrong Economics

If you are interested in gold, there is a source of info that started several years ago.
"Another" has always been anonymous. It is believed that he was a central banker. After a few years of messages, Another dropped out and was followed by "friend of another" FOA. Later, FOA dropped out and was followed by "friend of friend of Another" FOFOA. FOFOA is not anonymous.
ALL 3 of the contributors are brilliant in their area. There is no detail relevant to gold that is too obscure to find. If you want the deepest understanding possible on the subject of gold, you have to read the writings of Another, FOA and FOFOA.
FOFOA

A writer who has an EXCELLENT understanding of economics is Antal Fekete.
Professor Antal E. Fekete - Articles
He is incomparable in his field. The "John Bedini" of details and understanding.

While it is useful to understand the economic forces that shape our world, it is imperative to understand the forces that are pulling the ultimate strings.
The bankers, the Bilderburgers, the Trilateral Commission, the Freemasons, the Vatican, The U.N. et al are pulling lots of strings. These groups are also under the control of a higher level.

I'll add more as time permits. I currently post only in "comments" at the Daily Bell. The Daily Bell
I have leaned a lot there. Ingo Bischoff is an extremely informative contributor.
The Daily Bell
Dan

Martin A. Armstrong appears to be a pretty smart guy.

Also, it looks like the government educated him about itself and how it works.

Now he's twice as smart.

Video of him.

Models

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