Economic pressures

[Danny B]

The CFR and end times

At the end of WW II, the Bretton Woods agreement made the U.S. dollar the reserve currency. As prosperity returned to the West, there was an increasing demand for dollars. This allowed America to print paper to buy whatever we wanted. They sent us Beamers and Toyotas and we sent them paper. We used our status to finance wars everywhere. Eventually, we spent TOO much. America is in debt. The usual procedure is to inflate away the debt by overprinting. The printing causes a wage-price spiral that devalues the currency and makes it painless to pay down the debt.
The Western worker is in competition with the Eastern worker. Global wage arbitrage sends the jobs to the East. To make matters worse, the West buys goods from the East. The FED can't seem to cause the necessary inflation. They can print but, it never gets circulated.
Helicopter Ben said that he could ALWAYS stop deflation. He could make helicopter drops of cash if necessary. True to his word, he sent the helicopters to make drops to his friends in the financial industry. The Wizard from Princeton just assumed that money would trickle down to the middle class.

By forcing interest rates to zero, big, bad, bald, Ben Shalom Bernanke forced investors to shy away from investing in America. He just couldn't get the inflation he wanted no matter how much he printed. He had little chance of causing a wage-price spiral.
Everybody in the finance industry knows that money is created out of thin air. NOBODY in the finance industry wants the average person to be aware of this. Same is true of GOV. GOV prints what it wants and taxes are just a side show. The FED can print currency, ex nihilo, but, never for the common man.

If GOV just printed currency and sent it to everybody, nobody would work. GOV is in the business of tax-farming. We MUST be kept working. GOV squeezes us for every penny and screams for more. They stash it all away to keep us from becoming too wealthy.
Walter Burien: CA CAFRs show $8 trillion in tax surpluses, what we should do - National Nonpartisan | Examiner.com
WE would stop working. If GOV gave us boatloads of money, we would be aware that it didn't have any real value.

Recently, the Council on Foreign Relations recommended that the FED send tons of money to every person.
http://www.zerohedge.com/news/2014-0...-consumers-cas
"In other words, a world stuck in the last phase before complete Keynesian collapse, had no choice but to gamble "all in" with the last and only bluff it had left before admitting the economic system it had labored under, one which has borrowed so extensively from the future to fund the present that there is no future left, has failed.

The only question left was when would the trial balloons for such monetary paradrops start to emerge.

We now know the answer, and it is today. "
Last year, FED GOV passed out $ 2 trillion in benefits. The economy is still in the crapper. How much would GOV have to pass out to revive the consumer economy? How much each year? what about the $ 17 trillion deficit? What about the $ 212 trillion in unfunded liabilities?
For the CFR to propose this is a sign of desperation. ZIRP has trashed the economy. QE has trashed the economy. Free money would certainly make for some interesting distortions.
India seems to be looking at the idea. Direct Cash Transfers will reduce corruption: RBI governor Raghuram Rajan - Economic Times
The Central banks are aware that we are on a crash course into default. They hope to somehow force-feed liquidity into the system to hold off default.

[Danny B]

No WW III

Somewhat off-topic but, VERY good news. The power mongers in D.C. are once again ready and willing to throw Europe to the dogs of war. The Wolfowitz doctrine calls for America to control central Asia. Russia wouldn't allow that. The only way to weaken Russia sufficiently is to pry it loose from Ukraine. The Net has educated the Europeans to the fact that they are under attack from America. There are huge demonstrations in Germany against the FED.
Merkel is a damn socialist who went to Karl Marx university. BUT, she isn't willing to take Germany down in flames.
" Merkel emphasized, “A solution must be found to the Ukraine crisis that does not hurt Russia.”

She added that "There must be dialogue. There can only be a political solution. There won't be a military solution to this conflict.”
http://rt.com/op-edge/183328-minsk-wales-germany-key/
She made it very clear. NO NATO fight over Ukraine. This is a fight over pipelines and energy. It can be settled with trade negotiations instead of war.
The debt of the financial industry in Great Britain is 500% of GDP. I'm sure that the London Bankers were salivating ( like any mad dog ) at the prospect of a wide European war.
The European tribes are well acquainted with war. They know very well that the bankers cause them. Russia has their doomsday weapons, the cobalt bombs. They have scalar weapons and precursor weapons. The Neocons have to be bloody stupid to even consider starting a war with Russia.

[Danny B]

Free money and expensive oil

GOV and the FED are lying through their teeth. It's kinda funny how open they are if you look at the right numbers. China quit buying U.S. treasury notes but, other countries took up the slack.
* Japan re-starts buying and adds 20% ($169 b) to $1058 b
* Belgium picks up 400% ($101 b) to $135 b
* Luxembourg adds 210% ($79 b) to $148 b
* Ireland adds 360% ($61 b) to $98 b
* Norway adds 280% ($37 b) to $57 b
* Caribbean banking centers add 55% ($80 b) to $227 b
The very strange thing is that; these countries had no currency reserves before they did all this buying.

Obviously, there is no chance of an economic recovery if energy prices continue to rise. The European energy companies are losing many $ billions. The America companies; "In one year the top 127 oil and gas companies spent $110 billion more on capital expenditures than they received from operations. So, they acquired $106 billion in additional debt "
The cash is flowing out of the oil companies. If it didn't, energy prices would rise and the economy would be far worse.
http://srsroccoreport.com/wp-content...FRAUD-10-1.jpg

The oil companies are crashing because GOV won't allow them to pass along their rising costs. MUST READ: A Fraud By Any Other Name Is Still A Fraud : SRSrocco Report
How long can this go on?

[Danny B]

Armstrong and Rickards

Martin Armstrong, "We have constructed the largest database in the world of how money has performed for thousands of years."
As I already posted, Armstrong says that the next crash point is 2015.75. He calls for a crash til 2020.05,,, then a rise to 2024.35. We will bounce around til the biggest crash of 2032.95
Why Will the Downturn 2015.75-2020.03 be Far Worse Than Before? | Armstrong Economics

Jim Rickards has a new video that is extremely informative.
https://www.youtube.com/watch?v=KYW5OGWfqJc
He is privy to all the projections of all the intelligence agencies.

[Danny B]

Rising food prices

This post is really nothing startling.
"By using plain and simple math, along with data charts, scientists at the New England Complex Systems Institute have come to a clear-cut conclusion that when food prices rise, as much as they are in the US, then people start rioting."
"Stated another way, the only reason most people obey laws and agree to live in a socially polite manner is because their bellies are full. Take away the food and all illusions of social friendliness vanish in about nine meals (three days)."
Liberty Balance: Scientists Warn The United States To Prepare For Even More Riots, Brace Yourself (Video)
BEER is the answer.

[Danny B]

Automatic Earth, Tedbits and Jim Willie

Our fractional reserve debt system is like an airplane with short, stubby wings. Keynesian Airlines flies crappy planes. They have a very high stall speed. If growth is below about 6%, there isn't enough debt below the wings to keep the plane in the air. The central bankers are printing up new debt just to keep the plane in the air. Debt is going up but, wealth is not. The new debt is rescuing old debt from defaulting. This just gets bigger because of the interest burden.

We slide towards a global-mean wage as debt just grows ever bigger. We aren't growing and we aren't going to grow in the future;
We Live In A New World, But We Don't Want To - The Automatic Earth

GOV has crippled wealth creation with crony capitalism and collectivism. They have purposely created dependency. The free-**** army does not want to cut back their lifestyle;
Useful Idiots and the Something For Nothing Society – Part 3 of 5 | TedBits
We are slip-sliding away because everybody tried to live on future wages. U.S. GOV is most guilty of this. BUT, GOV is going to go down swinging,,, at the whole world. The rest of the world is swinging back.
This article from Jim Willie will take your breath away.
https://www.perpetualassets.com/news...lie-exclusive/

[Danny B]

Pension funds at risk

When Willie Sutton was asked why he robs banks, he replied, "that's where the money is". The criminal bankers have drained about everything that they could get their hands on. They are laying their hands on new fortunes.
Argentina is the model. They stole all the pension money.
That same process is unfolding here and now.

"In an inscrutable move that has alarmed state treasurers, the Federal Reserve, along with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, just changed the liquidity requirements for the nation’s largest banks. Municipal bonds, long considered safe liquid investments, have been eliminated from the list of high-quality liquid collateral. assets (HQLA). That means banks that are the largest holders of munis are liable to start dumping them in favor of the Treasuries and corporate bonds that do satisfy the requirement."
"But in a municipal bankruptcy, a judge would decide the fate of city workers’ pensions, making it an attractive option for banking interests. The oligarchs have long had their eyes on the massive sums represented by the pension funds."
I suspect that they can easily find a crooked judge.
They are setting up local GOV for asset stripping. They will go straight for the pension funds.
Preparing To Asset-strip Local Government? The Federal Reserve’s Bizarre New Rules. Destabilizing Economic Impacts Across America | Global Research

[Danny B]

Medicare costs

In years gone by, when granny could no longer work, she spent her days rocking on the porch. Then came the day when she didn't feel at all well. The doctor came out with his little black bag and told us that Granny had consumption and there was nothing that we could do. Those days are gone and the little black bag has been replaced by many $ billions of expensive machines.
The proton beam machine at Loma Linda hospital cost $ 100 million just by itself.
The original social security act was created to care for widows and orphans. For the elderly, support kicked in at 65 years of age. The average life span was 57.
Politicians make promises to get votes. They promised medical care. As usual, they never projected just how expensive that might get.

"According to a new study from Stanford surveying nearly 1,100 doctors. It finds medical science has “its default set to maximal interventions for all patients, irrespective of the effectiveness of doing so.”
All that money Uncle Sam spends on health care? One out of every six dollars is spent on the final year of life.

And here’s a new number we’ve run across: A quarter of Medicare’s budget is spent on the final year of life. And 10% of Medicare’s spending goes toward the final 30 days.


End-of-life health care is one of only two things that genuinely threaten Uncle Sam’s solvency, according to our friend David Walker, the former U.S. comptroller general"
"We said as much in these pages when we reminded you that health care’s portion of the federal budget keeps doubling every 20 years or so. By now it eats up 25% of the budget."
Health Care Costs: Still the Pig in the Federal Python - Daily Reckoning
Professor Laurence Kotlikoff, an economist at Boston University, accounted for all the projected unfunded liabilities like Social Security, Medicare, Medicaid and interest payments. He puts the U.S. debt at $222 trillion.

[Danny B]

Levy Center

"One firm in particular, the Jerome Levy Forecasting Center, a New York–based economic consultancy, warned that the world economy might plunge into another recession in 2015 that will take down the U.S. economy with it. It is hard not to take this forecast seriously. Levy economists, who use the profits perspective forecasting model developed by Jerome Levy in 1908, have accurately predicted every major financial event in the past few decades, including the 2008 financial crisis"
Another US recession may be coming … sooner than you think | Al Jazeera America

[Danny B]

Margin calls

Investors are allowed to buy stocks on margin,,, a down payment.
Investopedia; "A broker's demand on an investor using margin to deposit additional money or securities so that the margin account is brought up to the minimum maintenance margin. Margin calls occur when your account value depresses to a value calculated by the broker's particular formula."
"You would receive a margin call from a broker if one or more of the securities you had bought (with borrowed money) decreased in value past a certain point. You would be forced either to deposit more money in the account or to sell off some of your assets. "
"Sell off some assets". If stocks are going down, nobody will buy until they hit bottom. What can you sell? You have to sell your best investments because nobody wants your weak investments.
When the sub-prime crash hit, lots of investors got margin calls. They had to sell their best investments to cover the calls. At that time, Japanese stocks were strong. American investors sold Japanese paper to cover margin calls. This sell off crashed the Japanese market.
Remember, you sell your best investments.
China is falling badly. They have 64 million empty housing units. The FED has pushed Japan and Europe to print with wild abandon. The dollar is rising because the FED has printed less than others. In a Chinese crash, the dollar investments will be the most liquid,,, easiest to sell.
China moved 300 million self-sufficient peasants to the city and put them to work. They ran out of work so,,,, they built more cities. Hundreds more.
This is mal-investment and always crashes.
China was hugely focused on productivity and ignored domestic demand. They figured that the West would supply the demand. That worked for a while UNTIL we lost our job (to the Chinese) and our demand came to an end.
At some point, Chinese investors will sell their most liquid investments to cover margin calls.

[Danny B]

Symbiosis and parasites

Every $ 1 dollar increase in taxes reduces GDP by $ 3. The exact amount has been long debated and does vary. But, why?
A pristine economy among honest traders is a symbiosis. When a dishonest person enters the picture, it is predation. The mutual gain of honest trade is reduced by the amount stolen by the predator. The predator must keep his extractions below a level that would induce the prey to stop producing any surplus. In the human ecology, the predator must act the part of a parasite rather than as a "eater" ( a lion on the prowl ).
A lion won't set up his den at the waterhole because he instinctively knows that he will soon die of starvation. A parasite, on the other hand, has no regard for ecology. All parasites follow their innate M.O. until the death of their prey.
The parasitic mindset recognizes no limitations. Collectivist parasitism in the form of communism attempts to inspire productivity by exhortation to produce when symbiosis has been destroyed.

Collectivist parasitism in the form of corporatism attempts to force productivity by micro-managing EVERY facet of an individual's life. Just the same, a symbiosis is lacking. Statist parasitism is more or less interchangeable with corporatist parasitism. The difference between communist parasitism and corporatist parasitism is that the corporatist parasites work hard to reduce the number of non-producers.

Until there is a return to symbiosis and honest returns to the actual producer, productivity will diminish. Top-down control of collectivist fascism will create control but, it won't create productivity. The State tries to induce the missing productivity by creating widespread insecurity. There is a terrorist behind every bush. Charlie Rangel is calling for a war tax and a draft.
We must all work very hard to defeat all of our enemies.
NONE of this can work.

We have to have personal profit. We have to have a way to store this wealth. We have to have a return to the honesty of a symbiosis. Profit or perish,,, no matter the level of control.
In a symbiosis, nobody loses. It is both honest and just. We compete all of our lives and it doesn't sit well when the parasite walks in and steals,,,, and then tells us that it is our moral/legal obligation.

[Danny B]

Gold, the only reliable regulator of the monetary system

Re: gold. I suspect that most people just don't see the larger picture. At one time, all wealth was expressed in tangibles. All labor was manual, animal or man,,, with a few windmills thrown in. Man worked to provide his necessities. He could not be coerced to provide extra unless he had some way to store value. Time degrades all things except for precious metals and stone. This worked for quite a while until the industrial revolution. The industrial revolution created so much wealth that it had to be stored for the future in the form of debt notes. As more States enter into hyper productivity, it is ever-more difficult to store wealth.
The bankers continually fought the emergence of any kind of tangible that could supplant their debt paper. This worked in the newer cultures but, not in the older cultures.
The West is like an old fruit tree that no longer bears fruit. We still consume the same amount of nutrients but, yield no fruits.

We only nourish the structure.

The old cultures are producing fruit because they nourish the blossoms that produce fruit. The West prunes the blossoms to divert nourishment to the trunk.

The West wallows in a sea of debt paper that can't reasonably be redeemed. The West specifically blocked the renaissance of gold that SHOULD have been the tangible embodiment of wealth. Gold is a store of wealth that CAN be reliably redeemed in the future. After a point, debt paper can NOT be redeemed in the future.

At some point, the debt bubble will pop. The greatest risk of all is that NO debt paper will be trusted in the future. The is the ULTIMATE risk because people will not produce extra if they don't have a reliable store of wealth. North Korea is a good example.
https://www.youtube.com/watch?v=WvtW9iLD6Mo
When the cascade default occurs, ALL of the connected strands of the financial web will be strained one at a time, NOT in unison. They will sequentially fail. Antal Fekete and Sr. Price both wrote about a collapse of international trade. After the Smoot-Hawley Act, international trade fell by a huge amount. That was back when the world trusted us.

The old culture will go back to their old ways and only accept gold from their frenemies.
J.P. Morgan said that ONLY character merits credit. Money will not do it.

Century after century, we prove that currency issuance has to have a control that is out of the hands of man. If ALL faith is lost in debt instruments, it will be a long time before the world recovers.

[Danny B]

Shmita

Jeffrey Berwick is a well know libertarian and investor. He has a site called "Dollar Vigilante". He is very observant and has done a lot of good writing. He has an article that points out a LOT of coincidences that are disturbing.
God Has Chosen An Exact Date for the Dollar Collapse - Harbingers and the Shmita

[Danny B]

Jim Wilie, money not moving

Jim Willie has a newsletter. He makes quite a few predictions and he isn't afraid to be wrong. He is generally right. Those who only make "safe" predictions may have a better record for accuracy but, they predict stuff when it is fairly obvious.
"Money Supply is up 3.5-fold."
"Money Velocity is down almost 4-fold"
Nobody is buying or spending and the real economy is freezing up.
"The greater tragedy is that QE cannot be removed. Putting a halt to the QE monetary spigot means letting the financial markets collapse, bond yields to rise, stock indexes to fall, carry trade to go into reverse, and consumer lending to dry up. So the QE spigot continues in a slow death dispensing acid, rather than causing a sudden death."
The more money they print, the slower it circulates. http://67.19.64.18/news/2014/9-19gj/2.jpg

"As footnote, Russian President Vladimir Putin committed two deeds that infuriated the Western bank cabal supra-national leaders. Putin kicked out the Rothschild bankers from his country. Putin interrupted the USGovt heroin trade supply routes out of Afghanistan. Like Abraham Lincoln 150 years ago, the elite banker chambers wish to remove Putin and to suppress Russia, but the sprawling nation has joined at the hip with China. Thus Russia cannot be isolated any more than a bear can be bear hugged. "

"The Ukraine War is the USDollar Waterloo event. The Kiev Regime fascist leaders have begun to bug out, the IMF $3.2 billion loan funds now gone missing. " Geee, $ 3.2 billion gone missing.
I'm sure that the IMF will be happy to send a boatload more money.
Monetary Policy Killing the System

[Danny B]

The Avalanche and the Failure of debt paper.

Centuries ago, all wealth was expressed in tangibles. A society or a strongman stacked up land, slaves, rock, timber, metal,,, whatever was in demand. Land was the most durable wealth but, it was not portable. When the barbarians invaded, you couldn't take it with you. Metals were extremely useful and gold was at the apex of valuable metals. Gold and a few precious stones were the accepted standard for concentrated wealth. Credit / debt existed but, it was used mostly for transactions rather than storage of wealth.

With the arrival of the industrial revolution, there was so much wealth that it became ever-more difficult to store wealth. As each State industrialized, it was ever-more difficult. The store of gold did not grow as fast as the tangible wealth.
To facilitate trade, gold receipts were substituted for physical gold. Governments held gold to back their sovereign currencies. Over many decades, bankers and GOV slowly reduced the amount of gold backing their debt notes.
Gresham's Law states that the strongest currency goes into hiding because people use it for a store of wealth. GOVs worldwide removed backing in concert for their currencies so that none COULD be used to store wealth. Bankers are unproductive parasites so, they need all the currency circulating so it can be diminished by taxes, interest and inflation.
Fiat currency is GOOD for you and me but, the central banks hold GOLD. The Bank of International Settlements settles ONLY in gold. When Bernanke was asked why the Federal Reserve holds gold, he replied "tradition" . Gold is called the "barbaric relic".
The West has done everything it could to erase gold from the consciousness of Westerners. Gold NEVER left the consciousness of the people of the East and they are forcing a return to gold as a store of wealth.

The West is blowing an enormous credit bubble to try to preserve it's standard of living even though, it has lost it's job to the East. All credit bubbles eventually pop. They end in a cascade of default because everything is so interlocked.
Jim Rickards calls this an "avalanche" rather than a cascade. Both terms work. He has just released new predictions that go farther than the books that he wrote some years ago.
Quotes;
The “first avalanche” actually happened in 1998, when a $100 billion hedge fund called Long Term Capital Management (LTCM) almost imploded the markets.
As a result, they were caught by surprise by the 2008 crisis, when $11 trillion in household wealth was wiped out in a matter of weeks.

This was “the second avalanche.”
The four biggest banks, for example, are 30% larger than they were five years ago. And the five largest banks now hold more than half of the total banking assets in the United States.

To make things worse, the size of derivatives, the same instrument Warren Buffett once called “weapons of mass destruction,” are now worth more than $700 trillion.

That’s $200 trillion MORE than the total value of derivatives in 2007, when they brought down the global financial system.

Today, the size of the derivatives trading is more than TEN times bigger than the entire world economy.
Remember, in 1998 the banks had to bail out a failed hedge fund.

In 2008, the Federal Reserve had to bail out the banks.

Rickards: "Rickards invested most of his fortune in the company he worked for — the Long Term Capital Management fund.

After all, this was a fund run by two geniuses who had won the Nobel Prize in economics. They had IQs of 165 and were considered at the time the finest financial minds in the world.

He thought his money would be in good hands.

But eventually LTCM became a web of financial contracts worth a total of $1.3 trillion.

And the mathematical models blew up, causing the first financial avalanche we mentioned earlier. "
And now, in the coming avalanche, this CIA insider says it’s the Federal Reserve that will need a bailout.

In fact, during a private conversation, a member of the Fed has already confessed to this CIA insider that the Fed is secretly broke.

This means the world will have to bail the entire U.S. financial system out.
Hmmm, I just don't see that happening. America has trashed the world pretty thoroughly.
Some relevant charts:
http://research.agorafinancial.com/r...4/Graph4_2.png
http://research.agorafinancial.com/r...4/Graph3_2.png
http://research.agorafinancial.com/r...4/Graph2_1.png
Jim Rickards is a collaborator and spokesman for BIG GOV and big banking. He claims that the dollar will collapse. He claims that the world will bail us out using the synthetic fiat currency Known as "Special Drawing Rights". He is an insider pushing the new fiat that is favored by the PTB and insiders. It ISN'T going to happen. After the fiat dollar blows all to hell, NOBODY is going to use or endorse a new fiat currency controlled by the same group of criminals.
They / we will go back to gold as we have every time in history.
The Euro is backed by a floating gold price. It is possible that the Euro will survive if gold is revalued high enough. It is doubtful because the socialist tendencies of Europeans will always bring them down.
A Short, Cogent History Of The Eurozone: Why Peripheral Country Debt Is Toast | David Stockman's Contra Corner
France alone, has a 2 trillion euro debt.

All experiments with unbacked fiat currencies end in a crash. The great danger at this moment in time is that all debt currencies have failed. What about debt-bonds? Will ALL debt paper fail when the avalanche hits. John Rubino talks about just this possibility. https://www.youtube.com/watch?v=WvtW9iLD6Mo
The operating plan at the moment is HOPE. http://www.zerohedge.com/news/2014-0...-minsky-moment