Economic pressures

[BroMikey]

London bridge will fall down. This is the plan, sink the ship

and then come to the rescue to those who humbly bow.

[VIDEO]https://www.youtube.com/watch?v=5sEOl5FFM10[/VIDEO]


[VIDEO]https://www.youtube.com/watch?v=hUiG2UQKhic[/VIDEO]

[Danny B]

Money, debt and human nature

While the stock market is important, the bond market is much larger.
Headlines;
Fed acts as 'arsonist and fireman' to markets, Grant says – Bloomberg
Uh-oh, Canada. China pales as a risk to US growth – Bloomberg
Fed's stock levitation failing – 24hGold
This market is a "wheelbarrow of dynamite" waiting to blow – Daily Reckoning
The most astounding credit binge in history – Daily Reckoning
Illusion of omnipotent central banker biggest bubble we've ever seen – Financial Sense

The source and wellspring of our problems is human nature.
"1940s government economists were embracing the new Keynesian view that Say's law, the law of the markets, was irrelevant and supply and demand for goods and services could be regarded as independent from each other," Only a moron would believe that supply and demand could be independent for any length of time.
"Keynes wanted a new super-currency, which he called the bancor. Instead the world got the dollar and the "full faith and credit" of the US government expressed through her considerable gold reserves. While central banks could swap dollars for gold at $35 per ounce, there was no effective restraint on the issuance of dollar-money and credit. It allowed America to finance the Korean and Vietnam wars without resorting to domestic taxation. When those dollars-for-export returned home in the late sixties, the run against dollars and in favour of gold began, leading to the Nixon Shock, when the US finally consigned the Bretton Woods Agreement to the dustbin of history."

The Bancor would also have been subject to over-issuance.
" In this respect the lesson of the Lehman crisis is that flooding the system with money and guarantees of more money actually works. Gone will be any pretence of monetary discipline, gone will be any pretence of higher interest rates, and gone will be any constraint on the issuance of yet more debt. A crisis of malinvestment has become a crisis of the financial system, and will soon become a crisis of currencies. We can be increasingly certain that debt will be extinguished not by debtors reckoning with creditors, but by the debasement of money, and that this outcome becomes the unstated objective of policy makers."
https://www.goldmoney.com/research/a...efcode=dollarc

This article talks about hyperinflation being inevitable. Not sure about that. You have to get the money into the system to have hyperinflation. There is a distinct possibility that we will get a second currency. THAT is where hyperinflation will make it's appearance.

"House Budget Committee Chairman Tom Price, a Republican from Georgia, emphasized the need to reduce federal spending."
"But Democrats such as Chris Van Hollen of Maryland, the ranking member of his party on the budget committee, disagreed. He indicated that more spending is the way to attack the deficit, "
The following is taken from comments.
Robert Bostick • 21 hours ago

The federal defict is equal, to the penny, to net financial assets in the private sector. Cut Federal deficits and you cut those assets ushering in more private debt and bubbles. See the data below on what happens when there's a federal government budget surplus.

What you folks don't understand is that the federal government is a currency issuer and no one else in America is. We are all currency users and by definition must have revenue to avoid default. The federal government never needs revenue and can never involuntarily go broke because it issues its own currency.

In fact: U.S. depressions tend to come on the heels of federal surpluses.

1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.

1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.

1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.

1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.

1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.

1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.

In further fact, recessions invariably are cured by financial "stimuli," i.e federal deficit spending.

So why the intentional misstatements, from the President and Congress, the media and the economists?

Answer: They are paid by the rich to widen the Gap between the rich and the rest.

The price of fiscal policy ignorance is the total abuse of our nation's monetary sovereignty. None of the candidates and precious few in the population/elected officials at any level understand the FACT that the US never needs to tax, borrow or impose austerity to fund any Federal Government Program, this is the very essence of monetary sovereignty. 2010 August «#Monetary Sovereignty - Mitchell #Monetary Sovereignty ? Mitchell...

Yet, our so called experts on economics and fiscal policy; Greenspan, Volcker, Summers, Geithner, Ortzag, Bernanke, Krugman, Mankiw, Reich, Williams, Kudlow, Stockman, Laffer and Moore, never tell us about the implications of Nixon abandoning the gold standard and ushering in the fiat currency/dollar standard. This subversive decision protected the monopoly banks have on the creation of debt-money. When a nation becomes monetarily sovereign it never needs to tax, borrow or enforce austerity to fund its budget. It is free of the financial markets."
CBO Report on National Debt Paints Grim Picture

Ellen Brown and Steve Keen write quite a bit about this.
This is a subject that I am not clear on. Socialism kills incentive to work. Capitalism provides incentive to work. If everything is automated, do we still need incentive to work?

[wayne.ct]

What is money?

There are actually several ideas or meanings or definitions of money. The term has been redefined and misused so that people can become confused and deceived. I always question what people mean when they use the word. That way I know if I should trust what they are saying.

So, here is an article that encapsulates what I think "real money" is all about.

Chapter 22: The Mirage of Inflation

Here is one paragraph from the article that I thought might intrigue you enough that you might read the article.

In 1972, a collection of articles by F. A. Hayek was published in Great Britain: A Tiger by the Tail. It was on central bank inflation. The tiger today is much larger. It is much more dangerous. The world is still on the tiger's back

[wayne.ct]

The role of human nature

Human nature can be defined as what people do when confronted with a particular set of circumstances. It is what happens at the individual level when things change in the external environment. (all in my opinion, of course)

So, when some things happen, people spend less. When other things happen, people spend more. Other people try to influence what people buy or where and how people save. Other people collect statistics and some people tell lies because they are paid to tell lies or perhaps they simply repeat lies that they have heard or read. This is all human nature.

These actions, the things people do, are based on thoughts and fears that each person has which are, in turn, based on heredity, upbringing, education and intangibles such as faith and belief.

My point is this: You don't always know why people do what they do but you can observe the patterns and trends as things change. I think that if I look at what I see around me then I can get a feel for the direction and perhaps make some good decisions. But, on the whole, people are going to do whatever they do, and there are millions of people out there that I have no control over. The powers that be don't really have control either, as hard as they try. They don't control things and their loss of control will be devastating. Enough people are seeing what is happening to shift the "center" and the evidence is growing rapidly. More and more people will start to see it, too. It is a wave that is bigger than any single person. So, deal with it as it is. (and good luck!)

By the way, this supposed fact is not true. quote: "In further fact, recessions invariably are cured by financial "stimuli," i.e federal deficit spending."

[BroMikey]

All very flashy and wordy. All of the intricate details of a high

level business man that helps him to move his big chunk around

so he can drag in some free money off interest rates.

Sorry boys but from the perspective of your local street rats who are

looking for a job, all of your reasoning is bliss.

The truth is the truth and will always be the truth. Americans have

been taught to be lazy. Farmers work 3-5 months of the year.

Good ole GMO promises that they are now stuck with keeping

them out of the fields because weeds are no longer a problem.

Never mind that the crop kills everything that eats it.


People retire at age 50 collecting 2000-5000 per month for the next 40

years. Sure the Gov/Fed is cleaning up. But the work force is kicked

around, they have been for the last 30 years, they are the baby boomers.

Our fathers collected for 40 years with Dad retiring at 50.

Boasting in the background (You should have done like me)


No rhyme no reason.


The children like myself who hired into the same jobs at GM auto companies

were released every 3-5 years so no accumulated time could accrue.

Then rehired to use up our youthful strength with no intention on

caring about our ending. Don't I sound like a sissy? All I can do

is whin huh? Just keep calling for war among yourselves.

The appeal to the high mind will have everyone looking down

their noses against one another ready to see them removed

as programmed by the media. Them dern useless eater ain't as

good as me. look at me and my genius. That's it puff

yourselves up and look down your noses fool.

Never mind me I rant like this all of the time.

This is certainly nothing against the owner of the thread, whom

I have spoken with in person. He is a good guy.


Just one example of many, showing no equality in the land.



Of course your youth and your strength is far more valuable than

everyone else, isn't it, fool. I am talking to the high minded.

This spirit of inequality has already murdered our country, all

that is left to witness in the violent rage to follow.


It is coming.


As planned, sex and drug rings rule and have ruled the cities for 30 years,

this way people can still live. This country is already gone to hell and I hope

those of you who are very old are not around to see the end. The tanks in

our cities today will be used against the citizens because a large part of

them are used to having everything their way and have also learned to

live an illegal existence.

I know people who sold drugs on up into their teens and twenties

then took that money and made it grow other ways. After 30years

they have created a good flow of capital. Their beginnings always

effected their business behavior being outlaws at heart.

Some I grew up with turned to internet call girl services and fotos.

Most of them went to jail at one time or another.

They look so cleaned up and like normal folks when you meet them.

The point is very few work and the ones who do, are carrying the ball

for free. If the boomers are permitted to draw a normal income the

system will fall over dead in a few years.

So our system is out of control and this has been an intentional plan.

Like Wayne said, these young people are not the young people

of their fathers generation.

This generation as been taught to lie, cheat, steal, to get their way

do drugs, have wild parties, live high times and still find a way

to GET money without working.

If a man does not work, he should not eat, this is a common sense

principle that our nation has abandoned along with the God who said it.

The cities are already raging. I called Mom 5 years ago before she

moved out of Flint MI and the houses were all boarded.


The cities are all shot up and spray painted, the cities doz them under.

the people turn to whatever makes them enough money to survive.

So all of your words about what newspapers say is just silly talk.

The people alive today have been conditioned to kill each other.

The programming is destroying the will to work. Punch a card, be a

nurse or a city office worker, put in your 20 years and ride the system.

The rest are sentenced to death on the streets.

The guns go off all night long and nobody knows why or what to do.

The newer psychotropic drugs like Flakka and many more are bringing

the real nature of humanity on display. The military boys are given

these drugs by our Gov.

If people are this messed up, how can they work? What are they

working for?

I am sorry boys, it's over. The Fed has tried to extend this system

as long as they could but when no one is used to working it falls.

Pensions at 50 years making 3000 dollars for 30 plus years?

How long do you this this is going to go on?

Revolving credit cards still rule the desperate for the easy good

life of pleasure seeking.

Americans are not the same anymore and this is the key to the

destruction of a nation. When people seek pleasure from the time

they get up as young men till night fall and are unwilling to work

yet collect full benefits or wages, something is going to break.

This system has been setup to fail. Our young men who are willing

to work can not chose their desired occupation, they are confined

to Gov/state and local jobs run by power hungry control freaks who

hate THE HOME OF THE BRAVE AND LAND OF THE FREE IN GOD WE TRUST!!

THEY are using those who are willing to work and their energy to further

remove the American dream.

Sodom and Egypt is the mind of the youth in the USA.

She will do what she has to do to live. I have helped

men out of the 40 degrees below temps, they stayed at my

house. I couldn't let them freeze. I cry everyday for the

hopeless.


https://www.google.com/search?q=miya...k6eFOGAwHHM%3A












[VIDEO]https://www.youtube.com/watch?v=6kYDAuu6qj4[/VIDEO]

[wayne.ct]

I can feel the passion in your words

Compassion for the homeless – Sep 6, 2007 | nealo.com

[Danny B]

morality and business

Owner of the thread?? Bro Mikey, I'm just trying to pass on info to people so that they can prepare and survive. I'm just a reporter who is able to dig out stuff and integrate it with other stuff. People are more easily led when they don't know what is going on. I and many others are trying to remedy that. That is why I post links. You (pl) can read the original writer and decide what is true and false. Just remember,, don't shoot the messenger

Read Chodorov; "The rise and fall of society"
Read Tainter; "the Collapse of Complex Societies"
Read Strauss and Howe; "Generational Turnings"
While our descent and crash is terrible, it is just another cycle. This isn’t to diminish all the death and suffering but, I can't stop it.
Man is very competitive. Nature made him that way. A peaceful society is a good idea but, it doesn't last if man follows his instincts rather than his intellect. Mankind will continue to backslide until all men embrace ethics and morality in their daily dealings.

[Danny B]

spiraling down into deflation

Wealth transfer has impoverished the lower loop of the economy. The bankers laughed all the way to the bank. Now, they find that the economy is frozen up for a lack circulating money. The Council on Foreign Relations suggested that every person be sent $ 80,000 worth of pixels to their account.

"Around $5 trillion has been wiped off global equity markets since the yuan devalued earlier this month. That shift, allied to a string of bad economic numbers and a botched official attempt to halt the slide in Chinese bourses, has fuelled fears that the world’s second-largest economy is heading for a hard landing. Exports have been falling. The stockmarket has lost more than 40% since peaking in June, a bigger drop than the dotcom bust. "
The Great Fall of China | The Economist
While the CBs can create quite a bit of fresh cash, deflation can run a $ trillion a week.
The dreaded deflation; "Deflation is the Fed’s worst nightmare. The problem with deflation is that it is not just a transient drop in prices. Deflation tends to feed on itself and becomes impossible to stop. Lower prices cause consumers to delay purchases, which causes even lower prices as merchants try to clear the shelves.

New orders dwindle, inventories collapse and layoffs begin. Asset sales beget more asset sales, with lower prices causing financial distress and a wave of loan defaults. Commodities prices are telling us that a dangerous new wave of deflation has begun. "
So, how do you stop a drop in prices,,, easy, just add more money.
The article is very muddy. They mix price deflation and money-supply deflation together. No can do.
"Citigroup's chief economist Willem Buiter - that a global recession is imminent and nothing but a major blast of fiscal spending financed by outright "helicopter" money from the central banks will avert the deepening crisis. Faced with China's 'Quantitative Tightening', the economist who proclaimed "gold is a 6000-year old bubble" and cash should be banned, ?
Citigroup Chief Economist Thinks Only "Helicopter Money" Can Save The World Now | Zero Hedge
Keynes called gold a barbarous relic. Now, cash has earned the same moniker; The Financial Times Calls for Ending Cash, Calls it a ?Barbarous Relic? | Liberty Blitzkrieg

GOV is going to take all the pension money and convert it to GOV bonds,,,, just like Argentina. They can't have you holding cash or gold. Doug Ross @ Journal: IF YOU LIKE YOUR 401(k), YOU CAN KEEP YOUR 401(k): Obama Labor Dept. Sets Stage for Nationalizing Retirement Accounts

[Danny B]

Say's Law

Keynesian economics sort of works,, for a time. Since it requires un-ending growth, it is on shaky ground. Chinese birth policies resulted in avoidance of 400 million births. American policies about abortion reportedly have resulted in a missing 40 million. Japan holds the record for population shrinkage. ALL of these economies have stopped growing. The credit system DEMANDS that they grow to service debt.
The current "toolbox" of the central bankers is not working. It was marginally effective when there was population growth. Now;

DEFINITION of 'Say's Law Of Markets'

An economic rule that says that production is the source of demand. According to Say's Law, when an individual produces a product or service, he or she gets paid for that work, and is then able to use that pay to demand other goods and services.

"Say's law, or the law of markets, found in classical economics, states that aggregate production necessarily creates an equal quantity of aggregate demand."
"As each of us can only purchase the productions of others with his own productions – as the value we can buy is equal to the value we can produce, the more men can produce, the more they will purchase.[2]"
"Say's law has been one of the principal doctrines used to support the laissez-faire belief that a capitalist economy will naturally tend toward full employment and prosperity without government intervention.[3][4]"
"Say argued that economic agents offer goods and services for sale so that they can spend the money they expect to obtain. Therefore, the fact that a quantity of goods and services is offered for sale is evidence of an equal quantity of demand. This claim is often summarized as "Supply creates its own demand",

"In the long run, the ability to produce does not outstrip the desire to consume."
"John Maynard Keynes argued in 1936 that Say's law is simply not true, and that demand, rather than supply, is the key variable that determines the overall level of economic activity. According to Keynes, demand depends on the propensity of individuals to consume"
https://en.wikipedia.org/wiki/Say%27s_law
Nice words; propensity and desire to consume. Total BS. Nowhere is it mentioned that many people have a desire to consume but, they offer nothing in return. With a growing economy, they were able to do a steady extraction. Socialism focuses on creating demand. Say said that demand would create supply. People in hell want ice water.
We have an empty toolbox and a useless guidebook.

[Danny B]

The many faces of deflation

Americans lost their jobs and were no longer able to consume. The oil industry previously "contributed" about $ 450 billion a year to the financial industry pot. This recently turned negative to the amount of minus $ 167 billion. The drive down to the global mean wage resulted in lost wages to about a billion Westerners. Their wage loss resulted in lost sales and lost income for the Easterners. What goes around comes around.
As various States lost aggregate income, they liquidated some of their currency reserves to meet bills. In short, they presented U.S. Treasury bonds for redemption.
" Of course a reduced role for the market means a greater role for the PBoC and that, in turn, means FX reserve liquidation or, more simply, the sale of US Treasurys on a massive scale. "
There is lots more in the article but, it essentially shows why the world is dumping Treasuries. Why The Great Petrodollar Unwind Could Be $2.5 Trillion Larger Than Anyone Thinks | Zero Hedge

Armstrong said that U.S. Treasury bonds would crash in October. I'm guessing that would result from a redemption stampede. I believe that bonds for redemption are presented to the primary dealer banks for cashing out. The bonds were bought with earned trade-dollars. Some years ago, the FED gave the banks a few $ trillion of excess reserves. Will the primary dealers cash out the bonds with this free money,,, dunno.

Since the toolbox is now seen to be empty, there may be a run on CBs everywhere. Dunno. Central banks can’t save the markets from a crash. They shouldn’t even try | Business | The Guardian

Neo cons, neo liberal Neo bull$hit.
" Global wealth, rather than being spread equitably, as neoliberal proponents promised, has been funneled upward into the hands of a rapacious, oligarchic elite, creating vast economic inequality"
Chris Hedges: The Great Unraveling - Chris Hedges - Truthdig
A fair amount of the article is untrue but my focus is the unworkability of so many BS economic ideas.
Bonds and currency are debt notes. Vast economic inequality has made it so that bonds can not be redeemed. When any note becomes worth less or worthless, this is deflation. When a deposit of oil is worth less, this is deflation. The West had massive wage deflation but the Cbs try to fight off deflation of credit (debt notes). The TBTF banks were saved at the expense of the U.S. bond market.
Greece couldn't pay private banks so, European CBs rescued the debt from default. Same as TARP.
The banks were happy to screw the taxpayer so that they could get out from under all the bad loans they made. They put the State debt markets in great danger. This, in turn, puts the entire credit and debt system in great danger. The banks couldn't pay so they transferred the bill to the taxpayer. The taxpayer lost his job and can't pay. The mega danger from globalization is that contagion would reach all corners of the globe. When trust and confidence are destroyed, credit is destroyed. When trust is gone, only gold remains.

[wayne.ct]

Paper money

All sort of bonds, notes, paper money, contracts, derivatives, futures, options, etc. are things that can be bought and sold. There is a fancy technical term for that, but I don't want to be inaccurate. (Fungible?) My point is that the true value of such paper is what someone is willing to give for the article in an unforced, "free" trade, i.e. a free exchange. ALL such things will collapse together until the strongest of them rise to the top of the heap. What will those strongest items be? I can't say for sure, but I think shares in an honest ethical small business may be among those strong items. Other than that, commodities will retain value best. Lucky for most people, they can easily buy a bag of sugar, cocoa or coffee. When the winds change direction, it will become easier to see. The winds are changing.

[Danny B]

ISIS and the Austrian school

The winds are indeed changing. Reportedly, we have moved from "risk on" to "risk off". TAKE THE OPPORTUNITY TO BAIL BEFORE IT?S TOO LATE « The Burning Platform
The Pentagram, CIA and MOSSAD created ISIS because the U.S. military couldn't afford a full-on assault of Syria. The military refused because a low-budget attack would produce so many casualties. ISIS naturally has a great propaganda presence.
All the toolboxes and all the bogus economic theory have blow up. Austrian economics is a system that works very well. It does NOT allow great power to GOV.
"The video that was "made by ISIS" and which is really just a 55 minutes crash course in Austrian Economics - which is now apparently equivalent to terrorism - can be seen below, at least until the website administrator removes it because it is too evil, and anyone caught watching its evil anti-Fed message deserves to be droned."
The murderous SOBs at ISIS endorse a gold standard so, obviously, a gold standard is evil. OBVIOUSLY,,,,, Keep repeating this until you are a true believer.
http://www.zerohedge.com/news/2015-0...ld-standard-pr


The United States constitutes 23.3% of the world economy but 29.1% of world debt. It’s debt-to-GDP ratio is 103.4% using IMF figures.
Japan makes up only 6.18% of total economic production, but has amounted 19.99% of global debt.
China, the world’s second largest economy (and largest by other measures), accounts for 13.9% of production. They only have 6.25% of world debt and a debt-to-GDP ratio of 39.4%.
7 of the 15 countries with the most total debt are European. Together, excluding Russia, the European continent holds over 26% of total world debt.

Combining the debt of the United States, Japan, and Europe together accounts for 75% of total global debt.

How very strange. There seems to be a correlation between bank rescues and humongous debt.
$60 trillion of world debt visualised

[Danny B]

Parasites everywhere you look

The various American GOV agencies report that they have $ 60 trillion stashed away. California is a good example. Here are a few excerpts.
"The state of California has $600 billion in cash and investments. This makes Governor Brown’s statements (and this 2-minute filmed statement) that the state must massively cut programs because of a $16 billion budget account shortfall a criminal lie. Indeed, the state’s investment fund grew by $67 billion last year alone."
"If the $600 billion were returned to California’s 12 million households, each would receive $50,000"
"If the $8 trillion were returned, then each California household has been overtaxed by a present-day value of over half a million dollars ($500,000). And if we take our example of $150,000/year income, well, you’ll be happy to understand you’re owed a credit of ~$1.5 million ($1,5000,000)."
Law Enforcement: Arrest Officials Hiding CAFR Tax Surplus Billions, Trillions | Economy

A few years ago, a legislator proposed that Ca, GOV tap into the reserve fund for a small budget problem. Governor Schwarzenegger told him "you're on drugs". Is it protected or is it gone?

The UC system reports that it has $ 91 billion in cash and investments. The cost of tuition is rising at 3 times the rate of general price inflation.
“The cost of training a student at the Latin American School of Medicine for six years including room and board is less than $5,000 U.S. dollars,” Fidel Castro.
The Grace commission created by Reagan reported that not 1 cent of tax money goes to the GOV. Walter Burien maintains that GOV doesn't need to tax at all.

The industrial revolution brought GREAT price deflation. The money masters were afraid that we would stop working. The stock market was structured so that dividends would siphon off enough money to raise prices and defeat the economies-of-scale from automation that should have created price deflation. Payroll taxes were raised way up to ensure that we didn't have enough purchasing power to slack off from the work world. The FED was created at the same time as the income tax. The FED sucks out hundreds of $ billions in interest payments to use our own currency.
GOV is sucking out $ trillions in taxes that it doesn't need. The FED is sucking out $ trillions of interest payments that it doesn't need. Both the FED and GOV can,, and do print any money that they need.
Food stamps cost .4% of the GDP and GOV wants to cut them back.
The U.S. military budget is $763.9 billion for FY 2016. This doesn't include all the black projects that push the budget over $ 1 trillion. Food stamps are $ 74 billion and look to be cut.

The money masters are OBVIOUSLY taking our earnings to keep us working. They are afraid of general price deflation because we wouldn't have to work as much.
China burst on the scene and broke the paradigm. They not only offered manufactured stuff at deflated prices, they shut down much of our manufacturing. 50% of the cost of anything that you buy in the West is for finance. China also cut out much of the fat enjoyed by the finance industry. China brought the price deflation that the bankers dreaded. The West lost much of it's prime value-added industry and an enormous amount of employment income. Western finance was based on robbing the working man to keep him working. Exxon earns $ 2.31 a Bbl for finished product. The financials Gain, not earn $27 a Bbl. Finance dreaded the day that the working man would not need to work so hard. The PTB took the 401k money and used it to build up China. NOW, the working man is NOT working,,, forget about working fewer hours as a result of price deflation.

"Now Hudson, in an elegant but lethal indictment of the system, confirms that your ongoing struggle to make ends meet is not a reflection of your lack of talent or drive but the only possible outcome of having a blood-sucking financial leech affixed to your body, your retirement plan, and your economic future.

In his new book, “Killing the Host,” Hudson hones an exquisitely gripping journey from Wall Street’s original role as capital allocator to its present-day parasitism that has replaced U.S. capitalism as an entrenched, politically-enforced economic model across America."
Michael Hudson’s New Book: Wall Street Parasites Have Devoured Their Hosts -- Your Retirement Plan and the U.S. Economy
Crony-capitalism, aka socialism for the rich is killing the host. The financialization of the medical industry is just one of many rip-offs. The doctors aren't getting rich,,, just the bankers. Medicare Costs May Jump 52% in 2016 | Armstrong Economics

[Danny B]

Dead cat bounces don't last as long as previously

Headlines;
9/01 Oil falls even harder than stocks – MarketWatch
9/01 US stocks plunge – CNBC
9/01 US manufacturing growth slows dramatically – MarketWatch
9/01 Global trade in freefall: South Korea exports crash most since 2009 – Zero Hedge
Western Manufacturing and wages crashed. The financial sector tried to stay insulated from all this deflation. Consumption crashed so, productivity has to eventually crash. As consumption crashed, companies started merging to survive. This created mass layoffs,,, which, of course, reduces consumption. https://www.wsws.org/en/articles/201.../jobs-a15.html

Brazil, Chile , Columbia,,, they're all crashing. "Brazil Throws In Towel On Budget; Citi Compares Fiscal Outlook To "Bloody Terror Film" Brazil Throws In Towel On Budget; Citi Compares Fiscal Outlook To "Bloody Terror Film" | Zero Hedge

Paul Craig Roberts has a good article with a good view on the role of automation and job off-shoring.
"Several recent studies conclude that robots are going to displace millions of human workers. An Oxford University study found that 47 percent of jobs are at risk. Another study concludes that one third of all jobs will be lost to robots during the next 10 years. Some claim that the net job loss will not be so large, because new jobs will be created in order to repair the robots, at least until robots learn to do this also.

Perhaps you remember the claims by economists Matthew Slaughter, Michael Porter, and other shills for jobs offshoring that moving American jobs offshore would create better and more jobs in the US. After many years I am still watching for any sign of these promised new jobs. "

"The unaddressed problem is: what happens to consumer demand, on which the economy depends, when humans are replaced by robots? Robots don’t need a paycheck in order to purchase food, clothes, shoes, entertainment, health care, go on vacations, or to make car, utility, credit card, rent or mortgage payments. "
" A former MIT professor who has gone into business producing robots says robots will bring the jobs lost to offshoring home to America. But will they be jobs for humans or for robots? I am waiting to hear how robotics will expand the demand for human labor beyond a few repairmen to fix robots. And I am still waiting for the new and better jobs that offshoring promised. By the time they get here, if ever, robots will take them away."
Roberts is correct. NOTHING can stop efficiency. The Dying Institutions Of Western Civilization - PaulCraigRoberts.org

[Danny B]

Screwing Peter to save Paul

The latest bubble burst in 2008. People stopped spending. The FED manipulated interest rates down to (effectively) zero. This removed part of the cost of many things because finance costs were lower. Things got cheaper and people spent a bit more. BUT, all the institutions that depend on interest income were screwed. ZIRP is necessarily very temporary. The banking sector created hundreds of $ trillions of derivatives that essentially locked in ZIRP. There are roughly $ 440 trillion in interest rate swaps.
Huge sectors of investment were screwed by ZIRP. The free money that was originated to create ZIRP flowed into all kinds of mal-investment. Both the interest rate swaps and the mal-investment depend on continued free money.
The FED "saved' part of the productive economy but, screwed the investment sector. Because of a very low global wage, consumption and savings are WAY down,,, at all levels. Various States are liquidating reserves to keep things from crashing. This is part of the reason that U.S. treasuries are being liquidated. They are also being liquidated because they pay so little interest.
"we’ve quoted Citi, who, after reviewing the extant literature noted that for every $500 billion in EM FX reserve draw downs, the effect is to put around 108 bps of upward pressure on 10Y UST yields. "
The "Great Accumulation" Is Over: The Biggest Risk Facing The World's Central Banks Has Arrived | Zero Hedge

Only 3 U.S. companies are rated AAA credit. It is claimed that a rise in interest rates would bankrupt 50% of U.S. companies,,, dunno. FX reserve drawdowns put huge upward pressure on interest rates.
If the FED does not raise rates, outflows rise even faster. If the FED does raise rates, much of the economy is bust or insolvent.

Headlines;
China hedge funds face worst month in 16 years after carnage – Bloomberg
They too needed unending growth
Why Kuroda and Draghi are no match for quantitative tightening – Zero Hedge
They can print til the cows come home. It won't work.
China’s situation is wake-up call to prohibit currency manipulation – The Hill
ALL currencies have been manipulated. It never works in the long run but, idiots never learn.
Ending QE for western economic model underlies China crisis – Prime Economics
NOT true. The end of consumption is the cause of China's problems.