Economic pressures

[Danny B]

Bad plans,, bad results,,, no Atlantic trade

Money just isn't moving into and around the economy. The Central bankers lowered interest rates to force people to stop relying on interest income from banks and spend their money OR move it to risk assets to get some decent interest. THAT was the belief and the plan from the CBs. Ivory tower feces-for-brains.
"over the past 7 years central banks around the globe have gone absolutely overboard when it comes to their primary directive and have engaged every possible legal (and in the case of Europe, illegal) policy at their disposal to force consumers away from a "saving" mindset, and into purchasing risk(free) assets"
The result; "Europe's NIRP bastions, Denmark, Sweden, and Switzerland, the more negative rates are, the higher the amount of household savings!"
" As the BIS have highlighted, ultra-low rates may perversely be driving a greater propensity for consumers to save as retirement income becomes more uncertain."

Bingo: that is precisely the fatal flaw in all central planning models, one which not a single tenured economist appears capable of grasping yet which even a child could easily understand. "
"Since the middle of 2015, US investors have bought a big fat net zero of either bonds or equities (in fact, they have been net sellers of risk) and have parked all incremental cash in money-market funds instead, precisely the inert non-investment that is almost as hated by central banks as gold."
The feces-for-brains had a plan BUT, they had/have NO brain.
Durden postulates that the U.S. will definitely go to negative interest rates. Negative Rates In The U.S. Are Next: Here's Why In One Chart | Zero Hedge

What about other risk investments? "or mortgage companies that were hoping to go public this year, they might as well forget about it. As one industry analyst put it: “The IPO market isn’t even on life support. It’s just plain dead." Inside Mortgage Finance Publications - The Mortgage IPO Market is Dead – for Now; Short Positions Ease Somewhat at Certain Mortgage Shops
What about international trade?
"Russian Naval Forces have reported that the entire Atlantic Ocean appears to be totally deserted of major freighter ships for the first time in recorded history.

The Kremlin say that Panamax and New Panamax vessels, plus all types of wet carrier (oil/liquified natural gas) vessels including VLCC and ULCC supertanks are nowhere to be seen.

Russia claim that the evacuation of the Atlantic ocean is a “clear” sign of a coming Western economic/banking collapse, with the world’s stock markets crashing during the first part of the year being another clear signal."
Impending Financial Doom: For the First Time In History, Atlantic Ocean Is Empty Of All Cargo / Freighter Ships! The global Economy Is LITERALLY stopping. Right Now. Today. « InvestmentWatch

America the beautiful (and the IMF) have been going around looting other countries for decades. Other countries have now gone broke and America the beautiful must loot and pillage it's own people.
The West Is Reduced To Looting Itself -- Paul Craig Roberts - PaulCraigRoberts.org

[Danny B]

Paul Craig Roberts,,, MIchael Hudson

"Just recall how swiftly the 2007-2009 financial crisis unfolded. We anticipate that the next global financial crisis could be even more sudden and severe." "Putting on the seatbelt after the car has cashed"
(Interview) Europe: Why It's Going to Get a Lot Worse Before It Gets Better | Elliott Wave International

China and Japan are in an especially bad position because of capital flight. They are screwed if they try to stop it and screwed if they can't stop it.
The End of Globalization, Part 3

The next article is an indictment of the banks. They figured just how much a country could afford to pay in interest,,,, and then loaded up the country with adequate debt to generate this same amount of interest..

" Hudson learned that the goal of creditors is to capture the entire economic surplus of a country into payments of debt service."
" The US Treasury and State Department supported the Caribbean safe haven for illegal profits in order to offset the negative impact on the US balance of payments of US military operations abroad."
"International trade theory concludes that countries can service huge debts simply by lowering domestic wages in order to pay creditors. This is the policy currently being applied to Greece today, and it has been the basis of the IMF’s structural adjustment or austerity programs imposed on debtor countries"
"Hudson’s investigations into the problems of our time took him through the history of economic thought. He discovered that 18th and 19th century economists understood the disabling power of debt far better than today’s neoliberal economists who essentially neglect it in order to better cater to the interest of the financial sector.

Hudson shows that Western economies have been financialized in a predatory way that sacrifices the public interest to the interests of the financial sector."
The West Is Traveling The Road To Economic Ruin -- Paul Craig Roberts - PaulCraigRoberts.org
Argentina is the textbook example of a formerly rich country that was saddled with un-payable debt,,,,, and is now poor. If Argentina tries to default, some crooked judge in New York will rule against them. Then, the funds that they have on deposit in foreign countries are stolen.

(Hudson); " His research was so ground-breaking that Harvard University appointed him Research Fellow in Babylonian economic history in the Peabody Museum. "
You may ask, what does Babylon have to do with all this?
Debt ALWAYS builds up to an unsupportable level. It did so in Babylon. When credit is allowed to build up to astronomic levels, default always follows. Mass defaults are chaotic and often, catastrophic. To avoid this, debt jubilees were instituted every 50 years,,, for example. Mass default causes mass starvation and a jubilee was considered a better alternative.

A jubilee is an orderly cancellation of debt. You can bet that the bankers refuse to do this for the present credit bubble. Debt bubbles go back at least 4,000 years. The ancients figured out that a jubilee was preferred to mass default. This knowledge and conviction was lost long ago.

[Danny B]

China is trying to claw it's way back from the edge of the cliff

The big news is that all bets are against China. Everyone is betting that the Yuan will be devalued.
"But what does it mean for the rest of us? Well, if China is forced to devalue the yuan by the 40% the hedge funds expect (and that fundamentals seem to require), it will have fired not just a bazooka but an ICBM in the currency war. For the world’s second biggest economy to devalue on that scale would send shock waves through Europe, Japan and the US. "
There will be shock waves, all right.
"To sum up, a big yuan devaluation might force the same decision on much of Asia, Europe and North America — all at once. So instead of a drawn-out, back-and-forth currency war over the next few years, the process would be compressed into just a few trading days. "
Whether it is a super nova or an ICBM, it will be catastrophic for currency.
Epic Battle: Hedge Funds Versus China

I can't leave out Kunstler;
"When so many loans end up networked as collateral in some kind of bet against previous bets against other previous bets, you can be sure that cascading contagion will follow. And so that is exactly what’s happening as China’s rocket ride into Modernity falls back to earth.
Like most historical fiascos, it seemed like a good idea at the time: take a nation of about a billion people living in the equivalent of the Twelfth Century, introduce the magic of money printing, spend a gazillion of it on CAT and Kubota earth-moving machines, build the biggest cement industry the world has ever seen, purchase whole factory set-ups, and flood the rest of the world with stuff. Then the trouble starts when you try to defeat the business cycles associated with over-production and saturated markets."

"Poor China and poor us. Escape velocity has failed. Which raises the question: escape from what, exactly? Answer: the implacable limits of life on earth. "
LOVE IT
"So now, that dynamic duo, Nature and Reality, the actual owners of the planet, have showed up to read the riot act to the renters throwing a wild party. The fourth and perhaps ultimate financial crisis of the last twenty years begins to express itself in terms that only the raptors and vultures can see from on high. George Soros, Kyle Bass, and the other flocking shadow banking scavengers prepare to short the living ****e out of the old Middle Kingdom. The immortal words of G.W. Bush ring in their ears: “This sucker is going down,” and they are sure to win big by betting on the obvious. Trouble is, this sucker could go down so much further than they imagined, that whatever fortunes they gain from its descent will be foiled by the destruction of the very economic system needed for them to enjoy their gains."
This is something that i have pondered all along. These financiers have made huge bets. The huge bets could very well take down the entire system that they are counting on to pay off their bets.
Ground Control to Captain Zhou Xiaochuan | KUNSTLER
collateral in some kind of bet against previous bets against other previous bets, you can be sure that cascading contagion will follow
Everybody uses the Western banking system. EVERYBODY has these layers of bets on bets. It's not hard to imagine the whole credit system locking up. A lockup like that would man that wholesalers couldn't ship things,,, like FOOD and fuel.

"In 1992, George Soros brought the Bank of England to its knees. In the process, he pocketed over a billion dollars. Making a billion dollars is by all accounts pretty cool. But demolishing the monetary system of Great Britain in a single day with an elegantly constructed bet against its currency? That’s the stuff of legends."
Don't say that I didn't warn you.

[BroMikey]

Ya economic power.

[VIDEO]https://www.youtube.com/watch?v=52w_lwiJbWs[/VIDEO]

[Danny B]

The impending supernova and shockwave from China

George Soros; "The Greek crisis taught the European authorities the art of muddling through one crisis after another. This practice is popularly known as kicking the can down the road, although it would be more accurate to describe it as kicking a ball uphill so that it keeps rolling back down. The EU now is confronted with not one but five or six crises at the same time."

Tyler Durden; "China's slowest economic growth in a quarter century fueled concerns that bad debts will cripple the banking system and a catalyst for why virtually every hedge fund is now short the Yuan.

As Bloomberg puts it politely, these actions "add to evidence that President Xi Jinping’s government is moving with increased urgency to rein in financial-system risks."

We disagree: these are the same panicked, "after the fact" reactions that only a government on the verge of losing control will engage in."
Full Summary Of Chinese Actions To Prevent An All-Out Economic Collapse | Zero Hedge
"Ultimately, what will happen is that the "Shanghai Accord" idea, in which China announces a dramatic one-off devaluation, is implemented which is perhaps the only shock-approach that could possibly stem the capital flight even if it comes at the expense of a global deflationary wave. "

China has lots of internal controls and China is arresting and "disappearing" quite a few important people in finance. China does NOT have this kind of power for external regulations and external investors. if ALL the hedge funds are betting against them, I would say that they are toast. They are bleeding out foreign reserves. If everybody is betting against them, they can't win. There is no point in fighting if they will just lose later on,,,, with far lower FX reserves. There is no real point in holding out, especially since the hedge funds control many $ trillions. We may see a devaluation in a matter of weeks. This "global deflationary wave" will indeed be a shockwave.

[Danny B]

Oil headlines

Ex-OPEC Head Sees Oil Supply Drop - US Fracking Collapse
2/02 Exxon's profit tumbles 58 percent, slashes capex by one-quarter – Yahoo!
2/02 BP reports biggest ever annual loss – Reuters
• Exxon Faces First Downgrade in 86 Years (BBG)
• Iraq Sells Oil At $22, Fiscal Cliff Looms (BI)
• Goldman Sachs Questions Capitalism (BBG) GS may very well question CRONY capitalism. They wouldn't know free-market capitalism if it came up and bit them.
• Spring Festival Travel A One-Way Journey For Many Chinese (CNBC) They’re going back to the farm.
• Thousands Of Greek Firms Flee To Bulgaria (Kath.) Sad for the Greeks.

[wayne.ct]

A short video that illustrates the situation now

https://www.youtube.com/watch?v=j4JOjcDFtBE

There are many similar videos and I just happened to watch one yesterday. I picked this one, but they all illustrate my point. Be sure to watch one that is live, because the announcers and the control-room engineers are all taken by surprise. In fact, that is my point. Just about everyone is going to be taken by surprise when things go bad. Some will be prepared but all will likely be shocked. I can't imagine who would be so prepared as to not be shocked. I know, for example, that I have no personal experience to prepare me. It is simply beyond what I can imagine. Watch this video and see if you disagree.

[Danny B]

Wayne, my neighbor, Gene was head of engineering at Rockwell. Rockwell told NASA NOT to launch if it was too cold. NASA told the launch officials to take off their engineering hats and put on their PR hats.
Most people have had their sense of survival bred out of them. They will sit there and wait for somebody to help them.

[Danny B]

Flight to the dollar,,,, reset to gold

America the beautiful just prints more and more dollars to buy what it wants. Sr. Price argues that all trade imbalances will go away because we must switch back to gold. .:Plata:.
Armstrong, "The REAL function of gold is to act as a hedge against government — not inflation. " "With time, I came to see that markets always made a FALSE MOVE in the opposite direction before a big move. You need this type of false flag move for it cleans out everyone."
"This is what we are doing now. We just have to do this. We will get everyone offside and then slam them" Gold & the Dow | Armstrong Economics

China will be forced to devalue to stop capital flight. This will help them hold on to market share in manufacturing. Gold & the Dow | Armstrong Economics

" So now the world is in for a financial-monetary reset, dimensions and consequences of which are overwhelming. " "It all started by pushing capitalism without capital, which is like spreading religion without God.

So we do not have real Money in the system now, only humongously massive amounts of legal tender fiat “money”
This article is about giving helicopter money to everybody. The Fed's Nuclear Option - The Independent International Political Research Center

"The ongoing currency war is not new. In fact, the war has been raging since 2010. That’s when President Obama announced the National Export Initiative (NEI) in his Jan. 27, 2010, State of the Union. That policy initiative marked the beginning of the currency wars that have been raging ever since.

The president declared that it was the goal of the United States to double exports in five years. Of course, the U.S. could not become twice as productive or twice as populous in five years. The only way to double exports was to trash the currency, and that’s exactly what happened."
Currency inflation, seen from the street level is just a cut in wages. Everyone else is dragged in unless they want to lose market share and employment.
"The dilemma of currency wars is that every currency cannot devalue against every other currency at the same time. It’s a mathematical impossibility." The Age of Instability - The Daily Reckoning

Volatility makes it impossible for investors to calculate future profits so, they stay out of the markets. GOV enforces negative interest rates to force them out of cash and into investments. The negative interest rates wipe out anyone who depends on interest income so, they spend less. There is less spending,,, less profit.
The Age of Instability - The Daily Reckoning
There is an ongoing flight to the U.S. dollar and it may be soime time before people lose confidence in it; http://www.armstrongeconomics.com/archives/42811
Deutsche bank with $ 65 trillion in derivatives is about to blow; http://www.zerohedge.com/news/2016-0...-deutsche-bank
Deutsche Bank is in a good position to see the bad signs and , they see a LOT of them; http://www.zerohedge.com/news/2016-0...new-record-low

Headlines;
• European Banks Near ‘Terrifying’ Crisis: Raoul Pal (CNBC)
• Bank Selloffs Replacing Oil Rout As Stock Market Pressure Point (BBG)
• Kyle Bass: China Banks Months Away From ‘Danger Territory’ (CNBC)
• Investors Heading for Slaughter One More Time – David Stockman (Hunter)
OK, so, you can forget about the huge crash in oil,,,, that caused the crash of banks,,,, and just worry about the banks.
Sr. Price may very well be correct about the return of gold to stop the currency wars. I don't see the possibility of a smooth transition. America was a high-wage producer. As we lost our lock on manufacturing , GOV decided to trash the currency to regain market share. BUT, the dollar is going up and we are losing market share. In a currency war, everybody's wages go down so, consumption goes down.

[Danny B]

Still sliding away

Reasons not to prep;
1. “Obama fixed everything that was wrong with America”
2. “When Hillary Clinton is elected she will put this nation back on the right track”
12. “When things fall apart the federal government will take care of us”
21. “If the economy does collapse, I will just go on welfare”
41. “I don’t have to worry about preparing for a major disaster because that is what FEMA is for”
46. “If there really was a reason to get prepared they would have told us about it on the news”
The Rapture, Donald Trump, Hillary Clinton And 50 Other Excuses People Use For Not Prepping

" Global Stocks Enter Bear Market: One-Fifth Of All Worldwide Stock Market Wealth Is Already Gone" Everybody is predicting hyperinflation BUT, losses like this negate inflationary pressures.
The Last 16 Times This Happened There Was A Recession… this time will definitely be different.
Not too strangely, crime is up; Los Angeles Police Urge Residents ?To Protect Themselves? As Violent Crime Skyrockets
The layoffs are getting worse; 22 Signs That The Global Economic Turmoil We Have Seen So Far In 2016 Is Just The Beginning

• Citi: ‘We Should All Fear Oilmageddon’ (BBG)
• Just 0.1% Of Global Oil Output Has Been Halted By Low Prices (BBG) Keep pumping til you drop.
• US Running Out Of Space To Store Oil (CNN)
• Obama Proposes $10-a-Barrel Oil Tax (MW) Marvellous, that will fix everything. Gas in Ca. is expensive because they added tons of tax for cap-and-trade.

[Danny B]

Slamming the transmission into reverse

This is an old number. A barrel of oil is sold 48 times before it is consumed. Speculators add $ 27 to the cost of a barrel of oil. Exxon profits $ 2.31 for a barrel of finished product. Lindsay Williams is an unofficial spokesman for the oil barons. He reports that they are VERY tired of profit-takers and GOV taxes taking all the margin from their business.
Speculators add $ 27 to the cost. This has gone into reverse and the banks are crashing. You can bet that the oil majors aren't shedding a tear.
The whole system is in a feedback loop.
"Markets are currently in a well-oiled "death spiral," according to Citigroup Inc. analysts led by Jonathan Stubbs.

"It appears that four inter-linked phenomena are driving a negative feedback loop in the global economy and across financial markets,"
Citi: 'We Should All Fear Oilmageddon' - Bloomberg Business
Oil market spiral threatens to prick global debt bubble, warns BIS – Telegraph
2/06 Citi: World economy seems trapped in 'death spiral' – CNBC
2/06 Why the next two years could be worse than 2008 – Forbes
2/06 US rig count in free fall: plunges by 48 in one week – Oil Price
2/06 Oil conundrum: it's even worse than we thought – NASDAQ

PEMEX profits are down 70% AND PEMEX profits are what is used to finance the social safety net in Mexico. https://encrypted-tbn0.gstatic.com/i...MeVs3zcWM5k2w3

The great oil unwind is causing the great financial unwind. This is likely to cause the great credit unwind. Chinese traditionally go back home for Chinese new year. MANY of them are going back the the farm and the village on a one-way ticket. When the industrial economy does not have a niche for you, you must return to the agrarian economy to survive. Should the credit markets freeze up, there will be a lot of people who will yearn to change to a more secure living doing subsistence farming.

[Danny B]

Peak GOV goes away with the end of peak credit

More and more things are falling apart faster and faster. It is increasingly difficult for me to integrate these things into a complete picture.
Faster yet; 22 Signs That The Global Economic Turmoil We Have Seen So Far In 2016 Is Just The Beginning
Global bank risk; Global Financial System Risk Is Soaring Worldwide | Zero Hedge

Private credit is the "chart of doom"; Of Two Minds - The Chart of Doom: When Private Credit Stops Expanding...
Charles Hugh Smith; "The ultimate cost of protecting the privileges of the few at the expense of the many is the dissolution of the social order that enabled the rule of the privileged few."
My three primary models of decay and collapse are:

1. Historian David Hackett Fischer's masterwork The Great Wave: Price Revolutions and the Rhythm of History (given to me by longtime correspondent Cheryl A.)

2. Thomas Homer-Dixon's The Upside of Down: Catastrophe, Creativity, and the Renewal of Civilization

3. The decline of the Western Roman Empire (the process, not Edward Gibbon's epic 6-volume history). My recommended book on the topic (a short read): The Fall of the Roman Empire
Of Two Minds - The Opaque Process of Collapse

The banking cabal is strictly parasitic. Same for GOV. They get along well. ZIRP is a war on savers. It has gone on for years because their "take" from the productive economy (that is no longer producing) has fallen too far for them to survive. This protracted war on savers is killing what is left of a normal economy. The War On Savers And The 200 Rulers Of Global Finance | David Stockman's Contra Corner

The other mega-parasite, GOV, is hard at work trying to squeeze every last penny before the crash. With the crash of credit, GOV will NOT have the resources to employ millions of snoopers to look into every nook and cranny of your life.
http://www.caseyresearch.com/article...f-tax-havens-1
"What we can expect will be an increasingly desperate attempt to rob people of their personal wealth. The situation will ramp up to a draconian level. Then, quite suddenly, the crisis will be upon us. The dreaded tanks will run out of fuel - the governments will lose the economic power to continue their advance against economic freedom."

[Danny B]

Killing Deutches bank

Treasury secretary Hank Paulson came to GOV directly from Goldman Sacks. Lehman Bros was the arch-enemy of GS for over 100 years. Paulson EXCLUDED Lehman Bros from the TARP money. It was a straight kill job. When LTCM crashed, everybody had to pony up some money to keep the whole system from blowing up. Bear Stearns refused to participate and was later killed by it's competitors. AIG was killed when it's competitors dumped everything and killed it.
Deutches bank; the more that the CB prints (at the behest of GS), the more money flows out of stocks,,, including bank stocks. Mario Draghi is straight from GS. Mario Draghi is printing a ton of money. This is killing Deutches bank.
A Wounded Deutsche Bank Lashes Out At Central Bankers: Stop Easing, You Are Crushing Us | Zero Hedge
(Draghi)"ECB head fulfills the desires of his former employer Goldman Sachs first and foremost, one would wonder if as we speculated last summer Deutsche Bank is not indeed the next Lehman, if for no other reason than Goldman has decided the German financial behemoth should be the next bank to fail, and unleash the next global taxpayer-funded bailout episode."

[Danny B]

More contagion

FED; "Fisher said that the Fed had, “front-loaded a tremendous rally.” All this means is that the Fed pulled returns forward from the future to generate larger gains today." So, we are going to do a lot of catch-up on the downside.
https://www.thefelderreport.com/2016...mind-the-gaps/
• Deutsche Bank Is Shaking To Its Foundations (SI) They will shake apart.
• Why A Selloff In European Banks Is So Ominous (MW)Cause the banks were insolvent before the selloff.
• Lending To Emerging Markets Comes To A Halt (FT) Without fresh lending, they can't roll-over their existing debt.
• World’s Largest Energy Trader Sees a Decade of Low Oil Prices (BBG)
• German, French Central Bankers Call For Eurozone Finance Ministry (Reuters) They haven't been screwed enough by the European Central Bank so, they also want a finance ministry. One more step to a world GOV that will never work.
2/07 Will inflation destroy your retirement savings? – Motley Fool Nope, it will be stolen by GOV and bankers.
2/08 Venezuela flirts with default, could be worse than Argentina – CNBC Forget the flirting. Lets get down and dirty.

2/08 Consumption seen dropping as Japan's workers eke out 0.1% rise – Bloomberg Very strange,,, you don't pay them and,,, they stop consuming.
The meltdown of Deutches bank should be pretty traumatic. What about the contagion? Will it blow at the same time as China?

[Danny B]

Davidson, Armstrong and Rogers

Davidson has a good track record of predicting all the crunches for the last few decades. 80% Stock Market Crash To Strike in 2016, Economist Warns - The Sovereign Investor
http://pro.strategicinvestment.com/N...DPS102/?h=true
Martin Armstrong; "The two main areas to avoid are (1) ANY investment in government bonds (federal, state, local), and (2) bank stocks. These will be the two areas of major concern as we move forward in time. You can keep cash in U.S. TBills for right now, but as we move into 2017 you are better off with AA corporate paper. These two sectors will become contagions. European banks are in the lead for a collapse. The U.S. banks are still OK for now, but caution in advisable."
Jim Rogers; "Legendary Investor Jim Rogers Warns: “Most People Are Going To Suffer The Next Time Around” " the market knows this is over and we’re not going to play this game anymore.

The entire world is about to get hammered and the average person on the street is the one who will pay the price, as is usually the case."
Legendary Investor Jim Rogers Warns: "Most People Are Going To Suffer The Next Time Around"

• ‘Panic Situation’ As Asia Stocks Tumble Amid Fears Of New Global Recession (G.)
• Global Bond Rally Near ‘Panic’ Level With Japan Yield Below Zero (BBG)
• Japan’s 10-Year Yield Falls Below Zero for the First Time (BBG)
• US Bank Stocks And Bonds Clobbered By Recession Worry (Reuters)
• Investors Dump Stocks, Seek Safe Havens As Bank Fears Flare (Reuters)
• Banks Bonds Are “The Epicenter Of Growth Concerns Globally” (BBG)
• US Oil Industry Woes Grow As Storage Levels Hit ‘Critical Level’ (MW)