Economic pressures

[Danny B]

Strange, spending is relative to population

Everyone has heard; "the combined wealth of the richest one percent will pass that of the other 99 percent next year"
Here is an excellent graph showing wealth distribution.
https://cdn1.vox-cdn.com/thumbor/NkW...ribution.0.jpg
Europe and North America have been on a printing binge. Those closest to the spigot are VERY rich. China has much of the wealth held by the upper middle class. India has much held by the lower middles class. Much of this is because of China's one-child policy.
A great deal of this wealth is in the form of GOV bonds. They will soon be worth MUCH less.
A great deal of wealth is held in the form of stocks. BUT, the value of these stocks depends on sales. Since the consumer is flat broke, sales will eventually crash. At the moment, U.S. GOV is spending about 42% of the gdp. The French GOV is spending about 59% of GDP. A crash in GOV bonds is bound to reduce overall spending.
The crash in spending is very closely related to the demographic crash.
Hambone's stuff: 2008 WAS A TREMOR...WHY THE MAIN EVENT IS DEAD AHEAD
Japan has a falling population and a demographic crash. For some strange reason, they just can't seem to grow their oconomy.

[Danny B]

bad fundamentals in the bond market

"History shows that it is fiendishly difficult to preserve the value of money which is backed by nothing but promises, because it is so tempting for rulers to debase their currency when they think it will help them repay their debts. The long-term preservation of the real value (i.e., the purchasing power) of fiat money and bonds is obviously of little or no importance to today’s creators of money – the major central banks – who currently can’t debase money fast enough for their tastes. Yet, the current prices of bonds are at all-time highs,"
"Furthermore, we fail to comprehend how owners of claims on money (that is, bondholders) can continue to ignore the fact that the goal of generating more inflation is aimed precisely at reducing the value of their capital."
"Inflation is more or less a generalized diminution in the value of money. A bond is an instrument by which a promise to return, in the distant future, a fixed-in-currency amount of invested money is supplemented by periodic interest payments in the meantime. That’s it, and that’s all you get."
http://www.zerohedge.com/news/2015-0...s-bigger-short

Central banks everywhere are creating new "money" with wild abandon. As they create trillions more of debt instruments, they are, at the same time, trying to preserve the VALUE of each debt instrument. When they have an inflation target, they are, at the same time, driving down the value of the bonds.
The FED does stealth QE by claiming that, Belgium, Ireland, Cayman Islands and a few other tiny economies are doing to bond buying. All the CBs are working overtime to show that there is actual demand and value to their debt instruments. They insist that bonds have long-term value at the same time that they work to drive down this value.
This article has a billionare claiming that bonds are soon to fall in value because of bad fundamentals.
Armstrong claims repetitively and clearly that U.S. bonds will crash 2015.75
Singer is saying that now is the time to short them. It seems fated that the perception of the herd will soon focus on the fundamentals of the bond market.
The truth is; the world is awash in money (debt instruments) that can never be fulfilled,,, payed off. The law of supply-and-demand would have the value of these debt instruments reduced to almost nothing. This money has flowed into stocks but, the value of stocks is dependent on earnings. It had flowed into commodities but, commodities depend on consumption,,, just like stocks. It is flowing somewhat into real estate.
Mish's Global Economic Trend Analysis: $500 Million LA Home - Built on Spec
Currently, the rich must invest in things that other rich people will buy. We have price inflation in rich houses and toys. Eventually, it will flow into precious metals. When bonds crash, there are few areas where the money can flow. Just imagine a U.S. Treasury bond aa a big, giant, SNOWMAN.

[Danny B]

Gold is BAD,,, if you read Armstrong.

Martin Armstrong is absolutely brilliant BUT, he has a blind spot for gold. In 1961, 8 major central banks formed the London Gold Pool to manipulate currencies and gold. They formed the pool specifically to manipulate currencies and gold. They over printed currencies and the pool collapsed in 1968. Then, they tried a 2 tiered system that collapsed in 1980. Gold spiked to about $ 800--850 in 1980. Then;
"January 1980. Gold hits record high at $850 per ounce. High inflation because of strong oil prices, Soviet intervention in Afghanistan and the impact of the Iranian revolution, which prompted investors to move into the metal.

In August 1999, gold fell to an all-time low at $251.70 on concerns about central banks reducing gold bullion reserves while, at the same time mining companies were selling gold in forward markets to protect against falling prices."
Talk about lies and half truths !!
Investors are married to return, not to gold. When Paul Volker raised interest rates to about 21%, investors left gold for instruments that yielded interest profit. This is profit, not sentiment.
Central bankers have always tried to manipulate the price of the currency ( in gold).

The manipulation has been continuous. Gold Price Manipulation is Now a Global Effort
Gold Fix Study Shows Signs of Decade of Bank Manipulation - Bloomberg Business

Armstrong; "I have stated countless time that gold is NOT the hedge against inflation, hyperinflation, the anti-fiat antagonist against the dollar, or manipulation that keeps gold down; paper gold suppresses the price, and anything of the sort that amounts to promotions or excuses"
"All of that nonsense is pure BS, to state it bluntly."
Gold – the Hedge Against Government | Armstrong Economics
Gata has documented the manipulation. They even had a trader sit down with them and tell them at just what time of day each manipulation would take place. Gold Anti-Trust Action Committee | Exposing the long-term manipulation of the gold market
Armstrong dismisses all of this.

He really knows his stuff in other areas.
"I understand that this subject ( GOV default) was never taught in school. I believe that was part of our “conditioning” by government to accept them as our savior. My eyes opened when I stumbled upon a very rare book – “Herbert Hoover’s Memoirs”. He did not want to appear to have profited from the Great Depression, so he demanded that the publisher not make any money. As a result, they published 500 copies. I stumbled upon a copy in an antique bookstore in London. When I read his chapter on 1931, everything I learned in school collapsed. It became obvious"

The Greek Nightmare | Armstrong Economics
When the dollar was repriced from 1/20 of an ounce of gold to 1/35 of an ounce of gold, that was a partial default. When Nixon closed the gold window, that was a major international default. GOV has been hoping to do a soft default by slowly inflating away the value of the dollar. It isn't working because they can't get a wage-price spiral. The very rich are inflating the price of high-end assets but, that is the only place that the CBs have been able to create high inflation.
Lacking a soft default, they will call for a hard default.
Edit, another link on the manipulation of the POG;
http://www.24hgold.com/english/news-...re+Butler&mk=1

[Danny B]

theft by a different name

Our currency is a debt note. Our U.S. bonds are debt notes. Stocks are going up even absent earnings. All of these instruments have an assigned value. Their actual value is related to how much confidence people have in any given instrument. This is also true of gold. The CBs are creating bigger and bigger mountains of debt notes. As the perception grows that these notes are not worth what was previously believed to be their value, their perceived value goes down. This is a form of deflation. From that viewpoint, QE is causing deflation in certain areas. Much depends on confidence. As confidence falls, people tend to hoard. This reduces velocity and , somewhat, counteracts the effect of monetary inflation.
This is part of the reason that GOV is trying to force all currency into the system. It is a lost cause because employment and aggregate earnings are falling.
"The VELOCITY of money has fallen to BELOW Great Depression levels. This is the destruction of Capitalism, and I fear the response against the banks on the next downturn will lead to authoritarianism."
So, bonds crash in october. Do we have an election in November?
"The collapse in the VELOCITY of money illustrates the collapse in liquidity in the markets, which will erupt in higher volatility we have not seen before. The VELOCITY of money declines as HOARDING rises. This is how empires, nations, and city-states decline and fall."
VELOCITY of Money Below Great Depression Levels | Armstrong Economics
Armstrong also claimed that this shebang was the destruction of Socialism.


Argentina stole the pension funds when they went broke.
"But after reading what economist Martin Armstrong wrote in reaction to the Supreme Court ruling, in an article boldly titled “Kiss Your Pension Fund Goodbye”, you may think again.

Of course, Armstrong’s theory is just that – a best guess at what may happen. So I would understand if you still had a dose of skepticism.

But there’s more: Don’t forget the simple fact that the U.S. government has already diverted retirement savings into Treasuries!

This past March, in an effort to avoid breaching the debt ceiling, the Treasury dipped into the $193 billion G Fund, which is a part of the 401(k)-style Thrift Savings Plan (TSP) available to government employees.

And there’s even more: Obama’s new MyRA program is modeled specifically after the recently-raided G Fund. Needless to say, this has many worried that it could be used to prop up the government if needed.

According to official MyRA documentation, the plan is safe because the “investment is backed by the U.S. Treasury.”

Are they referring to the same U.S. government that has debt moving towards $19 trillion? And unfunded liabilities estimated to be anywhere between $128 trillion and $211 trillion?

Just where exactly is the government ever going to find the funds to pay back its creditors?"
Government is preparing to seize 401(k) retirement plans

[Danny B]

The power of denial

Stocks are due for a 50% decline. There appears to be little doubt.
Hussman Funds - Weekly Market Comment: When Paper Wealth Vanishes - June 1, 2015
Here is an excellent article on denial;
"To understand this pattern of avoidance of unpleasant realities, consider the behavior of cities -- even entire nations -- which cannot bring themselves to talk openly about their state of insolvency, let alone do something about it.

Chicago has amassed debt and underfunded liabilities totaling $63 billion, or more than $61,000 per household. Illinois already ‘enjoys’ the second highest property tax rate in the nation at 2.28 percent of a property’s value, which means the average property tax bill for the median home is $5,200 per year. On top of that, Illinois' income tax is a flat 5% and brings in a total of $18 billion from 4.7 million households, or $3,800 per household. Combined, that's $9,000 in taxes per year per average household (which earns $38,625).

Here's the brutal math: the current city deficit is 675% of current tax receipts. How exactly does Chicago plan to scrape another $61,000 out of each household on top of the existing tax bills?

It doesn’t. It has no plan. The plan is to simply remain in denial and ignore everything until it all breaks down. Which it has indeed started to do, with the ever-late, after-the-horse-has-already-left-the-barn downgrade of the city’s debt to junk status by Moodys."
"Or perhaps we could note that of the six mayoral candidates seeking election to run the city of Philadelphia, not one has even talked about its massive $5.7 billion pension shortfall during the campaign, even as they promise expanded pre-kindergarten programs and tax cuts. Not one"
In Denial: We Pursue Endless Growth At Our Peril | Peak Prosperity

[Danny B]

Flight from public debt to private debt

Stocks are expected to do a big decline. BUT, bonds are starting to crash. Armstrong says that, as confidence is lost in public debt, investment will flow into private debt.
The Fed & Interest Rates: The Nightmare That Will Not End Nicely | Armstrong Economics
How can private investment move into a sector that has no earnings? Dunno.
Armstrong on debt;
"Not all debt has the same economic effect, for like ice cream, there are at least three basic flavors:

If someone borrows to create a business, this is the most productive form of debt, which expands the economy producing real jobs.
Next we have the “bring it forward” debt scheme. This is a mortgage that brings future spending into the present, and actually reduces future economic expansion by transferring that spending to the present. Ongoing payments go toward interest – not economic expansion – reducing economic growth going forward. Job creation is minimal and can only be found in new home/business construction that is temporary and very brief.
Then we have government debt. This is in a category all by itself, for it is deflationary since it is never actually paid off. To service this debt, taxes must be enforced and raised over time, reducing disposable income for the taxpayers. This is more of a destructive economic influence than a constructive one. Even spending on infrastructure robs the future income for the present, which also has a long-term negative impact. Because government jobs are public servant, they produce no positive creation of GDP since they neither produce a product adding to the wealth of a nature. Government consumes the wealth of a nation the same as hiring a maid for home who does not add to the household income.

Those who rant and rave about debt as a whole fail to grasp that debt is not always destructive. It depends entirely upon the purpose of the debt, as well as how/if the debt is repaid."
GOV is spending an ever-greater % of the GDP BUT, it never pays back anything. The more that it spends, the greater the deflation. The more that it sucks out in taxes, the greater the deflation in the productive economy.
"The VELOCITY of money declines as HOARDING rises" Armstrong
"Ergo: when Armstrong states that “The VELOCITY of money declines as HOARDING rises”, he’s half right, but only half. I’ve explained before that this is also where Bernanke’s preposterous claims about an Asian savings glut a few years ago failed in dramatic fashion.

In that same sense, I wrote recently that the ‘savings rate’ in the US is calculated to include debt payments. If you pay off your mortgage or your payday loan, that is jotted down as you saving, even hoarding your money. Just one in a long range of mind-numbing accountancy tricks the US utilizes to hide the real state of its economy. "
How To Spot A Bubble - The Automatic Earth
Another GOV trick; when GOV prints currency, it counts towards the GDP. When they spend it, it is counted a second time.
Armstrong; "June was a Directional Change and July is a key turning point, so everything has been on schedule so far. Break that channel and you will see the Sovereign Debt Crisis. "
Armstrong; "This is the entire reason behind the Global Market Watch. This is a tool we use to provide the biggest clients with global portfolios. Since the computer is constantly monitoring everything at all times, it allows you to see the world at a glance. No analyst can do that. In addition, the computer is never tired, sick, had a fight the night before, or distracted by romance. The computer is consistent and chugs along on its merry way."
ah yes,,, the biggest clients. Armstrong previously had in excess of $ 3 trillion under management. His program has been flawless.
If his "biggest clients,, and others believe in him and all exit before October of 2015, what will the fallout be?
https://www.youtube.com/watch?v=60gCIR9PTMQ

Then, there is the "Better than Cash Alliance". They have a plan for you and your money.
"The 12 central governments that currently support the BTCA (the U.S. is one of them) do so because a cashless society would enable them to track and tax every purchase and sale made with sovereign currency within their borders.

And forcing everyone to hold all cash within the banking system also enables central bankers to continue their financial repression measures, such as imposing negative interest rates to steal from all cash holders. (After all, if the bank makes YOU pay interest for lending it money, you might prefer to hold cash under your mattress to get a higher return.)

In addition to producing new revenue for banks and governments, the payment systems would increase the politicians’ social engineering capabilities. Governments could compel consumers to purchase goods and services only from government-licensed organizations. "

https://www.moneymetals.com/news/201...lliance-000716
Armstrong; "The Fed will have to act regardless of the impact upon the Federal budget. "
OK, forget the federal buidget for a moment. What about $ 440 trillion in interest rate swaps?
"Every slice of the debt crisis exposes another layer of insanity. The real question becomes, how far do we go before this whole nightmare explodes in our face? It looks like we have 2 years perhaps, at best."
"Obviously, there are so many layers to this debt crisis you cannot focus on just one fundamental relationship. This is a convergence of many trends going wrong all at the same time. This is the classic flaw in analysis. The typical attempt is always to reduce everything to a single cause and effect."
The Fed & Interest Rates: The Nightmare That Will Not End Nicely | Armstrong Economics

[Danny B]

Cyclical economy vs equilibrium

In 1922, Nikolai Dmitriyevich Kondratiev published his work about the economy running in cycles. His writing that capitalist economies were characterized by successions of expansion and decline contradicted the Marxist idea of the imminent collapse of capitalism.[5] While visiting America, a communist academic listened to him and reported him to Russian authorities. He was immediately arrested on returning to Russia and later sent to Siberia where he died at age 46.
There has been many notable researchers who have given a lot of proof that the economy does indeed run in cycles.
GOV absolutely loves the academic diarrhea promulgated by Keynes.
"But here’s the thing. The dozen or so people running the worlds central banks and related institutions have no idea what they are doing, and for the most part are academics and apparatchiks who are completely ignorant about markets, to boot."
Stay Out Of Harm’s Way—-The Casino Is Fixing To Blow | David Stockman's Contra Corner

"The men and women at the Federal Reserve and IMF have 170 IQs and advanced Ph.D.s. But what good is all of that brainpower if you’ve got the paradigm wrong? They’re using equilibrium models, normally distributed risk, mean reversion, Monte Carlo simulations and other things that are the financial equivalent of thinking that the sun revolves around the earth.

What a small minority and I are doing is coming along saying, “no, the sun doesn’t revolve around the earth; the earth revolves around the sun.”

The best model for understanding capital markets is complexity theory, physics, phase transitions, network theory, graph theory and other applied mathematics that go along with those.

Let’s say you’re a really smart 25-year-old, and you’re trying to get a Ph.D. in finance. Perhaps you’re reading Strategic Intelligence or The Daily Reckoning and you say: “You know, I think they’re onto something. I think this complexity theory means something.”

But your professor, your Ph.D. thesis advisor, is a 55-year-old who spent the last 40 years learning about equilibrium models. Your professor won’t want to back away from it. It’s very hard when you’re 55, 60 years old to say: “Hey, everything I’ve been doing for the last 40 years is pretty much wrong.”
Awaiting a Paradigm Shift

More good reading is Elliot Long waves and Generational Turnings.

GOV bonds are paid back by working people. What if nobody is working?
The bureau of Labor Statistics truthfully (almost) reports honest labor statistice but, they really lie on their summary."
Since January, 594,000 more Americans are employed, an average of 149k per month. Considering the working age population has gone up by 732,000 since January, why is anyone crowing?
The BLS drones actually expect you to believe the unemployment rate has fallen from 5.7% in January to 5.5% today, because 442,000 Americans decided to voluntarily exit the labor force. That’s a hoot."
TABLE 9 « The Burning Platform

Greece;
"One cabinet minister told The Telegraph that the proposals by creditors seemed designed to bring about a deliberate rupture. “They want to force us into a position where we can’t sign,” he said.

“In a strange way we are all breathing a sigh of relief. We were afraid of a bad deal that would split the party but this is so atrocious it makes life easier. None of us can accept it,” he said."
“They want us to raise the tax on hotels to 23pc in the middle of the tourist season. These people are mad,” said one Syriza official.

Ashoka Mody, a former IMF bail-out chief in Europe, said the Greeks are right to resist the demands. “Everything that we have learned over the past five years is that it is stunningly bad economics to enforce austerity on a country in a deflationary cycle."
Why Greece Missed Its IMF Payment—–Syriza Politicians In Open Revolt Against Troika Ultimatum | David Stockman's Contra Corner

Edit; "They are still only debating the conditions for the disbursement of the final €7.2bn from the previous Greek bailouts! Even if they agree to that, which would cover the €6.5bn or so that Greece needs to get through June, that would still leave Greece with no way to pay its large debts to the ECB and others that are due in July and August. To get through the summer, there would need to be another whole bailout agreement, covering around €30-50bn "
Greece: out of cash, out of time, out of options | CapX
So,, if you give me 7.2 billion, i will repay you 6.5 billion.

[Danny B]

Don't try to get the best of a Greek

The Greeks kicked out the old boys club politicians. They elected "lefties". The old boys are going to deliberately crash Greece to get the Greeks to kick out the lefties. Stupid people make stupid moves. The economic minister, Varoufakis is WAY ahead of the bonehead politicians. He sucked every Euro out of GOV coffers, including municiplal GOV.
Everybody and their dog is expecting a bail-in of Greek banks to preserve the bankers. Varoufakis is dragging this out so that people have time to get their cash out,,, up to 700 million Euros a day.
http://www.zerohedge.com/news/2015-0...%82%AC700-mill

Greece consolidated their payments and deferred them to the end of june. By then, there won't be a farthing left in the banks, EXCEPT for the emergency liquidity pumped in by the troika.
http://www.zerohedge.com/sites/defau...june%205_0.jpg
When the bail-in comes, the only deposits left will be Brussels bucks.

Brussels;
"Naturally, creating the currency first provided the the power to create a bureaucracy, and then handle the debt afterwards. The problem occurred when these people left, as the new crew, who were now pure politicians, never heard of phase two. This has been my criticism.

The crisis facing Europe is simply that those in power have ZERO experience in the markets, and being lawyers, they assume the answer is to write a law to dictate the result. They fail to grasp that no law will ever alter human nature. It can suppress it for a while, even cause people to become addicted to government with the Roman model of free food and circuses, but the core traits will always remain intact.

Consequently, the governments are heading in the direction of authoritarianism for they see the world only through the rose-colored glasses of their own power. This now is the NEGATIVE interest rate concept and increased taxation trend which requires the elimination of physical money to sustain their power looking at only their fiefdom in isolation. They are more than likely going to attempt this unilaterally and then impose capital controls to try to prevent the flight of money from Europe. It will fail and we are headed into a chaotic period that may result in revolution."
Brussels & the Trend Toward Authoritarianism | Armstrong Economics

Yanis is stalling until there are no Euros in the Greek banking system,,, public OR private. The bail-in will gain the bankers their own money.

[Danny B]

Race, and the great downshift

You leave school and go out into the real world where you must compete for employment. What if you aren't prepared?
"Harvard PhD student finds a correlation between race and IQ. Harvard students says even if it’s true, it shouldn’t be a topic of research."
http://judgy*****.com/2013/05/20/har...body-is-wrong/

"Racial activist groups have tried to create their own tests to demonstrate intellectual parity of the races and attack the integrity of existing tests but the rankings are always the same; African Blacks average a 70 IQ (only 2% of Whites score this low), American Blacks are 85 (due to mixing with Whites, 20% on average), non-White Hispanics are 87, Whites 100, Asians 106 and Ashkenazi Jews at 115."
Does anybody white complain that the Ashkenazi Jews should be "hobbled"?
Why can’t we talk about IQ?

"And when it comes to IQ, size matters. The old science of head measurements found a 20 percent correlation of head size with IQ. The new science of MRI finds at least a 40 percent correlation of brain size with IQ."
"And when you compare black and white kids who score the same on IQ tests, their average difference in head circumference is zero."
Race, Genes, Intelligence - Facts Are Facts

Then, there are the differences in the "Peak" http://library.flawlesslogic.com/bell.gif
"If you tell yourself that the top professional and managerial jobs in this country require an IQ of at least 115 or thereabouts, then you also have to tell yourself that only about 2.5 percent of blacks appear able to compete for those jobs."
Black-White IQ Differences

"The median wealth of non-Hispanic black households dropped by more than one-third between 2010 and 2013, to $13,700, according to the Pew Research Center, citing Federal Reserve data. "
"Approximately 35 percent of African-American households have a zero or negative net worth, according to Pew."
http://www.huffingtonpost.com/eric-c...b_7514456.html
"There is about a 70 percent chance that an African American man without a high school diploma will be imprisoned by the time he reaches his mid-thirties"
http://www.alternet.org/news-amp-pol...nd-poor-people
Employment is competitive and there is no getting around this. Those who lost out on the intelligence lottery will not find work.

Venezuela and Saudi Arabia have about the same population. Venezuela has MORE oil than Saudi. Saudi and ARAMCO have a high level of expertise and produce a LOT of oil. Venezuela kicked out the foreign experts and tried to produce the oil themsleves. Production fell.
http://blogs.cfr.org/levi/files/2013...la-exports.png
Now, the country is running out of basic necessities. The hotels tell you to bring your own toilet paper.
You just can't put incompetent people in charge of important jobs.
When the bubble pops, how can the poor live on even less?

[Danny B]

SS ... keep the financial blinders on

"Alan Greenspan, former chairman of the Federal Reserve, said a Social Security Trust Fund does not exist"
“That means the trust fund is a meaningless instrument that has no function … it’s exactly the same thing as current expenses,” he said."
Greenspan: Social Security Trust Fund 'Nonsense' and 'Meaningless'
OK, so when the FED goes bust, how soon will people go bust?
"A recent study by the Federal Reserve finds that the surprisingly small sum of $400 in unexpected costs would put nearly half of all Americans into a position that would require selling something, borrowing money, or skipping other payments to cover it."
The Surprisingly Small Amount of Money That Would Send Many Americans Into a Tailspin
10,000 people are signing up for SS every day for the next 19 years.

Most people have a "normalcy bias" and don't want to hear any bad news. You can point out the chemtrails and people wil tell you that you are a "conspiracy theorist". They may be coughing their brains out but, YOU are crazy.
“Chemtrail Cough” is Sweeping the Nation -- Death by Respiratory Disease Has Skyrocketed | Humans Are Free

The stock market reacts to every whisper out of GOV even though it has been thoroughly proved that it is all lies.
Shadow Government Statistics - Home Page

Armstrong has an amazing record for accuracy but;
"So no worries. The majority of people will never follow this site. The majority will read what they want to believe, never to try to challenge accepted beliefs like if the ECB is buying how can bonds decline. They will read the popular news sites, and listen to the talking heads of TV mainstream. Traditionally, they will lose their shirts and that will contribute to the rising civil unrest. "
Ah yes,,, tradition.
"Government debt is uncontrollable from the central bank level. They do not create the debt, governments do that and there is no rational management concern within the political mechanism. "
What !!!! Politicians aren't rational or responsible?
The European Bond Crash | Armstrong Economics
Get your reservations in early for Camp FEMA. They wil be filling up fast.
Actually, the FEMA camps have been thoroughly debunked by popular Science. They also debunked the many rumors about 9/11.

[Danny B]

Shakeup at Deutsche Bank

All the theories are wrong so, the boneheads make up ever-weaker excuses.
“The U.S. Federal Reserve should delay a rate hike until the first half of 2016 until there are signs of a pickup in wages and inflation, the International Monetary Fund said in its annual assessment of the economy on Thursday."
The Back-Pedaling Brigade Returns—–More Central Banking Lunacy | David Stockman's Contra Corner
MARVELOUS,,,, a pickup in wages when we have to compete with Chinese and robots. 100 million not-in-the-workforce and ,,, inflation is going to pick up. It isn't getting any better, you know.
Daily Job Cuts - Layoff News , Job Layoffs 2015 / 2014 , Bankruptcy, Store closings, Business Economy News

Bill Bonner; What then?

The value of debt drops sharply and fast. Creditors look to their borrowers… traders look at their counterparties… bankers look at each other…

…and suddenly, no one wants to part with a penny, for fear he may never see it again. Credit stops.

It’s not just that no one wants to lend; no one wants to borrow either – except for desperate people with no choice, usually those who have no hope of paying their debts.
Bill talks about the possibility that there just isn't enough paper money in the system.
Weekend Edition: Literally, Your ATM Won’t Work... - Bonner & Partners

Here is an excellent article on the gold standard. Point # 4. is on deflation;
" Most of the deflation that occurred during the classical gold standard era (1873-1914) was of the latter, “good” sort.

Although I’ve been banging the drum for good deflation since the 1990s, and Mike Bordo and others have made the specific point that the gold standard mostly involved inflation of the good rather than bad sort, too many economists, and way too many of those who have got more than their fair share of the public’s attention, continue to ignore the very possibility of supply-driven deflation."
Keep in mind that GOVs always go off the gold standard when they are prepping for a war. You can't have a big war unless you whip out your credit card and sell your children's future.
Ten Things Every Economist Should Know about the Gold Standard | Cato @ Liberty

Derivatives are back on the radar. Think it has something to do with the imminent Greek default??????????
" Paul Wilmott, who holds a doctorate in applied mathematics from Oxford University, has warned that the so-called notional value of the worldwide derivatives market is over $1.4 quadrillion.

A quadrillion is an incomprehensibly massive figure: it is 1,000 times a trillion or 1 with 12 zeros. A trillion is 1,000,000,000,000 and a quadrillion has 15 zeros – 1,000,000,000,000,000. The annual gross domestic product of the entire planet is between $50 trillion and $60 trillion. Thus, the derivatives markets notional value is more than 23 times the size of the value of all of the goods and services traded in global economy in one full year."
- Deutsche is world’s largest holder of financial weapons of mass destruction (FWMD)
- Deutsche Bank’s derivatives position almost 15 times as large as Germany’s GDP
- Announcement follows Greek failure to pay IMF on Friday and growing financial risk
"It is unnerving that the shock resignation should follow an “extraordinary meeting” over the weekend following the failure of Greece to meet its scheduled payment to the IMF on Friday.

This does not count as a Greek default but it increases the risk of a default on the amalgamated 1.5 billion euros that now must be paid by the end of June. A default and the triggering of credit default losses would cause massive volatility in financial markets and potentially destabilise an already shaky global bond market and global financial system."
Just coincidence.

"There have been a number of shocks to the market this year which would have been expected to have led to sharp losses in the derivatives market but slipped quietly by.

The debris caused by the massive volatility in the Swiss Franc following its being unpegged from the Euro – where it spiked 30% in minutes in January – seems to have been swept under the carpet. Austria’s bad bank Heta failed in late February with apparently no casualties."
Another shock that seems to have been swept under the rug is the collapse of derivatives written guaranting the profits of shale oil. Some $ 3.5 trillion as I understand.
Deutsche Bank CEOs ?Shown Door? - World's Largest Holder of Derivatives In Trouble?
The markets run on credit.
Credit depends on confidence.
Confidence depends on morality.
We're screwed.

[Danny B]

P2P banking and the Central Banks

The big banks seem to have little appreciation for the effect of emerging technology.
" they are blinded to the vision of the forest due to the tree standing in their way. The true risk is outright disintermediation as the banking function is turned into cloud-based P2P software through the blockchain."
"Death by a thousand cuts now has a venture capital version. Observe as I walk through FinTech startups literally disassemblet the almighty money center bank."
"The $665 Million Evolution in a Space Nobody Respected a Year Ago - Already Outpacing the Internet Circa 1994"
Reggie Middleton's blog | Zero Hedge

Advice from The Burning Platform; "The rule is simple. Once market internals have deteriorated, the exit rule for bubbles is that you only get out if you panic before everyone else does."
PANIC BEFORE EVERYONE ELSE DOES « The Burning Platform
Most trading is done by computers that run similar or identical algorythms. Should there be a panic, there will be NOBODY buying.

GOV is the mega parasite that wants NO limitations. A gold standard is a limitation to expansion of the "money" supply. Around the late '90s, the various central banks sold off hundreds of tons of gold. Keep in mind that they sold this gold for paper currency that they can print in unlimited amounts. It makes no sense at all other than to diminish confidence and the role of gold for wealth storage. They finally gave up and threw in the towel. They are now buying gold.
Jesse's Café Américain: The Global Monetary Phenomenon That Almost No One Is Seriously Discussing

The curse of central banks has been with us for a long time. The money powers make war on any country that has (had) an independent central bank.
http://theeconomiccollapseblog.com/a...a-central-bank
If P2P banking starves out the money center banks, how will that affect the Central Banks?

[Danny B]

Creating currency as opposed to creating wealth

The headlines are getting more interesting. Yesterday was "panic before everybody else does".
Today; "If Your BS Detector Isn't Shrieking, It's Broken"
oftwominds-Charles Hugh Smith: If Your BS Detector Isn't Shrieking, It's Broken
51% of Americans receive a check from GOV. " Over 108,000,000 Americans received means-tested benefits in latest report from Census Bureau, more than are currently employed full-time."
Obama says that Greece needs to cut down GOV payrolls to meet the demands of creditors. Mish's Global Economic Trend Analysis: Greek "Paperology"; Obama Pressures Greece; Proposal Dismissed by Creditors as "Vague Rehash"; Dismal Choices
Obama wants to assure Americans that the district of corruption hasn't run out of stupid plans yet.

Many years ago, Roberto Vaca wrote a book titled, "The Coming Dark Age". He based his reasoning on the ever-increasing complexity of systems. They are all so connected that a breakdown in one will collapse others.

Roberto Vacca
The Coming
Dark Age
(revisited)
The futuristic essay which inspired the plot of the novel "The Death of
Megalopolis"
"I read this book in a palsied fascination of horror.
I have never read a book that was at the same time so convincing and
so frightening." - Isaac Asimov
http://www.printandread.com/download...arkagefree.pdf

"When the next great crash comes -- which could happen as early as the Fall of 2015 -- it will multiply and accelerate precisely because of these little-understood systemic risks which underlie almost every financial instrument, currency position and banking institution on the planet."

Learn more: The coming systemic market crash explained in new mini-documentary by the Health Ranger - NaturalNews.com

Here is an article on the progress of the bubble;
http://www.zerohedge.com/news/2015-0...-far-far-worse

I found an excellent article comparing growth in different aspects of the economy.
During the 27 years after Alan Greenspan became Fed chairman in August 1987, the balance sheet of the Fed exploded from $200 billion to $4.5 trillion. Call it 23X.
Well, according to Forbes, Warren Buffet’s net worth was $2.1 billion back in 1987 and it is now $73 billion. Call that 35X.
During those same years, the value of non-financial corporate equities rose from $2.6 trillion to $36.6 trillion. That’s on the hefty side, too—- about 14X.
As shown above, nominal GDP rose from $5.0 trillion to $17.7 trillion during the same 27-year period. But that was only 3.5X.
Next we have wage and salary compensation, which rose from $2.5 trillion to $7.5 trillion over the period. Make that 3.0X.
Then comes the median nominal income of US households. That measurement increased from $26K to $54K over the period. Call it 2.0X.
Digging deeper, we have the sum of aggregate labor hours supplied to the nonfarm economy. That metric of real work by real people rose from 185 billion to 235 billion during those same 27 years. Call it 1.27X.
Further down the Greenspan era rabbit hole, we have the average weekly wage of full-time workers in inflation adjusted dollars. That was $330 per week in 1987 and is currently $340 (1982=100). Call that 1.03X.
Wages have gone nowhere.
http://davidstockmanscontracorner.co...mbered-part-1/
The Industrial Revolution held the promise of extreme deflation in the price of manufactured goods. Unfortunately, this just didn't come to pass. The finance industry sucked up every bit of price deflation that tried to appear.
JUST the financial industry. EXXON corporation reported that they earn 5.5 cents per gallon on finished product. Last report that I heard was that every barrel of oil is sold 49 times before it is consumed. This added $ 27 per barrel. OLD number.

The producers have to actually work harder to create more wealth. The bankers just have to push a button to create claims on that wealth. Wealth creation is going down. The bankers are pushing ever-faster on the button to compensate for the shrinking wealth.

[Danny B]

Kicking banker butt in Scandanavia

The PTB have recently come to the conclusion that austerity does NOT work. I previously posted about Iceland.
http://www.energeticforum.com/270052-post547.html
Iceland was on the road to tax the snot out of everybody to pay for the losses of private banks. Ireland followed the dictates of the bankers and is still crashed. They didn't have leaders who would stand up for the people and the law.
"For starters, rather than scrambling to mobilize public resources to make sure banks didn't default on their various obligations, Iceland let the banks go bust. Executives of the country's most important bank were prosecuted as criminals."
That wasn't the first time. The Nordic countries seem to have more control over all this bogus BS than the warmer countries.

" Sweden and Norway, for example, both experienced a major power shift in the 1930s after prolonged nonviolent struggle. They “fired” the top 1 percent of people who set the direction for society and created the basis for something different.

Both countries had a history of horrendous poverty. When the 1 percent was in charge, hundreds of thousands of people emigrated to avoid starvation."
"There was a time when Scandinavian workers didn’t expect that the electoral arena could deliver the change they believed in. They realized that, with the 1 percent in charge, electoral “democracy” was stacked against them, so nonviolent direct action was needed to exert the power for change.

In both countries, the troops were called out to defend the 1 percent; people died. Award-winning Swedish filmmaker Bo Widerberg told the Swedish story vividly in Ådalen 31, which depicts the strikers killed in 1931 and the sparking of a nationwide general strike."
That right there shows good cause for unlimited immigration from countries with very different standards,,,, break up cultural unity.
"Labor’s success and the continued militancy of workers enabled steady inroads against the privileges of the 1 percent, to the point that majority ownership of all large firms was taken by the public interest. (There is an entry on this case as well at the Global Nonviolent Action Database.)

The 1 percent thereby lost its historic power to dominate the economy and society."
"When Conservatives eventually tried a fling with neoliberal policies, the economy generated a bubble and headed for disaster. (Sound familiar?)

Labor stepped in, seized the three largest banks, fired the top management, left the stockholders without a dime and refused to bail out any of the smaller banks. The well-purged Norwegian financial sector was not one of those countries that lurched into crisis in 2008; carefully regulated and much of it publicly owned, the sector was solid."
How Swedes and Norwegians Broke the Power of the ?1 Percent? | NationofChange

[Danny B]

Hard times for pensioners

"Now Ukrainians are losing their pensions and traditional support payments. The Ukrainian population is headed for the graveyard."
"Notice that this is a yank of the blanket from under the elderly in Ukraine. “Useless eaters,” they are assigned to the trash can"
"Yats sounds like a right-wing Republican when he refers to pensions, compensations, and social services as “privileges.” This is the Republican view of Social Security and Medicare, programs paid for by the payroll tax over the working lives of Americans. The Republicans stole the payroll revenues and spent them on their wars that enrich Wall Street and the military/security complex, and now blame “welfare handouts” for America’s fiscal plight."

",,, but as the termination of pensions and payments was triggered by the coming into effect of Yat’s law to “stabilize the financial condition of Ukraine,” the purpose of the termination of Ukraine’s social welfare system might be to free up money to hand over to the IMF and Western banks. "
"The same looting is underway in Great Britain, Italy, Spain, Portugal, and the United States. In Great Britain everything achieved by the Labour Party over many decades has been taken away, and not only by the Conservatives but by Labour leader Tony Blair himself. "
"Where will the money come from? It will come from Americans’ pensions.

Pensions accumulate tax free, and this accumulation will be confiscated in whole or part to make up for the failure to tax, another “privilege.”

That confiscation works that year. But what happens the next year when the dollar is reeling on foreign exchange markets from over-supply?

The answer is that another chunk of American pensions, and I am speaking of private pensions, will be confiscated “in order to stabilize the financial system.” Social Security will be long gone by this time.

Alicia Munnel, who was my replacement as Assistant Secretary of the Treasury for Economic Policy in the Clinton regime, advocated many years ago a confiscation of private pensions, including your IRAs and 401Ks, in order to compensate the US government for their non-taxed status."
"The joint attack by Clinton Democrats on private pensions and by Conservative Republicans on public pensions means that no American can look forward to having a pension. Americans are only one presidential election away from the loss of their pensions, and it doesn’t matter who they vote for."
"Apologists for exploitation claim that the rich are richer because they are smarter. But the stupidity of the rich is everywhere visible. The greedy fools have destroyed their domestic US market. Really, how stupid can you be? How do Americans buy when they are forced by offshoring out of well paid manufacturing and software engineering jobs into being waitresses, bartenders, retail clerks and part-time Walmart workers in order that corporate bottom lines improve? Who buys the stuff that sustains the profits? Not Americans who no longer have the incomes to do so.

The belief spread by Wall Street and “shareholder advocates” that corporations only have responsibility to their owners and managers has destroyed the American economy.
By locating production offshore, corporations have destroyed the incomes that supported the American consumer market."
"Americans are already dispossessed of their livelihoods and careers and their pensions are next. "
Ukrainians Dispossessed, Americans are next -- Paul Craig Roberts - PaulCraigRoberts.org

“How is society going to cope with structural unemployment and the envy, hatred and the social warfare?” he said. “We are destroying the middle classes at this stage and it will affect us. It’s unfair. So that’s what keeps me awake at night.”
Cartier boss with $7.5bn fortune says prospect of the poor rising up 'keeps him awake at night' - Business - News - The Independent

Many years ago, Henry Ford tried to sell his cars cheaply so that everybody could afford them. The Dodge Bros. were major stopkholders and sued him in court saying that he had the primary responsibility to his shareholders and NOT to the public. The strong price deflation that was promised by the Industrial revolution was blocked to pay rent on the money of the shareholders.
American industry tapped in to foreign demand until, foreign States had rebuilt their domestic manufacturing. The financial industry has impoverished the working class but, they have no plan or appreciation that the financial industry is far too big for the diminished economy. They have starved the goose that lays the golden eggs. ( Profits and taxes).
They plan to put a LOT of guns between you and them.
?The American Military Coup of 2012?: Encroachment upon Basic Freedoms, Militarized Police State in America | Global Research - Centre for Research on Globalization