Economic pressures

[Danny B]

As the economy dies, the lies get bigger

Various segments of the economy tried to avoid the shrinkage that struck the labor force. This works for a while but, not forever. Commodities are crashing. Stocks are starting to roll over. Who knows how low they will go. The Baltic Dry Index lost 23% in one week.
"Ignited by a plunge in Walt Disney Co., shares tracked by the 15-company S&P 500 Media Index have tumbled 8.2 percent in two days"
"The industry’s market capitalization was about $650 billion, compared with $135 billion in March 2009.

That value is evaporating. In just five stocks -- Disney, Time Warner Inc., Fox, CBS and Comcast Corp. -- almost $50 billion of value was erased in two days. Viacom slid 14 percent on Thursday alone"
What goes up,,, must come down.
The IMF and BIS have been warning us all along; The Next Financial Crash. ?The Writing is on the Wall?. Don?t Say ?You Weren?t Warned? | Global Research - Centre for Research on Globalization

Jim Willie makes it VERY clear. America will change to a third-world country.
The Automatic Earth has a very good article on this subject. Read it twice,,, including some very astute comments. Deflation, Debt and Gravity - The Automatic Earth

The J.P. Morgan gold vault is the largest private gold vault in New York. They ran it out of gold and sold it off. Reportedly, it is connected by a short tunnel to the vault of the Federal reserve. Reportedly, Robert Rubin was responsible for the loss of America's gold. One could easily suspect that J.P. sold off the FED gold before they emptied their own vaults.
http://www.zerohedge.com/news/2013-0...t-new-york-fed
Then, there is Ft Knox, "The U.S. Mint states that 147.3 million ounces of gold are now tucked into Fort Knox. Guarded by Apache helicopter gunships and tucked into a bunker with a bomb-proof roof and thick granite walls, you’d think that 147.3 million ounces of gold would be safe in the vault. While Treasury officials insist that the “gold is all there”, why the resistance to a public audit? Congress begs off, saying it will cost US$60 million to test the gold. Other figures bandied about suggest US$15 million. Other so-called experts contest both figures, stating that an independent audit and assay could be conducted for as little as US$15,000."
Executive Order for Your Gold - Gold Forecast - Silver Forecast - ETF Trading Strategies - ETF Trading Newsletter

Previously, the FED reported total dollars in circulation. They stopped reporting in 2006 because it cost too much to collect the information.
The End of M3 - Hiding the Truth About Inflation

Paul Craig Roberts has a plan / prescription for an escape / recovery. It's doubtful that the money powers will allow it to come to fruition.
http://www.paulcraigroberts.org/2015...-craig-robert/

[Danny B]

Counting debt as profit

The headlines get worse day by day.
Germany insists that Greece remains in the Eurozone. Besides public debt, Greece owes private debt; "Under this backwards arrangement, Greece owes Germany 100 billion euros, or roughly $109 billion. The broader euro zone – almost totally the PIIGS – owes it 531 billion. That’s almost $580 billion."
Europe?s Greatest Cover-Up Could Mean The Death Of The Euro [Vanguard FTSE Europe ETF, Proshares Trust II] | ETF DAILY NEWS
Yep, both China and Germany did vendor-financing. Now, they are left holding the bag.
Yanis; "Well, the derailment of the train that is the eurozone, which started with Greece and then other carriages started leaving the tracks sequentially – Ireland, Portugal, now Spain – is continuing."
" what we have now is we have insolvent banks that are in a deadly embrace with insolvent states. So, the states get – borrow money from the centre of Europe in order to give to the banks and banks borrow to give to the state and both banks and states are sort of locked into a deadly embrace with another sinking very fast."
http://www.nakedcapitalism.com/2012/...-finished.html

"Far Worse Than 1986": The Oil Downturn Has No Parallel In Recorded History, Morgan Stanley Says"
InvestingChannel: "Far Worse Than 1986": The Oil Downturn Has No Parallel In Recorded History, Morgan Stanley Says

Hussman; "
In 1972, 2000 and 2007 each of those peaks was followed by a dramatic stock market crash. Now, for the first time since the last financial crisis, all four of those signals appeared once again during the week of July 17th."
Why The Next Great Stock Market Crash In The U.S. Is Coming | ETF DAILY NEWS

At least the TTP is dead. The only problem is that it died from what is killing the general economy. The Economist: The TPP is Dead | naked capitalism

The auto industry is dying in spite of 7 year financing and liar loans. "Dealers were sitting on $100 billion in new vehicles – which automakers had already recognized as sales on their books. Channel stuffing. There were 3.45 million units waiting to be sold" http://www.nakedcapitalism.com/2014/...s-economy.html
How big a parking lot do you need for 3.45 million cars and trucks? How many jumper cables will it take to start them?

[Danny B]

Contagion; copper to bank centers

The commodity crash is taking out a few economies in South America. Chile is the biggest exporter of copper. Chile is crashing. Venezuela is a big oil exporter. Venezuela is crashing. Brazil is a big exporter of iron ore to China. Brazil is crashing. Emerging Market Mayhem: Gross Warns Of "Debacle" As Currencies, Bonds Collapse | Zero Hedge
Venezuela will soon default on their bonds. http://www.zengardner.com/south-amer...l-crisis-2015/
Many of the emerging market countries are carrying huge loads of dollar-denominated bonds. As their currencies weaken, it is ever-more difficult to service dollar-denominated debt.
Commodity-currencies were seen as a sure / safe bet for investors. This was true when China was a huge importer. BUT, as a rising China wiped out the wages of it's client base, it's exports fell off. So did it's resource imports. There is a glut of resources sitting in warehouses and tank farms.
Banks have huge exposure to formerly prosperous EM States that can no longer service their debt. More contagion.

[Danny B]

Job losses and economic shrinkage

Since '07: 1.4 million manufacturing jobs lost, waiter/bartender jobs gained – Zero Hedge
Full-time jobs just made a comeback – Bloomberg
Prime aged workers tumble in July – Zero Hedge
Pentagon Set to Announce Massive Army Cutbacks
Bloomberg needs a reality check.
" When the United States and Europe buy fewer consumer goods, China manufactures less of them. And the less China manufactures, the fewer raw materials and agriculture goods they import from resource rich nations. As exports decline from resource rich nations their economies grow weaker, their currencies fall lower" Trend Alerts - Trends Research Institute
"The United States constitutes 23.3% of the world economy but 29.1% of world debt"
"China, the world’s second largest economy accounts for 13.9% of production. They only have 6.25% of world debt"
It appears that China may survive a credit crash better than America.
$60 Trillion of World Debt in One Visualization - Visual Capitalist

Wealthy Hindu temples hold $ 1 trillion worth of gold and the GOV wants it.
PressReader - Connecting People Through News
One of the temples handed over 5 tons of gold. Guess they didn't miss it. The private stash is reported to be 20,000 tons and they import 1,000 tons a year.

[Ruphus]

Europe prepares to reduce risk in $505 TRILLION in derivative market!!!

Europe Moves to Cut Risk in $505 Trillion Derivatives Market - Bloomberg Business

[Danny B]

Endless war to provide endless debt

Churchill stated that WW II could have been avoided but, the bankers wanted it. They need to create continuous debt. https://www.youtube.com/watch?v=JyGmkotXLtY
The bankers financed the whole shebang and made quite a bit of money. American Banks Funded the Nazis | Global Research - Centre for Research on Globalization
The bankers had their fingers in everything; "According to the BBC and other sources, Prescott Bush, JP Morgan and other leading financiers also funded a coup against President Franklin Roosevelt in an attempt – basically – to implement fascism in the U.S.. See this, this, this and this."

Hitler had gold and everybody was willing to do business. Reportedly, he never ran out of gold; https://www.youtube.com/watch?v=Zfg2dxUXzG0
Everybody wanted a BIG war and did their best to get it financed; Never mind the Czech gold the Nazis stole... - Telegraph

The war debt just goes on and on and on and on. Government to pay off WW1 debt - BBC News
Great Britain has invaded every country but 22. They have had an unbroken century of warfare. http://www.theguardian.com/uk-news/2...ry-warfare-end
New York carried on the tradition from London. Ron Paul said that he can't remember any time in his lifetime when war wasn't being discussed.
Obummer wants unlimited war authorization to fight ISIS. Imagine how much that could be expanded and prolonged.

[Danny B]

Deflationary shocks and the supernova

Europe Moves to Cut Risk in $505 Trillion Derivatives Market (Bloomberg) " By redirecting these transactions to a clearinghouse, the derivatives market should become safer. If a counterparty goes bust, the clearinghouse will spread the losses incurred between all its member firms. Companies have to post collateral with clearinghouses to use them."
SO, who is going to post a few $ trillion of collateral?
"The "debt supernova" of the last decade or two has created massive over-capacity and this commodity deflation "is not temporary, it's the end of the central bank bubble." The catalyst has already happened -"It's China," Stockman exclaims, "China is the most lunatic pyramid of credit and speculation.. and capital is now fleeing the swaying towers of the China ponzi."
"debt supernova,,, I like that imagery. PIMCO calls it a "credit supernova". PIMCO'S Gross sees U.S. economy on road to extinction
"The Top's In" David Stockman Warns Of "Epochal Deflation" | Zero Hedge
I found a cool image; http://www.nasa.gov/sites/default/fi...ge/15-044a.jpg
http://mercenarytrader.com/wp-conten...-situation.png

Monetary authorities know very well the dangers of ZIRP. This article explains them very well. https://mises.org/library/unseen-con...st-rate-policy

"Ben Bernanke lambasts that period’s misguided “Bubble poppers.” And historical revisionism has painted the twenties as the “golden age of capitalism.” If only the Fed had printed sufficient money and saved the system from the Great Depression…"
Well, he's had his chance. He created a reported $ 27 trillion. The periphery is falling apart and bringing down the core. China is going to have a deflationary shock that will bring down everyone else. Credit Bubble Bulletin: Weekly Commentary: Core of the Core
State and local GOV increased taxes at double the rate that the economy grew. They are in no position,, and have no desire to cut back. http://charleshughsmith.blogspot.ca/...aw-coming.html

GOV ( enormous hordes of bureaucrats) consider themselves to be all-important. As the periphery collapses, they will grab whatever resources still exist. They have bought a billion bullets to make sure that the resources are transferred reliably.

Raúl Ilargi Meijer writes about hypothermia. ,,,,"frostbite, which are the result of the core of the body trying to save itself at the cost of the periphery, the extremities. Typically, a human body, for instance, will lose its toes first because the heart can no longer pump enough blood (heat) to them and at the same time keep the body’s core above a minimum temperature."
"In our economies we see the same pattern. It is not generally looked at or even recognized, however, since 99% of us live in denial of the possibility that such a thing would even be an option. This is a direct consequence of the fact that, first, all major news makers and decision makers reside in the core, and second, that saving that core while letting the extremities die off is somehow seen as a good thing. Post-crisis policies around the globe are directed at saving the financial system, not the people the crisis has pushed into poverty. Since these people are not seen as crucial to the survival of the core, and the system as a whole, they are – almost ritually – sacrificed on the system’s economic altar."
http://www.theautomaticearth.com/201...m-hypothermia/

[Danny B]

Plan "A"

Excerpts; "never has so much been at stake, in so many countries, and facing collapse, all at the same time."
"Of course, the greater the debasement of the currency through inflation, the more the central bankers profited. But at some point, the currency would have lost virtually all its value and it would be time for a reset. The currency would need to collapse and a new one created."
"And so, the Fed set about its hundred-year programme of continuous inflation. Although there have been periods of lower inflation (and even deflation), the programme stayed more or less on course, and now, its hundred-year life has all but ended: the dollar has been devalued almost 100%.

And so, we find ourselves at the day of reckoning. The economic crisis we are now facing (not only in the US; it will be felt, to a greater or lesser extent, worldwide) is not a mere anomaly that we need to “push past”. It’s a systemic crisis. It’s been created by design and the system must collapse."
"The end objective is to force as much money as possible into deposits in banks, then take it. The US, EU and a few other countries have passed confiscation legislation, allowing the banks carte blanche to confiscate and/or refuse to release deposits."

"Of course a reset of these proportions will not be without its fallout. The public will be horrified at the outcome, at the realisation that the very institutions they thought had been created to protect them had never been intended to serve their interests at all.

Once they realise that the world’s greatest Ponzi scheme has been foisted on them, they will be hopping mad and justifiably so. Those who had not had the foresight to internationalise themselves, to remove themselves as much as possible from the system, will most certainly want to get even in some way.

And this makes clear why governments, particularly that of the US, are working so hard to create a police state. Unless a totalitarian state can be created, those who are presently taking the wealth may not be able to fully realise their objectives.

The coming train wreck is no accident. It has long been planned. "
When A Train Wreck Is No Accident | Zero Hedge
Armstrong said that the sovereign bond market will collapse 2015.75.
The stock market has rolled over and many investors are fleeing. They will move their funds to the safety of the banks.

[Danny B]

Gibson

The FED has been a champion of 2% inflation. People resent direct taxation so, theft-by-inflation does a quieter job. Inflation has reached it's limit and we have flipped over into deflation. The Deflationary Implosion On The Road To Full-Blown Global Collapse | King World News
Armstrong has this to say;
" When we put out our forecast back in 1997 that oil would rise from $10 to $100 going into 2007, many people said we were crazy arguing the world could not sustain such high energy prices. We warned that unless oil rose to $100, new technology would not emerge. Oil had to rise in order to create alternatives. Now that we have warned that oil will move back to retest $35, everyone likewise said we were wrong for the world would not be sustainable at such a low level. "
The Age of Deflation & the Fed | Armstrong Economics

The Central Bankers generally accept and operate on the "monetarist" principle. THE INTEREST RATE IS THE PRICE OF MONEY. The number crunchers have apparently proved this to be untrue. This would mean that our whole operating system is founded on faulty information and faulty logic.
,,,,,"which seek to control prices by setting interest rates, have no theoretical justification behind them. They are the consequence of blindly accepting the quantity theory of money, upon which macroeconomics is based."
"A mistake made by central bankers is to believe that the price of money is its interest rate, instead of the reciprocal of the price of the products for which it is exchanged. Interest rates are money's time preference, which in free markets broadly reflects the average time preference of all the individual goods bought with money. The problem with monetarism is that it ignores this temporal aspect of exchange."
Gibson's Paradox: The Consequences For Gold | Zero Hedge

[Danny B]

Gibson's Paradox

The FED has been a champion of 2% inflation. People resent direct taxation so, theft-by-inflation does a quieter job. Inflation has reached it's limit and we have flipped over into deflation. The Deflationary Implosion On The Road To Full-Blown Global Collapse | King World News

The Central Bankers generally accept and operate on the "monetarist" principle. THE INTEREST RATE IS THE PRICE OF MONEY. The number crunchers have apparently proved this to be untrue. This would mean that our whole operating system is founded on faulty information and faulty logic.
,,,,,"which seek to control prices by setting interest rates, have no theoretical justification behind them. They are the consequence of blindly accepting the quantity theory of money, upon which macroeconomics is based."
"A mistake made by central bankers is to believe that the price of money is its interest rate, instead of the reciprocal of the price of the products for which it is exchanged. Interest rates are money's time preference, which in free markets broadly reflects the average time preference of all the individual goods bought with money. The problem with monetarism is that it ignores this temporal aspect of exchange."
Gibson's Paradox: The Consequences For Gold | Zero Hedge
The world is laboring under false theories and false paradigms. If Gibson's paradox is indeed correct, then, the interest rate is NOT the price of money. China is laboring away trying to save their economy. Like many countries, they are playing with interest rates. Things are crashing anyway. http://www.zerohedge.com/news/2015-0...st-matter-time
Their exchange rate is locked in with the dollar. The dollar is perceived as a safe haven and is rising. This forces up the price of goods from China and their export market is crashing. They need to devalue the Yuan to compensate for this. They need to NOT devalue the Yuan if they hope to have it included in the SDR basket of currencies.

"instead of the reciprocal of the price of the products for which it is exchanged"
This is an interesting idea. What happens to money if products are NOT exchanged? Zero velocity of money is described as barter. Barter doesn't incur finance or interest charges and bankers hate it more than anything.
"products for which it is exchanged" The FED has been able to inflate the upper loop of the economy because no "products" are exchanged. They haven't been able to inflate the lower loop of the economy. ZIRP has proved to be a failed tool of a faulty paradigm.

[Danny B]

Cheerleaders,,,,,, doom leaders

Armstrong stresses that confidence is crucial to continuation of the "system". The cheerleaders are out in force. US wholesale inventories up solidly, signal upward GDP revision – CNBC Inventories are up because retailers aren't able to sell. There are other cheerleaders who completely distort the labor numbers, etc.
The people who have predicted every step of this mess have their own observations.
#4 Larry Edelson is “100% confident” that a global financial crisis will be triggered “within the next few months”…

“On October 7, 2015, the first economic supercycle since 1929 will trigger a global financial crisis of epic proportions. It will bring Europe, Japan and the United States to their knees, sending nearly one billion human beings on a roller-coaster ride through hell for the next five years. A ride like no generation has ever seen. I am 100% confident it will hit within the next few months.”
Why does everybody keep citing October?
#8 Egon von Greyerz is even more bearish. He recently told King World News that we are heading for “the most historic wealth destruction ever”…

Eric, there are now more problem areas in the world, rather than stable situations. No major nation in the West can repay its debts. The same is true for Japan and most of the emerging markets. Europe is a failed experiment for socialism and deficit spending. China is a massive bubble, in terms of its stock markets, property markets and shadow banking system. Japan is also a basket case and the U.S. is the most indebted country in the world and has lived above its means for over 50 years.

So we will see twin $200 trillion debt and $1.5 quadrillion derivatives implosions. That will lead to the most historic wealth destruction ever in global stock, with bond and property markets declining at least 75 – 95 percent. World trade will also contract dramatically and we will see massive hardship across the globe."
These aren't the kind of people that you would invite to a party.
8 Experts That Are Warning That A Great Economic Crisis Is Imminent

ALL democracies fail. Democracy is socialism-lite. MANY influential people are pushing for world socialism. Central bankers have always claimed that the CB must be independent so that it won't respond to demands from the collectivists and overprint. Well, that idea isn't working out too well. The CBs responded to the demands of their banking buddies and,,,, overprinted.

The failing of socialism is that it tries to give a high standard of living to non-producers using DEBT. "Rather than using these lower rates to pay off its substantial debts, Greece funneled as much money as possible towards Government employees (nearly one in three Greek workers).
As a result, Government wages nearly doubled to the point that your typical Government employee was paid 150% more than his or her private sector counterpart." Greece's Collapse Was a Reversion to the Mean? Who's Next? | Zero Hedge
The collectivists always try to harness up the producer to support his fair share of non-producers..... Beggars, bankers and Bureaucrats. Man is hard-wired to provide support to his close genetic lineage,,, maybe.

[Danny B]

The cause and fallout from the Yuan devaluation

#1 The devaluation of the yuan on Tuesday took virtually the entire planet by surprise (and not in a good way). The following comes from Reuters…

China’s 2 percent devaluation of the yuan on Tuesday pushed the U.S. dollar higher and hit Wall Street and other global equity markets as it raised fears of a new round of currency wars and fed worries about slowing Chinese economic growth.

#2 One of the big reasons why China devalued the Yuan was to try to boost exports. China’s exports declined 8.3 percent in July, and global trade overall is falling at a pace that we haven’t seen since the last recession.
China's exports are falling because their preferred clients are out of work. They are out of work because of the Chinese. Just as austerity has been proven to NOT work, the Chinese are going to prove once again that currency wars do NOT work. 12 Signs That An Imminent Global Financial Crash Has Become Even More Likely
" And back in December 2014, “Bond King” Jeff Gundlach had a serious warning for the world if oil prices got to $40 a barrel.

“I hope it does not go to $40,” Gundlach said in a presentation, “because then something is very, very wrong with the world, not just the economy. The geopolitical consequences could be — to put it bluntly — terrifying.”

#6 This week we learned that OPEC has been pumping more oil than we thought, and it is being projected that this could cause the price of oil to plunge into the 30s…"
Purchasing power in the rich nations has collapsed and the people are spending far less. Wage deflation,,,,economic deflation.
#10 Things are not so great in the United States either. The ratio of wholesale inventories to sales in the United States just hit the highest level since the last recession. HAH ! CNBC says that this proves that the GDP must be adjusted UP.
"Overnight we got another acute reminder of just who is lying hunched over, comatose in the driver’s seat of global commerce: the country whose July exports just crashed by 8.3% Y/Y"
"Also, please do not think that this crisis will be “over” by the end of 2015. What we are moving into is just the start of the crisis. Things will continue to unravel as we move into 2016 and beyond. The recession that we experienced back in 2008 and 2009 will seem like a Sunday picnic compared to what is coming by the time that everything is all said and done.

"So that is why I work so hard to encourage people to get prepared.
What we are facing is not going to last for weeks or for months.
The coming crisis is going to last for years, and it is going to be painful beyond what most people would dare to imagine."
Another bummer of a guy that I would NEVER invite to a party.
Gerald Celente Is Now Predicting That A Stock Market Crash Will Happen By The End Of 2015

Edit: OPEC just kicked oil into the $30s OPEC just kicked oil into the $30s
I suspect that the "junk bond" market will be the first to vaporize. The Next Financial Disaster Starts Here | Casey Research

[Danny B]

Having the reserve currency in a currency war

Gibson's Paradox, Triffin's dilemma, Gresham's Law. Essentially, a reserve currency is a DRAG. Everybody flees to it for safety and drives it up.
John Kerry Warns "Dollar Will Cease To Be Reserve Currency Of The World" If Iran Deal Rejected | Zero Hedge
China was pegged to the dollar. The rise cut way back on their export market and they had to devalue. It was a big kick in the teeth for many currencies / States. Currency wars are never successful but, the CBs are doing it anyway. " It is mathematically impossible for every country to devalue its currency to boost exports. Yet Japan, the eurozone countries, and China seek to do that.
Read more at Mish's Global Economic Trend Analysis: Don't Worry, There's Only One Cockroach

There is so much cash sloshing around and nowhere for it to go.
"They look only at the USA debt and assume the dollar must crash, when in fact, the problem we face is on a global scale and $18 trillion in U.S. debt is simply not large enough for international capital to hide. " China & the Dollar | Armstrong Economics
" And thus, whilst 215,000 “jobs” were supposedly created – nearly all of them, part-time – 144,000 people left the labor market entirely, bringing the total number of working age Americans not even looking for work to a record 93.8 million,"
If Gerald's Right, Are You Ready? | SilverSeek.com
"the Cartel has now repelled gold from crossing the “line in the sand” it drew on July 19th’s “Sunday Night Paper Gold Massacre” an incredible 39 times. In fact, in its desperate attempt to prevent the inevitable global stampede into real money,"
The solution for Triffin's Dilemma and Gresham's Law is to let gold return to it's former status.
In the meantime, we have Hindenburg Omen And Death Cross to worry about along with something even worse. Forget Hindenburg Omen And Death Cross – This Alarming Event Just Happened For The 5th Time In History And The Other 4 Times The Stock Market Collapsed More Than 33%! | King World News
The FED printed dollars and they went into emerging markets and commodities. These have both crashed. If the FED prints more dollars, they have no place to go. They can't go into stocks any more. They already own much of the bond market. Like Voldemort's ghost, all these digital dollars are circling the globe looking for something to make them tangible.

[Danny B]

Deflation for fun and profit

Job # 1 for the bankers is to convert their thin-air money into tangibles. "If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered"
Since the dollar has lost about 97% of it's purchasing power, you can say that we have had quite a bit of inflation. We managed to suck a lot of money from the rest of the world so, we didn't lose too much of our standard of living,,,,YET.
Deleveraging and it's attendant deflation are baked in the cake and on the way.
Deleveraging as a Biblical Plague - The Automatic Earth
Unemployment claims foretell a big downturn. Initial Claims Send Longest Bubble Peak Warning In History | David Stockman's Contra Corner
The CBs have lost control and are now fighting each other. http://www.zerohedge.com/news/2015-0...nancial-crisis


"No one knew of the meeting. No one knew who attended.
No one knew of the resolution passed. And for 2 years 8
months and 4 days this meeting was kept a guarded secret.
But true to an old saying, murder will out. And on the 22d
day of February 1923 the manipulating bankers and
financiers became involved in a dispute and contention over
certain Liberty Loan bonds affected by the resolution passed.
And in revenge or in retaliation or for other cause the proceedings
of the secret meeting were published in the Manufacturers
Record, of Baltimore, Md. And for the first time the proceedings
of this meeting and the names of the bankers attending were
known to the outside world.
When the curtain was drawn and the world looked in on
the secret conclave of bankers there could be read from the
resolution passed the disguised, concealed hand of a secret
gentlemen's agreement. Brushing aside the veiled preamble.
the resolution passed and held in secret reads:
In their capacity as members of the orderly deflation committee
of the American Bankers Committee of the American Bankers
Association, they hereby agree to abide by the spirit of the address
in their own affairs, and that they will encourage its general
adoption by bankers and the people of the country.
The bankers in secret conclave assembled did not say
what they purposed to do, but pledged themselves to abide
by and stand together to do it. The effect of this secret
resolution passed at this bankers’ meeting was to secure
and bind all bankers in a gentlemen's agreement for the
concerted action and cooperation to make effective the
control of the discount rate and the open-market operations
immediately to contract and take out of circulation the
money and credits of the country.
Further following the amendment of April 13, 1920, and
the secret bankers’ meeting held May 18, 1920, in Washing
ton, D.C.. the Federal Reserve banks, under orders of the
Federal Reserve Board, without notice or warning, with the
people groping in the darkness, began the raise of the dis
count rate, raising the rates from 2 to 5 to 7 to 8 to 9
percent, and until in some farm banks the rates were raised
as high as 85 percent. And with the cooperation of the
open-market policy, the reserve banks selling bonds and
securities under the mechanism of the Reserve System, the
money and currency of the country began to gather and
flew back in great swollen stream and current, back until
11/2 billions of currency was withdrawn from circulation in
8 months, reducing the volume and supply of credit over
101/2 billion dollars. And under the law of money and the
volume of supply in circulation, the value of money, the
property of these manipulating financiers, was doubled and
tripled in value.
Under the same law of money, as the discount rate arose
and bonds and securities were sold and money and credits
withdrawn from circulation, commodities, values, and the
price level fell. fell first upon the unsuspecting, the conflding,
unorganized farmers, forcing down farm values and the
price level and doubling and tripling taxes upon the
farmer—doubling interest, debts, and mortgages upon the
farmers, measured in farm crops and products, the only
means with which the farmers have to pay—and reducing
by more than one half the farmer's earnings and income and
impairing his tax-paying power, destroying his interest- and
debt-paying power as well as his buying and consuming
power; and at the same time doubling, tripling, increasing
and multiplying the value of the remaining money in
circulation and of war-debt bonds and claims and all contracts
and obligations payable in money, the property of the international
financiers and the manipulating bankers."

- Representative Finley H Gray, May 2, 1933
"concerted action and cooperation to make effective the
control of the discount rate and the open-market operations
immediately to contract and take out of circulation the
money and credits of the country."
The original FED charter did NOT allow a discount rate nor, selling of Treasury bonds on the secondary market. The FED chief, Benjamin Strong ILLEGALLY sold bonds on the secondary market.

"Under the same law of money, as the discount rate arose
and bonds and securities were sold and money and credits
withdrawn from circulation, commodities, values, and the
price level fell." This deflation (reduction in the supply of money and credit) made it impossible for people to service their loans. PRESTO, the bankers got everything.
The G-20 countries have agreed to bail-in laws. The banks will take all accounts. Nobody will have money or credit to service their loans. NO PROBLEM, the banks will have tons of money to buy up everything when the prices are depressed,,,,, everything that they didn't already foreclose on.

You can see why they don't want a gold standard. It prevents any big manipulations of the money supply. A Rush to Judge Gold | Cato @ Liberty

[Danny B]

Auto bubble ,,, china miracle turns sour

"Dealers were sitting on $100 billion in new vehicles – which automakers had already recognized as sales on their books. Channel stuffing. There were 3.45 million units waiting to be sold"
Total U.S. Auto Lending Surpasses $1 Trillion for First Time
About $119 billion in auto loans originated in the second quarter of this year
Total U.S. Auto Lending Surpasses $1 Trillion for First Time - WSJ
$ 1 trillion in auto loans with 3.45 million units waiting to be sold. The economy is GREAT !!
Industrial production jumps as auto production surges – Yahoo!
Don't look now, but the subprime auto bubble may be bursting – Zero Hedge
Give it time and auto loans will catch up with student loans. You didn't forget about student loans,,, did you? Borrowers fall further behind on $1.3 trillion in student loans – Bloomberg
There seem to be a LOT of canaries in the coal mine. "This Alarming Indicator Is Back At A Level Last Seen 10 Days Before The Bear Stearns Collapse"
This Alarming Indicator Is Back At A Level Last Seen 10 Days Before The Bear Stearns Collapse | Zero Hedge What does canary taste like.
The China "miracle" was seen as do-able even though it might get a bit bumpy. After all, China is holding big reserves rather than enormous bond debt. Stockman thinks that it just isn't going to happen. Financial integration will bring financial contagion. The Great China Ponzi—-An Economic And Financial Trainwreck Which Will Rattle The World
The Great China Ponzi—-An Economic And Financial Trainwreck Which Will Rattle The World | David Stockman's Contra Corner
Social Security holds tons of non-negotiable securities issued by the Treasury. The SS fund is empty and benefits of $ 800 billion are paid out of current accounts.