Economic pressures

[Danny B]

Productivity vs distribution

Keynes was childless when he left this world but, he left behind his great BASTARD. Recent developments in Japan have shown the true colors and results of his great failure. http://www.zerohedge.com/news/2014-1...man-apologizes
At the same time, Herr Weidmann has clearly shown that the Keynesian failures in Europe are a huge contrast to the rational management in Germany. Kudos To Herr Weidmann For Uttering Three Truths In One Speech | David Stockman's Contra Corner
A purely capitalist economy would have a relatively large demarcation in the difference of living standards between the producers and the non-producers.
A collectivist economy attempts to make this demarcation much smaller. The non-producers would have a higher standard of living under collectivism than under free-market capitalism.
This theory sounds good to the non-producers. BUT, being non-producers, they have no understanding of motivation. They were never afflicted with this malady. Socialism appears rational to those who would most benefit from it. Those who work the hardest feel no temptation to give away the fruits of their labor. The socialists say, " from each, as to his abilities, to each, as to his needs". Socialism promises no rewards so, it is nothing more than a distribution system, NOT a producing plan.

The world is flooded with needy bureaucrats and lawyers that all "merit" a huge salary. They don't produce anything but, they wear nice suits. They ferociously fight against any reduction in their standard of living. They ferociously deny that they are superfluous. They increase the taxes and decrease the motivation. With 100 million + Americans of working age no longer in the work force, the tax base shrinks. It will crash. It always does.

[Danny B]

Land tax, wealth and the corporation

Norman Government represented top-down total control. Anglo-Saxon government represented decentralized government. The Shire was the important unit of Anglo-Saxon GOV. This system was used as a model for forming counties in America. All wealth public and private comes from land and land taxes. It follows that whoever collects the taxes controls the wealth. The counties, and to a lesser degree, the States controlled the collection of public wealth / debt in America. The original constitution gave very little power and / or wealth to the central GOV in the district of Colombia. That district was the only specified property of the federal government. All powers not specifically granted to the federal GOV were reserved for the states.

This included the right to secede from the union. The northerners recognized that the wealth of the south was very important to the prosperity of the north. Though the Southern states had the right to secede from the union, the war criminal, Lincoln killed hundreds of thousands to prevent just that.

"The Right of Secession" by Gene H. Kizer, Jr., Bonnie Blue Publishing, Southern History, Southern Literature
"The Right of Secession" by Gene H. Kizer, Jr., Bonnie Blue Publishing, Southern History, Southern Literature

The monarchists / monopolists from England had never given up on controlling America,,, if not directly, than through the imposition of a central bank. The war of 1812 was started specifically to force America to NEED a central bank.

The Real History of the United States - Part 3 - The Second Bank of the United States | Greenewave
The Real History of the United States - Part 3 - The Second Bank of the United States | Greenewave

The civil war was a further effort by the monarchists to impoverish America to the bankers. The civil war caused even more centralization of power in America.

The federal government had always chaffed on it's inability to gain power by owning land and imposing land taxes. The imposition of the Federal Reserve and income taxes went a long way towards creating income for the central Gov. By the constitution, the States owned the land within their boundaries. BUT,

"In the 1940s, the Bureau of Land Management was created to inventory all federally-controlled lands for the purpose of disposition. This didn’t happen. Instead, the national government kept and controlled the land.
Over 40% of all national possessions were Bureau of Land Management
(BLM) lands, but all but a few of those acres were in the 12 Western states"

http://epubs.utah.edu/index.php/HJP/...ewFile/669/512

And, how did they get this land?

"If one drew an imaginary line from Montana to New Mexico, every state
west of the line has been the victim of statehood discrimination. Each was
held hostage and forced to cede massive amounts
of state lands to the national government while still
a territory as a condition for statehood."

"States east of that imaginary Montana to New Mexico line had 4% of their
collective acreage controlled by Washington, D.C. States west of that line
realized that 57% of their land was under national dominion. Some Western
states were forced to hand over 90% of their land to the national government."

The federal gov had originally promised to sell all these lands and send a % of the proceeds to the states BUT,

"The philosophical change concerning public lands was one-sided. With
votes from the East, where few public lands were found and fewer national
government mandates endured, Congress voted to change the way the game
was played. In 1976, the Federal Land Policy and Management Act
FLPMA formally reneged on the promises made at statehood. "

OK, so where did we go wrong?

A "wita" was a sage in old England. Witan is plural. Witenagemotis a group of wita (sages). This is similar to a Moot.

The founding fathers KNEW that they had unfinished business. They had made the federal court the final arbiter. They knew that a federal court would find for federal power. They proposed a witenagemot to keep the federal court from over stepping the original intentions of the founders. They were distressed that they came to no workable solution. We, of course, have a federal court that stretches all bounds of the law. A couple of examples;

"The question of leaving the Union is not addressed by the Constitution. In Texas v. White, 74 U.S. 700 (1869), the Supreme Court suggested that the Constitution ordained the "perpetuity and indissolubility of the Union"

Article Four of the United States Constitution - Wikipedia, the free encyclopedia
They suggested.

"The United States Supreme Court has upheld the broad powers of the federal government to deal with federal lands"
Federal lands - Wikipedia, the free encyclopedia

Federal lands are lands in the United States for which ownership is claimed by the U.S. federal government, pursuant to Article Four, section 3, clause 2 of the United States Constitution.

"The Federal Property and Territory Clause or Property Clause gives the United States Congress power to dispose of, and make all needful rules and regulations regarding territories or other property owned by United States. Additionally, the clause also proclaims that nothing contained within the constitution - may be interpreted to harm (prejudice)- any claim of: the United States,"

All of this has been a constant push for centralization that runs contrary to Anglo-Saxon law. It is a return to feudalism. The increasing centralization has given increasing wealth and power to the monarchists / monopolists. They use this to accomplish regulatory capture and force even more centralization.

We even have a new / old god. His name is mars,,, the god of war. War is so profitable that it just makes sense to create it endlessly.
PressTV - Shadow facts about shadow government

We also have another god. Law had already given the corporation immunity from prosecution. Law made it immortal. The supreme court gave it personhood. Endless war is very good business. The eternal corporation is our new master.
https://www.youtube.com/watch?v=Ez8I8VGLNUw

The corporation is our new demi-god and the top of the banking industry controls the demi-gods.
Corporatism Explained; https://www.youtube.com/watch?v=oUKsKL6DLwk

The new feudalism has brought great inequalities of wealth. Britain's five richest families worth more than poorest 20% | Business | The Guardian
The complication comes in that the wealth is held as debt instruments. Debt instruments don't hold up very well in a collapse.

[Danny B]

Gold and new global banks

Various analysts are stressing out because ; "China’s foreign reserve pile fell to $3.89 trillion from $3.99 trillion at the end of June. " They claim that it is a big deal. What next after China’s foreign-reserve fall? - MarketWatch
But then; "one of the keynote speakers was chairman of the Shanghai Gold Exchange (SGE) Xu Luode. In his speech he made a few very candid statements about Chinese consumer gold demand, that according to Xu reached 2,000 tonnes in 2013."
Shanghai Exchange Chairman Admits China Gold Demand Topped 2000 Tonnes In 2013 | Zero Hedge
The Shanghai exchange is selling about 50 tons a week. Those inscrutable Chinamen are trading perfectly good paper promises for gold.

The BRICS have created a BRICS bank to compete with the IMF
BRICS Bank Viewed as IMF Competitor
China and 20 other countries have created the Asian bank to compete with the World Bank; China, 20 Other Countries Initiate New Asian Bank - ABC News
Slowly, but surely, the rest of the world is trying to push the dollar out of their system. They just don't have enough of their own currency at the moment. The solution is to just announce that the price of gold will be doubled. They may very well do that when the flow of East to West gold slows to a trickle.

[Danny B]

Mopping up oil with dollars

Neither economics nor politics are simple. I have to meander between subjects.
By the late 60s, America had printed too many dollars to pay for The Great Society and the Viet Nam war. By 1971, every State wanted to trade their excess dollars for gold. Nixon shut off gold convertibility. All those dollars and nowhere to spend them. Kissinger told the Saudis that he would offer a deal that they couldn't refuse. America would protect the Saudi oil fields from any attack. Saudi would sell oil only in dollars. Kissinger encouraged the house of Saud to raise the price of oil. This effectively mopped up all those homeless dollars. The Saudis used the dollars to buy US GOV paper.
The dollars had to be hoarded by foreign States to pay for oil. This need kept the dollars from returning home.
U.S. GOV attacked anyone who tried to sell oil in anything but dollars.

As the world grew richer, there was ever more demand for dollars as a means of storing riches. We just printed more paper to buy whatever we wanted. This is slowly going into reverse as the world tries to shun the dollar. America is bombing as many oil producers as it can to uphold the price of oil.

[Danny B]

Gold and the great reset

The world wants to escape the dollar. Every dollar that they hold helps finance our wars.
Now, there is much talk about a new currency world order. https://realcurrencies.wordpress.com...-dying-dollar/
The dollar will be rejected for international payment. We will be forced to offer a new currency that is gold convertible. Years ago, there was much talk about the Amero; "Vicente Fox threatened, saying, "Eventually, the American people will 'beg' the politicians for the new currency, the Amero.
https://realcurrencies.wordpress.com...-dying-dollar/
Canada is DECIDEDLY against this because they expect to get stripped of all their oil and natural resources; Amero to become USA’s new currency when dollar collapses - English pravda.ru

Rather than the Amero, Richard Moyer suggests the name 'Clownbux" America's New Currency: Clownbux

The Amero seems to have sunk beneath the waves. Gold seems to be rising into view. There is much talk about a gold-backed Chinese Yuan. This isn’t likely because of Triffin's Dilemma and Gresham's Law. Gold will most definitely make a major re-appearance. You don't actually have to back a currency with gold.
"Note: An international gold standard does not require a return to national gold standards by participating nations. In an international gold standard gold is only relevant for international transactions between nations. Fiat currencies, such as the dollar, euro, and yen, remain in use for domestic transactions within countries."
Fourth Currency
Previously, all international imbalances were settled in Dollars. When the dollar became just a debt note, the whole system went out of whack,,, much to the delight of the bankers and the war industries. Debts were never extinguished.

The debt and the pressures have just gone too high. The IMF and everyone else recognizes that a new system must be rolled out. EVERYBODY is talking about the great "reset". IMF's Planned Global Currency Reset | Peak Prosperity

"In a GCR global currency reset, all of the most significant currencies devalue. In a global currency reset scenario, there could be 100+ countries that devalue their currency. This has never happened in written history."
Global Currency Reset | Global Currency Reset NOW! – Currency Devaluation

The world is very tired of being robbed and attacked by the holder of the reserve currency.
Napoleon, "quand la chine s'éveillera, le monde tremblera" (when China wakes up, the world will shake)."
"China will use gold and gold pricing to force global currency reset"
China will use gold and gold pricing to force global currency reset - National Finance Examiner | Examiner.com
China can declare any price that it wants for gold. American gold is valued at $ 42.22 an ounce. AFTER China buys as much golds as it can get, it can declare that it will pay double or triple the going price.
The dollar will be rejected for international trade if it isn't reset with all other currencies. You can bet that the internal dollar will NOT be gold backed. Only the external dollar will be. The price of gold will rise until supply generally meets demand.
Reportedly, that will start out at about $ 3--4,000 dollars.
Jim Willie: Gritty Questions on the Historic Collapse | SilverDoctors.com
After a few years, it will go much higher.
XAU at the FOREX and the LBMA trade about 4500---5000 tons of gold every day. It isn't moved. It is just used as a reference for value. Much of international trade is on the gold standard. The Bank of International Settlements settles ONLY in gold. Before too much longer, international trade will be settled in a manner that extinguishes debt. The imbalances will be paid off in gold-ounce Letters of Credit.
U.S. imports will slow to a trickle and there will be shortages of everything.

[Danny B]

Global reset and gold

So, what kind of world will we have with a gold standard?

Greenspan: “The Gold standard is not possible in a welfare state”
"So doesn’t this jeopardize the Fed’s independence?
Independence of a central bank is important, for example, so that there
isn’t reckless financing of government deficits.
Greenspan: “I never said the central bank is independent!”

"Greenspan: “The Fed’s balance sheet is a pile of tinder, but it hasn’t been lit … inflation will eventually have to rise.”
"Did I mention he said the promises made by the government cannot be kept? Mathematically, he said, it’s impossible."
Q: Why do central banks (still) own gold?
Greenspan: “This is a fascinating question.”
He did not answer the question, but he did point out: “Gold has always been accepted without reference to any other guarantee.”
Greenspan: 'Fed's Balance Sheet Is a Pile of Tinder'
Willem Midlekoop has a good vid on the reset; https://www.youtube.com/watch?v=UK9NB800kkM
Lindsey Williams says that there is going to be a global currency reset. He is very specific that it will be a reset and NOT a collapse. https://www.youtube.com/watch?v=HTxgWyUzS_M
Christine Lagarde of the IMF says a reset. How often is the IMF right?
Ron Paul said "Bernanke, ( now Yellen) believes that he can control the reset". Dr. Paul says that it will NOT be controllable.
I suspect that Dr. Paul is correct.
Antal Fekete and Hugo Salinas Price have projected that international trade will come to an end.
Hold on tight to your dream; https://www.youtube.com/watch?v=UKQsv1Q3ZNY

[wayne.ct]

A Reset and NOT a Collapse

Please define these two terms. The zombie population will either 1. continue their blind course in a stupor or 2. wake up and start acting in enlightened self-interest. Either way, will things really change that much? Please explain.

[Danny B]

Stockman and Greenspan try to get the truth out

OK energetic people, it's late and time for me to leave a few links. To preface one of them, we all know that the net has brought information AND communication that is unravelling the best laid plans. I found a fascinating article about the forces fighting in the Ukraine.
It started out as a couple of commanders trying to communicate to their opponents..... "Igor Bezler agreed to be interviewed by three TV crews at the same time: a Russian one, a Novorussian one, and a Ukrainian one."
"First and foremost, it was amazing to see how much both sides fully agreed upon.
Both sides agreed that this war was useless and only benefited the
enemies of the Ukraine. Both sides expressed contempt, disgust and even
hatred for the politicians in power and the oligarchs who rule over
Banderastan today. Both sides also agree that Yanukovich was a scumbag
and that the Maidan protests were absolutely legitimate but that the
original protests had been hijacked by enemies of the Ukraine. Both
sides also agreed that this war had to be stopped."

STOP THE WAR !! HOLY $HIT BATMAN !
The Vineyard of the Saker: Something very, very interesting has happened in Novorussia

Alan Greenspan recently "came out of the closet" and told us that the FED was NOT independent. It followed orders. He also said that a gold standard was not possible with a welfare state. Also; "Alan Greenspan: QE Failed To Help The Economy, The Unwind Will Be Painful, "Buy Gold"

Mr. Greenspan’s comments to the Council on Foreign Relations came as
Fed officials were meeting in Washington, D.C., and expected to announce
within hours an end to the bond purchases.

He observed that history shows central banks can only prick bubbles
at great economic cost. “It’s only by bringing the economy down can you
burst the bubble,” and that was a step he wasn't willing to take while
helming the Fed, he said.
http://www.zerohedge.com/news/2014-1...inful-buy-gold

The latest reflection on Stockman’s web site, the Contra Corner, the author Jerzy Strzelecki writes the article, On The Impossibility Of Rational Calculation Under A Keynesian/Friedmanite Central Banking Regime.

“David Stockman’s book is the first one in the history of economic thought which describes in detail, mostly based on economic history of the United States from the World War I to the present, and in particular on the basis of a
detailed analysis of the period from 1985 to 2012, what happens in the economy when a Central Bank, liberated from the anchor of the “barbaric relic” consisting in a linkage between money and gold, becomes a completely discretionary master of the interest rate,replacing in the process of its determination “the invisible hand” with a “visible hand” of the Monetary
Political Bureau of the Open Market Committee of the Federal Reserve System.”
David A. Stockman - The Great Deformation

[Danny B]

Please define these two terms. The zombie population will either 1. continue their blind course in a stupor or 2. wake up and start acting in enlightened self-interest. Either way, will things really change that much? Please explain.

Wayne, my best guess is that the PTB will look out for themselves. GOV will look out for GOV. You will look out for yourself. I will look out for myself and the kids that I raised (not mine).
When you (fig) raise a kid by giving them everything that they desire, you cripple them. They don't know how to look out for themselves. There are many millions of people who have never had to do an honest days hard work.

What does mother nature have in store for any species that has no consideration for their self-survival? Everybody was given ample warning before Katrina hit. Some elected to stay put and wait for somebody to take care of them.
Only 3 companies in America have AAA credit rating. A rise in interest rates will wipe out 50 % of companies. Something will push us off the edge. There will be a cascade of default and GOV / banks will declare force majeure.
All credit transactions will stop during the bank holiday. NO EBT or SS. Social security just bought 174,000 rounds of .357 hollow point.

Even zombies have to eat. When the fridge is empty, 30 million will try to collect from GOV or become hunter-gatherers. Homeland Security has a couple billion rounds of ammo. They will protect the property of the bankers.
The FEMA camps will be invitation only. GOV has also converted 6 military bases to hold criminals.... the ones that they don't shoot on sight.

Everyone's "trust horizon" will shrink down to include just a few friends and family. Those who aren't supported by a prepared group will die.
"The difference between civilization and barbarism is 9 missed meals"

An interruption in diesel fuel will mean that the cities will soon run empty. That is a key thing to be aware of.

[Danny B]

Continuing deterioration

It's late, I'm going to leave a couple of links for interesting reading.
"According to BNP, Petrodollar recycling peaked at $511 billion in 2006,"
"But no more: "this year the oil producers will effectively import capital amounting to $7.6 billion."
http://www.zerohedge.com/news/2014-1...nobody-noticed

1/4 of people across Europe at risk of poverty;
PressTV - 1/4 of people across Europe at risk of poverty: Report

This article is on a "Tobin Tax". It has a lot of interesting facts and figures;
Depending on the estimate, the 1% took in anywhere from $2.3 trillion to $5.7 trillion per year.
PressTV - Infuriating facts about our disappearing middle-class wealth

Wolfgang Schäuble is calling for a global tax scheme. He's not at all bashful. “Taxation Must Go Global,” Says German Finance Minister

It's painfully obvious that consumption has crashed. Reportedly, the wealthy are concerned; http://www.newsweek.com/janet-yellen...y-world-282096

12 charts; 12 Charts That Show The Permanent Damage That Has Been Done To The U.S. Economy

Chris Hedges has been very vocal about the lawlessness of GOV; https://www.youtube.com/watch?v=TOlg_2qAbUA

[Danny B]

No jobs, lots of austerity to come.

Well, you already knew that I wasn't going to post any good news. I found one headline from the cheerleaders;
U.S. payrolls rise, unemployment rate falls to 5.8 percent – Yahoo! AND one from something a bit more realistic;
Job cuts surge 68%, most in 3 years; worst October since 2009 – Zero Hedge

I already wrote that the energy markets are running negative capital now. Now this, "What this world desperately needs is a long term plan to deal with its shrinking net-energy-per-capita ratio. This metric will someday turn into a complete sinking negative that will, in turn, utterly ruin all of our capital markets."
This is from a site called Peak Prosperity.

European States are running up ENORMOUS debts trying to keep everybody afloat.... The nanny state. Just imagine if they weren't spending all that money on social programs. There are proposals to institute austerity but, it isn't a big push at the moment. Just the same, hundreds of thousands are protesting austerity.
"At the heart of the matter is a lack of jobs and rising income inequality. Austerity caused neither. Central banks and government policies did.
Read more at Mish's Global Economic Trend Analysis: Riots in Brussels: 100,000 Protest Austerity, Overturn Cars, Throw Fire Bombs; Wherefore Art Thou Austerity?
NOTHING is working.

"The central planners are in a state of fear and panic"
"In short, everything the central planners have tried has failed to bring widespread prosperity and has instead concentrated it dangerously at the top. Whether by coincidence or conspiracy, every possible escape hatch for 99.5% of the people has been welded shut."
"They've spurred the greatest wealth gap ever in US history, greater even than at the extremes of the Great Depression, apparently without the slightest concerns for Plutarch's ancient admonition that "An imbalance between rich and poor is the oldest and most fatal ailment of all republics."
Central Planners Are In A State of Panic - Chris Martenson | Peak Prosperity

Much of the problem is due to market and wage forces that are beyond the control of our worthless politicians. Though, they do make things worse by doing the bidding of the bankers.
Decades of bad policy from the Central Bankers has removed all moral hazard. They can bet on anything and the CB will bail them out. NOTHING that they do is illegal. Power attracts the corrupted. 2/3 of the business conducted by Bank of America is illegal. Not to worry, nobody will get prosecuted. This has brought out the absolute worst.
http://gordontlong.com/Articles/Arti...ute_System.pdf

3--4 hundred million Chinese and Indian peasants went from being peasants to being employed in manufacturing. Consequently 3---4 hundred million Western workers will now become peasants.

[Danny B]

Karen Hudes and Judge Anna von Reitz

Karen Hudes is a grad of Yale and a high-power lawyer at the World Bank. She turned whistleblower to report lots of high level corruption. She was fired from the World Bank. Reportedly, the 188 members of the WB re-instated her. There is a lot of info on the Ron Paul site and, I suppose that it is mostly true.
Karen Hudes Update - This is a long post - to summarize where we are and where we need to go. This is excellent ... | Peace . Gold . LOVE
I don't know.
Here is a Facebook conversation between Karen and a prominent lawyer;

The following is a true copy of a Facebook Conversation which took place July 17, 2014 between Former IMF Attorney Karen Hudes and Judge Anna von Reitz. Read it and decide for yourselves what you think: | Kentucky Marijuana Party

It will definitely make your head spin;
"No, Karen, the fraud is that the corporation doing business as the United States of America (Inc.) — a governmental services company owned and operated by the Federal Reserve"
"The World Bank, IBRD (International Bank of Reconstruction and Development), and Federal Reserve were ALL creditors in the bankruptcy of the United States of America, Inc."
"All these years the IMF, an agency of the UNITED NATIONS, and its spin off governmental services corporation dba UNITED STATES, INC. has been plundering the assets of The United States Trust"

"And then there is the question of where did all the gold confiscated by the Roosevelt Administration go, along with the 8000 tons that once were kept in Fort Knox? If you check out Ron Paul’s website you will see an amazing video — the Board of Governors of the Federal Reserve admitted to him (finally) that the gold is gone and they don’t know where it went."
"And what about the 5700 tons of gold that has been surreptitiously shipped to China over the course of the past twenty years, all clearly shown on the FT-900’s? And, while we are at it, where is Germany’s 3,396 tons of gold that were entrusted to the Federal Reserve Bank of New York, but which have suddenly vanished and can’t be repaid"
Strange times.

[Danny B]

Gold and credit

From Greenspan; "Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets, since every credit instrument is ultimately a claim on some tangible asset. "
"The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit."
Who Said It? "Deficit Spending Is A Scheme To Confiscate Wealth. Gold Stands In The Way Of This Insidious Process" | Zero Hedge
For many years, the money supply has grown at 3 times the rate that the productive economy has grown.
In January of 2014, the GOV debt stood at $ 17 trillion. It is expected to hit $ 23 trillion by 2015
https://www.youtube.com/watch?v=8DD5pjPS-aM
ALL debt has to be paid by somebody. Either the debtor or the creditor. GOV and banks always try to have currency inflation inflate away the nominal value of the debt. EVERYBODY pays a part of the debt after the bankers inflate the system.
This time, it's different. Logan airport has cash sniffing dogs. When John Law crashed the money system of France, you couldn't leave the country unless your coach was searched for gold coin. This time, we have digital currency. The FED is desperately trying to create monetary inflation to make the debt easier to pay back. How can you create monetary inflation if electronic money moves wherever it wants?
The FED has been able to create price inflation in assets but, little else. True economic inflation requires a wage-price spiral. This will never happen because the West is sliding DOWN towards a global-mean-wage. Consumption is falling fast enough to depress most price inflation.
GOV caused price inflation in assets by directly buying assets and futures. The CFR released a paper proposing that every family be sent $ 80,000 of free money. This shows you just how desperate the PTB are to inflate away U.S. debt.
The FED just can't seem to get price inflation with all of it's currency / credit inflation. The money just moves around TOO fast. "And the global currency market trades OVER $5.3 trillion per day."
http://www.zerohedge.com/news/2014-1...-2008-collapse

[Danny B]

TOR and fractional reserve banking, phony tapering

For all you Bitcoin believers, TOR was partly funded by GOV. Think that maybe GOV has a key to the backdoor??
Operation Onymous Takes Down Tor Sites As We Warned: What is the Future of Darknets?
A very good interview with Chris Martensen; Ask The Expert Interview with Chris Martenson from Peak Prosperity | Zero Hedge
Here is a good article on fractional reserve banking; The Daily Bell - Fractional-Reserve Banking is Not Fraud
A short article on idiots; 11 Ways You Know You Live In A Country Run By Idiots | Zero Hedge
Jim Rickards says that we are going to have a $ 100 trillion meltdown. It's not coming out of MY pocket.
The FED is tapering. It has quit buying treasuries. The FED earlier gave about $ 2.7 trillion to the banks for excess reserves. Just what do the banks need with excess reserves??? The banks do NOT loan out reserves. As the FED tapered off the purchase of treasuries, the banks took up the slack and bought up everything. Wonder where they got the money?
The FED may be shuffling things around but, there is no taper of liquidity injections.
Several months ago, the FED cut back on treasury purchases. At the same time, Belgium stepped in and bought hundreds of $ billions. Previous to that, Belgium had NO dollar reserves that could have been used to buy dollar debt.
The BS is very stinky AND transparent. There must be a lot of stupid investors.
Warren Buffet is sitting on the sidelines with $ 56 billion in cash. He loses $ 29 million a day by not having the cash invested. Soros increased his bet against the stock market from 3% to 16%. We shall see.

[Danny B]

Deflation in the economic engine

Here is a graph of American debt; http://www.kitco.com/ind/Claire/imag...p_image004.jpg
Here is a graph of gold plus instruments,,, Exeter's Pyramid; http://upload.wikimedia.org/wikipedi...20px-Exter.png
Currently, everything is considered an asset. There is a class of assets that are tangible things / goods. There is a class of assets that are paper claims on future productivity. Many of these claims have a "value" that is based on the value of some tangible asset. Mortgage backed securities are a good example.
The typical, accurate definition of deflation is " a reduction in the supply of money and credit".
BUT, when your house drops 50% in value, this price deflation reduces the amount of equity that can back credit expansion. The CBs bought $ trillions of mortgages and stocks / bonds trying to inflate values so that credit expansion could resume. Obviously, we can't rescue the price-and-credit structure when the wage-and-employment structure has crashed.
The Central Bankers and GOV are absolutely petrified at the prospect of deflation and price deflation. They print $ trillions but, can't actually do anything about employment.
America is in hyper-deflation and the FED tries to print just enough to offset deflation with inflation. So far, it's working,,, for the well connected.
The very rich do not spend their money. They invest it. They provide the grease for the economic engine. The engine is well greased but, it is not in motion. All the new money is locked in the financial system.

The economic engine may be run by investment but, it only advances by consumption. Production and consumption are economic activity, NOT investment. The producing economy is in deflation while the financial economy is in inflation.
Economic activity is in deflation. It's everywhere; "in September, demand for electric power, a “bellwether for China economic activity,” fell 8.4% from the prior month, the second straight monthly decline." Debt, Propaganda And Now Deflation - The Automatic Earth

Those in the ivory towers don't seem to have a good grasp; ” A study by the St. Louis Fed finds that the answer is “a dramatic increase in the private sector’s willingness to hoard money instead of spend it.”

Note: the ‘hoarding meme’ is habitually used by economists, re: Bernanke and his Chinese savings glut, to point out situations which are more often than not characterized by people being too poor to spend, not sitting on anything at all. For economists, if people don’t spend, it must be because they save, never because they’re poor. I kid you not."
Debt, Propaganda And Now Deflation - The Automatic Earth

"China itself is now one shock away from a deflation trap. Chinese PPI has been negative for 32 months as the economy grapples with overcapacity in everything from steel, cement, glass, chemicals, and shipbuilding, to solar panels. It dropped to minus 2.2% in October. The sheer scale of over-investment is epic.

The country funnelled $5 trillion into new plant and fixed capital last year – as much as Europe and the US combined "
China is focused on productivity with little regard for where the consumption is going to come from. Asia may be the first to collapse; "And now we have deflation. Which is not the falling prices, though they are a – delayed – symptom. Still, other symptoms are as valid, as nobody is spending. Mass unemployment in southern Europe is a symptom. West Texas oil at $74 dollars today is one. The Chinese economy, allegedly still growing at $7.5%, but at 250% debt-to-GDP, is another. Throw in 207% debt-to-GDP debt levels across southeast Asia."

After the Mark collapsed in Weimar Germany, the Rentenmark was created. "The genius of the Rentenmark is that it released the Reichsbank from having to finance the government," writes Fergusson. Rigorous discipline of state expenditure followed, as well as the refusal of further credit to the government"
Refusal of credit to GOV, What a great idea. When Money Dies: Germany and Paper Money After 1910 - Marcia Christoff-Kurapovna - Mises Daily
U.S. GOV spends about 43% of GDP. That is where the demand is coming from. Everything produced must be destroyed in wars so that demand does not stop.